Small Modular Reactors

Debate between Lord Harrington of Watford and Drew Hendry

Wednesday 20th February 2019 Westminster Hall

[Richard Harrington]

I very much regret that I do not have time to go through all the points raised by hon. Members. I am happy to go through them later with any of those Members, except of course the hon. Member for Inverness, Nairn, Badenoch and Strathspey (Drew Hendry)—for the sake of Hansard, I am joking. I congratulate my hon. Friend the Member for Copeland (Trudy Harrison) on securing this excellent debate. The term “Trudy-isation” is beginning to enter our parliamentary language, and she has Trudy-ised the whole debate on small modular reactors.

The development of small modular reactors is very much at the core—excuse the pun—of the Government’s strategy for the development of nuclear power, which we know is an important part of the mix. I would like to answer in detail the shadow Minister’s questions about money, but I do not have the time. Suffice it to say that we are considering a consortium bid. Rolls-Royce is at the centre of that, but many other companies are involved. I obviously cannot go into detail, but this is of the magnitude of money that the shadow Minister mentioned, and it is very close to fruition. We worked closely with all members of the consortium to develop it.

The good thing about this debate is that every Member bar one was very much in favour of the development of nuclear energy, our sector deal and everything we are trying to do to make sure that nuclear remains an important part of our mix, for several reasons. There are security reasons. The point was made about the excellence of offshore and onshore wind and all sorts of wind, but the wind does not blow all the time. There is the green energy point of view, because this will develop a significant amount of carbon-free power. My right hon. Friend the Member for Scarborough and Whitby (Mr Goodwill) quoted President Putin, who made the point that countries that have tried basically to have no nuclear or coal energy do not know what to do. We will not put ourselves in that position. Modular reactors are an important part of our future.

Times are changing and costs are going down. The shadow Minister made the point that we have to be very careful about the costs of small modular reactors. Those are very well known, which means that we have to look at scale. Building one was the original problem, particularly for the two sites at Moorside, which were mentioned by my hon. Friends the Members for Carlisle (John Stevenson) and for Copeland. The hon. Member for Ynys Môn (Albert Owen) spoke so well about Anglesey. The hon. Lady who is the spokesperson for Plaid Cymru—

[Drew Hendry]

The Westminster leader.

[Richard Harrington]

And she is the Westminster leader. I beg the pardon of the hon. Member for Dwyfor Meirionnydd (Liz Saville Roberts), but I was trying to avoid making a mess of her constituency name, which I have done before—I will not fall for that one again. I will, however, have a good go at saying Trawsfynydd, because I have been there. It is an excellent site for small modular reactors, as are Anglesey, Moorside and many others. The good thing about them is the support of the local community for nuclear, because many have seen the benefits that nuclear has brought in the past, such as prosperity and good-quality, highly paid employment.

In the time that I have left—I believe that my hon. Friend the Member for Copeland should be left a couple of minutes at the end—I will talk briefly about the financing models. Clearly, one of the big problems about nuclear generally has been financing. Everyone knows that, and that the large chunk for current nuclear power stations is about £15 billion-plus, and could be £20 billion. That is a significant sum of money. The two projects we have talked about—Moorside and Wylfa in Anglesey—are not to take place in the timescale we had hoped for because of the financing.

However, I believe that the efforts we are putting into the regulated asset base model will open up nuclear again—a modern way to fund it. Institutions are very interested. On the small modular reactor side, my Department organised a very successful conference for the first time—in a high-tech area of the midlands, rather than one of the traditional sites—and quite a few financial institutions attended. We are in talks with the Treasury and inside the Department about developing that finance model. Logically, I believe it will work for smaller nuclear developments as well as large ones, because institutions obviously like to invest in smaller chunks.

The Government are very committed. We are helping small modular reactors. Apart from dealing with the consortium that I mentioned, we are providing funds to give the regulators the kinds of facilities necessary for the regulatory process. Quite a lot is going on, and I had wanted to speak for about 20 minutes on this subject. Earlier I was waving my hands at the hon. Member for Inverness, Nairn, Badenoch and Strathspey not out of disrespect for him personally or because of anything he said, but because I wanted more time to go through my speech. However, I have galloped through the major points. I would just like formally to put on the record that the Government’s policy is firmly behind nuclear and very much behind—

Oral Answers to Questions

Debate between Lord Harrington of Watford and Drew Hendry

Tuesday 20th November 2018 Commons Chamber

[Richard Harrington]

The Government want to finalise the future trading relationship with the EU as quickly as possible. My right hon. Friend the Secretary of State mentioned one alternative to achieve that.

[Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)]

In addition to the threat that leaving the EU poses to skilled manufacturing jobs, the Minister will be aware of the devastating news that Michelin plans to close its factory in Dundee, threatening 850 such jobs. Will the Minister work closely with the Scottish Government to ensure a future for that plant?

[Richard Harrington]

I reassure the hon. Gentleman that I have spoken to the company and I have sought assurances about support available to staff. The Secretary of State and I have spoken with the Scottish Government’s Cabinet Secretary for Finance, Economy and Fair Work and with the Secretary of State for Scotland. The Department is playing an active role in the Dundee action group.

[Drew Hendry]

I thank the Minister for that answer, but his Government can do one thing right away to give immediate and future help. The UK Government are currently £50 million short on matching the Scottish Government on the Tay cities deal. Is this to be, like Aberdeen, Inverness and Stirling, part of a near £400 million shortage of match funding and a failure of the UK Government on city deals, or will he do the right thing and fight for match funding to support Dundee at this challenging time?

[Richard Harrington]

As the hon. Gentleman knows, each deal with each city is an individual one based on the circumstances of that city. I see him regularly, and it would be a pleasure to meet him to discuss his constituency and the proposed city deal.

Oral Answers to Questions

Debate between Lord Harrington of Watford and Drew Hendry

Tuesday 17th July 2018 Commons Chamber

[Richard Harrington]

I am very pleased to reassure my hon. Friend, who works so hard on this subject, that we continue to work closely with the Scottish Government on many industrial strategy priorities, including our support for innovation and business productivity. Regarding the review, work is under way across government to determine its scope. Clearly, our partnership with the Scottish Government will be essential as that progresses.

[Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)]

Scrapped subsidies for renewables, failure to support the oil and gas sector in its time of need, betrayal over the pledge to invest £1 billion in new carbon capture in Peterhead—now, the Government are seemingly poised to splash £15 billion more of taxpayers’ cash on outdated nuclear technology at Hitachi’s Wylfa plant. When will we get an industrial strategy that actually works for Scotland?

[Richard Harrington]

That is not the picture of the oil and gas industry that I know following a visit to Aberdeen, where I saw more investment, more Government support and more support in the area for this Government’s industrial strategy. I am a great admirer of the hon. Gentleman normally, but I think he must have read the wrong script for this question.

Oral Answers to Questions

Debate between Lord Harrington of Watford and Drew Hendry

Tuesday 13th March 2018 Commons Chamber

[Richard Harrington]

As my right hon. Friend will be aware, the whole sector is important to us, and specifically the supply chain. I have met various players involved, and it is of critical importance to us.

[Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)]

The UK Government have so far failed to announce a sector deal for oil and gas, and there was no mention of one in their industrial strategy. There is a need for a sector deal approach to the industry. The Scottish Government have been calling for such action. Will the Minister finally rectify this glaring omission and commit that vital support for the industry and the jobs and investment it relies on?

[Richard Harrington]

The hon. Gentleman should be aware that this is a priority for us. We are working very hard with the sector to come up with a sector deal, and I expect those talks to come to fruition very soon.

Nuclear Safeguards Bill (Sixth sitting)

Debate between Lord Harrington of Watford and Drew Hendry

Committee Debate: 6th sitting: House of Commons
Tuesday 14th November 2017 Public Bill Committees

[Richard Harrington]

I thank the hon. Gentleman for contributing new clause 5. It might surprise him that although I cannot accept what he asks for, I have a proposal for him and the Committee to consider. The new clause addresses the issue of consultation with the devolved Administrations on new international agreements relating to nuclear safeguards. As hon. Members will be aware, the UK Government are responsible for negotiating and signing these international treaties. The ratification of treaties is subject to the Act I mentioned before, the Constitutional Reform and Governance Act 2010, which requires them to be laid before Parliament.

The Government have the power to conclude international treaties under prerogative powers but cannot automatically change domestic law or rights and cannot make major changes to constitutional arrangements without parliamentary authority. That will remain the case for international agreements relating to safeguards that are currently under negotiation, such as the new nuclear co-operation agreements with the US, Canada, Japan, Australia and so on that we have mentioned, and the agreements with the IAEA.

The measures put forward in the hon. Gentleman’s new clause would be a significant departure from the usual position—I know he knows that; it is why he proposed it and it is the policy of his party—and I do not consider it appropriate to accept them. As I said, nuclear safeguards are not a devolved matter, but I nevertheless reassure hon. Members that the Bill already ensures an appropriate level of transparency and scrutiny in respect of international agreements relating to nuclear safeguards, which I have been through before.

New clause 5 refers to “relevant international agreements”, which is a defined term as set out in the Bill. The existing drafting of Bill allows for the inclusion of any relevant international agreements as designated by the Secretary of State, so it is unnecessary to detail individual agreements in the Bill. While I appreciate the sentiment of the new clause, the role of relevant international agreements is already subject to a clear and open process under the Bill. I have explained that before and I do not intend to repeat it all again, unless any members of the Committee wish me to. It is a clear and open process.

On the specific focus of the new clause—consultation with the devolved Administrations, which I know is the hon. Gentleman’s main interest—it appears to require formal consultation with the devolved Administrations prior to our concluding international agreements relating to nuclear safeguards or any agreement with EU member states relating to nuclear safeguards. As I am sure hon. Members are aware, the Bill extends to and applies to England, Wales, Scotland and Northern Ireland, and in the case of amendments, to the same extent as the provision amended.

As I have said, nuclear safeguards are not a devolved matter. Despite the responsibility legally being the UK Government’s, I hope that our general approach of having an open and transparent process, which is evolving, would be described as reassuring. The Government are acutely aware of the value of consultation in developing this new regulatory regime—obviously with the ONR, but also with the industry generally and formally and informally with parliamentary colleagues. As I have explained before, the nuclear safeguards regime regulations will be subject to detailed consultations with the regulator and industry. Industry stakeholders across the UK, which of course includes Scotland, Wales and Northern Ireland, will be widely encouraged to take part in that consultation. The outcome of the consultation will then be made public, in line with the Government’s general policy on consultations.

The public consultation on the draft regulations will not be the first or only opportunity for stakeholders to be made aware of our intentions, and it will not be their only opportunity to provide the Government with their views. We have had detailed discussions with the nuclear industry since the referendum, and we will continue to work closely with it and other stakeholders when taking the development of the new regime forward, including the development of regulations. My officials have already been in discussions with colleagues from across the devolved Administrations and the relevant environment agencies, such as the Scottish Environment Protection Agency, Natural Resources Wales and so on, to ensure effective collaborations on key Euratom-related policy areas—including the domestic nuclear safeguards regime—and will continue to do so.

I have been clear that the relevant international agreements will be subject to a clear, open and transparent process involving a high degree of consideration, scrutiny and external engagement. However, I do appreciate the concern behind new clause 5, which is why I already committed to the hon. Member for North Ayrshire and Arran to address her query on consultation with the Scottish Government by writing to her on the subject. I would therefore propose instead, if it will be satisfactory to the hon. Member for Inverness, Nairn, Badenoch and Strathspey, to write directly to Scottish Ministers, Welsh Ministers and the Northern Ireland devolved authority on the subject for consultation. In the light of these explanations, I hope the hon. Gentleman feels able to withdraw his amendment.

[Drew Hendry]

I thank the Minister for his attempts at reassurance. I know that the Minister is genuinely trying to concede some ground and I appreciate that. However, his attempts at reassurance do not really hit the mark. There should be negotiations with the Scottish Government and the other devolved authorities in the light of the devolved responsibilities. It just is not good enough that after the deal is done a consolation might be undertaken with Ministers. That is not the way that this should happen at all. There are significant impacts on the nuclear industry and those devolved responsibilities.

Question put, That the clause be read a Second time.

Nuclear Safeguards Bill (Fifth sitting)

Debate between Lord Harrington of Watford and Drew Hendry

Committee Debate: 5th sitting: House of Commons
Tuesday 14th November 2017 Public Bill Committees

[Drew Hendry]

I will make a few short comments to indicate Scottish National party support for the amendment. The shadow Minister referred to our being in new times; indeed, we are in uncharted territory. The SNP has great concerns about the possible use of Executive powers, particularly the prospect of a lack of scrutiny. Let us consider how the decision to leave Euratom came about: representatives found out about the decisions via a bit of small print in the Bill. That does not give the Government a good track record in how transparent they are willing to be. No warning was provided and no indication was given of the impact. Frankly, there was a blatant lack of transparency.

We call on the UK Government to ensure that future decisions are taken in a transparent and consultative way and in an inclusive manner. At the moment, the set-up does not give anyone reassurance that that will happen, so we support the amendment.

[Richard Harrington]

I have been very interested in our tour around Henry VIII and the French royal family and its possible member, Henry IX, which you did not rule outside the scope of discussions, Mr Gray, but you are entitled to use your judgment. However, neither Henry VIII nor Henry IX had to come up with a nuclear safeguards regime; I wonder what would have happened if they had.

In all seriousness—[Interruption.] The hon. Member for Southampton, Test is on great, humorous form, as well as making serious points, which I will try to answer, I hope, in a suitably serious manner. The fundamental difference between us, forgetting the “may” and “must” difference for the moment—we will come on to that—is about the actual powers and why we need them. I find the Henry VIII expression a bit misleading—not that the hon. Member for Southampton, Test is trying to mislead the House—given the way it is always referred to in the press and so on. We are talking about very limited non-primary legislation here.

Changing minor references, whether saying that that calls for Henry VIII powers or not, would not be a good use of parliamentary time, given that Governments have to govern and Parliament must in some way ration its time so that it can deal with the fundamental matters that it has to deal with. I know the Opposition’s view generally on Henry VIII powers, but I think there should be some leeway within that for what genuinely needs to be delegated, and which is comparatively minor in nature, so that we can act quickly. I am sure the hon. Gentleman and the Opposition Front Bench recognise that in practice. Sometimes principle is a great thing in life, but it has to be adapted pragmatically to deal with circumstances. I will park that for the moment.

As it stands, clause 2 will create a limited power, enabling regulations to amend the Nuclear Safeguards and Electricity (Finance) Act 1978, the Nuclear Safeguards Act 2000 and the Nuclear Safeguards (Notification) Regulations 2004. It will be a narrow power to amend references in those laws to provisions of the existing agreements with the IAEA. Those references enable the IAEA to carry out its activities in the UK, including, importantly, by providing legal cover for the UK activities of its inspectors. The references and the legal cover they have will need to be updated after the new agreements have been concluded with the IAEA; it cannot be done before.

At present, our nuclear safeguards regime complies with international safeguards and non-proliferation standards agreed between the three parties—ourselves, Euratom and the IAEA. The UK applies those standards primarily through its membership of Euratom. They are set out in two tripartite safeguards agreements between the UK, the IAEA and Euratom: the voluntary offer agreement and the additional protocol. At the moment, they rely on the UK’s membership of Euratom. Following our withdrawal from the European Union and Euratom, these agreements will become ineffective. That is why the Bill has to ensure that a domestic civil nuclear safeguards regime is put in place. The UK will need to conclude new agreements with the IAEA to detail the international safeguards and nuclear non-proliferation standards with which the UK agrees to comply. Without those, no regime we could have will be recognised by the international community.

Amendment 5, as tabled and eloquently articulated by the hon. Member for Southampton, Test, intends to require—rather than enable—the Secretary of State to make regulations under clause 2. I welcome the Opposition’s change of position on clause 2 since Second Reading. Amendment 5 clearly recognises the need to have the power in clause 2 to ensure the necessary legislative amendments are made in time to give effect to the new IAEA agreements, and to therefore ensure that the UK has a civil nuclear safeguards regime that gives effect to international standards on the UK’s withdrawal from the Euratom treaty.

However, making the Secretary of State’s power in clause 2 mandatory does not provide any additional value. Following the negotiation of the new agreements, the references to the old agreements in the legislation mentioned in this power automatically become ineffective —they will not work. The inspection of UK facilities by IAEA inspectors is a vital part of our agreement with the IAEA. It is not in anyone’s interest to fail to make the necessary consequential amendments to existing safeguards once new agreements with the IAEA are agreed. Requiring the exercise of the power in the Bill is therefore unnecessary.

I want to assure hon. Members that we are currently negotiating new agreements with the IAEA on the same principles as the existing agreements and that the consequential changes are expected to be minor. That will ensure that the IAEA retains its right to inspect all civil nuclear facilities and continues to receive all current safeguards reporting, ensuring that international verification of our safeguards activity continues to be robust.

Oral Answers to Questions

Debate between Lord Harrington of Watford and Drew Hendry

Tuesday 12th September 2017 Commons Chamber

[Richard Harrington]

As I am sure my hon. Friend is aware from his former membership of the then Energy and Climate Change Select Committee, we are talking all the time to these organisations, and our priority is to maintain the maximum continuity of supply that everyone in this country has been used to and will continue to enjoy.

[Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)]

Until now, the Government have put nuclear at the heart of their energy strategy, but their decision to leave Euratom puts at risk the security of markets, businesses and workers in the sector. Could this mean that the Secretary of State is finally wavering over his support for the over-budget and very late Hinkley Point?

[Richard Harrington]

I can confirm that the Secretary of State is very much in favour of the arrangements at Hinkley Point and that the Government are in favour of a mix of energy that includes nuclear and all its other sources. This has been very successful and ensured energy security and the continuity of supply that everybody enjoys.

[Drew Hendry]

The Minister will be aware that energy from nuclear plants will cost £92.50 per megawatt hour but that the new strike price for offshore wind is only £57.50—nearly half. Is he happy for people to pay higher bills for his Government’s nuclear obsession?

[Richard Harrington]

I thank the hon. Gentleman for effectively congratulating the Government on the results of the recent auction for energy prices—I, too, was delighted that the cost of offshore wind effectively dropped by half. I also remind him, however, that energy has to remain a mix. Nuclear is part of that mix, and as with all mixes aimed at maintaining continuity of supply, some are more expensive and some are cheaper. What matters is the average price paid, and I think that Hinkley will turn out to be a really good deal for the taxpayer, as it involves no public funds upfront, which is very unusual for this kind of massive development.

Oral Answers to Questions

Debate between Lord Harrington of Watford and Drew Hendry

Tuesday 27th June 2017 Commons Chamber

[Richard Harrington]

As my right hon. Friend will be aware, the Government are monitoring the situation very carefully, and we do not believe that it will make any difference whatsoever to liquefied gas supplies.

[Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)]

I welcome the Minister to his new post. Getting back to the North sea, the kind of action described by my hon. Friend the Member for Aberdeen North (Kirsty Blackman) is vital, especially to help along the return optimism. The Scottish Government have invested £5 million to explore decommissioning opportunities in oil and gas that could grow many new jobs. When will we get action from the UK Government, and when will we see a robust and comprehensive future energy strategy from the UK Government?

[Richard Harrington]

As the hon. Gentleman will be aware, the Government have been very actively involved in funding seismic surveys and the 3D visualisation centre at Heriot-Watt University. I am looking forward to the next licensing round and to dealing with the strategy he mentioned. I should mention the Kraken development, which the Government have supported, because the first barrels of oil were produced last week, and we look forward to there being 50,000 barrels a day at peak.

[Drew Hendry]

The fact is that the UK Government have been slow to realise the potential of decommissioning, pulled funding from vital carbon capture and storage pipeline projects, failed adequately to address the drop in renewable energy investment and plunged public funds into risky and poor-value nuclear power projects against the advice of experts. When will this Government wake up and take our energy opportunities seriously?

[Richard Harrington]

I am afraid that I must completely disagree with the hon. Gentleman’s view of things. We are committed to supporting the development of a decommissioning industry. I think that there are significant opportunities. We are currently considering options for the delivery of a port and yard, and we will continue to engage closely with all relevant stakeholders as we develop our options.