View from City Road: A nuclear fund is not the real issue

Plans for an independently managed fund, financed by the nuclear industry, to pay for the decommissioning of nuclear power stations after privatisation, at first sight seem a very reasonable way of insuring future generations - and prospective investors - against these burgeoning costs.

Set the money aside in the equivalent of a pension fund for worn-out power stations and there will be no need to worry about the multi-billion pound bill for cleaning up the mess when the time comes.

The idea of a stand-alone fund comes from a government-sponsored report by the Science Policy Research Unit at Sussex University. The sub- text of the argument is Nuclear Electric's desperation to be privatised. An independently managed fund is one way of making sure the company's future clean-up costs are paid.

Under present arrangements, the industry is building up large provisions in its own balance sheet, including a substantial amount of cash, to pay for decommissioning. But who knows whether the company will still be solvent in 135 years? The benefit claimed for the stand-alone fund is that the money necessary to complete decommissioning early in the 22nd century will be guaranteed.

The problem is, however, that when apparently ingenious but in truth overly-complex schemes like this are suggested, it all too often indicates muddle and confusion in the underlying privatisation. With nearly all the Government's saleable assets now gone, privatisation is these days driven as much by dogma as anything else. Just look at the railways. Nuclear power, an industry where every decision is politically charged and the cost of big accidents would in any case have to be borne by the Government, should be kept in state hands.