Inquiry
1. In the autumn of 1998, it became known that Ministers
had commissioned a report from the consultants KPMG on options
for introducing commercial disciplines into British Nuclear Fuels
Limited (BNFL), through a public private partnership (PPP). In
the course of our inquiry in 1995-96 into Nuclear Privatisation
we had already examined some of the implications of the transfer
under consideration at that time of Magnox power stations to BNFL.[1]
We had also heard oral evidence in February 1998 from BNFL a few
days after the Magnox transfer, in the course of our inquiry into
Energy Policy.[2]
We decided in December 1998 to monitor the possible introduction
of a PPP into BNFL, with a view to reporting to the House before
final decisions were taken. In June 1999 we visited BNFL's largest
facility, at Sellafield. We held informal discussions there with
senior BNFL management, workforce representatives and the regulators.
We also gained some impression of operations at the site. In July
1999 the Secretary of State announced his decision to proceed
with the process of appointing advisers for an eventual PPP "by
the end of this Parliament", meaning April 2002 at the latest.
Advisers were appointed in the autumn of 1999. We decided to hear
oral evidence in the early part of 2000 and report thereafter.
2. By the early part of this year, however, it was
apparent that the Secretary of State's original timetable was
untenable, as a result of a series of setbacks for BNFL. We had
originally contemplated a relatively substantial programme of
formal oral evidence, including from some of the outside bodies
who had submitted written evidence, from workforce representatives
and from those advising BNFL and the Government. We had intended
to pursue issues raised in memoranda submitted on BNFL's accounting
practices. In view of the delay in the earliest date envisaged
for completion of a PPP, however, announced by the Minister in
late March, we decided to curtail our inquiries and make an interim
Report to the House, to set out our view of the agenda for the
months ahead and to provide an opportunity for the House to express
its views and concerns. We will continue to examine the proposed
PPP and the background to its possible introduction, and to take
further evidence as appropriate.We heard evidence in March 2000
from the Nuclear Installations Inspectorate (NII) of the Health
and Safety Executive (HSE) and the Environment Agency (EA); from
British Energy plc (BE) and the United Kingdom Atomic Energy Authority
(UKAEA); from Dr Gordon Mackerron of the University of Sussex
Science and Technology Policy Research Unit (SPRU); and from the
newly appointed Chairman and Chief Executive of BNFL. On 3 April
2000 we heard evidence from the Rt Hon Helen Liddell MP, the Minister
for Energy in the DTI.
Parliamentary Debate
3. BNFL is a plc wholly owned by the Government
and one of the few remaining industrial companies in the public
sector. Parliament's involvement in the affairs of BNFL over the
years has been at best patchy, usually prompted by some incident
or controversy. Although individual Members, including those with
a constituency interest, can pursue some issues, there is little
opportunity for most Members to debate BNFL. As a result, there
is little appreciation of some of the issues, which can too readily
be dismissed as the preserve of a few critical enthusiasts. The
process of moving towards a PPP has not been marked by any evident
concern on the part of Ministers to give Parliament a voice. The
July 1999 decision to proceed towards a PPP was announced in a
written answer rather than in an oral statement to the House.
The decision to seek to retain a majority Government shareholding
owes something to a positive desire to avoid primary legislation.
The entire process of introduction of a PPP could indeed go through
without any parliamentary debate. We consider that the time
is ripe for a parliamentary debate on BNFL's future status and
prospects. The delay in bringing the proposed public private partnership
to fruition offers an opportunity to test parliamentary opinion
on the subject. Following the recent recommendation of the Liaison
Committee, we append as an Annex a draft resolution to be put
to the House.
1 Second Report, HC 43 of 1995-96 - "HC 43"
- paras 77-89 Back
2 Fifth
Report, HC 471 of 1997-98 - "HC 471" - Ev, pp 125-142 Back
