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Sunday, February 15, 2004

NAO report: The Nuclear Liabilities of British Energy plc
The UK's National Audit Office, which independently scrutinises public spending on behalf of Parliament, has produced a damning report which highlights the conflicts of interest, hidden costs and risks to the taxpayer/energy market that resulted from the way British Energy (and its associated nuclear liabilities) were privatised in 1996.

Responding to the National Audit Office Report into British Energy, Malcolm Bruce MP, Liberal Democrat Shadow DTI Secretary, said:

"This report shows that British Energy continued to pay dividends that the company's performance could not justify. At the same time the DTI failed to realise the effect the new market for electricity would have on British Energy's profitability and the exposure of taxpayers to the company's nuclear liabilities.

"Despite the potentially large public liability the DTI relied on analysts and the fact that the company continued to pay dividends.

"According to the NAO, part of the DTI's problem was that there were too many Government agencies involved without ever knowing the full story of the mess British Energy was in, or the adverse effect Government policy was having on the company.

"The rise in the price of British Energy shares in the past week shows that shareholders are still hopeful of getting some return. It is unacceptable that shareholders in a private company who have failed to hold the management to account should be bailed out by the British taxpayer."