:00:25. > :00:29.Thank you, Mr Speaker. I'd like to ask the Secretary of State for
:00:30. > :00:32.business, energy and industrial strategy if he will make a statement
:00:33. > :00:43.on the nuclear decommissioning authority's early contract
:00:44. > :00:50.termination at the Mike estate. The Secretary of State for business,
:00:51. > :00:55.energy and industrial strategy. This morning I informed the House
:00:56. > :00:58.that the nuclear decommissioning authority has terminated its
:00:59. > :01:03.contract with the Cavendish floor partnership for the decommissioning
:01:04. > :01:07.of 12 redundant Magnox sites. The MDA ran a ?1.6 billion tender
:01:08. > :01:13.process from April 2012 which resulted in a 14 year contracts
:01:14. > :01:17.being awarded in September 2014 to the partnership, a joint-venture
:01:18. > :01:23.between the British-born Cavendish Nuclear and Floor Incorporated. They
:01:24. > :01:27.started a consolidation process to ensure that the scope of the 2012
:01:28. > :01:33.tender matched the actual status of the commission. It became clear that
:01:34. > :01:36.there is a significant mismatch between the work tended for and the
:01:37. > :01:40.actual scale of the work that is required to be carried out. The MDA
:01:41. > :01:44.board concluded that it should terminate the contract in two years'
:01:45. > :01:47.notice. Termination was made with the agreement of CFP, and has no
:01:48. > :01:56.reflection on their performance. Dealing safely with the UK's nuclear
:01:57. > :01:59.legacy is fundamental. Decommissioning work will continue
:02:00. > :02:06.for a further 2.5 years. The MDA will establish the placements for a
:02:07. > :02:10.structure to be put in place when the current structure ends. The MDA
:02:11. > :02:13.has also settled outstanding claims against it by Energy Solutions in
:02:14. > :02:19.relation to the 2014 Magnox contract. The MDA was found by the
:02:20. > :02:22.High Court to have wrongly decided the outcome of the procurement
:02:23. > :02:27.process. It is clear that the 2012 tender process was deeply flawed.
:02:28. > :02:32.The MDA has agreed settlement payments with Energy Solutions of
:02:33. > :02:43.?26.5 million, plus 8.5 million of costs. And with Bectel,
:02:44. > :02:47.approximately ?12.5 million in total. These are very substantial
:02:48. > :02:52.costs which could have risen further if the case had proceeded. Tax must
:02:53. > :02:57.be able to be confident that public bodies are operating effectively and
:02:58. > :03:01.securing value for money. Where this has not been achieved, such body
:03:02. > :03:04.should be subject to rigorous scrutiny. I've therefore established
:03:05. > :03:08.an independent enquiry into the original procurement process and why
:03:09. > :03:13.the 2014 contract proved unsustainable. These are separate
:03:14. > :03:17.issues that need to be examined thoroughly. I've asked Mr Steve
:03:18. > :03:22.Holliday, former chief executive of National Grid, to lead this enquiry.
:03:23. > :03:25.The enquiry will take a cradle to grave approach beginning with the
:03:26. > :03:30.MDA's procurement and ending with the contract termination. The
:03:31. > :03:33.enquiry will set out the lessons learned and recommend any further
:03:34. > :03:38.action it sees fit, including any disciplinary investigations or
:03:39. > :03:42.proceedings that may be appropriate. The enquiry will report jointly to
:03:43. > :03:46.me and to the Cabinet Secretary, and his report will be available to this
:03:47. > :03:49.house and to the select committee. Mr Speaker, this was a defective
:03:50. > :03:53.procurement with significant financial consequences, and I'm
:03:54. > :03:58.determined that the lessons to be learned should be exposed and
:03:59. > :04:01.understood. But those responsible should be properly held to account,
:04:02. > :04:08.and that it should never happen again. Bakun Bailey. The MDA has
:04:09. > :04:13.withdrawn an appeal against the judgment handed down in late July
:04:14. > :04:18.last year. Comey secretary therefore confirm why this decision has been
:04:19. > :04:20.taken now? Why the matter was brought to appeal in the first
:04:21. > :04:23.instance? The whether both actions were indeed sanctioned by the
:04:24. > :04:28.Secretary, or indeed his predecessor. The Government
:04:29. > :04:32.concerned that the MDA had not acted properly in the tender process and
:04:33. > :04:37.that the MDA was acutely aware that unsuccessful bidder might challenge
:04:38. > :04:42.the outcome of the competition. The court also stated that the NBA had
:04:43. > :04:47.published -- the court stated that the MDA had fudged the report to
:04:48. > :04:51.achieve a particular outcome. What's also more worrying is that the MDA
:04:52. > :04:55.attempted to get rid of information that might have been detrimental to
:04:56. > :04:59.it, including reference to shredding notes. Given the serious nature of
:05:00. > :05:03.the judgment, will the Secretary of State assure the House that work
:05:04. > :05:07.there will be full public disclosure, and a public hearing.
:05:08. > :05:10.Does the secretary also agreed that the future operation of the MDA has
:05:11. > :05:16.been called into question as a result of this case? And will he
:05:17. > :05:21.confirm what structural changes are necessary, and when? Can he offer
:05:22. > :05:24.any assurances to workers in Magnox going forward? And finally the
:05:25. > :05:29.secretary's written statement confirms that it has become clear to
:05:30. > :05:32.the MDA that there is significantly a mismatch between the work
:05:33. > :05:39.specified in the contract as tended in 2012. Can be secretary therefore
:05:40. > :05:43.confirm when he or his predecessor was first aware of this mismatch,
:05:44. > :05:49.and whether this would have been apparent from the work already being
:05:50. > :05:52.carried out by previous contractors? Thank you, Mr Speaker. The
:05:53. > :05:55.honourable lady is quite right to ask the question and I hope she will
:05:56. > :05:59.agree that the written statement I made today is thorough and
:06:00. > :06:04.comprehensive. I'm very happy to have conversations with her and the
:06:05. > :06:09.select committee over the weeks and months ahead. She asked some
:06:10. > :06:12.specific questions about both the termination of the contract and the
:06:13. > :06:23.litigation. In terms of the litigation, there was indeed a
:06:24. > :06:27.hearing at the court in July. There was another one in December. On the
:06:28. > :06:31.1st of March of this year, a few weeks ago, a new chief executive and
:06:32. > :06:38.chair of the MDA took office. It seems to me appropriate that a new
:06:39. > :06:42.set of eyes should consider these matters, and a course of action,
:06:43. > :06:47.rather than those people who were responsible and involved in the
:06:48. > :06:52.procurement exercise. In answer to your question, it was a decision for
:06:53. > :06:59.the MDA board, that is how it is constitutionally established. But
:07:00. > :07:03.its decision required ratification by me, by the Chief Secretary to the
:07:04. > :07:08.Treasury, and by the accounting officer in my department. She raises
:07:09. > :07:13.some very important questions about the conduct of the original
:07:14. > :07:17.procurement, and mismanagement. This is exactly why it seems to me we
:07:18. > :07:25.need to have an independent figure, independent of government and the
:07:26. > :07:29.MDA, to report to this house, and also the Cabinet Secretary. Not only
:07:30. > :07:36.to learn the lessons to make sure that things cannot happen again, but
:07:37. > :07:40.if there is a fault and an error has been made, then the recommendation
:07:41. > :07:43.of disciplinary action can follow from that. She quite rightly raises
:07:44. > :07:52.the question of the Magnox workforce. For whom this will be a
:07:53. > :07:57.difficult day. She should, and I'm happy to confirm to the House, that
:07:58. > :08:01.there is no question of the good performance, operationally, of the
:08:02. > :08:04.contract. It was the question of the terms of letting the contract. Good
:08:05. > :08:08.progress has been made. The workforce that is employed in the
:08:09. > :08:14.decommissioning contract will continue as planned. And when the
:08:15. > :08:19.report is made available, lessons will be learned about the structure
:08:20. > :08:26.of the MDA, as well as any particular procedural aspects. Mr
:08:27. > :08:29.John Whittingdale. Will my right honourable friend and join me in
:08:30. > :08:32.paying tribute to the workforce in my constituency who are doing a
:08:33. > :08:36.magnificent job in decommissioning that power station. Will he confirm
:08:37. > :08:39.that nothing will prevent that work going forward? That will he also
:08:40. > :08:45.listen to their real concerns about the effect on their pension
:08:46. > :08:50.entitlements with changes made with regard to the cap on exit payments?
:08:51. > :08:53.I certainly join him in paying tribute to the workforce there. Good
:08:54. > :09:00.progress has been made, as he will be aware, improbable, in terms of
:09:01. > :09:02.decommissioning the site there. With the underground waste vaults
:09:03. > :09:07.containing intermediate level waste having been cleared and
:09:08. > :09:13.decontaminated. That is a reflection of the hard work there. In terms of
:09:14. > :09:18.the pension arrangements, there is a separate agreementth consultation
:09:19. > :09:24.and discussion going on surrounding that which is not related to today's
:09:25. > :09:28.announcement. Mr Speaker, I thank the Minister for his response and
:09:29. > :09:31.the shadow Secretary for securing the subject question. This debacle
:09:32. > :09:36.shows that the UK Government cannot even manage its nuclear project,
:09:37. > :09:39.which comes at great cost to the taxpayer, leaving its case for
:09:40. > :09:46.nuclear energy future more threadbare than ever. When we take
:09:47. > :09:51.into account the bizarre and illogical decision to leave Euratom,
:09:52. > :09:55.we are right to be concerned and to seek reassurances that uncertainty
:09:56. > :09:58.over the future of decommissioning will not lead to stand is
:09:59. > :10:03.deteriorating. What assurance Comey secretary give today? This should be
:10:04. > :10:07.a wake-up call. The UK Government's nuclear obsession will do nothing to
:10:08. > :10:11.lower energy bills and will only bird in the next generation with
:10:12. > :10:17.unprecedented economic environmental and security instability and risk.
:10:18. > :10:21.The Tories should do the responsible thing and scrap the nuclear
:10:22. > :10:26.obsession in favour of investment in renewable energy and carbon capture
:10:27. > :10:29.technology. Scottish renewables recently reported that one in six
:10:30. > :10:33.renewable energy jobs in Scotland is under threat in the next year. Will
:10:34. > :10:39.the Government acknowledged that its energy policies need to be reviewed
:10:40. > :10:43.to allow the Scottish Government to continue with its competent and
:10:44. > :10:47.ambitious vision of a prosperous, green future? And finally when can
:10:48. > :10:49.we expect full details of the timetable of this investigation into
:10:50. > :10:58.this matter? Well, I would say to the honourable
:10:59. > :11:02.lady that humility might be appropriate here because the
:11:03. > :11:06.Scottish Government's provided oversight to this procurement as
:11:07. > :11:11.part of the competition programme board and I'm sure that the lessons
:11:12. > :11:18.to be learned will apply to the Government in Scotland as well
:11:19. > :11:21.between 2012 and 2014. I am sure the people of Scotland as well as those
:11:22. > :11:25.of the whole of the United Kingdom, whatever their view of the future of
:11:26. > :11:29.nuclear power, would want the existing nuclear power stations to
:11:30. > :11:34.be decommissioned safely and to have arrangements in place so that that
:11:35. > :11:40.could be done reliably. In terms of the payment review, which I hope she
:11:41. > :11:46.welcomes, I have asked Mr Holliday to give some interim findings by
:11:47. > :11:53.October of this year so that it can inform the further decisions. Thank
:11:54. > :11:59.you, Mr Speaker. I am sure that my Right Honourable friend will pay no
:12:00. > :12:03.attention whatsoever to the bizarre protestations of the SNP spokesman
:12:04. > :12:06.but I hope in asking Steve Holliday personally and we all have very
:12:07. > :12:11.considerable confidence to do this review, he will seek to bring the
:12:12. > :12:14.review itself to a final conclusion reasonably soon after the interim
:12:15. > :12:18.report in October so that we can actually get to the bottom of this
:12:19. > :12:25.and make sure as he rightly says that this does not repeat itself in
:12:26. > :12:28.future years. I agree. I think it is important quickly to learn the
:12:29. > :12:34.lessons and to apply them. This is very important work. The work has
:12:35. > :12:36.been and is being carried out to a high standard but those lessons need
:12:37. > :12:43.to be learned and need to be applied. May I thank the Secretary
:12:44. > :12:46.of State for his courtesy call to me on this matter this morning and the
:12:47. > :12:51.subsequent letter. The Select Committee will challenge and work
:12:52. > :12:55.constructively with him and Steve Holliday on this important issue.
:12:56. > :13:00.Will he clarify whether the enquiry will be confined to the procurement
:13:01. > :13:09.process which led to this specific contract will consider other
:13:10. > :13:13.contracts such as that to decommission Dounreay with the same
:13:14. > :13:18.company that won the Magnox contract and will be enquiry be broad enough
:13:19. > :13:23.to consider whether the arrangements have always been and will continue
:13:24. > :13:26.to be fit for purpose? I am grateful to the chairman of the Select
:13:27. > :13:33.Committee for what he said. I can confirm what he said which is that
:13:34. > :13:36.the management arrangements are very much in scope. I have the terms of
:13:37. > :13:40.reference and put them first thing this morning into the library of
:13:41. > :13:47.both houses of parliament. It is open to Mr Holliday to go where the
:13:48. > :13:52.evidence takes him, to use the phrase on this. The particular
:13:53. > :13:58.concern is about this contract, but if he feels that he needs to look at
:13:59. > :14:06.other aspects of the management, years absolutely free to do so.
:14:07. > :14:09.Thank you. I welcome the characteristic candour and openness
:14:10. > :14:12.with which the Secretary of State has approached this is you. Can he
:14:13. > :14:18.reassure me and the house that in the contracts -- context of the
:14:19. > :14:25.scope of this enquiry, not only will it look at the NDA but also looking
:14:26. > :14:27.at the role of any of the UK Government departments at the
:14:28. > :14:32.Scottish Government in this process as well. I will indeed. The terms of
:14:33. > :14:38.reference which are available and will be published this morning make
:14:39. > :14:40.it very clear that it applies to the NDA and two Government departments
:14:41. > :14:45.as well and that is absolutely right and proper and from the beginning of
:14:46. > :14:51.the procurement in 2012 to the conclusion of the litigation and
:14:52. > :14:58.determination of contract. Under current plans, the power station
:14:59. > :15:01.will lose most of its jobs in under ten years. The Government has
:15:02. > :15:06.committed to continuous decommissioning as recommended by
:15:07. > :15:12.the Welsh affairs Select Committee. Well he published plans and will he
:15:13. > :15:15.agreed to meet with me to discuss the future? I will certainly meet
:15:16. > :15:18.with the honourable lady and I am glad she has given me the
:15:19. > :15:22.opportunity to emphasise that the work will continue but all of the
:15:23. > :15:28.sites as planned and I think she will know that the work is ahead of
:15:29. > :15:31.schedule in the plant that she mentions, but in the light of it
:15:32. > :15:39.being ahead of schedule, I will meet with her to update on the latest
:15:40. > :15:43.timetable. Thank you, Mr Speaker. This was clearly a defective
:15:44. > :15:47.procurement with quite serious financial consequences. And I
:15:48. > :15:51.welcome the Secretary of State's determination that the reasons for
:15:52. > :15:56.it will be exposed. But will he assure this house that where people
:15:57. > :16:03.are found to be responsible or at fault, they will be brought to
:16:04. > :16:08.account? Mr Speaker, I can confirm to my honourable friend that the
:16:09. > :16:11.terms of reference are very clear that the enquiry can make any
:16:12. > :16:15.recommendations it sees fit, including as to any disciplinary
:16:16. > :16:24.investigations or proceedings that may in its view be appropriate as a
:16:25. > :16:27.result of these findings. Thank you, Mr Speaker. Goody Secretary of State
:16:28. > :16:30.please confirm that the thousands of people waiting for an outcome on
:16:31. > :16:38.their pensions will not be ripped off? Yes, Mr Speaker. There have
:16:39. > :16:42.been constructive discussions with the representatives of the
:16:43. > :16:45.workforce. They are continuing, the consultation continues and of course
:16:46. > :16:53.we want to bring them to a satisfactory conclusion. The NDA
:16:54. > :16:58.settlement payments are very substantial. Can my Right Honourable
:16:59. > :17:02.friend confirm that whilst these payments were made without accepting
:17:03. > :17:06.liability that the cost has potential to rise much further, had
:17:07. > :17:13.they gone to court? My honourable friend is absolutely right. We have
:17:14. > :17:16.a duty to consider the further risks to public money, which is why it
:17:17. > :17:24.might accounting officer and the Chief Secretary to the Treasury and
:17:25. > :17:28.I, on advice, accepted is, that however painful it is an these are
:17:29. > :17:31.very significant sums of money as my honourable friend said, that we
:17:32. > :17:42.should be preventing those sums of money being even greater. Given the
:17:43. > :17:45.cost problems with this NDA decommissioning Magnox contract, how
:17:46. > :17:49.can they Secretary of State have any confidence whatsoever in the cost
:17:50. > :17:51.figures for Hinkley point which will itself need decommissioning,
:17:52. > :17:57.especially giving the farce of the massive cost overruns and huge time
:17:58. > :18:02.delays in building the EDF sister reactors in Finland and Normandy,
:18:03. > :18:10.neither of which has opened years later, massively cost overrun? This
:18:11. > :18:13.is about a procurement process that was wrongly specified around
:18:14. > :18:19.decommissioning, not against the built costs of a future reactor. But
:18:20. > :18:22.when we have the other reports of Steve Holliday, if there are wider
:18:23. > :18:31.lessons for the industry, then we will be sure to take them. There is
:18:32. > :18:36.much that all public sector organisations can learn from the
:18:37. > :18:41.procurement process and public - private initiatives, as the amount
:18:42. > :18:48.of money spent by the NHS on PS I will attest. We'll be Secretary of
:18:49. > :18:51.State assure me that all departments will be given the opportunity to
:18:52. > :18:56.learn best practice from this review? I think it is important
:18:57. > :18:59.whether such a serious set of consequences to public money that
:19:00. > :19:03.the conclusion should be publicly available, available to the south
:19:04. > :19:10.and including four other Government departments if they would want to
:19:11. > :19:14.reflect on it. Cannily Secretary of State confirm the holiday enquiry
:19:15. > :19:19.will have reached its final conclusions and issued its final
:19:20. > :19:25.report in time for any lessons to be learnt, to be taken into account
:19:26. > :19:28.before the new contract process begins? What I would say to my
:19:29. > :19:31.honourable friend is that one of the reasons I asked Mr Holliday to make
:19:32. > :19:37.a report by October so that that can happen. I will meet with him in the
:19:38. > :19:42.coming days, as he sets out the scope and timetable, but that is one
:19:43. > :19:45.of the key reasons for the report and I'm sure he will want to make
:19:46. > :19:51.his recommendations available for the new process. What were the terms
:19:52. > :19:59.of the payoff? He has not mentioned it. I have mentioned the settlement.
:20:00. > :20:09.It is nearly ?100 million for the settlement of the litigation and the
:20:10. > :20:20.Chief Executive of the NDA has come to the end of his contract.