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Nuclear Decommissioning

Volume 450: debated on Thursday 19 October 2006

7. If he will make a statement on his Department’s use of the Treasury Green Book in calculating nuclear decommissioning costs. (95034)

The Nuclear Decommissioning Authority and British Energy calculate these costs. At all times, the Department follows HM Treasury guidelines.

That is an interesting answer. It contradicts what Mr. Hugo Robson, one of the Secretary of State’s own officials, told the Public Accounts Committee on 27 March. The DTI first claimed that it had followed the Green Book, then admitted that it had ignored it. The Secretary of State told me on 6 July that he would write to me explaining the problem. I do not know whether he has written to me and the letter has been lost in the post. Could he send me another copy?

I wrote to the hon. Gentleman on 10 July and I will certainly send him another copy. As I understand it, the Department follows Treasury guidelines. As he knows, the purpose of the Green Book is slightly different. It looks at investment appraisal. The discounted rates that the Department has applied in relation to decommissioning costs are in line with the Treasury guidelines. I confirmed that when I wrote to him last July.

The Government have decided to include nuclear energy in the mix and have promised not to provide any taxpayers’ subsidies. It is important for the right level of provision to be made so that future taxpayers as well as current ones benefit. In view of what the Secretary of State has said, will he go back to the Department and ensure that it uses the 2.2 per cent.—not 3.5 per cent.—figure that is in line with the new Treasury guidance?

On the latter point, the Treasury rate to be applied has, as my hon. Friend knows, been reduced to 2.2 per cent., which is the figure being used. On the broader point, we are talking largely about decommissioning costs that have arisen from the fact that, throughout the 1940s, ’50s, ’60s, ’70s and ’80s, no one sat down to work out how the decommissioning work was to be carried out and costed. That is now being done in respect of a new generation of nuclear power. I believe that it is important to maintain the mix, as my hon. Friend said. We set out the position in July and that remains our position.