Lord O'Neill of Clackmannan
Main Page: Lord O'Neill of Clackmannan (Labour - Life peer)
Lord O’Neill of Clackmannan
I thank my noble friend Lord Hanworth for introducing this debate, although when it was first announced I was not sure that we would have much to debate. I thought that we would probably be well on the way to getting a strike price. Secondly, I did not anticipate the European Parliament having the vote that it did, throwing the carbon market up in the slates. The first question that we have to ask the Minister is what the Government propose to do to retrieve the situation so that the price of carbon can be made clear so that potential investors in all forms of generation of a low carbon character, whether renewable or nuclear, have some sort of idea of where we are going in Britain.
If there is a problem, it is not the Government as such; in my view it is the Treasury. In my recent experience of the nuclear industry within the past decade, I remember two occasions. One of them concerned the pay and conditions of the Nuclear Installations Inspectorate, where there was a dramatic leakage of staff because of the skill and expertise of these individuals and because their pay and conditions was of a Civil Service character. It took the Treasury years to come to an appreciation of the fact that these people had to be put into a special employment box, as it were. Thankfully, the Government’s upcoming legislation will deal with that.
Secondly, there was the whole question of the contractorisation of Sellafield and the insurance thresholds that had to be set for that. It took months and months of trying to get the Treasury to appreciate the significance of this insurance question. The insurance question was quite straightforward. There had to be a raising of the threshold whereby the Government would become responsible for any potential difficulty. It was not an issue that was raised by a single company although the one I was associated with at the time, the Washington Group, had been the favourite company to take the Sellafield account. It eventually took the intervention of the shareholder executive from BIS to get the Treasury moving. We know the merits of the case one way or another and it has been described already, but the Treasury is the department causing the problem.
It is fair to say that DECC in these matters is a well-intentioned lightweight spectator. It has to get its act together. There is so much at stake here. We need to get a price and we need to get a signal sent because there are people not only in EDF but other contractors that are prepared to come in and spend money and to use different forms of generation and different reactors, which could widely expand our industrial base. If nothing else, given that we are no longer going to be able to build lean-tos and conservatories, we need something to help the construction industry. Certainly, starting work at Hinkley Point as quickly as possible would be a good signal to all concerned.