Paul has been the back- bencher's back bencher, the scourge of the Executive (Tory, Coalition or New Labour Governments), whether in the chamber of the House of Commons or in the several select committees on which he served, inflicting many witnesses to forensic and unstinting scrutiny. Parliament will miss him greatly.
I reproduce below a splendid speech he made in a Westminster Hall debate he initiated almost exactly 10 years ago. Despite the then Labour energy minister spitting that Paul's "concoction of conspiracy theory, innuendo and hyperbole has reached new heights in the House." Paul's accusations turned out to be underestimates of the dissembling of the Government when Nuclear Management Partners were later sacked from their scandalously mismanaged contract for Sellafield.
Newport West MP
Paul Flynn to stand down after 31 years
BBC on Line, 25
October 2018
Newport West
MP Paul Flynn, 83, said failing health meant he will relinquish his seat
"as soon as possible".
Labour's Mr Flynn was first elected in 1987 and has won seven elections
since then.
Nuclear Industry Finance
Paul Flynn (Newport, West) (Lab): This is a lamentable saga of a breakdown of parliamentary
accountability on nuclear industry finances. It is a matter of the gravest
importance, involving the most hazardous nuclear site in the country and huge
sums of money. Initially, the contract was worth about £7 billion—£1 billion a
year—but eventually it could cost up to £93 billion.
The Government have been bewitched
by the pied piper of nuclear power, just three years after deciding that
nuclear power was financially an unattractive prospect. They are now
uncritically embracing it as a panacea. That might explain the disgraceful events
that have taken place. It may also be a subterfuge to bury embarrassing news on
the continuing saga and the enormous cost of the nuclear legacy, and also to
disguise the fact that the Government are dumping a potential multi-billion
pound liability on the taxpayer in a wholly unwarranted and possibly illegal
new subsidy for the nuclear industry.
All hon. Members except two have
been denied any chance of commenting on the policy, which is a parliamentary
outrage. Early-day motion 2321, which was signed by more 30 hon. Members, asked
for action on the matter.
On 14 July, my right hon. Friend the
Member for Croydon, North (Malcolm Wicks)—I am delighted to say that he is in
his position today—wrote to the Chairman of the Public Accounts Committee, and
sent a copy to the Chairman of the Business, Enterprise and Regulatory Reform
Committee, in which he set out the proposed arrangements for a public sector
supported nuclear indemnity for the winner of the competition for the parent
body organisation to take over the management of the massive Sellafield site.
He inserted, inter alia:
“Given the low probability of a
claim being brought, the Nuclear Decommissioning Authority has assessed that
the benefits of engaging a contractor will far outweigh the small risk that the
indemnity may be called on.”
He said, “small risk”. That is a key
issue. The risk was so serious that the main contractor said publicly that
without the indemnity his company would withdraw from this very lucrative
contract. He said that it was not prepared to take on the insurance risk. The
Minister’s letter also said:
The Minister placed the letter in
the Library, but not on 14 July. It appeared in the Library on 15 October —75
days after the final date on which hon. Members could object. As hon. Members
have only two working weeks in which to comment on such departmental minutes,
that effectively meant that no MP, other than the two Committee Chairmen, had
sight of the minutes within the specified period. That alone should invalidate
any subsequent attempt by Ministers to push ahead with the concluding transfer
of the management contract for Sellafield. None the less, they concluded the
contract on 6 October, the first day that Parliament resumed after the summer
recess.
Yesterday, in our splendid debate on
the feed-in tariff, I heard the Minister talking about how slowly Parliament
moves on many desirable objectives. However, in the
19 Nov 2008 : Column 120WH
case of nuclear, the Government move with the speed of a striking cobra. When it comes to renewables, their actions are very similar to that of an arthritic sloth, yet speed was of the essence in this matter.
19 Nov 2008 : Column 120WH
case of nuclear, the Government move with the speed of a striking cobra. When it comes to renewables, their actions are very similar to that of an arthritic sloth, yet speed was of the essence in this matter.
“what recent communications or
discussions (a) he, (b) other departmental Ministers and (c) officials, have
had with (i) the Nuclear Decommissioning Authority and (ii) consortium
applicants for the Sellafield decommissioning contract on the indemnification
of the contract holder against claims arising from property damage, the cost to
human health, or the cost of measures of reinstatement of any significantly
impaired environment in the event of an on-site accident or other incident
resulting in the dispersal of radioactive materials off-site.”
Therefore, the Department should
have been well aware of my interest and possibly that of other hon. Members.
The reply came back, which said, inter alia:
“It would not be viable for any of
the bidders to proceed without an indemnity because any fee earning benefits of
the contract would be overwhelmed”—
“by the potential liabilities. The
NDA has assessed that the benefits of engaging a new contractor far outweigh
the remote risk that an indemnity might be called upon”—[Official Report,
14 July 2008; Vol. 479, c. 76W.]
The Minister chose not to inform me
at that time—this was in July again—that he had written to the Chairmen of the
two Select Committees and that he had not put the departmental minute in the
Library. Perhaps the Minister could explain why that was the case.
I pursued my inquiries. I tabled a
question on the insurance indemnification and asked what the financial value
was of the insurance indemnity. The answer said:
“While the impact of any call on the
proposed nuclear indemnity could be very high, there is an extremely small
possibility only of the indemnity ever being used, and it is therefore not
possible to put a meaningful financial value on the indemnity.”—[Official
Report, 22 July 2008; Vol. 479, c. 1146W.]
May I gently suggest to the
Department that the reason why it cannot put a value on the risk is not because
the risk is small, but because the liability is enormous, given the cost of
clearing up after any nuclear accident? Now, that responsibility is being put
on the backs of taxpayers, because neither the contractor nor commercial
insurers will accept the risk.
On 28 August, during the recess, I
again wrote to the Secretary of State to find out what was happening with the
PBO transfer. I said:
“between ministers or officials in
BERR and the NDA in regard to the indemnification for Sellafield.”
In response to my further inquiries
and to my point of order on 22 October, I received a further reply from the
Minister. He talked about the schedule for evaluation
19 Nov 2008 : Column 121WH
of the PBO bids provided for the announcement of a preferred bidder on or around 11 July. He went on to talk about the rigour of the programme that had been carried out. He was not very convincing. The Minister also said that there was no scope for slippage in the contract, because it would cause problems if a new contractor had to be found for Sellafield.
19 Nov 2008 : Column 121WH
of the PBO bids provided for the announcement of a preferred bidder on or around 11 July. He went on to talk about the rigour of the programme that had been carried out. He was not very convincing. The Minister also said that there was no scope for slippage in the contract, because it would cause problems if a new contractor had to be found for Sellafield.
The Department for Business,
Enterprise and Regulatory Reform circumvented the usual procedures in place to
inform Parliament, and privately wrote to the two Select Committee Chairmen
instead, and failed to lodge the minute. On the same day as the Minister’s
letter to me, 27 October, the Chairman of the Public Accounts Committee—a
greatly respected senior MP—wrote to the Secretary of State saying that the
guidance to Ministers in the manual “Managing Public Money” is unequivocal. He
cited the relevant extract:
“It is essential to give Parliament
prompt and timely notice of any significant commitments, including contingent
liabilities into which the Government intends to enter.”
The Chairman also said that the
Public Accounts Committee will feel that the period for objection should be
reopened. That is the same view as that of those who signed the early-day
motion.
Mr. Andrew Smith (Oxford, East) (Lab): I commend my hon. Friend’s forensic work on the issue and
support his call for full and transparent accountability in respect of
Sellafield, as well as for any financial support from taxpayers or consumers
for future nuclear power, whether through subsidies or more covertly through
indemnities or guarantees, none of which, on his evidence, would be in the
public interest.
Things get even more worrying in the
rest of the Secretary of State’s letter of 3 November. He admitted that hon.
Members had not been informed due to “an administrative error”, but then went
further, seemingly denying his own claim and—this is rather alarming—attempting
to justify the strategy of circumventing appropriate parliamentary scrutiny. He
said:
“‘Managing Public Money’ sets out
two procedures for notifying an impending indemnity—notifying the House or
writing to the Chairs of the relevant Committees. These are alternates.”
I believe that what the Secretary of
State said and his interpretation lay down a precedent for future policy. We
must resist the idea that something of enormous cost and importance—a huge
burden on taxpayers now and in the future—need not go through parliamentary
scrutiny, but that one or two Select Committee Chairmen can place a tick on it.
It is an extraordinary usurpation of the rights of parliamentarians to suggest
it, but that is what he is saying:
Of course, there was a reply. The
Chairman did not object, and so the process continued. The Secretary of State
said:
“No objections were raised and you
confirmed in your letter to Malcolm Wicks of 22 July...that you had no
objection to the Department’s proposal”.
What about all the rest of us? Many
of us did have objections. It was clear from the flow of parliamentary
questions—I have quoted mine alone, but other people have been involved—that we
had no opportunity whatever to object, because we did not know that the minute
was there until 75 days after the period of objection. I am sure that hon.
Members present will agree that that is an utterly unacceptable rationalisation
of something that was at best a foul-up, but looks more like a cover-up.
I would like to draw attention to
the question of risk and how serious it is. The Washington-led management
consortium URS was reticent to take over the insurance for Sellafield because,
as its representatives said in a public meeting, it is highly hazardous and a
very dangerous nuclear site. Who says so? In October 2006, Justice Openshaw
presided at the trial of British Nuclear Group for a processing accident at its
Thorp site. His conclusion about the hazards of Sellafield was:
“By reason of its huge scale, its
nature and its complexity Sellafield...is the most significant and potentially
the most hazardous nuclear site in this country.”
Even the British Nuclear Group’s own
board of inquiry report on the incident, which involved something called a feed
clarification cell, stated:
“Given the history of such events so
far, it seems likely that there will remain a significant chance of further
plant failures occurring in the future”—
of the report’s recommendations. BNG
decided to change the system, but said that the risk was still there.
There are extraordinary statistics,
including in the memorandum submitted to the Select Committee on Defence in
January by the international nuclear safety expert Dr. Gordon Thompson,
executive director of the Institute for Resource and Security Studies. He said
that
Paul Flynn:
From the evidence given by Gordon Thompson, the nuclear specialist, to the
Defence Committee, I want to give one example of the danger of Sellafield. He
described the amount of high-level radioactive waste there as containing
At the time of the Chernobyl
accident, we were assured that it was a mild risk, and yet the sheep in north
Wales that were contaminated 22 years ago are still under
19 Nov 2008 : Column 123WH
control orders now. To put it another way, there was 27 kg of caesium-137 at Chernobyl; there is 2,400 kg at Sellafield.
19 Nov 2008 : Column 123WH
control orders now. To put it another way, there was 27 kg of caesium-137 at Chernobyl; there is 2,400 kg at Sellafield.
No doubt the company that took over
these consortiums exercised due diligence before reaching the conclusions that
it did. Hon. Members of all parties should collectively regard what has taken
place since then as unacceptable, sharp and evasive practice in a modern
parliamentary democracy.
I urge the Minister when he replies
to put away any prepared notes that he has and just respond to these points: I
ask him to commit Her Majesty’s Government to suspending the current contract
between the Nuclear Commissioning Authority and the new USR Washington-led
parent body organisation, or PBO; I ask him to look again at the subsidy that
is being paid and to check that it is within European rules; I ask him to
postpone the planned go-ahead on 24 November until such time as the House has
had the opportunity to scrutinise in detail all the financial implications for
taxpayers of this indemnification procedure; and I ask him to set up a fully
independent examination of Sellafield’s risks and insurability.
Finally, the series of events that I
have just described besmirches the good name of Parliament by contemptuously
disregarding the rights of parliamentarians. The Government and the nuclear
industry cannot bury the true cost of nuclear power. It is our responsibility
to clear up that mess, but they must be open and transparent. In their plans
for future nuclear operations, they have tended to disregard the vast cost of
nuclear waste and, in this case, the insurance that is an essential part of
that cost. I urge the Government and the nuclear industry to face up to their
demons and ensure that the industry pays its full costs.
Mr. Peter Atkinson (in the Chair): Order. Before I call the Minister, I inform hon. Members
that this debate will now end at 4.42 pm, subject to there not being another
Division in the House.
19 Nov 2008 : Column 123WH—continued
The Minister of State, Department of Energy and Climate
Change (Mr. Mike O'Brien): This
issue arose as a result of an administrative error by a junior official in the
Department for Business, Enterprise and Regulatory Reform. That official was
told that the letter to the Chairman of the Public Accounts Committee on this
matter needed to go in the Library. It did not go in the Library. When it was
checked, some months later and after the parliamentary recess, whether that
letter had gone in the Library, it was found that it had not gone in. On that
day, that letter was put in the Library.
In the last 15 minutes or so, I have
heard references to cover-up, to conspiracies and to contempt of Parliament,
and I say this to my hon. Friend the Member for Newport, West (Paul Flynn): his
concoction of conspiracy theory, innuendo and hyperbole has reached new heights
in the House. It is the case that there was a minor error by a junior official,
who should not be crucified for that error by my hon. Friend; that would be
unworthy of my hon. Friend.
This happened within the Department.
There was no requirement on the then Minister of State, my right hon. Friend
the Member for Croydon, North (Malcolm
19 Nov 2008 : Column 124WH
Wicks), to place the letter in the Library. He took the view that that was necessary in order to be open about this matter. An error was made by a junior Department official—humans are fallible—but I expect better of the hon. Gentleman than to talk about cover-ups and conspiracy. This attempt to manufacture a mountain out of such a tiny molehill is ridiculous.
19 Nov 2008 : Column 124WH
Wicks), to place the letter in the Library. He took the view that that was necessary in order to be open about this matter. An error was made by a junior Department official—humans are fallible—but I expect better of the hon. Gentleman than to talk about cover-ups and conspiracy. This attempt to manufacture a mountain out of such a tiny molehill is ridiculous.
The idea that the letter was secret
is complete nonsense; it is a farce. Letters to the Chairman of the Select
Committee on Public Accounts are not secret documents. They belong to the
Committee, and members of the Committee can see them and refer them to the
press. Far from trying to mount some sort of cover-up, as my hon. Friend
suggests, my right hon. Friend was trying to be open with the House of Commons
and to make sure that Members knew what was going on. I utterly refute the
allegations, innuendo and concoctions that my hon. Friend has put forward. It
is unworthy of him, and I expected much more from him.
Paul Flynn:
Will the Minister explain why the Members who were interested in this matter
were not informed? There is a great deal more to this. The Department tried to
blame the Library, saying that it had not told the truth. The Department also
said, in a press release to the Western Mail, that the reason why it was
done was that it was a rushed procedure and it did not have any time. The
Department has been wholly consistent on that, but it has given two versions.
The first is that it did not have time and had to rush things through, and the
second is the one that the Minister is giving now, that there was a failure.
Mr. O'Brien:
I am sorry that my hon. Friend believes that he should be specifically informed
of such matters above other Members. The two people who were informed were
those who were clearly in a position to get the letter. The Public Accounts
Committee Chairman was to receive the letter and would therefore clearly be
informed. The letter was put in the Library to make it available to anyone who
wanted to read it.
If my hon. Friend has a long-term
opposition to nuclear, that is fine. I have no problem with that. Many people
in the House have long-term oppositions to nuclear, but they do not concoct
stories, conspiracies and cover-ups out of nothing as he has done. I have
seldom felt so worried by the way in which stories are made up out of nothing
as when I was listening to him today. There has been a regrettable error, and
the Department regrets that things were not done as they should have been. My
right hon. Friend wanted things to be done properly and ordered them to be
done. He took a decision, not because the procedure required him to, but
because he wanted things to be done openly. My hon. Friend suggests that the
opposite was the case, but he is simply wrong.
My hon. Friend accuses the
Government of dumping liability on the public, but who on earth does he think
owned those nuclear power stations? Does he think that they were somehow owned
by a private company when they were created? They were owned by the public—he
knows that. No liability is being dumped on anyone, secretly or otherwise;
there is a public liability. The Nuclear Decommissioning Authority has been set
up to deal with the public liabilities that we have as a country and as a
Government. We are trying to deal with those
19 Nov 2008 : Column 125WH
liabilities in a sensible, coherent way, and to ensure that that is done openly and with full consultation. There has been widespread consultation on this matter. The idea that something is happening secretly is nonsensical, as this matter has been addressed in the blaze of publicity.
19 Nov 2008 : Column 125WH
liabilities in a sensible, coherent way, and to ensure that that is done openly and with full consultation. There has been widespread consultation on this matter. The idea that something is happening secretly is nonsensical, as this matter has been addressed in the blaze of publicity.
The nature of the indemnity is very
clear. There is a legislative restriction, in terms of the Government’s
liability, so that they are able to deal with those liabilities if an incident
happens in the UK. Under the Paris and Brussels conventions, other countries
have signed up to agreements on how nuclear incidents might be dealt with, but
the United States is not a signatory to some of those. My hon. Friend says that
we are failing to put a value on the indemnity, but what is the indemnity
about? It concerns the remote possibility that, if an incident happened in the UK,
an American court might take a view about a court fine or settlement over
there.
All the companies that bid in the
process said that they were quite to happy to undertake the task, but that they
would not be responsible for a liability that some American or other court,
which has not signed the Brussels and Paris conventions, might impose. The NDA
therefore decided, quite properly and openly, that it would have to come
forward with the indemnity. When that was done, my right hon. Friend wrote to
the Public Accounts Committee, and that letter was to go into the Library. An
administrative error, and nothing more, resulted in that not happening. The day
that we found out that it had not happened, it was immediately corrected. That
is what happened, and all the other claims do not add up to a hill of beans, if
we are talking about hills and mountains.
Mr. Jamie Reed (Copeland) (Lab): I am gratified by the way in which my hon. and learned
Friend is dissecting the incoherent concoction that has been put before him.
Much has been said about the speed with which the process has been carried out,
but does he agree that speed was of the essence? The regulator, the NDA and the
Government all wanted the process to be addressed with speed, and speed was
essential for operations at the Sellafield site to remain both smooth and safe.
Mr. O'Brien:
That is the case. We had to undertake the process, for which negotiations and
bids were received, and the letter of indemnity had to be agreed at the end of
that process. As soon as it was agreed, it was decided that Parliament should
be informed and that a copy of the letter to the Chairman should be put in the
Library.
I want to make it clear that it is
the Government’s responsibility to deal with and to pay for decommissioning and
to clean up our historical civil nuclear liability. The NDA’s mission is
therefore funded from the public purse, and is subject to parliamentary
approval for expenditure and funding in the normal way. Since its creation,
significant resources have been allocated to decommissioning. The NDA’s total
spend was £2.4 billion in 2005-06, rising to £2.8 billion in 2007-08. Its
budget for the next three years is set to rise to more than
19 Nov 2008 : Column 126WH
£8 billion, which is the largest amount ever spent on UK civil nuclear clean-up programmes over that sort of period.
19 Nov 2008 : Column 126WH
£8 billion, which is the largest amount ever spent on UK civil nuclear clean-up programmes over that sort of period.
The competition at the heart of this
issue was also at the heart of the NDA’s mission to deliver fast,
cost-effective clean-up. In March, the competition for the low-level waste
facility near Drigg was completed, and the Sellafield competition is on course
for completion on 24 November. I am letting my hon. Friend the Member for
Newport, West know that. Those are significant milestones, and indemnity is a
common feature in those sorts of commercial contracts.
In the case of the NDA’s estate, the
decision whether to grant a nuclear or other form of indemnity to a contractor
is a commercial matter for the NDA. It approaches each competition on a
case-by-case basis. If giving indemnity represents good value for money, it
will consider giving it on sensible commercial terms—I should like to emphasise
that point.
Mr. O'Brien:
I have given way already. It is about time that I set out my case to my hon.
Friend, because I would like him to listen to one or two things. We have
listened to his views at some length, so perhaps he would care to listen to
some of my replies to his points.
In the UK, claims relating to
third-party damage arising out of nuclear occurrence are exclusively regulated
by the Nuclear Installations Act 1965, which implemented the principles long
established in the Paris and Brussels conventions on third-party nuclear
liability. The NIA restricts compensation claims to personal injury and
property damage caused by a nuclear incident in the UK. It also excludes from
making claims those who are not UK citizens or from other Paris and Brussels
signatory states. The United States is not part of that arrangement.
Therefore, there is an extremely
small risk—I emphasise that—of non-eligible victims taking their claims to
courts elsewhere, possibly the country of the contractor, such as the United
States. The NIA and the Paris convention place a financial cap on the liability
of the operator, currently £140 million for standard sites, in return for the
acceptance of strict and exclusive liability. Therefore, claimants do not have
to prove fault, and all claims are channelled to the operator, not to his
supply chains. However, any contractor whose home country is not party to the
convention risks unlimited liability if an action is brought in courts in their
country, for instance the US. Parties cannot obtain insurance against that. An
indemnity was therefore considered appropriate against the risk of such claims
arising from a nuclear incident that falls outside the protections of the
Nuclear Installations Act and the Paris and Brussels conventions. There are no
insurance facilities available for that risk.
I say to my hon. Friend that the
matters in question have been dealt with appropriately. I apologise for the
error of a junior official in the Department, and he was right to take us to
task, but not in the way in which he did. He exaggerated, went way over the top
in his condemnations and traduced my right hon. Friend who was seeking to be
open with him and other Members, not, as he suggested, to form some sort of
cover-up.
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