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Earl Ferrers: My Lords, first, I understand the noble Lord's concern that this is an important Statement. It is a technical Statement. In no way did I wish to be curt to my noble friend Lord Boyd-Carpenter, as he might have considered that I was, in saying that it is a matter for the usual channels. However, my noble friend Lord Boyd-Carpenter is, if I may say so in a most gracious way, an old war horse at these games. He knows perfectly well that the Government cannot say that there will be a debate, because it is a matter for the usual channels. Having said that, I agree with him and the noble Lord, Lord Marsh, that these are important matters. We are talking about high technology. As the noble Lord rightly says, British industry has an enormous capacity to lead the world in this area, and the world market is considerable.
Part of the reason for privatising is to enable the industry to become more competitiveto compete better in the world than it has in the past. I believe that I can give the noble Lord, Lord Marsh, the assurance he seeks, but it would have to be couched in fairly generous terms.
The point regarding the special shares is to ensure that the Scottish part remains Scottish. It is not supposed to be a hamper on the development of either the Scottish or the English nuclear industry. That is the whole purpose of the privatisation. It is to make the industry more competitive; it is not to be a fetter.
My first question is this. In repeating the Statement the noble Earl said that there had been great improvements in the performance of the AGRs and that the PWR at Sizewell had been built to time. Under those circumstances, since the industry has been such a success under public ownership, why on earth do we wish to privatise it?
My second question is this. While consumers may well benefit from the early ending of the nuclear levy, what other benefits will the consumers gain arising from privatisation? The Statement made no reference to the benefits which consumers are likely to achieve from privatisation. Perhaps the noble Earl will outline those.
Regarding privatisation, shall we once again have the spectacle of the chairman's salary being increased many times over for doing the same job? Will the chairman and other members of the board be made millionaires because they will be granted share options?
Finally, I ask the noble Earl about the £70 million of pensioners' money which was used by Nuclear Electric to sack 2,000 people in order to fatten up the industry for privatisation. Can he say whether that £70 millionagain
Earl Ferrers: My Lords, that was a good old controversial speech, was it not? I see that I shall have to give the noble Lord a lesson on the advantages of privatisation, but now would not be a particularly appropriate moment. I merely record the fact that new Labour is just as determined to carry on with nationalisation as was its predecessor.
If the noble Lord, Lord Stoddart, were to examine all the different companies, he would see that the benefits of privatisation were enormousnot only to those employed by the companies but also to their customers. The noble Lord asked: if the industry has been so successful thus far, why bother to privatise it? I come back to lesson number one on privatisation: namely, if an industry is privatised it generally works better, more cheaply and more efficiently. That is why we believe this privatisation to be necessary.
He then turned to the good old controversial subject of chairmen's salaries. I have no idea what the chairman's salary will be. But it is important that those who run our organisations are paid the rate for the job, whatever that rate happens to be. If you do not do that, you merely lose them to other organisations.
The noble Lord asked about the £70 million of pensioners' funds used to fatten up the industry. That was rather a vulgar way of putting it. If people are made redundant, they are entitled to a pension. If they are made redundant, it is in order to make the business more efficient. I cannot think that the noble Lord, Lord Stoddart, believes in his heart of hearts that it is right to employ more people than is necessary, at the ensuing cost to the public and to customers.
Lord Skelmersdale: My Lords, so far my noble friend the Minister has been subjected to a whole list of detailed questions, but there has been very little praise and very little condemnation for this policy of the Government. I congratulate the Government because of what was in the Statement, not so much because I am an arch Right-wing privatiseralthough I recognise that if the Government are not prepared to put up development capital, industries will starve unless somebody else does. In this particular case, as indeed in other privatisations, it has been the City that has done just that.
In the Statement (I do not have the words exactly right) it was made pretty clear, to me at least, that the Government would not finance any additional nuclear power stations and that the market would be the judge. How can the market be the judge in the current circumstances, when 75 per cent. or thereabouts of the electricity generation market is in the private sector and 25 per cent. or slightly less in the public sector?
Earl Ferrers: My Lords, I am grateful to my noble friend for congratulating the Government. That was a very wise move and one that is greatly appreciated. He asked how the market can be the judge among the different systems of electricity generation. The fact is that people know the cost of generation. That is what the market is about, whether it is a matter of nuclear generation or any other kind of business. There are different methods of generating electricity. It is for the market to decide, as opposed to the Government subsidising, and therefore distorting, costs across the board. It is for the industry to decide whether there should be nuclear generation of electricity.
My noble friend asked what had happened to the "pot of money". A pot of money has been produced by the levy. That money is available for decommissioning the Magnox reactors and will be available for that purpose. The cost of the liabilities will be the cash in hand, some £2 billion; the remaining levy from the industry until it is privatised; and the privatisation proceedsplus of course the expected reduction in the costs of decommissioning, which were estimated to be about £1.1 billion. The money that has been raised will be there and will be used for the decommissioning of Magnox reactors.
Earl Russell: My Lords, perhaps I may return to the issue of safety. I ask the noble Earl to remember the case of the nuclear accident at Three Mile Island. At the inquiry it emerged with painful clarity that the cause of the accident was that the company, which was privately owned, had brought the plant into operation before it was ready in order to get it into the old financial year and to secure a tax rebate of 5 million dollars (I believe that was the sum, although I would not answer for it). I decided then that I would never trust nuclear safety to the power of the profit motive. Can the noble Earl tell me why I should change my mind?
Earl Ferrers: My Lords, the noble Earl referred to a specific example, in which I believe there was no escape of radiation from the building. However, that does not answer the noble Earl's real concern. He said that a company brought the station into operation before it should have done. Perhaps I may return to a remark I made to an earlier point raised by the noble Lord, Lord Ezra. What controls safety is the regulations that are attached to an organisation. There are many safety aspects, on roads, for instance, and in the air. Rigorous safety is accorded to organisations that are privately run. The reason why safety will be assured when nuclear generation is privately run lies in the regulations that apply to it, which will be just the same as those that apply to it now. If the noble Earl is doubtful about that, I would
With regard to the noble Earl's last argument about "unexploded vires", I have to work out exactly what unexploded vires are. But I understand his generality of concern. I shall explain only that that is the position of the law at the moment and that is why the Government do not see a need for further legislation.
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