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New Nuclear Build: Government Action

Business secretary John Hutton's speech in full to the BERR Nuclear Investor Conference, London, 12 June 2008

The Government has made its decision now about the future of nuclear power in Britain. Nuclear power is right for the United Kingdom. It can serve our vital national interests and also help us contribute towards meeting the growing climate change challenge that we face.

But that decision was very much the easy part. To make our nuclear ambition a reality, one thing is going to be essential. All of the actions we now need to take have to be seen, first and foremost, through the prism of what is most likely to deliver new nuclear investment in the UK. That is the challenge we have to face.

I believe we are strongly placed. But we cannot afford to be complacent.

We shouldn’t forget that here in Britain, 50 years ago when I was growing up, the UK became a global pioneer in the development and use of nuclear energy. And the Ernst and Young research shows that we can lead again.

But it also carries a warning.

As more countries seek to protect themselves from future energy price rises, soaring demand and the consequences of climate change, the competition for resources is increasing. For finance, people, technology, infrastructure.

I take this competition for resources seriously. Our ambition and commitment is to build and maintain the best market in the world for companies to do business in nuclear power.

But in Government, our role is different from what it was in the past. This time round, Government will not be the purchaser of nuclear technology or power generation.

But we have a decisive role to play in facilitating that necessary investment.

And I have no doubt that Government can make the difference between the decision to invest here or take those resources elsewhere.

So, with that perspective front and centre of everything we do, we will take the necessary actions to enable nuclear to be an attractive investment option for you in the UK.

Given the scale and nature of the energy threats we now face, I believe, as the Prime Minister has also said very clearly, our ambition must be more than just to replace our existing nuclear capacity.

No politically-imposed ceilings on the contribution from nuclear in the UK’s energy mix.

The market - not ministers – should be free to determine the precise mix.

But ministers can help clear away the regulatory obstacles.

So, we are going to be focussed on creating:

Effective cross Whitehall institutions for you to work with;

A more transparent and efficient regulatory framework;

Clear, fair and predictable planning processes;

Ensuring the skills, supplies and expertise required for new build are here in the UK; and

A viable solution for long-term waste management.

This morning, I just want to touch briefly on these five points in turn.

Firstly we need to make it as easy for you as possible to work with Whitehall.

So we need to make sure that we are joined up across Whitehall.

That we have the right focus and structure internally to deal with you as potential UK investors.

So today, in response to the analysis that Ernst and Young have done, I can announce we will be improving the way we do our business, making it easier for you to work with us.

First, we are going to be setting up a new Office of Nuclear Development at the heart of Government.

The Office of Nuclear Development will bring together the Government teams and resources focused on facilitating new nuclear investment in the UK.

We want you to have one point of contact with the civil service and ministers. A body with a strong commercial impulse and whose purpose every day will be to do what is necessary to maximise investment opportunities in the UK.

Secondly, to support the OND, we will set up a new Nuclear Development Forum – which I will chair - will bring together Government and industry. And help ensure we have an effective channel for communication and dialogue – to, as best as we can, lock in momentum and ensure we keep our foot to the floor.

A chance for regular and direct high level contact on the issues that matter most to you, as potential investors and operators.

It will be based in part on our successful PILOT Taskforce for the UK oil and gas sectors.

Its first meeting will be planned for the summer.

Next as far as regulation is concerned. We are working with the Nuclear Installation Inspectorate to boost transparency and efficiency in our regulatory system.

I don’t want to pre-empt Tim Stone’s review or what Tim and Mike Weightman, Chief Inspector at the NII, will be saying later this morning.

But I want to make a commitment to everyone today that we will tackle those issues identified in the review.

We will improve the recruitment and retention of NII inspectors.

We will ensure the NII has the capability and the capacity to deliver the timely completion of the Generic Design Assessment.

And I am acutely aware of how important this issue is to everyone in this room this morning.

Next, the Justification Process.

It is going to be simpler and more efficient.

And I am pleased that Government has received an application from the Nuclear Industry Association to now justify the four new nuclear reactor designs originally submitted for GDA.

Based on input from leading energy companies and reactor vendors, this application reflects current interest, I think, in the UK market.

And following full and detailed consideration, we’ll consult on our findings and publish a final decision next year.

But approved designs still need efficient, fair and consistent planning processes to be established.

So, we’re committed to establishing a new planning regime that is now geared up to meet the urgency of the challenges we face.

There is legislation going through Parliament, as we speak. It will help speed up decisions on these and other major national infrastructure projects that are vital to our country’s future.

At the turn of the year, we’ll be inviting nominations for potential new nuclear sites.

And prior to consultation, we are today releasing a summary draft of the exclusionary and discretionary criteria, process and timetable we’re using for our Strategic Siting Assessments.

I know in the past the planning process has frustrated rather than facilitated new nuclear investment in the UK. We can’t afford another repeat of the Sizewell B planning process that took 6 years to complete. New nuclear won’t happen in the UK if investors believe these delays will occur again. We mustn’t let them.

Let me now turn briefly to the supply chain.

With the construction of one nuclear reactor equal to 4 times the project build of the new Wembley stadium, new nuclear has the potential to create tens of thousands of new jobs.

This autumn we will update the UK’s manufacturing strategy to help UK businesses make the most of these new opportunities.

Later this month we’ll be hosting a Low Carbon Economy Summit to explore how the UK can make the most of the radical shift in our energy infrastructure.

We’re already taking important steps to equip our nuclear industry.

Just this week the Home Office announced that nuclear will be added to its list of key occupations as part of the new points based migration-system.

And I want the OND to work with skills-bodies, employers, universities and colleges to help identify skills shortages and gaps so we can deliver learning, research and training at every level of our education system.

Finally, on the subjects of waste management and decommissioning.

These have always been two of the nuclear industry’s biggest historic challenges.

Today the Environment Secretary Hilary Benn, will publish a framework for implementing geological disposal for higher activity radio-active waste.

This multi-billion pound facility will deliver lasting improvements to local facilities and infrastructure. And today we are inviting interested communities across Britain to discuss the possibility of locating a geological disposal facility in their area.

Our Energy Bill will also introduce measures to ensure every new nuclear power station has a Funded Decommissioning Programme before construction can begin.

And I want to particularly thank those of you here that contributed to the recent consultation on our draft Funded Decommissioning Programme guidance.

Early analysis shows overall general support for our objectives and the proposed way forward.

We will publish our official response to the consultation later this summer - with a view to releasing our finalised guidance by early next year.

The Nuclear Liabilities Financing Assurance Board will provide independent public advice to me, as Secretary of State, on the suitability of Funded Decommissioning Programmes submitted for approval.

And today, I am publishing the Terms of Reference for this body, and launching the process to select its first chair and first new members.

We’re looking for experienced people, with a range of skills, from financial and legal experts to specialists in the nuclear industry. If you’re interested, please let us know.

So I hope you will agree that a lot’s been done. And a lot is in train. Our political commitment is absolute.

And the practical measures that we are outlining today are another step towards making a reality of our ambition for new nuclear power in this country.

At a time of real concern about global oil prices, the need to have a diverse mix of low carbon energy sources that can help reduce our dependency on oil has never been more obvious. Nuclear must be right at the heart of the energy mix in the UK in the future. We will do whatever it takes to clear the path.

My ministers and the team in the new Office for Nuclear Development are focussed on nothing else.

And today that is my commitment to you.

Thank you.

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