Statement by , DBEIS Minister of
State
I am laying a Departmental Minute to advise that the Department
for Business, Energy & Industrial Strategy (BEIS) is
retrospectively notifying Parliament about contingent liabilities
not previously disclosed, due to procedural errors. His Majesty’s
Treasury has approved the contingent liability.
The Minute describes the contingent liabilities that the NDA has
entered with two landlords, The Crown Estate and Baron Egremont,
for the renewal of an uncapped indemnity in the Sellafield
Replacement Sea Line (RSL) Lease.
A pipeline runs from the Sellafield Nuclear Plant site over
foreshore and seabed owned by two separate third party
landowners, The Crown Estate (TCE) and Baron Egremont of the
Leconfield Estate (Egremont). The Replacement Sea Line (RSL) is a
critical asset for the delivery of nuclear safety and the
environmental performance of the Sellafield Site.
These are long standing liabilities, with the lease arrangement
for the unlimited liabilities in place since 1991. This lease
pre-dates the formation of NDA in 2004, following the
introduction of new guidelines and status of Sellafield as part
of central Government (2016) meant such indemnities now require
government approval.
On this occasion, there was an unfortunate oversight: HMT
approved the indemnity in February 2021, though due to a delay in
commercial negotiations, the NDA did not notify the Department
that the lease had been finalised in January 2022. BEIS
recognises that the notification process has not been followed
and is notifying parliament now.
Therefore, it was not possible to notify Parliament of the
liability particulars in advance of the transaction documents
being signed. The Department has noted the Committee’s concerns
regarding this matter and fully accepts the need to follow the
correct approvals and reporting procedures and is in the process
of conducting a review into best practices.
The contingent liability’s expected risk to the Department’s
available resource loss is considered very low as any nuclear
liability would be covered by the Government Indemnity, with
liability above £140m falling to central Government under the
Paris Brussels convention. Non-nuclear liability is covered by
insurance up to £100m, and above this threshold would need to be
funded from the NDA and department annual budget. If the
liability is called, provision for any payment will be sought
through the normal Supply procedure.
If, following the laying of the departmental minute, a member
signifies an objection by writing to me, I undertake to examine
the objection and respond to the member concerned.
I will update the House of any further changes as necessary.
