Heseltine must face pit review scrutiny

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Indy Politics
MICHAEL HESELTINE, the President of the Board of Trade, is to be summoned before the House of Commons Select Committee on the Environment amid growing concern over the environmental impact of the coal review.

Mr Heseltine is expected to give evidence on 8 February. The one- off session is to help the committee to examine the implications of future energy policy and in particular the closure of coal mines.

Some energy experts are concerned that if the Government cuts back on gas-fired electricity plants and nuclear power, the UK will not meet its commitments to reducing emissions of greenhouse gases and acid pollution.

Professor Ian Fells of Newcastle University said Britain needed the Sizewell B pressurised water reactor and at least one more PWR to meet EC rules.

The nuclear industry is also at the centre of controversy over the fate of the nuclear subsidy, which benefits Nuclear Electric, the state-owned generator, to the tune of more than pounds 1bn a year.

The Government has said that the subsidy, which is raised from a 10 per cent levy on electricity bills, is to enable Nuclear Electric to pay for decommissioning and waste management related to old nuclear plants.

However, Nuclear Electric said that the money went into cash flow. It was used to pay for waste processing at Sellafield, to maintain existing nuclear power stations and to fund the building of Sizewell B. The company said: 'We do not differentiate between the pounds we get from the levy and the pounds we get from electricity sales.'

Stephen Ogle, Nuclear Electric's financial control director, said pounds 2bn had been invested over the last two years in Sizewell B and in the ageing Magnox plant. This comes from the levy and from company profits.

Nuclear Electric said it was satisfied that it would have enough to cover its decommissioning liabilities when they fell due. But a big question is what will happen if the Government reduces the levy to help subsidise British Coal.

It is believed that some members of the trade and industry committee want to see Nuclear Electric relieved of historic liabilities and denied the levy. One suggestion is that the levy and the liabilities could be vested in a trust fund to ensure any sums raised from the consumer are put to their perceived use.