Energy Bill Debate

Full Debate: Read Full Debate

Lord O'Neill of Clackmannan

Main Page: Lord O'Neill of Clackmannan (Labour - Life peer)

Energy Bill

Lord O'Neill of Clackmannan Excerpts
Thursday 4th July 2013

(10 years, 10 months ago)

Grand Committee
Read Full debate Read Hansard Text
Moved by
29: After Clause 3, insert the following new Clause—
“Decarbonisation obligation
(1) The Secretary of State must bring forward regulations for a “decarbonisation obligation” within a year following enactment for the purposes of ensuring obligations under section 1(1) are met.
(2) A decarbonisation obligation means the level of carbon intensity of electricity generation in the United Kingdom that a relevant supplier may not exceed in respect of the total kilowatt hours of electricity that it supplies to customers in England and Wales during that year.
(3) In setting a decarbonisation order, the Secretary of State must first obtain and take account of advice from the Committee on Climate Change.
(4) Under this section, a “relevant supplier” refers to electricity suppliers supplying electricity in the United Kingdom.
(5) Section 4 makes further provision in relation to subsection (2).”
Lord O'Neill of Clackmannan Portrait Lord O'Neill of Clackmannan
- Hansard - -

This is a probing amendment and in some respects it follows on from what my noble friend has just been talking about. The opportunity to adopt a decarbonisation obligation, which would set decarbonisation targets for supply companies, arises as a consequence of a 2004 European directive, which required electricity supply companies to disclose the environmental impact—that is, the CO2 emissions and nuclear waste of the electricity that they supply to customers over a year. In 2005, this was given effect in the UK by way of an SI. Therefore, since 2005 up to the year ending 2011—this is a matter of public note—we have published information about the emissions that each of the major energy suppliers has been responsible for in a year.

I think that when the regulations were initially drafted, it was assumed that people would look at what they had emitted and try to reduce the total year by year, given the general consensus for, and desirability of, securing a degree of carbonisation. However, a deficiency in the regulations has meant that there has in fact been very little in the way of an appreciable reduction in emissions from 2005 to 2011—the period for which data are available. The UK average for the year ending 2011 is 430 grams per kilowatt hour, which is a fall of 30 grams since 2005, so one cannot really say that the existing regulation has been particularly effective in reducing the carbon emissions created by the energy generators. Indeed, for other reasons which I think have already been mentioned in respect of the cheapness of coal, in 2012 carbon intensity climbed to 530 grams per kilowatt hour because of the attractiveness of coal as an alternative to gas and other sources at that time.

This is only a probing amendment, as it obviously has not had the benefit of the hands of parliamentary draftspeople. Nevertheless, the point that I really want to make is that I do not think it would be unreasonable for the Government to consider that we ought to use this information and not let it just gather dust on the shelf. I should like to think that this information would provide us with an approach to the problem. It is pretty well spelt out in the amendment that within 12 months of the Bill becoming an Act there would be a decarbonisation obligation, which would be set by the Secretary of State after consultation with and advice from the Committee on Climate Change. In effect, it would be a target for carbon reduction for the main electricity suppliers. We talk in the amendment about the relevant suppliers. By that, I mean suppliers of a sufficient size. We are not talking about micromanaging this. We could say the big six and one or two others, and that would probably catch just about everybody.

Therefore, it is not a massive exercise but I think we are missing a trick here. We have information that is not very satisfying, and it ought to be employed to some extent. If it is not, then in some respects it almost begs the question: why bother gathering this stuff in the first place? Why bother requiring the companies to make these returns if nobody is paying any attention to them? It may well be that there are people within DECC studiously looking at these data every year. However, again, that begs the question: why are they doing it if they are not doing anything with the information?

We have an opportunity here to explore the possibility of using the information as another lever in trying to decarbonise, or certainly to reduce the carbonisation of, our electricity supply. It is a fairly modest amendment and would probably cost very little for the Government to set in motion. It would probably be a source of complaint for the relevant electricity suppliers but, given that they are always complaining anyway, one more reason for complaint will not make an awful lot of difference. It would give the Government the opportunity to take some leadership on this issue, because the previous Government and this one have been rather lax about it. We see quite clearly that virtually nothing has been achieved on decarbonisation during six years of recording. It is a fall of five grams per annum, which probably works out at just about 1.1% per annum. I am not sure that any Government would want to defend that record. I recognise that there are circumstances where there are cheaper sources of fuel, which are dirtier, but these sources will not be available for much longer.

--- Later in debate ---
Lord O'Neill of Clackmannan Portrait Lord O'Neill of Clackmannan
- Hansard - -

If the Government are satisfied that they and their predecessors have done everything they could since 2005 to achieve a reduction of 30 grams per kilowatt hour, they are content with very little.

We are not asking the companies to do anything. They have already provided the information and it is clear that they are not pursuing decarbonisation with the enthusiasm and vigour that the Committee and the House want them to. It is therefore surprising that the Minister should be so complacent about this. She is suggesting that she will do no more than is being done at the moment: that the European directive will take out coal eventually and, once it does, we will have reached the sunlit uplands and everything will be fine. I shall withdraw the amendment but I think that when the Minister reads this she will be embarrassed because she is coming out with some fairly complacent stuff.

The major players have not been performing as well as they should have been and should be pushed harder. The Government have the information and the means of consultation to secure realistic targets, which would not be crippling but would be a great deal better than the, in effect, 1% per annum improvement that we have enjoyed over the past five or six years.

Earl Cathcart Portrait Earl Cathcart
- Hansard - - - Excerpts

I genuinely do not understand this. I can understand Europe wanting to get rid of coal altogether, but how is it that the Germans are planning to build 20 more coal-fired power stations? I do not understand how they will get away with it if the Europeans are going to get rid of coal altogether.

Lord O'Neill of Clackmannan Portrait Lord O'Neill of Clackmannan
- Hansard - -

I am merely quoting what the Minister said. As a consequence of, for example, the large plant directives, our dependence on coal-fired generation will contract to a great extent. The Germans have created a number of problems for themselves and, in some respects, hell mend them. They have turned their back on nuclear power in a petulant and immature manner and they are now trying to resolve problems of generation in a situation where they have the wind in the north, the demand in the south and nothing in between.

Coal may well be an issue but I do not think that they will satisfy the regulations without CCS, which is still a pipe dream in many respects. It is one that we wish to pursue and, I hope, achieve, but for the next 10 years it will be a gleam in the eye of a few technologists and nothing else.

We are not asking the Government to do anything that they do not already do. It begs the question whether, were it not for a European directive, they would be collecting this information in the first place. They do not seem to be doing anything with it. It is there gathering dust and I do not understand the point of collecting it. It might be better to try to rescind the directive and say, “Let’s get this burden away from the companies. We do not need the information, we do not do anything with it and we are not going to use it to encourage them to reduce their emissions”.

Baroness Worthington Portrait Baroness Worthington
- Hansard - - - Excerpts

I am sorry to prolong the debate but I think this is really important. I stress that, in addition to providing a solution for how vertically integrated companies can meet their carbon intensity targets, by requiring them steadily to divest and move into low carbon, you solve one of the other problems that the Bill does not currently adequately address. I am getting e-mails daily from independent generators saying, “Fine, we can get CFD but who is going to buy our power?”. We are removing the obligation from the suppliers to buy low-carbon power. One of the features of the RO until recently was that there was an obligation on suppliers to increase their renewable percentage and that gave them access to the market. There is nothing to replace that in the CFDs. So, if you are an independent generator of renewable energy, you know that you have a good product but if no one wants to buy it you are really stuck.

On that basis, this issue deserves more attention, not merely because it helps us meet the carbon intensity targets but because it helps to solve the problem that the Bill currently faces of what we are going to do about access for independent generators.

--- Later in debate ---
Lord O'Neill of Clackmannan Portrait Lord O'Neill of Clackmannan
- Hansard - -

I beg leave to withdraw the amendment.

Amendment 29 withdrawn.
--- Later in debate ---
Lord Jenkin of Roding Portrait Lord Jenkin of Roding
- Hansard - - - Excerpts

My Lords, I congratulate the noble Lord, Lord Whitty, on the comprehensiveness of his amendments. When we approached this Bill, I was rather under the impression that there had been so much thinking about the creation of the new independent body, the ONR, and so much discussion about it that allotting most of today’s session to considering it was perhaps a bit excessive. However, having studied his amendments—and no doubt there will be others who will wish to make points—I think that the discussion may well take us until 6 pm, although I hope not.

I approach this from a number of different standpoints. First, I think that I am the only Member of the Committee who took part in the debates on the Nuclear Installations Act 1965. That was a few months after I had been elected to the other place, but I have since reminded myself of the provisions of that Act, which are very comprehensive. They have been amended down the years since then—through the lovely system of LexisNexis, one can get a very good summary of what the Bill originally was and how it has changed with time. Therefore, to take issue with the noble Lord, Lord Whitty, I think that the main licensing provisions of the 1965 Act are still going to be in force and are not repeated in this Bill. It is assumed that the authority, the ONR, will have those licensing provisions. There is a substantial area where people will need to look back. That is the first thing.

Secondly, before I entered Parliament I was an employee of a large chemical company and one of the things that we did was to supply CO2 to the Magnox nuclear power stations to be used as a cooling material— I will refer to that later. I have also been one of those who over recent years have been pressing very hard for this change to the ONR to take place. The case that had been very firmly made to me was that remaining part of the Health and Safety Executive meant that inevitably inspectors on the nuclear regulation side were civil servants and thus bound by Civil Service terms and conditions. In fact, experienced inspectors are very valuable people, much sought after around the world. They have been though a long period of training and have a lot of experience. Sometimes people will say an inspector is not really fully qualified unless he has been doing the job for about 20 years—and that has been said to me by more than one person. Therefore, there was considerable pressure from this part of the HSE, the nuclear regulatory part, to separate. I heard those arguments and paid considerable attention to them. The noble Lord, Lord Oxburgh, may remember that when the Select Committee interviewed Dr Mike Weightman, I raised this point and he was very kind to acknowledge that some of us had indeed been pushing this case fairly hard.

That is how I approach the amendments tabled by the noble Lord, Lord Whitty. He makes some good points but I hope that he will forgive me if I point out that some of his amendments may indeed perhaps not quite be what he intended or envisaged. However, as I make these criticisms, no doubt he will have good answers. To take the amendments in the order in which they appear on the Marshalled List, the first with which I take issue is Amendment 38D. The noble Lord made quite a point about associated sites and of course he is quite right to refer to the issue—it is in Clause 57(1)(a)—but, as he readily acknowledged, his amendment may go deeper and wider than he perhaps intended.

Let me return to my previous point. The distillers company for which I worked produced CO2, originally as part of the process of fermentation but eventually as a chemical process, and supplied it to a large number of different industries, not least, of course, the drinks industry. It would be absurd to regard those distilleries and factories as anything to do with the nuclear industry. Of course, when the material is delivered to the nuclear power station it has to be of nuclear quality, which is, quite rightly, properly regulated—but it is not the site where it is made that is regulated but the material that is delivered. No doubt there are many other examples.

I have recently ceased to be honorary president of the Energy Industries Council, which represents something like 600 firms in the energy supply chain businesses, of which nuclear is clearly one. On the rare occasion I was asked to talk to them, I always made the point that they had to make sure that they were producing materials and products to nuclear standards. This was something that quite a number of the firms found quite difficult to do. Those standards are higher than most other engineering standards, particularly for pieces of equipment, but that does not mean to say that the sites where they are made become nuclear sites. I hope that my noble friend the Minister will feel that it would be quite wrong to expect the ONR to go around inspecting sites where no kind of nuclear hazard could conceivably exist.

On Amendment 38F, I agree with the noble Lord. I do not see why this should not be extended to air transport. There must be occasions when nuclear materials are transported by air, although probably not very many, and clearly that should be within the remit of the ONR. That seems to be a reasonable change, but I have criticisms of some of the other amendments.

Amendment 38N refers to,

“other relevant agencies with responsibilities in the nuclear field”.

It is my impression that the nuclear regulator has always been able to consult and go much further than just consulting, having very detailed arrangements for regulating the interaction between the various bodies. There are long and substantial memoranda of understanding that cover that sort of field. I have made it my business to get a copy of the current memorandum of understanding between the HSE, which was the body that was running what is to be the ONR under this Bill, and the Environment Agency. When I came to print it out, it was 14 pages and contained a number of very important statements. I will not begin to read them all, but the objectives of the memorandum are to,

“facilitate effective and consistent regulation by ensuring that … activities of EA and HSE in relation to nuclear licensed sites are consistent, coordinated and comprehensive … the possibility of conflicting requirements being placed on licensees, or others operating on nuclear sites (collectively referred to as ‘operators’ in this memorandum), is avoided … synergies are exploited and the appropriate balance of precautions is attained”,

and,

“duplication of activity is minimised”,

which is of course very important if you are trying to keep the costs down. Perhaps most important of all is that,

“public confidence in the regulatory system is maintained”.

I shall not read more than that, but the annexe to the memorandum goes into very considerable detail as to how it is to be done. Presumably these will all remain in force. They may have to be signed by different people because the organisations will be different. The one that I have in my hand was signed by the noble Baroness, Lady Young of Old Scone, when she was chairman of the Environment Agency, and by Timothy Walker, the then director-general of the Health and Safety Executive. If there are to be modifications in the memorandum, they will need to be signed by the current people. I hope that my noble friend may be able to address that.

Amendment 40N would not be right. It would risk all sorts of difficulties, duplication and so on. In particular, it would risk classifying a site as licensed before a nuclear site licence is granted. I heard what the noble Lord said about that, but of course there is the elaborate process of the generic design assessment. He referred to Hinkley Point C. That has been absolutely combed over by the existing nuclear regulator. It was a hugely important step forward when it finally gave approval of the design, but the noble Lord is right that there is not a site licence yet. That will be the last stage. To argue that all this should be taken into account without taking account of the whole GDA process seems a little unreal. Therefore, I say yes as regards air transport but I suspect that the other elements may not be quite what the noble Lord, Lord Whitty, intends. I hope that my noble friend may be able to take account of these representations.

Lord O'Neill of Clackmannan Portrait Lord O'Neill of Clackmannan
- Hansard - -

I congratulate my colleague and noble friend on the rigour with which he has approached this area. It is the nature of probing amendments to make sure that what it says on the tin is what the Government are going to do. If we can get it right, we can avoid the kind of problems which I encountered many years ago as a constituency Member. I picked up the local newspaper to be told that the local authority rubbish tip near one of my villages was a nuclear dump. I then had a terrible job trying to find out who was responsible for the nuclear element within it. It transpired that it concerned a lecturer at Stirling University and that all we were really talking about was the lowest of low-level waste coming out of the radiology departments of the local hospitals. For about 20 minutes, it afforded one of the local hysterics an opportunity to parade his anxiety about all things nuclear. However, it also indicated that there is an awful lot of loose talk. Therefore, if at this stage we can make the issue of associated sites clear and explicit, and even if it is a somewhat tortuous process, as I think my noble friend has indicated, that will be important.

We should not lose sight of the fact that, at some stage or another, a lot of low-level waste is gathered together and taken to Drigg, where it is treated. As we say in Scotland, “Many a mickle maks a muckle”. You end up with a whole lot of little bits of radiological and nuclear waste being brought together on a site and being treated. Therefore, it is important that we differentiate between that which is a nuclear site and that which is not.

It is clear that throughout, for example, the generic design assessment process, which looked at the two new forms of reactors that we may well see in the UK, the Environment Agency walked step-by-step with the nuclear agency at the same time. As Lord Jenkins just said, it is important that we make sure that—

Lord Jenkin of Roding Portrait Lord Jenkin of Roding
- Hansard - - - Excerpts

Perhaps I may make one thing clear at the beginning. I have no ‘s’ on the end of my name. There is correspondence in the archive at Cambridge University between my great-grandfather and the great Lord Kelvin. My great-grandfather said to Lord Kelvin, “Mind you, when you take out the patent, you must not spell my name with an ‘s’”.

Lord O'Neill of Clackmannan Portrait Lord O'Neill of Clackmannan
- Hansard - -

If only an “s” were the only thing that I had to worry about. When you have a name such as O'Neill, it can be spelt about five different ways. In some instances, it is an ‘l’ of a difference at the end—but we will pass over that.

The point that I wanted to get at here is that we know that there are problems with the successor agency. There is a proliferation of agencies with which the nuclear agency will have to be associated and will be linked to. It is very useful that we have this opportunity for the Minister, probably somewhat tortuously, to make the matter quite clear. In this day of judicial review and the like, what we say in these Committees, when we are being sensible and relevant, is of some significance outwith this place. Therefore, it will be guidance for people. I still have some sympathy for constituency MPs confronted with the prospect of a nuclear dump in their back yard. In my constituency, it was almost in the field where we believe the Battle of Bannockburn was fought, but it was not quite. They did not need to use nuclear weapons in 1314, although we might have to use something akin to them in 2014—but that is for another day and another debate. I welcome the amendments and wish them well until they are withdrawn.

Lord Deben Portrait Lord Deben
- Hansard - - - Excerpts

My Lords, I do not think that one can add much to what my noble friend Lord Jenkin said, except to underline one thing, which is the question of the sites and their management. I declare an interest as the chairman of Valpak. We are responsible for a good deal of recycling.

First, there is a real issue about sites and the checking of sites. Wherever the check can come on the product, one is in a much stronger position. My noble friend’s point is that, in many cases, the site is actually not a nuclear site at all but the product is provided for a nuclear installation. In those circumstances, it is very important that any consideration of the checking of sites should be limited to those which one has to check and not include those which one does not. That is more important than one might think, given how difficult such checking is.

Secondly, I support the point made by the noble Lord, Lord O'Neill, as I was also previously a Member of Parliament—for a constituency with two nuclear power stations. It is interesting how quickly people become happy to have those nuclear power stations once they understand the situation but how easy it is to stir something up when you have them. The only way to overcome those things, as I know the Minister will understand, is to have absolute clarity and to state matters in a form and in language that people can understand.

When we sought planning permission for Sizewell B, I held nearly 50 parish meetings. The trick was that the only people who could come to those meetings were people who lived in the parish, so the peripatetic protesters could not arrive and we could have a proper conversation. The protesters had to go to their own parish meetings. At most of them, they were well known and not altogether liked. Therefore, the discussions, considered and reasonable as they were, ended up with all those parishes supporting the opening of the new nuclear power station. My noble friend should be reminded that what made it work was the simplicity and clarity with which we discussed the issue. I hope that in answering what I think has been an interesting debate, particularly the discussion between the noble Lord, Lord Whitty, and my noble friend Lord Jenkin, she will give us an assurance that we will continue to be as clear as possible. This is a very dangerous area in which to be unclear and it helps a great deal if there is clarity from the beginning.

--- Later in debate ---
Lord Deben Portrait Lord Deben
- Hansard - - - Excerpts

I agree with my noble friend about that example. The reason I drew from familial experience was that I was brought up by a father who had pastoral responsibility for one of the mining villages in south Wales. For him, that event was most devastating. Although as a family we were not affected by it, my father was affected by his memories of what he had to do in those kinds of circumstances. I remember vividly his comment that you can never trust to police an industry those for whom the main interest is the industry as a whole. That is not because they are bad men and women, but simply because they would have to wear two different hats, and you should not ask people to wear two different hats. That is why we keep on talking about declarations of interest and so on. We know that however good and sensible you are, it is sometimes quite difficult to remember which hat you are wearing.

Again, I agree with my noble friend—Aberfan remains in one’s heart in a very special way and will be there until the day one dies, even though one was removed from it. That is simply because of the effect it had on people one knew and upon the memories of my father. I feel strongly that we should not allow the lesson that we should have learnt from the coal industry to be forgotten in this industry.

Lord O'Neill of Clackmannan Portrait Lord O'Neill of Clackmannan
- Hansard - -

I have some sympathy with the remarks that have been made, which sets me at variance with my noble friend. When I was chairing the Trade and Industry Select Committee in the late 1990s, we went to Dounreay, which has been the subject of many investigations and problems. Had other colleagues been here, I am sure they would have be able to embellish this far more than I can. At Dounreay, there had quite clearly been a failure to scrutinise the safety arrangements on the part of what was then the Nuclear Installations Inspectorate. It is fair to say that that part of the inspectorate had pretty well gone native. Dounreay is in a very isolated part of the UK. You cannot go very much further north without getting wet. It is natural that everybody was living and working together, playing golf on the same golf courses, probably drinking in the same pubs and what have you. They came together.

An independent report had to be carried out. It was carried out and, as the Select Committee, we wanted to see it. We were told by the DTI Minister at the time, who I think was John Battle, that it would not be appropriate for a Select Committee to see it. The DTI was the sponsoring ministry. The Nuclear Installations Inspectorate was in those days, as it is now, sponsored by the equivalent of the DWP. It took the Secretary of State for Scotland, who had environmental responsibility for the area, to step in and say, “Publish and be damned”, so we got access to the report. In fact, it was not anything like as damning as people had anticipated, but it was essential that it was produced.

There is a danger in establishing this umbilical link between the sponsoring department and the functions. We have seen it in agriculture and food safety in the past. And we have taken strenuous steps to correct it, but there are still problems. In my experience, the nature of the nuclear industry is such that it is a secretive industry. It grew out of the production of weapons-grade material for nuclear weapons. While it is now under commercial control in a number of respects, it nevertheless still has a culture of understandable secrecy, partly because of what would be regarded as security but also because it is so damn dangerous. The truth is that because of the way in which in the industry is handled, the dangers are minimal.

The culture of the industry is determined not only by security but by safety. At times, there is a sense in which the industry is covering its own back as well as trying to protect people. That is natural. Even today nuclear installations are for the most part in relatively isolated, secluded areas. It is common knowledge that Sellafield was chosen during the war because it was most unlikely that German bombers would ever be able to find the place because it is shrouded in mist and it is likely to be raining all the time, hence the Lake District. In those days, it was just a weapons store.

The industry has a security culture and a culture that is understandably and correctly preoccupied with safety, but it is also at times unduly linked to matters of secrecy where safety can be jeopardised. In my limited experience, I confronted a situation where there had been regrettable failures at Dounreay, which have now been corrected. The report on that was nothing like as condemnatory as people thought it would be but there was reluctance to have it published. It took an independent agency, the Scottish Office, and the late Donald Dewar as Secretary of State—who made it quite clear that he saw no reason why we should not have access to it—for us to get the report. I remember that we got a faxed copy of it as we got off the plane in Caithness. The clerk had summarised it by the time we got to Dounreay and we were able to make use of it when we were questioning officials.

There is a danger in creating too close a link between the ministry and this function. It is important that we discuss it and have it aired but I would like to think that we do not go any further with it because there are too many examples of departments looking after their own too carefully. The ONR took a long time to come about. It should really have been in the previous Energy Bill but in those days the DWP and DECC were arm wrestling over it. It was a turf war. The compromise was that they would let it go as long as they had a control over it. The DWP conceded a bit and held a bit and we just have to accept that that is the way in which the matter was agreed. For the reasons I have given, it would be desirable for us to leave it to the DWP rather than having a sponsoring department that might take an overprotective view of what could be at stake here, which could be very serious.

Lord Roper Portrait Lord Roper
- Hansard - - - Excerpts

My Lords, when I heard the noble Lord, Lord Whitty, introduce this amendment I had a good deal of sympathy with it. It seemed strange that we should be losing contact with something of such importance but having heard the last three speeches, I see the strength of the points made by my noble friends Lord Jenkin and Lord Deben and by the noble Lord, Lord O’Neill. I hope that on this occasion the noble Lord, Lord Whitty, will think carefully about this amendment.

--- Later in debate ---
Lord O'Neill of Clackmannan Portrait Lord O'Neill of Clackmannan
- Hansard - -

I rise in defence of my noble friend—although we disagreed on the previous amendment. We are losing sight of what is a legitimate tactic in the process of scrutinising legislation. In order to have the Government justify what is in the Bill, we have to ask them to remove things for them to tell us why they should be in it in the first place. That is what my noble friend has sought to do in a variety of areas. No one is suggesting that the ONR will decline the invitation. It seems to be general public knowledge that one or two Middle Eastern states that are envisaging or engaged in the development of nuclear power have looked to the United Kingdom as an independent regulator separate from the supplier of the kit and the running of the kit which they anticipate having. In order for us to have a clear understanding of the powers and the responsibilities of the ONR, we have to use the rather brutal method of seeking to delete those powers from the Bill so that they can be better defined. I realise that I have spoken for about two minutes longer than I should have done, but we are making rather heavy weather of this and I hope that my noble friend’s amendments will be treated fairly, as the Minister always does.

Baroness Verma Portrait Baroness Verma
- Hansard - - - Excerpts

I am extremely grateful that the noble Lord ended on his last note, because I consider everything extremely carefully, but I agree with my noble friends Lord Deben and Lord Jenkin that we must not be so restrictive on what the ONR could do to enhance its standing in the world. I would like to address the amendments of the noble Lord, Lord Whitty, as they are grouped, so that I can clarify for him the reason why we are taking the position that we are.

Amendment 40C would require that the ONR’s accounts are presented to the Secretary of State and laid before Parliament at the same time as the annual report. The noble Lord, Lord Whitty, asked whether the accounts would be made available. Accounts are already required to be audited and laid before Parliament under paragraph 21 of Schedule 7, and, in practice, the accounts and the annual report will be published together. I hope that that answers the noble Lord’s question on reporting and laying before Parliament.

Amendment 40D would remove the ONR’s powers to borrow. This is not an element of the Bill that it is intended that the ONR would use frequently, and it can be used only with the Secretary of State’s approval. It is certainly not a blank cheque, but there may be instances where the ONR’s work may require extra funding in the short term to achieve a long-term goal, and in this instance I believe that the ONR’s power to borrow money, with appropriate checks and balances, is suitable for an independent public body.

Amendment 40G, on the other hand, would seek to require the ONR to recover the full costs of an inquiry. Laudable though the intention is, we cannot always guarantee that full cost recovery will be appropriate. The costs of some inquiries may not be fully attributable to one or even a group of duty holders. We would not wish unfairly to add extra charges to business for costs not incurred by them.

I am grateful to the noble Lord for tabling Amendment 40K. It would remove provision in Clause 79 for the ONR, with Secretary of State approval, to provide services related to its expertise but not part of its purposes. My noble friend Lord Jenkin eloquently articulated how important the provision is, because of the specialist knowledge that ONR possesses, if resource were available, to, for example, assist another country with assessing the safety of a new reactor design. Under the Bill, ONR could charge for such work, including at a commercial rate. The provision of such advice would have real benefits—not just financially, but, as my noble friend said, by helping to spread the UK’s high standards of practice internationally and giving ONR inspectors wider experience.

Let me be clear: the ONR’s first priority will be to meet its obligations as the UK’s nuclear regulator. Nothing will allow us to detract from this. My noble friend Lord Deben is right; we must allow the ONR to get on with its core activities. To ensure that there are no actual or perceived conflicts of interests, any commercial work which the ONR undertakes will be only with the consent of the Secretary of State. For those reasons, I hope that the noble Lord will withdraw his amendment.