NUCLEAR INSTALLATIONS (LICENSING AND INSURANCE) BILL [H.L.]

THE MINISTER OF POWER (LORD MILLS)

I listened attentively to the noble Lord, Lord Wilmot of Selmeston, because was interested to hear that at the beginning of his speech he challenged the principle of this Bill. He said that the Bill was uncalled for and that it was not a question of State enterprise versus private enterprise. But after that, in every word he said—or so it seemed to me—he enlarged upon the fact that we are seeking to protect private enterprise and limit their liabilities, both in amount and in time. With all respect to the noble Lord, nothing could be further from the truth. As I said on Second Reading, the noble Lord himself played a great part in the nationalisation of some of our industries; and in this industry, the electric supply industry, we have looked upon the object of nationalisation as not only to coordinate the supply industry but also to provide efficient businesses capable of serving the State and the community. Therefore, it has been our endeavour to do all we can to facilitate their operations.

Further, we have always tried to look ahead in matters with which this Government have dealt and not wait until events overtook us. We have six nuclear power stations under construction or planned by the electric supply industry, and there is one small reactor in existence, operated, as the noble Lord rightly said, by Associated Electrical Industries. What we are seeking to do is not to add to the risks that people run but to safeguard them from risk by laying down conditions under which atomic power stations should be operated and by seeing that in the event of any damage resulting from 985 their operations, people get proper compensation.

We have felt it wise to say that every operator shall be covered to enable him to meet compensation arising from damage, and we have thought it right—and I make no apology for it—to use that great British enterprise, the insurance market, in order to enable such cover to be provided, though there are alternatives. So much for the principle: that is, to enable everybody who operates an atomic reactor to take proper cover and to be fully liable for any happenings from that reactor, subject only to the limit of £5 million in any one case—a matter which we shall no doubt discuss upon a later Amendment.

I should like now to deal with this particular Amendment. The effect of the Amendment would be to require the Minister to consult the Atomic Energy Authority in each case before granting a licence. It is undesirable, I suggest, to tie the Minister's hands in this way. At the start of the licensing system the Atomic Energy Authority will certainly be consulted, and there will be the closest possible liaison between the Authority and the inspectorate appointed under the Bill. But the Authority is essentially a research and development organisation, whereas the inspectorate will be concerned with licensing commercial-type reactors. The paths of the two organisations may therefore diverge as time goes on. Consultation on the general principles of safety will naturally continue, but eventually there should be no need to consult the Authority on every application for a licence.

LORD WILMOT OF SELMESTON

Could we not have the Bill then?

LORD MILLS

I suggest that we must have the Bill now, so that men are properly trained and everything is done by the time the reactors begin to operate. As I was saying, consultation on the general principles of safety will naturally continue, but eventually there should be no need to consult the Authority on every application for a licence to build a reactor of a well-known type. A statutory obligation to consult them in such cases would be an unnecessary burden on the Minister and on the Authority.

The second effect of the Amendment would be to require the form of licence 986 to be prescribed in each case—and I use the term "prescribed" in exactly the way the noble Lord outlined. "Prescribed" must be taken to have here the meaning assigned to it by Clause 9 (1) of the Bill; that is to say, prescribed by statutory instrument made jointly by the Minister of Power and the Secretary of State. This would be an exceedingly cumbrous procedure. The conditions of a licence will be highly technical. They are, as I am sure the noble Lord will appreciate, essentially matters which fall within a Minister's executive responsibility, and he will be advised on them by his own inspectorate; by the Nuclear Advisory Safety Committee, which as I announced in the debate on Second Reading of the Bill it is intended to appoint; and by the Atomic Energy Authority, at least in the early stages of the work. There is nothing to be gained by bringing these detailed technical matters before Parliament. Indeed, there might be an undesirable loss of flexibility, because the Bill states that the conditions applied to a licence may be varied at any time. If experience should prove that such a variation was necessary, it might need to be done at once, without waiting until a statutory instrument could be amended. For these reasons, I cannot accept the Amendment.

LORD SILKIN

I do not propose to discuss the principle of this Bill, because I take it that by passing the Second Reading your Lordships have accepted it, whether we like it or not. I want to confine myself to this Amendment, but with your Lordships' permission, I should like to say a word or two about the second Amendment, which really goes with the first. At the outset of his remarks my noble friend Lord Wilmot of Selmeston apologised in advance for the possible weakness of the drafting of the Amendment, and I should like to reiterate that statement in regard to the drafting of all of them. We on this side are in great difficulty when it comes to drafting; we have no assistance whatever, and have to do our best burning the midnight oil. It would be strange indeed if our Amendments were watertight. The noble Lord is entitled to make what capital he likes out of that, but I hope he will not treat us too roughly in dealing with any defects in drafting.

987 The purpose of the first Amendment is simply that in embarking on the unknown, as we are to-day, not knowing what is in the Minister's mind, and he possibly not knowing what his proposals are going to be; not knowing whether it is proposed to grant licences to a few individual undertakings in the course of a year, or to scores of undertakings, or to what kind of undertakings (we have no idea of that, and certainly none has been disclosed to us) we felt it right that Parliament should be informed of each proposed licence, so that Parliament could say, "Yes" or "No". That is all Parliament can do; it cannot revise the licence or make amendments. I cannot for the life of me see what is the objection to that, but the noble Lord thinks it would be cumbersome and that it is not a suitable subject for Parliament.

I can see the point which the noble Lord makes about technical conditions, which may be long and above the heads of Members of Parliament or Members of your Lordships' House, who may not understand all the technicalities of all the conditions to be imposed. But I hope that all of us are capable of appreciating the general principle of granting a licence to a particular undertaking. We are not so much concerned—and I make this point in connection with the drafting of the Amendment—to be able to express views about the detailed conditions. If, for instance, the noble Lord were disposed to accept the idea of the Amendment, namely, that Parliament should be informed in every case of a grant of a licence, I am sure we should agree about how much Parliament should be informed as to the conditions or about what kind of information Parliament should be given. As I say, we should not be insistent upon every single condition in the proposed licence being put before Parliament and forming the subject of debate.

I should have been grateful if the noble Lord had addressed himself to the reasons why it is undesirable, particularly in the early stages, the first few years when these licences are going to be granted, that Parliament should be informed as we go along, so that it may say that, generally speaking, the Minister is doing the right or the wrong thing, or that particular undertakings are not perhaps suitable, or even that a proposed site is not a suitable one for the grant of a licence. Parlia- 988 ment may well have doubts as to whether a particular site is a suitable one. I hope that, in the light of these considerations, the noble Lord will see his way clear to look at this point again.

He referred to an unnecessary burden of informing Parliament of what he is doing in this novel undertaking—for he is embarking on something very novel and far-reaching. Those of us who have been Parliamentarians for a long time realise that Parliament can be troublesome, and it is convenient sometimes, if one is a Minister, to be able to act without giving Parliament all the information which Parliament wants. But we are living in a democracy, and Parliament is entitled to know where we are going on a far-reaching matter of this kind. I would say to the noble Lord that it is really undemocratic to embark upon this enormous venture, to leave it to the Minister, and for the Minister to say: "Well, it would be very awkward if I had to tell Parliament what I am doing; it would be cumbersome. Therefore, let me go my own sweet way and consult nobody except the Treasury".

Now may I say a word on the case for consulting the Atomic Energy Authority. If the noble Lord has any alternative to that provision, we shall be glad to consider it; but we felt that the Atomic Energy Authority was the Authority which had the technical knowledge and appreciation of this problem. I do not know whether the Minister has in his Department people of equal standing who can give him advice, or whether he thinks he has all the knowledge himself. Presumably, he would be acting on some advice, and we feel that, apart from the departmental advice, he ought, in the case of a grant of a licence, to consult this body, which is an important public body and which can speak with authority on questions of atomic energy. We think that, however cumbersome and burdensome it may be to have to consult bodies—and those of us who have had responsibility appreciate that it is sometimes awkward to be under a statutory obligation to consult people—it is nevertheless, a healthy check; and it can be useful to the Minister himself if he has to consult, and if it is put in the Bill. We feel, therefore, that on both these points we ought to insist that the Minister should give the matter consideration.

989 I said that the second Amendment is really on the same lines. Perhaps that should have come first, but as bad draftsmen we were not able to arrange it. Its natural place is that we should first settle whether these licences should be granted at all to private bodies, or should be confined to statutory undertakers and Government organisations. We on this side feel—at least most of us do—that it would be desirable in the first place, at any rate, to restrict it to statutory undertakers and Government bodies. Later on, we could reconsider it. That is the feeling, and the Amendment was put down for that reason. Logically, the second Amendment arises if the first is rejected. But we think it might be convenient if we discussed at the same time both the principle of the kind of organisations to whom licences should be granted and the principle that, in any case, before the licence is actually granted, Parliament should be informed and there should be consultations with the Atomic Energy Authority. I feel that my noble friend's Amendment should be supported, and I hope that it will not be rejected lightheartedly.

LORD BALFOUR OF INCHRYE

May I make two observations upon the first Amendment, leaving aside the broad principle which is raised by the second Amendment? On the first Amendment, it is proposed that there should be an obligation upon the Minister to consult the Atomic Energy Authority. I should like to submit this thought to those who are advocating that course. The Atomic Energy Authority, as the Minister has said, is a research and development organisation, whereas these stations will be productional. It is, I submit, basically wrong that production, production methods and plans should be subjected to the straitjacket of any organisation which confines itself to research and development. Surely, research and development are the basis upon which production takes place, and it is wrong that production should be censored, as it were, by an organisation for research and development.

As the Minister has said, in the beginning there will be consultations with the Atomic Energy Authority; but I submit that to make this obligatory for all time would be a fundamental mistake for the development of this new science. The 990 second point on this first Amendment was made by the noble Lord, Lord Wilmot of Selmeston, who put forward the proposition—

LORD SILKIN

The noble Lord has several times said that the function of the Atomic Energy Authority is merely research and development. Has he read Section 2 of the Atomic Energy Authority Act, 1954, which sets out the functions of this Authority? They are much wider than he is saying. If the noble Lord would look at Section 2 (2) (b), he will see that it says: to manufacture or otherwise produce, buy or otherwise acquire, store and transport … and so on. It indicates clearly that these functions are rather wider. I do not want to debate this aspect: I just wanted to make a point of correction.

LORD BALFOUR OF INCHRYE

In the original Bill, yes; but in fact the Atomic Energy Authority's main purpose is research and development.

LORD WILMOT or SELMESTON

If the noble Lord will forgive me, he is quite wrong, because I have the Act in my hand, and the primary purpose of that Authority is here defined: to produce, use and dispose of atomic energy … That is its function. The others are secondary functions.

LORD BALFOUR OF INCHRYE

I am taking the Minister's own basis of the duties of the Atomic Energy Authority.

LORD WILMOT or SELMESTON

It is set out in the Act.

LORD BALFOUR OF INCHRYE

Yes, but in practice its purpose is for development and research. I submit that it is wrong to link an organisation whose primary purpose is development and research with production.

The second point the noble Lord, Lord Wilmot of Selmeston, raised was that the person who may suffer injury is exposed to the difficulties of obtaining redress under private enterprise, the inference being that if it was a Government-owned enterprise compensation would be easier to obtain. I submit that it would be much better for the average man who has suffered injury to have the great insurance world behind his claim than to have to fight the official channels. The liberty of action, the breadth of view and the 991 tolerance of outlook evident in regard to insurance claims met by our great insurance market compares more than favourably with the somewhat niggardly bargaining which has to go on before one can obtain any compensation from public authorities. I submit that that is a powerful argument, so far as the man who is injured is concerned, in favour of private enterprise as against Government authority.

LORD GRANVILLE-WEST

I do not know whether it is in order for me to speak to the second Amendment that stands on the Order Paper, because it is closely linked with the Amendment which has already been moved by my noble friend Lord Wilmot of Selmeston. With regard to the first Amendment, the Minister has indicated that the Atomic Energy Authority is a research organisation and is therefore not a competent body to consider the question of licences to any industrial undertaking. My understanding of the position, however, is that in any event an industrial undertaker will have to go to the Atomic Energy Authority for a licence, whether to set up a reactor in his factory or to exercise patent rights which are vested in the Atomic Energy Authority. It seems to me that if an industrial undertaker has to make approaches to the Atomic Energy Authority for a licence it is right and proper that the Atomic Energy Authority should have the opportunity of tendering to the Minister advice as to whether the site is suitable for the proposed installation.

The next point I would make is on the statement of the noble Lord, Lord Mills, with regard to the powers under this new Bill. On February 29, 1956, in another place, when a question was raised about the growing interest of private enterprise in the nuclear energy field, the then Lord Privy Seal said that the Government were satisfied that under the Atomic Energy and Radioactive Substances Acts, 1946 to 1954, they possessed the powers necessary to exercise administrative control over the use of nuclear fuel. Therefore that goes to the question: for what purpose is this Bill brought forward to-day? The Government either have or have not full powers to exercise the necessary control.

992 Then on March 14, a fortnight after that statement was made, the Lord Privy Seal made another statement in the other place on the relationship between the State and private industry in the field of nuclear energy. In the statement he said that the Government considered that the relationship between the State and private industry in this field should be one of close partnership, subject to the maintenance of a proper degree of Government control. It is on that point that I would like to say a few words this afternoon, particularly with regard to the second Amendment which stands upon the Order Paper.

With regard to this close partnership between the State and private industry in the field of nuclear energy, the Atomic Energy Authority has been vested under the Act with powers of research and the other powers to which my noble friend Lord Wilmot of Selmeston has drawn the attention of your Lordships' House. They have been engaged in this policy of research into the nuclear field, and that has involved the British taxpayer in millions of pounds of expenditure. They have, as a matter of fact, made tremendous progress in that field, and it is true that private industry has contributed very greatly to the developments which have taken place. Private industry has been engaged to undertake much of the development of reactors for the Central Electricity Authority. The contracts have been placed out to them, and their teams of experts, and those who were seconded from the Central Electricity Authority, were in close collaboration with the Atomic Energy Authority for over two years; they were, in fact, trained by the experts of the Atomic Energy Authority in this field. It is due to the know-how which was imparted to them by the Atomic Energy Authority that private industry has been able to function in this way.

So the submission that one is bound to make, in face of this situation, is that if private industry is to continue with this kind of work then it is right and proper that the Atomic Energy Authority, which after all has led the way and given them the know-how, should at any rate have this close partnership which the Lord Privy Seal was talking about. But I notice that the electrical companies who have joined into consortia to undertake 993 this nuclear development work have joined together in groups to develop their activities in certain fields. They are depending all the while upon the Atomic Energy Authority, yet the Atomic Energy Authority, which is the one body upon which everything depends, is left out of the consortium. Had the Atomic Energy Authority been brought into the consortium then the great benefits and advantages which arise to private industry in the contracts they are undertaking, and, indeed, in the export which it is understood they will be engaged upon, would be of some benefit to the nation as a whole. The nation would have some return for the vast expenditure in which the taxpayers have been involved as a result of the efforts of the Atomic Energy Authority.

For all those reasons I would submit that, far from licensing not being the concern of the Atomic Energy Authority, it is a matter with which they are vitally concerned. They should, therefore, be consulted at the earliest moment, particularly as they will have to grant the licence for the reactor to be installed, and, indeed, will have undertaken under the terms of the licence to acquaint the industrial undertaker, with whom they will be in constant and close touch, of any further developments they may discover in the course of their researches.

Finally, I would say that the need for this Bill has not been made out. My noble friend Lord Silkin on the Second Reading asked the Minister for what purpose the Bill was brought forward. The noble Lord, Lord Mills, did not give a satisfactory answer why the Bill is needed now. In fact, as the noble Lord, Lord Wilmot of Selmeston, has stated, undertakings have already been started for Associated Electrical Industries, Limited, and they have already built a nuclear reactor, not under the authority of this Bill but under the authorities which already exist, under those authorities which the Lord Privy Seal said were ample safeguard and which gave the Government complete control in the field of private enterprise development of nuclear energy. For those reasons I would ask the Minister again to consider the Amendment which my noble friend has moved.

LORD GREENHILL

I should like to add a word indicating my own uncertainty about the value of this clause. The clause, as I read it, is simple, and it is this: that nobody except the Authority shall produce or use atomic energy or store or dispose of nuclear fuel, and so on, without a licence, and that licence shall be given only by the Minister. That, I think, is the gist of Clause 1. What I am asking myself, as my noble friends have asked, is what is the purpose of this Bill? If, as the noble Lord, Lord Mills, indicated, its purpose is to ensure the safety of those working in or around a reactor, one can then examine what the processes of these safety measures are. But if, as we are also told, the purpose of the Bill is not the safety of those who are in or about a reactor, but that in the event of anything occurring there shall be a means of compensating by monetary payment those who are either injured themselves or whose property has suffered, then the whole Bill really means that here is a way of ascertaining or obtaining the backing of insurance companies for any damage or suffering that may he incurred. Is that the purpose of this Bill?

Suppose we look at it in a purely businesslike way and say to ourselves that there may be a certain number of private enterprise manufacturers of reactors who, in order to put up reactors, must first get a licence for the site. That seems a perfectly reasonable thing to do. But how many reactors do we envisage it may be necessary to erect in this small country of ours within the next ten or twenty years? After all, who are the potential purchasers of these reactors within our country? If, however, the answer is that manufacturers of reactors want, as it were, to develop their own methods of producing reactors in order that they can obtain a world-wide market to which to supply reactors, then that might be something that ought to be encouraged. But that does not come within the province of Clause 1 of this Bill. All that it says here is that any private enterprise which wishes to build a reactor cannot do so unless, before acquiring the site, the person concerned gets the Minister to grant him a licence for that site. That applies to anybody 995 other than the Atomic Energy Authority. Again, I think that the Minister ought to satisfy us as to what really is the purpose behind Clause 1.

LORD SHACKLETON

I am considerably concerned by the statement that the noble Lord, Lord Balfour of Inchrye, made with regard to the purposes of the Atomic Energy Authority. It seems to have suffered something of a change since the Lord President of the Council gave up his direct responsibility under the 1946 Act. I would ask your Lordships to hear in mind that the terms of the 1954 Act on this matter were quite specific: that the main purpose of the Atomic Energy Authority was to produce, use and dispose of atomic energy and carry out research into any matters connected therewith. I appreciate that the application of atomic energy to industry will have to be mainly in the field of those who wish to use it or produce it on a large scale, whether it be the Electricity Authority or those who want to use it as a prime mover for some particular purpose. But it is clear, I think, from the 1954 Act that the Atomic Energy Authority is, in a sense, the supreme authority; indeed, the arguments for the 1954 Act were to remove from direct Whitehall control and from the control of the Minister the powers which it was argued—and as I thought quite unnecessarily at that time—could not be discharged efficiently by Whitehall.

Now we see ourselves in a position where we are not quite clear what the Minister's mind in this matter is, and we certainly do not know the views of the Atomic Energy Authority, though we may be given that information in due course when the Atomic Energy Authority make what I understand is their Annual Report to Parliament. It may be that then they will give us something of their views as to how they will apply their responsibility for licensing, particularly in the matter of those processes which they have developed. I hope, therefore, that we shall not leave this Amendment without hearing from the Minister some account of how he feels about the discharge of this duty by the Minister and by the Atomic Energy Authority, which clearly has to be done jointly in some way or another.

996 Indeed, the more I have heard of this debate the more I am concerned about what I might call the interim state of mind of the Government in this matter. The Minister suggested that the reason this Bill was necessary was that the Government wished to proceed along a path which would enable developments to go on over the years; yet this Bill is limited. If I understand it rightly, Clause 1 makes it clear that only atomic energy produced by fission processes is being considered. I do not know myself what the views are about the production of atomic energy by the fusion process. We know that some form of fission process is necessary in order to produce a fusion, but we should like some further explanation as to why this longer-term development is not necessary.

I am also concerned about the use of the word "site". Perhaps the Minister could tell us a little about it. The Explanatory Memorandum—this is relevant to the particular Amendment—makes it clear that the Bill is intended to apply to fixed sites only. I do not know whether this is a matter on which some legal expert can give us an opinion, but I am not quite sure what a fixed site is. Is a marine reactor when it is fixed in a harbour covered by this Bill? Is an aeroplane "fixed" until it takes off? All these are, on the whole, more likely developments in the field of atomic energy than the licensed fixed sites which we hear about. We are much more likely to be confronted with this sort of development in the near future in regard to things which one would expect to be not necessarily administered by the Government but in the hands of private enterprise. It would seem that, whether it be in the shipping of the world or in the aeroplanes of the world, these reactors are not necessarily likely to belong either to the Government or to the Atomic Energy Authority. I hope, therefore, that before we leave this Amendment we shall have a clearer explanation as to where the Atomic Energy Authority will come in on these matters, and perhaps also an explanation why the Bill, which seeks to protect us far into the future, is in fact so very limited.

THE MARQUESS OF SALISBURY

Perhaps I might say one word on this Amendment. I had not intended to speak and I have not looked up the exact 997 wording of the Atomic Energy Act, but as my name has been mentioned by I think at least one noble Lord—at least, we were told that the then Lord President said certain things and that the Government appear to have changed their minds—perhaps I ought to say one word at least to your Lordships on this question. I hope that even now the noble Lord, Lord Wilmot of Selmeston, will not press this Amendment.

The attack upon this portion of the Bill has been based largely, or at any rate nominally, on security reasons. But the protection that is given under the Bill seems to me very wide indeed and, I should have thought, as efficient as could possibly be devised. Clause 1 (1) says: No person other than the Authority shall use any site for the purpose of installing or operating

1. (a) any plant designed or adapted for the production of atomic energy by a maintained and controlled fission process; or
2. (b) any other installation of such class or description as may be prescribed … unless a licence to do so … has been granted … by the Minister."

That is the first safeguard. The second safeguard is that the Minister may at any time …

1. (a) attach to the licence such conditions as he may in the interests of safety think fit."

That is the second safeguard. Under paragraph (b) he can vary or revoke any condition for the time being attached to the licence. Then it states: Subsection (4) of section five of the Atomic Energy Authority Act, 1954 (which makes temporary provision with respect to the discharge of waste on or from premises occupied by the Authority) shall apply to any licensed site"— under this Bill. So that any authority which is given up to now will be extended to new premises which are to be licensed under the Bill; and under subsection (6) any person who contravenes subsection (1) is liable to a fine or imprisonment. Finally under Clause 2 (1): A nuclear site licence may at any time be revoked by the Minister or surrendered by the licensee. So that the Minister, and the Government, who represent the community, I should have thought, keep complete control over the position.

The Amendment of the noble Lord, Lord Wilmot of Selmeston, says that the 998 Atomic Energy Authority ought to be consulted. That is a matter of opinion; but I believe that the noble Lord, Lord Mills, was right in saying that the Authority were essentially a development and research organisation. Indeed, if my memory serves me aright, I emphasised that again and again in your Lordships' House at the time of the passage of the Bill, and it was a great surprise to me to find that that is not generally accepted. After all, Harwell is entirely a research and development project. Windscale, which has been mentioned, is also for research and development; and although it is true that there was a pilot power station at Windscale, that was purely an experimental station. While a certain amount of electricity was released into the grid, nobody has suggested for a moment that Windscale was a commercial station; at least, I have never heard that said.

I understand that every commercial station which is being or will be built under the Act is to be under the Ministry of Fuel and Power and that the Atomic Energy Authority has nothing to do with the operation of these commercial stations. That was always accepted and approved by Parliament. The position, as I understand it, therefore, is that whatever may be said about Windscale or Harwell, the actual commercial production of atomic energy has always been regarded as a matter for the relevant Government Department—the Ministry of Power, the Ministry of Health and, I suppose in some respects, the Home Office; in fact, whichever is the relevant Government Department. Commercial production is not a matter for the Atomic Energy Authority at all; otherwise why are not all commercial reactors under the Authority rather than under the Ministry of Power?

Nor do I think that security would be increased under this Bill by the suggestion that any new proposals should be referred to Parliament; for if noble Lords opposite are nervous about the capacity of Government Departments to ensure security, surely your Lordships' House or even another place is no more competent on a matter so technical or esoteric as that. Those are very technical matters, and the Government Departments concerned—the Department of the noble Lord, Lord Mills, and others— 999 have given very special consideration to them. I have the highest admiration for the Atomic Energy Authority. For some time I was responsible for it, so far as Her Majesty's Government were concerned, and I think they are a magnificent body of men, very experienced in this new field; but I would not say that they were the only people who were competent to judge on the security of a reactor. Therefore I do not really feel that this argument about security holds water.

I am driven to the conclusion that what is really worrying noble Lords opposite, perhaps subconsciously, is the possibility that private enterprise might have any share in this new field. The noble Lord, Lord Silkin, shakes his head but I believe that that is borne out by the second Amendment in the name of the noble Earl, Lord Lucan, which, he rightly says, must be read in connection with this first Amendment. The Amendment proposed by the noble Earl is to leave out 'body corporate' and insert 'statutory undertaker or Government Department'", and that automatically cuts out any other form of enterprise at all. I entirely agree with the noble Lord, Lord Silkin that that is the "guts" of the whole proposal. Parliament must read these two proposals together in order to see what noble Lords opposite have in mind. I do not think any of us should complain that noble Lords opposite take that view for, after all, they are convinced and sincere Socialists and they believe in the national ownership of the means of production and distribution. It is very natural for them to take that view and I should be the last to criticise them for doing so; but it is only right that we should realise what this proposal really means, otherwise we may be led astray.

Noble Lords opposite really want the reference to Parliament only in order that as each proposal is brought up they may oppose it. If the noble Lord, Lord Wilmot of Selmeston, tells me that he will not oppose a satisfactory proposal, I must say that I do not believe he would get all his colleagues on the Front Bench to support him. I entirely agree that the grant of licences must be most carefully supervised by the Minister. This is a new field and one which is potentially dangerous, and I am quite sure that the noble Lord, Lord Mills, would himself 1000 agree that it is one in which the utmost care and discretion must be exercised. But surely those who sit on this side of the House would not rule out the possibility of any other form of enterprise except a statutory undertaking or Government Department as mentioned in the proposal of the noble Earl, Lord Lucan.

LORD SILKIN

Will the noble Marquess forgive me for interrupting? He rather inquired what was in our minds in moving these Amendments, and perhaps he will not mind my saying what is in my mind. It is the fact that we all think that certainly in the early stages of this new development Parliament ought to be informed of where we are going. We are not so concerned with the details of the conditions but we should like to know to whom these licences are going. The assumption is that they are going to be private.

I accept, for instance, that Her Majesty's Government are not going to accept the second Amendment. We have put it down, but it will not be accepted; therefore there will be licences for private enterprise and we should like to know where Her Majesty's Government are going. What we propose may not be necessary for all time, but certainly for the first two years we should like the Minister to tell Parliament to whom licences are going and what kind of conditions are being imposed. And if the noble Marquess wants any assurance I join my noble friend Lord Wilmot of Selmeston in saying that we shall not oppose any reasonable grant of licences.

THE MARQUESS OF SALISBURY

If what the noble Lord wants is that Parliament should be consulted, I would point out that that is not in the Amendment. The Amendment has nothing whatever to do with that.

LORD SILKIN

Not consulted, but informed.

THE MARQUESS OF SALISBURY

If the noble Lord will allow me to say, I still believe that what is behind this Amendment is what I might call ideological rather than practical considerations.

SEVERAL NOBLE LORDS

No, no.

THE MARQUESS OF SALISBURY

That is my view, and that is why I believe 1001 the Amendment should be rejected—because I feel that this is such an important field that any body of men who can improve the wealth of the country by exploiting this field should be allowed to do so within the very strict limits imposed by security, and it seems to me that in this Bill there is that possibility. If we limit the possibilities of exploitation merely to Government Departments and statutory undertakings we may be doing more harm than good. I realise that noble Lords opposite may not agree with that view, but I hold it very strongly, and that is why I believe that the Amendment should be rejected.

LORD WILMOT OF SELMESTON

Will the noble Marquess allow me to say that if he does not know what is behind the Amendment perhaps I can tell him. It is not put down for ideological reasons but for practical reasons. The purpose behind it is exactly what is stated: to see to it that the development of this great new held of power is proceeded with in an orderly manner and with caution. The Minister has yet to tell us what he has in mind for these private licences. He has told us nothing.

THE MARQUESS OF SALISBURY

If the purpose of the noble Lord's Amendment is merely exploratory, to enable the Minister to make a statement, that is a matter between him and the Minister.

LORD WILMOT OF SELMESTON

I cannot compete with the noble Marquess on these fine Parliamentary points, but I should like to ask him this, for he is a great authority on this subject and speaks with great authority and experience on the matters that fell within his province as Lord President of the Council. Surely he has not been quite accurate in defining the functions of the Atomic Energy Authority as principally research and development. Am I not right in saying that its main purpose is at the present time production of atomic fuel at Windscale and the fast breeder reactor in the North of Scotland? That is the purpose for which it was set up.

LORD CONESFORD

The only embarrassment I feel in speaking at this stage is that I do not desire to say anything further on the first Amendment; but speaker after speaker has coupled with the first Amendment, I have no doubt for good reasons, a discussion of the second 1002 Amendment. I doubt, therefore, whether the second Amendment is to have a wholly separate discussion. Two things can be said quite definitely about this Bill. The first is, perhaps, unnecessary to say, in view of the fact that the House has accepted the Bill on Second Reading: that is that, whatever else is true about this Bill, it is certainly not premature.

The second matter which I wish to bring to the attention of the Committee is this. The second Amendment would limit the people to whom licences can be given to statutory undertakers or Government Departments. I submit that it would be difficult to think of a more disastrous proposal. Whatever may be the merits of statutory undertakers or Government Departments, they are not very good at exporting goods. This power to operate plant may be of the greatest importance, as I understand it, to the export trade of this country. Some of the plants which are mentioned in the first clause of this Bill are plants of a kind which may be the subject of a valuable export trade—I am sure the Minister will correct me if I am wrong.

LORD SHACKLETON

Would the noble Lord be kind enough to say which plants he thinks we should be exporting under this Bill?

LORD CONESFORD

I would only say that at the recent Brussels Exhibition there were exhibits from some of our great companies, including, I believe, the A.E.I., which has been mentioned; and they were regarded abroad as products which organisations there might possibly purchase or get contractors from this country to build in their country. That can be of the greatest importance to our export trade. It seems to me that an Amendment (I am now speaking of the second Amendment) which would debar our great exporting industries—such as A.E.I., English Electric and possibly others; indeed, many others—from operating in this country plants which, if successfully operated, might lead to an invaluable export trade for this country, would be quite disastrous on national grounds. For these reasons I strongly oppose the second Amendment.

LORD GRANVILLE-WEST

I wonder whether the noble Lord would forgive me for intervening. Could he tell the House under what authority the A.E.I. 1003 have already contracted to sell to Western Germany a Merlin reactor? They will not derive any authority under this Bill. Under what authority are they doing it?

LORD CONESFORD

Any questions as to the legal powers under which things are now taking place would, quite clearly, be far more appropriately directed to the representatives of Her Majesty's Government. What I am confining myself to is something about which I believe the noble Lord who has just spoken will probably agree with me. The effect of the acceptance of the second Amendment on the Order Paper would certainly be that further enterprises would not be allowed to operate these plants in this country. I think that that would be the effect—indeed, I think that that is intended to be the effect; and I believe it would be a disastrous effect. For these reasons I am wholly opposed to the second Amendment.

On the first Amendment, I do not wish to add to what has been said. If it was intended that there should be a wholly separate discussion on the second Amendment then I apologise for having intervened now. But I know that noble Lords on the other side will forgive me, because so many of them have themselves coupled the second Amendment with the first in this discussion.

LORD TAYLOR

I have one small point on the first Amendment. That concerns the question on which I thought my noble friend Lord Silkin and the Minister were in agreement—namely, that the first Amendment would cause these licences to come before Parliament. The value of this is very great from the public point of view. There will be very few of these stations licensed; and if the rest of the Bill is to operate, it is very important in the interests of public safety, that people should know where they stand. This would be a convenient way of getting it known. I very much hope that the Minister may find some method, even if he does not accept this Amendment, by which the granting of a licence should be publicly known, so that the public risks with which this Bill is mainly concerned are as widely known as they ought to be.

LORD MILLS

We have had a far-ranging debate on this matter, which has 1004 taken in not only the first Amendment but also the second. I was glad to hear the noble Lord, Lord Wilmot of Selmeston, say that there are no ideological reasons behind his first Amendment. I do not really believe that the same can be said about the second Amendment. Be that as it may, I am grateful to the noble Marquess, Lord Salisbury, for giving us his views, which I largely share, based on his experience with the Atomic Energy Authority.

I said that the Authority is largely a research and development organisation; and that is true. The object of the research and development is the production and use of atomic energy. But other bodies, notably the electricity generating boards, will be mainly concerned with exploiting the results of the Authority's research and development. The noble Lord, Lord Granville-West, referred to the work of the consortia which the Atomic Energy Authority brought together and instructed, as he rightly said; but they are to-day contributing greatly to our knowledge on these matters. I was very proud the other day to go to Italy and attend the laying of the foundation stone of the first large atomic station on the Continent, which is being designed and built by a British firm. We should always have in mind that kind of development.

I have been pressed to say what is the purpose of this Bill. Really, I do not understand why the purpose is not understood—it is clear enough. At the present time, any person can operate a nuclear reactor without a licence, apart from the ordinary patent licence for construction, from the Atomic Energy Authority. The whole purpose of this Bill is to institute licences for safety reasons, and to enable the Minister to set up an organisation to ensure that proper conditions are laid down and followed. That, surely, is a very proper object, and one which should not be delayed until we have reactors operating throughout this country.

The noble Lord, Lord Silkin, rather suggested that what we were seeking to do was undemocratic. But the function of the Minister, surely, is to administer the Act which enables him to do certain things. It is no part of his duty, every time he carries out an administrative act which is entrusted to him, to run to Parliament and to say: "Please may I 1005 do this?" We are fully safeguarded in this matter. First of all, if there is an important reactor to be established, the question of a site is subject to a full public inquiry, and Parliament knows what is happening long before the reactor is built.

LORD TAYLOR

Was there such an inquiry in the case of the Aldermaston reactor?

LORD MILLS

This reactor is a small one known as a "swimming pool type" reactor, and its establishment was carried out in full consultation with the Atomic Energy Authority. I cannot at this moment answer the noble Lord's question as to whether or not there was a public inquiry, but I will see that he does have an answer.

I informed noble Lords that the intention was to set up an inspectorate inside the Ministry of Power, the Department which is responsible for electricity authorities and for the development of atomic energy for peaceful purposes, and I informed noble Lords of the suggestion by the Secretary of State and by myself that we should also have a Nuclear Safety Advisory Committee composed of those best qualified to advise us. Then, of course, I should think that for some long time to come the Atomic Energy Authority would also be fully consulted.

The noble Lord, Lord Granville-West, referred to the statements made by the Lord Privy Seal, but I must say that I see nothing in those statements inconsistent with the introduction of this Bill. There is a very close partnership between the Atomic Energy Authority and private firms. If private firms come along with a proposal to have a research reactor, we must he prepared to see that the proposal accords with certain principles of safety which will be prescribed, and to see that they carry them out. Then, the other purpose of the Bill is to make proper arrangements for meeting claims which might occur as a result of an accident. We cannot leave these things to chance, and the Bill describes precisely what should be done.

The question was raised as to whether this referred only to the control of fission processes. It goes much further than that. As your Lordships see, under Clause 1 (1) (b), "any other installation of such class or description as may be pre- 1006 scribed" would be covered by this Bill. So that it is not confined only to what we know to-day: it can extend to what we may know to-morrow.

LORD SHACKLETON

I am sorry to pursue the Minister on this point, but why, in that case, does paragraph (a) specifically mention fission? It seems to me that this is a very important point; and we understand now that this Bill will enable the Minister to license any future atomic energy power.

LORD MILLS

Clause 1 (a) specifically mentions fission because that is the practical thing with which we are dealing to-day. Clause 1 (1) (b) gives the Minister power to license further methods of producing nuclear power of which we may know nothing to-day but which may come along in the future. It seems to me that that is a proper thing to include in this Bill.

When one comes to the second Amendment—and it may be that your Lordships would wish to debate that by itself—here is a clear case where it is desired to restrict the Bill entirely to statutory undertakings or to Government Departments, and that would be wholly unacceptable. I hope, therefore, that the first Amendment will be rejected.

LORD WILMOT OF SELMESTON

Before the Minister sits down, I should like to ask him one question which seems to me to be of great importance. If I understood him aright, he said that at the present time, and under the law as it now is, any person can set up an atomic reactor without a licence or without permission from the Authority. Is that so?

LORD MILLS

The site would have to be approved. Anyone desiring to set up a reactor would, in the state of the law as at present, have to get a licence from the Atomic Energy Authority.

LORD WILMOT OF SELMESTON

That is what I thought.

LORD MILLS

But if they were to produce their own design which was different from the Atomic Energy Authority's discoveries, then a new situation would arise.

VISCOUNT ALEXANDER OF HILLSBOROUGH

Subject always to the provisions of Section 10 of the Act of 1946. The Minister can make an order at any time he likes in these matters.

LORD WILMOT OF SELMESTON

I had to present the sanction to Parliament, and I think it certainly was the intention of Section 10 that an absolute control should be vested in the Minister, who is the Minister under that Act. That was afterwards transferred under the Atomic Energy Authority Act to the Lord President of the Council and to the Authority.

LORD SHACKLETON

Has Section 10 been lost from the original 1946 Act?

THE MARQUESS OF SALISBURY

I do not wish to weary the House by intervening again, but I have now looked up what I said on the Second Reading of the Atomic Energy Authority Bill in 1954. This is what I said [OFFICIAL REPORT, vol. 187, col. 475]: The Atomic Energy Authority is given power by this clause to produce and dispose of ' articles ' required for the use of atomic energy. … This … means that the Authority could, so long as it did not make electricity generation its primary business"— and that is what was under discussion at that time— produce electricity as a by-product of its undertaking. … But I should make it clear that the Government certainly do not intend that the Authority should use this power so to generate electricity except as a by-product of the manufacture of fissile material, … I think that makes it clear that there was no question of the Atomic Energy Authority being anything but an experimental and development project.

It is the same with regard to weapons, with which the Authority was also concerned. The first three lines of Clause 2 (2), as your Lordships will see, prohibit the Authority from undertaking the development or production of any weapon or part of a weapon save in accordance with arrangements made with the Minister of Supply: but the last four lines allow the Authority, on its own initiative, to undertake any experimental work. Throughout my Second Reading speech the whole emphasis was on experiment, and I do not believe that it was ever conceived at that time that the Atomic Energy Authority was anything but an experimental and development project.

LORD WILMOT OF SELMESTON

I am much obliged to the noble Marquess for giving me my case completely. He confirms what I thought was the case: that the Atomic Energy Authority's primary business was to produce atomic 1008 energy—not, I agree, to make weapons and not, I agree, to generate electrical power by the use of atomic fuel; that is the function of the generators of electricity. But the primary purpose of the Authority, as its name denotes, is to produce atomic energy and, ancillary to that, to undertake research.

THE MARQUESS OF SALISBURY

I do not accept that, if the noble Lord will forgive me. Of course, it would produce fissile material, which was one of the purposes.

LORD WILMOT OF SELMESTON

Its main purpose.

THE MARQUESS OF SALISBURY

That is why the Lord President of the Council, as a non-departmental Minister, was given the job of deciding how much would go to civil and how much to military use. The main purpose, I should have thought, was experiment and development in this entirely new field in projects which could afterwards be used by industry, for export and for the development of electrical power. I certainly understood that to be the purpose.

LORD WILMOT OF SELMESTON

I am sorry to delay your Lordships but this is important, the more important since the noble Marquess, with his authority, has intervened. If the noble Marquess would look again at Section 2 (2) of the Atomic Energy Authority Act he will see that it says that the functions of the Authority are: (a) to produce, use and dispose of atomic energy and carry out research into any matters connected therewith; (b) to manufacture or otherwise produce, buy or otherwise acquire, store and transport any articles which in the opinion of the Authority are, or are likely to be, required for or in connection with the production or use of atomic energy … which is its main function. The noble Marquess's memory is at fault if he thinks that I am wrong.

THE MARQUESS OF SALISBURY

If the noble Lord were right, Harwell would have no function at all.

LORD WILMOT OF SELMESTON

Harwell is experimental and Windscale is for the production of atomic energy.

THE MARQUESS OF SALISBURY

It was always thought to be an experiment in this new fuel, and Harwell was set up 1009 as an experimental and development project so as to keep us abreast of other countries. The noble Lord is perfectly right in saying that they produce fissile material, but that is not the only and, in my view, not the main purpose.

LORD SILKIN

The relevance of all this interesting discussion is whether the Atomic Energy Authority are a suitable body to be consulted before the granting of a licence, and I think that every word that has been said demonstrates that they are.

THE EARL OF LUCAN

Before the noble Lord sits down, I should like to remind him that any confusion about the function of the Atomic Energy Authority must be laid at the door of the Government, because the noble Lord, Lord Mills, in 1957, when he made his case for the expansion of the nuclear power project, said that the Government, in conjunction with the English and Scottish Electricity Authorities and the Atomic Energy Authority, had now completed their re-examination of the programme. If they were brought into consultation then over that matter, surely there is a case for their being brought into consultation over licensing.

LORD MILLS

There is nothing inconsistent in that statement with the present position. We consult the Atomic Energy Authority from day to day and we will go on consulting them for a long time to come. Section 10 of the Atomic

VISCOUNT ALEXANDER OF HILLSBOROUGH

We are quite dissatisfied with the noble Lord's reply. We do not wish to prolong the debate in view of the remaining items on the agenda for to-day, and we shall certainly divide in favour of our Amendment.

LORD GRANVILLE-WEST

We have had a discussion which covers the object of this Amendment and, therefore, with your Lordships' permission, I formally move the Amendment.

THE EARL OF LUCAN

A good deal has been said already on this Amendment, but one point has not been raised. There is what some noble Lords have called the ideological approach to this question—the differing views taken by different Parties of what is the national interest. Some of us feel that in matters that are so vital to the life of the country as atomic energy and its development the State is the only authority that should be entrusted with it. We can understand that noble Lords opposite do not take that view, and one sometimes hears the view expressed that what is good for private industry is good for the country. However, setting aside that disagreement, there is another purely practical consideration on which surely the Government should think again in the matter of throwing open the setting up of nuclear establishments, and that is the question of skilled manpower.

We see continually in the newspapers, and we hear from the most authoritative sources in the country, that there is a grave shortage of scientific and technological manpower. Moreover, we are told from equally responsible and authoritative sources that the position will get worse before it gets better; in other words, that we shall not catch up for a long time with the demand for scientific manpower. We hear that we are being outstripped in many directions by many other countries. Yet this Bill is 1012 going to give power to use up this treasured manpower. Surely here is a case for Government control of a scarce commodity. If any body corporate that can convince the Minister it can cope with the job is allowed a licence, and is allowed to draw on the scientific manpower of the country, that can only, in the long run, weaken us.

LORD MILLS

The Government cannot agree that private industry should be debarred from the use of nuclear energy whether for purposes of research, or, in the future, as a source of industrial power. If Great Britain is to be in the forefront of countries manufacturing nuclear reactors and equipment, both for the home and overseas markets, the public and private sectors of industry must be free to gain first-hand experience of the use of nuclear energy. I am aware of the shortage of skilled manpower. I am also aware of the great benefits we have already received by the co-operation of that skilled manpower employed in private industry, as well as in public undertakings. I suggest that the manufacturers of nuclear equipment must be free to experiment and to evolve new ideas, designs and materials under working conditions. If this is not permitted, we shall be at a great disadvantage compared with our competitors. The purpose of the Bill is to provide that installations to exploit nuclear energy are designed, constructed and operated in accordance with the best safety standards, whether the owners are electricity boards or private firms. For these reasons, I beg your Lordships to reject this Amendment.

THE EARL OF LUCAN

Could the noble Lord explain why it is necessary for a private firm to have a licence to set up a nuclear establishment? Surely, any firm in private industry can obtain their experience in the way they already do. 1013 They have built the stations that are now operated by the Electricity Authority. That was the intention in the Government White Paper of 1955: that the stations should be built in the normal way by private industry for the electricity authorities who will own and operate them. Surely, for export the same procedure will apply. A private contracting firm in England will contract to export a nuclear station to a foreign country, and will contract to build it in the same way that it has been building stations for the Electricity Authority. Why is it necessary for such a firm to be given a licence to operate a station in this country?

LORD MILLS

In reply to the noble Earl, I would say that British industry does not stand still. British industry may need to know at first hand the result of certain conditions with which they will meet in designing nuclear installations. We have an example already in the Associated Electrical Industries reactor. Personally, I should welcome British industry being continually alive to all the possibilities in this field, and where they need to deal with nuclear materials to advance their work I should welcome their application.

LORD GRANVILLE-WEST

Can the noble Lord say whether there are reciprocal arrangements in existence between the private industrial company and the Atomic Energy Authority, because the Authority have undertaken, under the terms of their licence, to supply private industry with the results of their further research and development. If private industry makes a discovery in its research and development, is it under a similar obligation to the Atomic Energy Authority?

LORD MILLS

I cannot answer that question specifically, but I should be surprised to see the Atomic Energy Authority making any arrangement with any private firm without having such reciprocal arrangements.

LORD GRANVILLE-WEST

With respect, may I refer the noble Lord to the publication which has been made concerning nuclear energy in Britain, where it states specifically that, where the Atomic Energy Authority grants a licence to private industry, in consideration of that licence, and as part of it, it undertakes to acquaint them and keep them 1014 aware of the results of their further researches and any further developments which take place.

LORD MILLS

I think the noble Lord must have misunderstood me. I said I should be very surprised if the Atomic Energy Authority did not have such reciprocal arrangements.

LORD GRANVILLE-WEST

I am obliged to the noble Lord.

LORD MILLS

As the noble Lord, Lord Latham, has said, the purpose of this Amendment is to specify water undertakers as being among the local bodies which the Ministers of Housing and Agriculture are to consult, where appropriate, before authorising the disposal of radioactive waste from nuclear sites. The Amendment, as the noble Lord has said, relates to Section 5(4) of the Atomic Energy Authority Act, 1954, in its application to licensees under Clause 1(4) of the Bill. But the arrangements for authorising the disposal of waste under the 1954 Act are in any case temporary. I have consulted my right honourable friend, the Minister of Housing and Local Government, and I am informed that that Ministry are about to enter into consultation with the British Waterworks Association and other associations of local bodies regarding the permanent arrangements to be made between those bodies and the Minister of Housing in regard to the question of radio-active waste generally; that is, not merely waste from the premises of the Atomic Energy Authority and licensees under this Bill, but waste front all sources. I suggest to the noble Lord, and I hope he will accept it, that it would not be proper for me to accept an Amendment of this kind while those discussions are in progress.

LORD LATHAM

Can the noble Lord say whether the discussions will include arrangements for consultation with the water undertakers by the Minister?

LORD MILLS

I understand that that is one of the objects of the consultation.

LORD LATHAM

These arrangements would be more or less of a permanent character, once they were agreed and approved?

LORD MILLS

That, again, is the object of consultation.

LORD DOUGLAS OF BARLOCH

Might I ask the noble Lord how long it will be before these consultations reach finality? Could it possibly be before the next stage of this Bill?