Infrastructure Bill [HL]

Debate between Lord Teverson and Lord Jenkin of Roding

Tuesday 22nd July 2014 Grand Committee

[Lord Jenkin of Roding]

I promise I am not going to try the patience of the Committee anything like as long as I did a few minutes ago. If one reads the passages in the draft report of the task force, it recommends a number of different methods by which financing could be organised. One is crowdfunding. That might be quite a good way to raise sufficient money to get the community involved. Perhaps it would not be the whole community or the BANANAs that the noble Lord, Lord Cameron, referred to, and we are all very familiar with them, but enough people for them to turn around and say “For heaven’s sake, shut up because we want this to go ahead”.

That report is quite interesting because financial circles see some difficulty of the sort that the noble Lord, Lord Cameron, has been describing, but this is particularly a case where the widest possible flexibility is needed. We want to see community involvement in infrastructure schemes of this sort, but we should not attempt to prescribe how that should happen. The noble Lord, Lord Cameron, clearly indicated that raising the percentage might offer considerable difficulties. It should be entirely free for a local community or investor to decide how it should be done. That can really only be done under a voluntary system.

[Lord Teverson]

My Lords, perhaps I may respond to the noble Lord, Lord Cameron, who raised some valid points, but they were over individual shareholdings, which is a separate issue, as opposed to a total collective shareholding. Further regulations could be made around maximum individual shareholdings or defining the control of those shareholdings. That is a fairly regular way in which to do this—aggregating some of these things if they are, for example, vexatious. I accept fully that there is a risk of individual shareholder activism but that is a separate issue to the community being able to have a significant or noticeable stake, as opposed to one that is, in smaller schemes, almost token.

Energy Bill

Debate between Lord Teverson and Lord Jenkin of Roding

Tuesday 19th November 2013 Lords Chamber

[Lord Teverson]

My Lords, I very much welcome this government amendment. However, I have a concern which is similar to the concern expressed by my noble friend Lady Maddock about how these numbers are produced. When the price increases came through from the energy companies, a bill that I saw, to family members, bullet-pointed the green energy costs as being at the top of the list, giving the impression that this was the most important thing. We all know that numbers are subjective. Numbers in company accounts are as objective as they can be but they are subject to how things are interpreted to some degree; as we know, for example, in terms of the lack of tax that is paid by some multinational companies. Do the Government have any view about how these numbers should be somehow independently audited or at least be auditable, if we feel that they fall below standard?

[Lord Jenkin of Roding]

I will just add one point before my noble friend replies. I was very glad to hear her say that she would rather this was done voluntarily, but a back-up power is important to encourage the right response from the industry. I apologise to the right reverend Prelate. I was moving amendments on this subject during proceedings on the last energy Bill but one. Those amendments suggested that we needed to see more detail in the Bill. As other noble Lords have said, one needs to have a very clear view as to what these figures actually mean, which is not always apparent. I get bills with pie charts and other things from British Gas. I have one in front of me, to which I have referred before, from Southern Electric. Many of them try to do their best, but such is the lack of trust now between the public and the industry that the public need to be reassured that the figures actually mean what they say. I look forward to seeing what comes from this but, along with other noble Lords, I very much welcome these amendments.

Energy Bill

Debate between Lord Teverson and Lord Jenkin of Roding

Tuesday 9th July 2013 Grand Committee

[Lord Jenkin of Roding]

When I first went to the Treasury in 1970, one of the things they said was, “You’ve got to realise that 50% of the population does not understand what 50% means”.

[Lord Teverson]

Do we know which 50%? That is the question.

My noble friend Lady Maddock is being too modest. When we went through the Green Energy Bill we encountered some really strange language. We asked why it was written in that way, and it turned out it was supposed to be written in plain English—in a way that people would understand. Actually, this amendment is perfect for what it should be. The draftsman has written it in a clear and easily understood format. That is exactly what it should say, and I hope that the Secretary of State, the Minister and the Government will see a way to bring it in.

Enterprise and Regulatory Reform Bill

Debate between Lord Teverson and Lord Jenkin of Roding

Monday 3rd December 2012 Grand Committee

[Lord Teverson]

Thank you very much indeed. In fact, last month the Government already had their first auction of phase three allowances. They made £34 million and sold 6.5 million EUAs at €6.62 per unit—a terrible price in terms of carbon pricing but not a bad price, given some of the other prices that have been found. Unfortunately and regrettably, since then the price has fallen below €6. The German Government have sold some as well more recently and that price fell. There is an intention to auction in excess of 50% of these allowances in phase three and once auctioning starts, it seems that will be one of the ways in which the price will go up because the free issue has ended.

I would also hope that the Government’s intention to raise the bar on 2020 carbon reductions to 30% will be successful. That would also mean that the number of these allowances would decrease in the market. This seems to be an obvious revenue stream, some of which could be used towards reinvestment— I am not saying that it must be—of those carbon reduction revenues into green growth and into making sure that that whole process is reinforced.

I must apologise to the Grand Committee in that Amendment 11, on a second area, has a mistake in it. In subsection (3), at the very end, it should say Clause 1 instead of “section 1” and I apologise to noble Lords for that. I have been looking for a way in which, when the time is right, we could lever extra money into the Green Investment Bank without having all the effects of increased public debt, which is why the current £3 billion comes from asset sales. It means that there have to be other ways of finding that money, with all the borrowings, but the debt is not changed. As I understand it, it would be absolutely the same as for the Nuclear Liabilities Fund, which is currently worth some £8.6 billion. Again, this is a way in which the firepower of this bank could be increased quite substantially without the effect on public debt that other forms of fundraising might have. It would not require outside borrowing by the bank and would take over the trustees’ functions.

I do not know how many of your Lordships have read the excellent report by Professor Gordon MacKerron, Evaluation of Nuclear Decommissioning and Waste Management, which came out earlier in the year. I am sure that my noble friend the Minister was closely associated with it, given his responsibilities in that area. Very importantly, it makes the point that at the moment the vast majority of that £8.6 billion has to be invested in the National Loans Fund for a very low return. I would be interested to learn from the Minister whether he or his officials know what that current rate of interest is. Professor MacKerron was clearly particularly concerned at the low rate of return. On understanding the net present value of the fund’s existing liabilities, he said,

“though its current rate of accumulation is significantly less than the discount rate applied”,

which was 3% . He went on:

“Whether the fund will be able to meet all the … liabilities will depend on a range of factors (in addition to whether the current approach to its investment regime are maintained)”.

He questioned whether putting that cash into the National Loans Fund would maintain a sufficient value for the decommissioning costs of the existing nuclear fleet. There is a simple solution to that as well: the purpose of the Green Investment Bank is not only to invest in green infrastructure but to create a proper commercial return from its investments, so we have a double-win situation here. We increase the firepower of the Green Investment Bank quite substantially and also make it far more certain that the NLF will be able to meet its liabilities and not put the liability back on taxpayers, as would happen otherwise in future. So we have a double success. I beg to move.

[Lord Jenkin of Roding]

My Lords, I have some doubt about the proposed new clause of which my noble friend has just spoken. The Nuclear Liabilities Fund very properly seeks to avoid the situation that the country got into over many years when large numbers of nuclear installations of one sort of another were left to be decommissioned and their radioactive materials dealt with, and there were no funds available. One is always astonished at the huge amounts of money that have to be set aside to satisfy the obligations that are now being discharged to decommission these nuclear plants safely and effectively. My noble friend Lord Teverson may contradict me on this, but I believe that it is intended entirely to be confined to that purpose; it is intended to be there when it is needed and nuclear establishments come to be decommissioned. When my noble friend says that this increases the firepower of the Green Investment Bank, what does he mean? Is it intended that the fund should be invested in other green projects, which may or may not achieve the return expected when the fund was invested? I would have thought that that would risk defeating the purpose of the Nuclear Liabilities Fund.

The question of the rate of interest that should be earned on that fund is something that the Minister may wish to look at. I had not refreshed my memory of Professor MacKerron’s report, and I was grateful to my noble friend for reminding me what was in it. Of course, it is a very low rate of interest, as he has rightly said. But the fact of the matter is that this is a hypothecated fund; it is there for a particular purpose, and the idea that it could be used by the Green Investment Bank to invest in something else that might produce a higher return risks prejudicing the absolute and essential purpose for which it has been set up—namely, to meet the costs of decommissioning nuclear plants when they are available. I hope that the Minister will give some indication that he will look at this proposal in the proposed new clause with some suspicion, because I believe that it might be misconceived. I apologise to my noble friend Lord Teverson for putting it in that form, but I feel very strongly about this.

One of the best things that the previous Government and this Government have done is to make sure that future nuclear liabilities will not fall on the taxpayer but are regarded as a proper cost of those who invest in nuclear installations, power plants and so on. That is what it is intended to do. It is a very wise thing to do, and I hope that it will not be prejudiced by diverting it to some of the other purposes of the Green Investment Bank that noble Lords have talked about this afternoon.

--- Later in debate ---

[Lord Teverson]

My Lords, as we are in Committee, perhaps I could come back on my noble friend Lord Jenkin’s important areas. I can reassure him on both those items that we would be better off if this amendment was passed. First, the MacKerron report is quite clear that the current rate of investment going into the National Loans Fund almost certainly will mean that its liabilities cannot be met, so we have to find another way to do this. The Green Investment Bank is not a fund to give away money; it is there to commercially invest, alongside other commercial investors. It could be perceived as being a greater risk perhaps—I will come on to why it is also a lesser risk—but also as providing a sensible return with a very sound government-backed institution to do the investment, and I think that is good. Furthermore, this fund has to invest its money in the National Loans Fund. That is a euphemism; what it actually means is that it has to give it all to the Treasury. So the Nuclear Liabilities Fund at the moment is similar to unfunded state pensions. It goes in there, but to take the money out will have the same impact as paying pensions into the future. While it is a discrete amount that is accounted for, it just reduces the national debt. That is all that it does on the current terms.

In fact, how secure is that? Yes, there is an accounting mechanism, and my noble friend is absolutely right that the sins of the past are huge in terms of those funds having been lost during the process of changes in the nuclear industry and its ownership over the past couple of decades. First, this amendment would make it far more certain that this fund will be able to meet its liabilities in the future. Secondly, we, as taxpayers and as citizens, would know that that money is in a place where we can actually see it, see its value, see that it is different and separate out of the Treasury from the national debt and, as the noble Baroness, Lady Worthington, said, we can predict decommissioning of nuclear plants far enough in advance to craft the investment and our exit strategies around those financial needs.

[Lord Jenkin of Roding]

As we are in Committee, I hope that I can say a couple of words about this. The nuclear industry is, of course, building up this fund as part of the Government’s policy to make sure that the liability for decommissioning does not again fall on the taxpayer. It has recognised this, and it follows the same pattern as one has seen increasingly in the offshore oil and gas industry, where funds now have to be put aside so that when the oil rigs are decommissioned, again that does not fall on the taxpayer but is part of the cost that has to be built into the supply of the oil or gas and therefore met by the investor. I think that my noble friend Lord Teverson may be confusing two matters. I use the phrase again: this is a hypothecated fund. It is not like the pension fund. There never was a separate fund for that. It is simply that the pension contributions from, for instance, the teachers’ pension fund have been paid to the Government, and the obligations are met, of course, by the taxpayer out of the fund. There has never been any question of trying to balance the one against the other. This is quite different. This is a fund that is being set up and funded by the industry. It has to be built up while plants are operating—not just when they are commissioned—so that, at the end, when they come to be decommissioned, which may be 50 or 60 years ahead, the fund is there. They have invested in it so the cost will not fall on the taxpayers. It is a separate, hypothecated fund. It may make the green bank look bigger because it will have more money but it cannot do anything with it other than get a rate of interest. My noble friend shakes his head, but if they are going to start investing in green industrial ventures and so on, it seems to me that that would be a breach of trust to those who have built up the fund. It may be that they can hold it and, as it were, guarantee the payment, but the minute that they start investing it themselves, it seems to me that that is risking the whole purpose for which the fund has been set up.

A separate issue is whether there is an alternative method of investing in the Nuclear Liabilities Fund that might get a slightly more realistic rate of interest. That is a separate matter, but it seems to me that to make it part of the loan capital of the UK Green Investment Bank would be a breach of trust, as I suggested, against the firms that are building this up perfectly properly. They agree, they recognise it, and they know that they do not want to go back to the previous position, but they want the fund to be available to finance the decommissioning of the plants when the time comes.

[Lord Marland]

My Lords, perhaps I can deal with this quite swiftly. Both the ETS and the NLF, the Nuclear Liabilities Fund, reported to me in my previous department so I have a rough idea of what is going on. Let us deal with the EUAs and the ETSs first. I also sit on the government assets committee and we looked at selling some of our EUAs. We drew the conclusion that the price was not right, the market was not big enough and we would not be able to get a substantial figure into the market. However, as the noble Lord, Lord Teverson, rightly says, an opportunity may come along later.

Clause 4 permits financial assistance to be provided in any form,

“as the Secretary of State, with the consent of the Treasury, considers appropriate”.

If we were able to do it and if—that is a big “if”—the Treasury agrees, the Secretary of State could divert funds into it. Amendment 6 permits the Government to use a proportion of revenues from auctioning emission permits to fund the bank. There is already provision within that.

This is creative thinking and I am very grateful to my noble friend for that because he is a great creative thinker. I turn to the Nuclear Liabilities Fund. Clearly, as the noble Lord, Lord Jenkin, quite rightly said, two things are going on here. One is that this is a fund that is committed to nuclear liabilities; it is committed to the nuclear industry and, therefore, it has a range of opportunities in the nuclear industry in which it could invest. The noble Lord, Lord Wigley, referred to Wylfa and other investments in new nuclear. I had discussions with the chairman of the NLF about developing the fund into nuclear investments, including, for example, a MOX plant, which is something that we were committed to when I was in the department and, indeed, new nuclear. That is entirely for the NLF to decide for itself.

The problem I have with the NLF diverting funds here is that this is an investment bank and it is what it says. There is no such thing as a guaranteed investment. Some investments go up and some investments go down and if the NLF lost money, co-venturing with the Green Investment Bank on things that it did not understand, of course the liabilities would not be met. Despite the fact that we may consider it a very boring return on the investment at the moment, it is planned to match some of the liabilities. But I do not want the noble Lord, Lord Teverson, to go away thinking that actually the NLF is enhancing its investments, but think that it has enough on its plate with the nuclear industry.

Therefore, given the commitments that I have made on Clauses 4 and 6, I hope that, despite the fact that two very important points have been raised—and I am grateful to my noble friend Lord Jenkin of Roding, who has expertise in this field—the noble Lord will withdraw the amendment.

Energy Bill [HL]

Debate between Lord Teverson and Lord Jenkin of Roding

Monday 24th January 2011 Grand Committee

[Lord Jenkin of Roding]

Perhaps I may add a word or two to the debate because I put my name on the amendment. We spent a good part of this afternoon’s proceedings all agreeing that the Government face a major challenge in seeking to extend the Green Deal or apply the Green Deal to the private rented sector; indeed many noble Lords from all parts of the Grand Committee were stressing the problems that are being faced on this. I agree with that.

Although I have a lot of sympathy for those who say we have waited a long time, we must get on with this. If we try to hurry it forward and bring forward the date of the review and curtail the length of time that the review may take, it will go off at half cock. When dealing with the complexities and the challenge, which I described earlier as enormous when citing the federation, we have to be prepared to make sure that the authorities and all the people who take part in this—the property owners, landlords and tenants so far as is possible—are sufficiently aware of what is expected before one tries to rush forward.

My noble friend Lord Teverson says that by 2013 we will know and have enough experience, but with the greatest respect I do not believe that for a moment. This is going to start pretty slow and the immediate reaction will be people coming along and saying “It’s not happening”, and that we have to have compulsion and the full panoply of regulations. That would be very unwise because it might get the process off in the wrong way.

The Minister has been absolutely right. The Government do not want to go down the road of compulsion through regulation, yet if one rushes the review and starts to make decisions on what is bound to be pretty imperfect and incomplete information, my guess is that is that we will be in greater difficulty than we otherwise would have been. I would therefore urge more caution on this.

The date that my noble friend and I have put on this amendment and the other amendments that go with it are perfectly realistic and I would not agree with the noble Lord, Lord Davies of Oldham, that we could bring the thing forward. That would run straight into the dangers which I have been trying, in my own imperfect way, to point out.

Perhaps I can say to my noble friends on the Front Bench that, if the Government are being criticised for anything, it is that on a number of issues they are moving too fast and trying to do too much at the same time. We are dealing here with a problem whose origins go back many decades. Indeed, in some cases it will be centuries. To try to rush forward and deal with it all in a relatively short time is a potential recipe for disaster. I hope that the Government will get the message that this needs a measured approach with enough time being given for people to consider and make sure that they understand the information that is to come out of the review before rushing to make regulations. That comes back to the very first point I made earlier this afternoon. If you go too fast, it will have the effect of drying up the rented sector. People will throw their hands in the air and say, “Blow that. I am not going to let any more”. That would be a very great pity.

[Lord Teverson]

Perhaps I could respond to that because it is exactly not what I am saying. I am surprised that we have a Bill where the Government are constraining themselves with a “best after” date as opposed to a “best before” one. I am not suggesting that things have to move forward at any time, but that we have within the Bill something that Governments normally try absolutely to avoid, which is a restriction on when they can take action if they feel that that action is necessary. We all hope that the action will not be necessary, although I note that a report of the review must be published by 1 April 2014, so there is a longstop. However, while I am the last person to argue that we should not put the quality and success of this scheme first—that is essential and why the 2012 date is right—what I find difficult to understand is not that we are forcing the Government to do this earlier, but that they could not exercise their own power to move forward if they felt it necessary to do so.

I did invite the Minister to suggest, if the scheme was seen not to be moving forward particularly well, other ways of doing it. I am sure that there are ways outside this Bill that the Government would get on with. Indeed, I know that my noble friend would do that, which may be part of making sure that landlords are aware of the benefits of the scheme, that it exists and can be successful. We have also discussed ways of utilising the local authorities, although not through enforcement because I am sure that the Government would find other ways to respond. What I find difficult is that the Government have imposed a constraint on themselves in the Bill about when the process can start.

Energy Bill [HL]

Debate between Lord Teverson and Lord Jenkin of Roding

Monday 17th January 2011 Grand Committee

[Lord Teverson]

I shall speak first to my Amendment 8C. I am trying to be helpful to the Government, as is the noble Baroness, Lady Smith. Where the Government talk about withdrawing authorisation from Green Deal providers, there has to be an authorising body as there is a mechanism within the Bill for those organisations to be authorised in the first place. So there should also be a means, in extremis—we hope it would never be used—whereby authorisation can be taken away from those authorisers as well.

I tread carefully here, but on the amendments of the noble Baroness, Lady Smith, it would be almost impossible to disagree with Amendment 2D which seeks,

“to ensure that assessors and providers have the qualifications and skills”,

to perform their functions under the Green Deal. I question Amendment 2G, however. In my mind, the jury is out on this. I have a concern about this whole scheme in terms of quality. I know that this is not what the noble Baroness means, but I am concerned that we have moved towards some kind of tick-box assessment; that if you meet certain criteria, then everything is fine. It is more important in many ways that a level of intelligence is attached to these processes, in a similar way to consumer protection in the financial services industry where there is an overall requirement for suppliers to act intelligently in the overall interests of the customer. While there is a place for standard assessments, they do not always meet that quality element. When we are talking about a programme that is to be as large as we hope it will be, the quality element is of great importance. I am not sure whether just assessment processes with a list of issues completely fulfil that. I am not necessarily talking against the amendment, but I am very anxious that there should be a qualitative demand in the Bill that providers think intelligently and provide plans that are specific to households and people; and that assessors are not working to a completely standardised format but in terms of whether a quality product will be provided within that market.

[Lord Jenkin of Roding]

My Lords, I have sympathy with what the noble Lord, Lord Teverson, has just said, particularly about Amendment 2G. When one thinks of the enormous range of the buildings that are going to be subject to the Green Deal process, it is with the utmost difficulty that one imagines how one could have a standard assessment measurement. What one looks for are sufficiently skilled and trained assessors who can look at a widely differing range of buildings and use their skill and judgment, in the time-honoured phrase, to come to a conclusion and make an assessment. We will come to this in Clause 4, where the requirements are very fully spelt out.

The idea of a standard assessment seems to me to inevitably result in a “tick-box” culture, which has been an unpleasant factor in so much of what one faces in modern life: people feel it is sufficient simply to tick the boxes. If we are going to have fully trained and qualified people—an objective I totally support—then we must rely on their skill and judgment to decide on the appropriate assessment for the hugely differing range of buildings with which they will be confronted. One would expect there to be assessors who specialise in particular kinds of buildings, because they will have the experience and expertise to deal with them. I am therefore unhappy with amendment 2G.

I have given training a good deal of attention over the past year or two. I believe that the present Government and BIS have produced a splendid blueprint of what they envisage the process of skills training to be. There is no question that the skills training system which operated under the preceding Government left much to be desired in achieving results. I declare an interest—as I have before—as the president of the National Skills Academy for Nuclear; I have also been involved with Cogent and a number of others. I have had dealings with Energy & Utility Skills, a highly effective body. It was the one—I raised this on the Floor of the House before the election—which tried to fit in to the national scheme for training people to install smart meters, and was firmly told that it could not have help with that. I am happy to say that Ministers in the present Government have addressed this problem fully. If we are to make a success of that—we may come to this later—there must be a proper system for training people to install these meters.

We need to keep a careful eye—this is a key stage in the whole Green Deal process—on how the training of the assessors will be handled. If my noble friend can give us some more information, that would be very helpful. Yes, we are going to have a code, and we will come to that later under another amendment. But I think this will be a key part of the whole process.

I have referred before to the fact that I had my house installed under the old CERT scheme, and it was an unhappy experience: one simply ran into the sand. At first I went through the Energy Saving Trust, and that became completely futile, so I started again with my own supplier. In the end that produced a solution, although an expensive one, as I had to pay for all the scaffolding, which was very tiresome. But I was satisfied in the end that the expert who came from British Gas to decide what my house needed was highly qualified and that the installer was able to do a good job. Those are the key things which will generate confidence in whether the Green Deal scheme will take off as we hope it will. This is an important requirement, which hinges on skills and training, and not on standard assessments.

--- Later in debate ---

[Lord Teverson]

I agree with my noble friend entirely. The quality of the assessor is most important, but that has to be supplemented by the duty of providing good information or a good plan as well. On that basis I beg to move.

[Lord Jenkin of Roding]

There is both good and bad in this suggested new clause. The point about the first three subsections seems to me to be inherent in the nature of the scheme. However, I do not know whether this is the right way to make clear that the scheme is intended to give the consumer, the householder, the best deal available. I am sure that there will be many circumstances where the assessor will have to weigh up the situation and say, “Are we asking too much?”, which means that it could not be paid back within a reasonable time; and, “Are we asking too little?”, which means that the householder could have paid rather more. This may need to be written into the Bill in some form. With the use of the words,

“the best overall energy solution”,

you are opening up the possibility that someone will sue if they can be persuaded that they could have got a better one. Somehow one has got to try and avoid that. That is the good part.

Subsection (4) is totally impractical and undesirable. As I said at Second Reading, one of the great advantages of the Green Deal over the CERT programme is that this is not written directly around carbon savings but is intended to provide the householder—the consumer—with incentives for lower bills and warmer houses. To require that in every individual case someone has to sit down and estimate what the carbon savings are likely to be seems to me to be unrealistic. I apologise to my noble friend for using what may seem to be fairly strong words, but everyone has recognised that one of the advantages of this is that people may choose to have warmer homes and pay back rather more because they will not get as much savings as they might have had had the whole thing gone into saving energy costs. How is anybody going to conceivably estimate that at the outset?

We have a classic case here where the carbon savings, which certainly lie at the heart of this in order to achieve our carbon targets, are the consequence and not the primary objective. As I said at Second Reading, people will respond much more easily and readily to an offer of lower bills or a warmer home than they will to someone coming along and telling them that they have to cut their carbon footprint. Subsection (4) is very difficult and I would find it hard to support if it were to find its way into the Bill.

Justification Decision (Generation of Electricity by the EPR Nuclear Reactor) Regulations 2010

Debate between Lord Teverson and Lord Jenkin of Roding

Wednesday 17th November 2010 Lords Chamber

[Lord Jenkin of Roding]

My Lords, I add my voice in support of these regulations. The noble Lord, Lord O’Neill of Clackmannan, and I were fortunate to attend a briefing this morning by one of the potential investors that would be building these nuclear power stations. One word came out of that. The noble Lord used it; it is “confidence”. He was talking about the billions of pounds that will be invested in the next generation of nuclear power stations. The investors will have to have confidence at every stage that this is going to go ahead and be successful.

We are discussing these regulations and the order. The whole process of justification has been very elaborate. I have here the justification report on one of the two designs of reactor. This has been a formidable step. The fact that the Secretary of State has now accepted that the justification process has been properly completed and that we now have these statutory instruments is one further step in the confidence of the industry.

This is not the last word: the industries have to continue to get further consents, not least the licensing of the designs through the generic design assessment process. We heard high praise this morning of the work of the Nuclear Installations Inspectorate in getting to this stage. There seems to be confidence that this will happen by the due date of July next year. That has to happen, but I say nothing about planning—we are not talking about planning tonight, and that is another stage to be got through.

The industry has been looking for a number of steps to generate confidence. The Secretary of State’s statement last month was a major step along the way. There was no question about that: it made an extremely favourable impression on the industry and its potential investors and the supply chain as well.

Last week I asked a Question about the future of the Nuclear Installations Inspectorate and I raised with the Minister who was representing the Department for Work and Pensions—he is responsible for the Health and Safety Executive, and the NII comes under the HSE—that we are still waiting for the decision about the reorganisation and, I hope, the setting up, through a legislative reform order, of a new statutory corporation to take over the functions of the NII. I do not know whether my noble friend can say anything more about that. It is something to which great importance is being attached by the industry, particularly because of the need for the NII to be able to recruit the people with the very scarce experience and skills against a background of a global nuclear renaissance. These people are much in demand and this process, which has been under discussion for some time, is seen by the industry as another important step which, if and when it is achieved, will continue to generate confidence. I hope my noble friend will be able to say something about that, although the actual process—I entirely accept this—is not for his department but for the Department for Work and Pensions. If he can say something that would help this process of confidence, to which I have referred, I would be extremely grateful.

Like the noble Lord, Lord O’Neill, I too have an engagement. I hope I can stay until the end, but I offer my apologies to the House if I cannot.

[Lord Teverson]

My Lords, I have never felt such pressure to make a short speech, so I will see if I can do it. I thank my noble friend for his usual panache in introducing the subject. One of the things that strikes me while reading through these statutory instruments is that we have, once again, a problem of opaqueness with respect to this industry and sector. They are among the few SIs I have read in which, even after reading the Explanatory Memorandums, it is quite difficult to really get to the depths of what they are trying to say. No doubt we can blame that on EURATOM regulations or whatever. In terms of designated technical matters, this sounds innocuous but is obviously crucial to these documents and the meaning of “justification” is rather different from what I have known before. In particular, we talk about approval, but neither of these reactors is approved at all. This is just the start of the process and there is much more to go on further. I was particularly interested that in the justification SIs we have two useful definitions—on intermediate-level waste and on spent fuel—but they are never referred to in the documents. That is slightly strange.