Nuclear Safeguards Bill

(Limited Text - Ministerial Extracts only)

Committee: 1st sitting (Hansard): House of Lords
Thursday 22nd February 2018 Lords Chamber

[The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Henley) (Con)]

My Lords, I am not sure whether I heard the noble Lord set out his own party’s policy more widely on Brexit, but perhaps that will be for another day. He can then assist the Committee, but I leave that with him. I offer my congratulations and thanks to him, to the noble Baroness, Lady Featherstone, and the noble Lord, Lord Warner, for introducing their amendments. I think that it was the noble Lord, Lord Warner, who compared the response last night by my noble friend Lord Callanan to a Geoffrey Boycott innings. For those of my age and beyond, I will go for a sort of Ken Barrington type of response, so it will be long and slow. However, it is important that I get it all in to make sure that we have a proper response to the debate so that we can consider these amendments again on Report. It is also important for noble Lords to understand in this sort of Ken Barrington response that I am going to give—

[Lord O’Neill of Clackmannan]

We want wisdom, not Wisden.

[Lord Henley]

The noble Lord knows that he always gets wisdom from me. I want also to say that I am not necessarily going to respond to all the points in the course of this debate because an awful lot of them apply to later amendments. Nevertheless I will give a fairly full response, but I shall start by making a pretty fundamental point, made by my noble friend Lady Neville-Rolfe. It is that we are where we are. My noble friend supports this Bill because, as she said, it is very important that we have plans in place for when we leave Euratom. We are going to leave Euratom at the same time as we leave the European Union in March of next year. That was dealt with in the notice of withdrawal Bill, now the European Union (Notification of Withdrawal) Act 2017. The legislation has been through both Houses of Parliament and has the support of the party opposite and others.

What I want to make clear to the Committee is that we are determined to continue to have a constructive and collaborative relationship with Euratom and with all our other international partners. The withdrawal of the United Kingdom from Euratom will in no way diminish our nuclear ambitions, and I make that clear to the noble Lord, Lord Broers, and others. Maintaining the continuity of our mutually successful civil nuclear co-operation with Euratom and international partners is going to be a key priority for us. As a member of the International Atomic Energy Agency, we are committed to have in place nuclear safeguards. I should remind the Committee that these have nothing to do with safety. Nuclear safeguards are reporting and verification processes by which states demonstrate to the international community that civil nuclear material is not being diverted into military or weapons programmes. The United Kingdom has been a member of the IAEA since its formation back in 1957.

Under the Euratom treaty, the civil nuclear material and facilities within member states are subject to nuclear safeguards measures conducted by the European Commission on behalf of Euratom. Euratom also provides reporting on member states’ safeguards to the International Atomic Energy Agency, which conducts nuclear safeguards globally. Nuclear safeguards measures include reporting on civil nuclear material holdings and development plans, inspections of nuclear facilities by international inspectors, and monitoring, including cameras in selected facilities. I repeat that nuclear safeguards are distinct from nuclear safety, which covers the prevention of nuclear accidents, and nuclear security, which covers physical protection measures. Those are the subject of independent regulatory provisions and we shall move on to them in due course.

As was made clear by my noble friend last night and I make clear again today, the European Union and Euratom are uniquely legally joined. Euratom shares a common institutional framework, making use of the same institutions; namely, the Council, the Commission, the European Parliament and the ECJ. For example, the European Commission has an active role in shaping and enforcing Euratom rules and it currently plays a central operational role on safeguards in the UK. As was further made clear by my noble friend last night, Euratom is also subject to the jurisdiction of the ECJ.

When the Prime Minister formally notified our intention to leave the European Union in June, she also commenced the process for leaving Euratom. That notification was debated and authorised by Parliament through the European Union (Notification of Withdrawal) Act 2017 which, as I have said, had the full support of both Houses of Parliament. The United Kingdom will therefore withdraw from Euratom in 2019 at the same time as withdrawing from the European Union. That is why we need the legislation before us now to be in place.

The United Kingdom’s current nuclear safeguards regime operated by Euratom will cease to function in the United Kingdom as a result of our withdrawal from Euratom. The Nuclear Safeguards Bill will ensure that we have the right regime in place for the Office for Nuclear Regulation to regulate nuclear safeguards. I reassure the Committee that the Government are meeting the challenges that clearly lie before us. We have already made great progress in the work that we are doing to secure continuity for our nuclear industry by establishing long-term arrangements to secure nuclear safeguards. The Queen’s Speech on 21 June last year included our intention to take up the powers that will set up a domestic nuclear safeguards regime, and that is what this Bill seeks to do.

[Lord Fox]

My Lords, perhaps I missed them, but what are the long-term arrangements that have already been established?

[Lord Henley]

My Lords, will the noble Lord bear with me? I said that I was going to play a fairly long innings and I want to explain these matters in full. There is no point in the noble Lord interrupting at this stage. I am going through this carefully and slowly in order to explain what we are going to do to make sure that we have the right things in place for when we leave Euratom and the EU in March of next year.

Our intention is for the new domestic regime to exceed the standard that the international community would require from the United Kingdom as a member of the IAEA. It will be run by the Office for Nuclear Regulation which, as the Committee will know, already regulates nuclear safety and nuclear security. We will also be agreeing a new voluntary offer agreement with the IAEA. I believe that we all recognise the special contribution—

[Lord Warner]

I am sorry to interrupt the Minister, but can he say what discussions have actually taken place with the IAEA to get to that point of an agreement before March 2019? What is the plan of meetings for those discussions that have taken place and are planned to take place?

[Lord Henley]

My Lords, discussions have already taken place with the IAEA. We will continue with those discussions to make sure that we are in the right place at the right time. If the noble Lord will bear with me, I will continue with my speech and set these things out in the proper manner.

[Lord Warner]

I understand what the Minister is saying, but none of us has moved amendments this morning that in any way suggest that we would not be leaving Euratom by next year. We have accepted that for the purposes of this debate. We are not slow learners: we do not need to be taken rather slowly through the arguments that we went through last night.

[Lord Henley]

My Lords, I am sorry if the noble Lord feels that he is not a slow learner. At times, I have felt that he and other noble Lords have been a bit slow on these things. That is why I am trying to spell it out very carefully and very slowly and I will continue to do so. I hope to make it clear so that the Committee and the House will understand that we will have the appropriate civil nuclear safeguards regime in place by next year, which is of paramount importance for us at that stage. We have had already considerable discussions with Euratom. There will be further discussions with the IAEA. I will not go into the details but I can no doubt write to the noble Lord in due course.

In a sense, this is an amending Bill. As noble Lords will be aware, it will amend the Energy Act 2013 by creating new powers so that we can put in place regulations that offer detail on the domestic safeguards regime, such as accounting, reporting, control and inspection arrangements. It also creates the limited power that I referred to earlier which we will get to in later amendments, allowing us to amend the Nuclear Safeguards and Electricity (Finance) Act 1978 and others. That power will mean that references in that legislation to existing international agreements can be updated once new international agreements have been reached. We will discuss that in greater detail later on.

I have listened carefully to what has been said on the agreements that we have before us on Amendments 1, 2, 12, 16 and 17. These amendments taken as a group cover the fundamental issue of the United Kingdom’s future relationship with Euratom and our strategy pertaining to this. I fully appreciate the sentiment and the intention behind these amendments. I shall try to address them all.

On Amendment 1, the new clause proposed by the noble Baroness, Lady Featherstone, would require Ministers, when negotiating and concluding the withdrawal agreement, to have regard to the desirability of associate membership of Euratom, and require the Government to report periodically to Parliament the progress to that end. Noble Lords will have heard many times before that there is no such thing as associate membership of Euratom. I made that clear at Second Reading. It is important that discussions on this matter focus on the actual treaty. The concept of associate membership does not exist in the treaty. Given the frequency with which the point comes up, I start my response by reading out exactly what the Government said to the BEIS Select Committee on this point in the autumn:

“There are two different articles in the treaty that deal with the relationship between Euratom and third countries. One of them is Article 101, which enables the community to enter into agreements with third states. That is the one that has been used in the research and training context with Switzerland. That requires a qualified majority vote. The other one is Article 206, which enables the community to conclude an agreement establishing a formal association involving reciprocal rights and obligations. That is the ‘association with’ part, not being an associate member. That requires unanimity.”


It is indeed the case that the Ukraine and Switzerland each have a form of association agreement with Euratom, but those agreements cover only research and training activities. Neither covers nuclear safeguards activities. These countries are not associate members of Euratom. Wanting to maintain a close relationship with Euratom is this Government’s stated objective so we need no persuading on that point. We have already stated very clearly in Statements to the House that the Government will be seeking a close and effective association with Euratom as part of the next phase of negotiations with the EU. We have made clear the desirability of this aim and that it forms part of our negotiation strategy.

I fully recognise the importance of providing clarity on the progress of the Government’s plans for withdrawing from Euratom and our ambitions in respect of a future relationship with Euratom, which the noble Lord, Lord Warner, asked about earlier; it is relevant to Amendments 2 and 16, which I will deal with later.

--- Later in debate ---

[Lord O'Neill of Clackmannan]

The Minister referred to Article 206 and the agreement that has been arrived at with Switzerland and Ukraine in respect of training and research. Does that provision afford any opportunity for other areas to be incorporated in an agreement with Euratom? Could it be the portal for enabling us to be alongside Euratom in the way that the Ukrainians and the Swiss have been able to obtain for their preoccupations with training and research?

[Lord Henley]

My understanding is that it will allow them to do that. I am not aware that Article 206 could be used further as the noble Lord suggests. If I am wrong, of course I will write to him, but it might be a matter of interpretation. I should remind him in respect of Article 206 that I stressed when I read out the Government’s response to the Select Committee that any agreement required unanimity. That is obviously quite a big “if” in these matters. If there is anything further I can add, I will write to the noble Lord.

[Lord Hunt of Kings Heath]

The Minister is being very helpful. It is the first explanation we have had as to why the Government are leaving. He talked a lot about the influence of the EU over Euratom’s activities, which is no doubt something that we can test and explore. But I do not understand what “close association” means. The Government clearly could not go for a formal association because the relationship would be one in which the EU would set the rules, and we know that the Government have drawn a red line against that. Does “close association” mean that we would basically subcontract the inspectorate from Euratom to work under the auspices of the ONR, with the ONR as the regulator? Does it mean that, despite everything that the Government have said, we hope that we can simply replicate Euratom rules and that it will somehow oversee it, which seems unlikely? Until we know what the Government want to get out of Euratom, it is difficult to know whether the Bill will meet the circumstances if no close association at all is agreed.

[Lord Warner]

Can I amplify something from what the noble Lord, Lord Hunt, said? If the Minister looks at my Amendment 2, he will see that the suggested new subsection (1)(a) refers to,

“a report on the progress of discussions with Euratom on the scope and conditions for a form of association with Euratom”.

It does not talk about associate membership. Listening to what he said about what the Government aspire to sounded remarkably like seeking,

“a form of association with Euratom”.

In clarifying the Government’s intentions for the noble Lord, Lord Hunt, will the Minister explain the difference between what the Government want and the wording in my amendment? I am quite happy to change the wording if it helps the Minister.

[Lord Henley]

I was coming to the noble Lord’s amendment to make quite clear our ambitions for that future relationship and how we see it developing, before I was interrupted first by the noble Lord, Lord Hunt, and then by his noble friend Lord Warner interrupting him. I will now deal with how we want to ensure proper clarity on where we are going. The information I will provide to the Committee particularly relates to Amendments 2 and 16 from the noble Lord, Lord Warner.

The noble Lord will remember that we made a Written Ministerial Statement on 11 January. I am sure that he knows it off by heart by now. It included a commitment to continue to provide quarterly updates—it is information that noble Lords particularly want in this matter—addressing the progress on the wide range of issues relating to Euratom exit. That will include progress on those negotiations, but also on how they will develop into our future relationship with Euratom, as well as progress made by the ONR on establishing the United Kingdom’s domestic safeguards regime. I cannot tell where those negotiations will take place. The noble Lord will have to bear with me. What he wants, as far as I understand it from his Amendment 2 and the other amendments, is a guarantee that information will be provided by the Government. All I am saying is that we have made one Written Ministerial Statement—actually, we have made more than one—and we will continue to do so. That reporting commitment goes far further than the proposed amendment, by keeping Parliament regularly updated on the key issues that have been raised. I hope the Committee will welcome the fact that we will continue to provide further updates on those. The noble Lord, Lord O’Neill, asked for one. There will certainly be one before the Easter Recess.

I turn to Amendment 12 on our future relationship with Euratom. The Committee will be aware that in her speech on 22 September 2017 in Florence my right honourable friend the Prime Minister set out her desire for an implementation period after the United Kingdom has ceased to be a member of the EU. This is now well understood in the EU and I do not think that the amendment is consistent with this position. It remains the Government’s intention to ensure continuity for the nuclear industry and to avoid the possibility of the cliff edge that noble Lords referred to for the industry on exit day.

I hope that the Committee will not need to be reminded that the UK will not be a member after 29 March next year, whether an implementation period can be agreed with the Commission or not. That much is clear. If it is not, I will repeat from page 1 of the letter that the Prime Minister sent to President Tusk:

“I hereby notify the European Council in accordance with Article 50(2) of the Treaty on European Union of the United Kingdom’s intention to withdraw from the European Union. In addition, in accordance with … Article 50(2) as applied by Article 106a of the Treaty Establishing the European Atomic Energy Community, I hereby notify the European Council of the United Kingdom’s intention to withdraw from the European Atomic Energy Community. References in this letter to the European Union should therefore be taken to include a reference to the European Atomic Energy Community”.


In other words, there can be no question of separately attempting to prolong our membership of Euratom beyond the point at which we leave the EU. That is a very different matter from having an implementation period, which is something we are aiming at. That is a period after we have left the EU and Euratom, during which we continue to be covered by the EU acquis. By “acquis” we mean the regulatory framework that applies to EU member states. In exchange, the Government expect that the United Kingdom would be able to continue to benefit from its current access to the EU’s markets for the duration of the implementation period.

Again, I must emphasise that any agreed implementation period is not a way of delaying our departure from Euratom. It is a way of making the transition smooth, rather than sudden. My reason for asking noble Lords not to press their amendments is simple: the amendment does not seek to establish an implementation period after exit; it seeks a transitional period before exit. My honourable friend the Minister for Business and Energy set out on 7 February that there can be no question of separating the situation for Euratom from that of the wider EU. The two are, as we know, uniquely and legally bound. Again, I made that clear at earlier stages.

Finally, I turn to Amendment 17, which seeks to require the Government to lay a strategy for maintaining existing arrangements once the UK withdraws from Euratom and for this to be considered by both Houses before the main substantive provisions of the Bill can be brought into force. As I have said, the Government have made it absolutely clear that they will seek a close and effective association with Euratom in the future. As was mentioned in the Written Ministerial Statement, the Government set out the principles on which our Euratom strategy is based, including to aim for continuity with current relevant Euratom arrangements, to ensure that the United Kingdom maintains its leading role in European nuclear research, to ensure that the nuclear industry in the UK has the necessary skilled workforce, and to ensure that on 29 March 2019 the United Kingdom has the necessary measures in place to ensure that the nuclear industry can continue to operate. In respect of our future relationship with Euratom, we will also seek a close association with Euratom’s research and training programme, including the Joint European Torus and the International Thermonuclear Experimental Reactor projects. We will also want continuity of trade arrangements to ensure the nuclear industry can continue to trade across EU borders, and to maintain close and effective co-operation with Euratom on nuclear safety.

The Committee will be fully aware that the nature of our future relationship with Euratom is part of the next stage of negotiations, which is yet to begin. An implementation period may well be agreed and we hope that it is, but there are no guarantees. In any case, without such a period the United Kingdom will legally leave the EU and Euratom in March 2019. The Bill and the regulations made under it are crucial to make sure that we can establish that domestic nuclear safeguards regime to meet international safeguards and nuclear non-proliferation standards when Euratom’s safeguarding arrangements no longer apply in the United Kingdom. From that point, the United Kingdom will be responsible for its safeguards, including having its own state system of accounting and control.

[Lord Rooker]

In that case, are we not all wasting our time? Could the Minister say whether the International Atomic Energy Agency has already agreed in the discussions that have taken place that the contents of the Bill lead it to believe that the safeguards office will be able to demonstrate the independence it requires? If not, we are wasting our time.

--- Later in debate ---

[Lord Henley]

The noble Lord never wastes his time, nor does he waste the time of the Committee, but I can give an assurance that discussions continue with the IAEA, which is perfectly happy that we will be able to meet the appropriate safeguards regime to meet its standards by March next year. We will discuss that on later amendments. Processes have taken place in the ONR and it is engaged in recruitment. We will meet its standards—standards similar to those met by the Americans as fellow members of the IAEA. All that will be in place; that is the point behind the Bill. It is why I do not think these amendments are necessary—we will no doubt discuss them in much greater detail on Report. I hope that the noble Lord and the noble Baroness, Lady Featherstone, who is about to respond, will be happy and feel able not to press their amendments.

[Baroness Featherstone]

I thank the Minister. I listened carefully to his arguments in response to the amendments. I think that our work is not done; I did not hear a meeting of minds at this point. What I did hear was a universal view from across the Committee that surety and certainty are not there. We will probably want to come back on this on Report. For the moment, I beg leave to withdraw the amendment.