Nuclear Safeguards (Fissionable Material and Relevant International Agreements) (EU Exit) Regulations 2018

Lord Henley Excerpts

Tuesday 22nd January 2019 Lords Chamber

Moved by

[Lord Henley]

That the draft Regulations laid before the House on 29 November 2018 be approved.

Relevant document: 9th Report from the Secondary Legislation Scrutiny Committee (Sub-Committee B)

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

My Lords, I was going to move this and the next set of regulations jointly, as set out on the Order Paper. However, I received a request from the noble Lord, Lord Adonis, and I am grateful to him for giving notice that he would find it more convenient if we dealt with them separately. I am more than happy to comply with that request. Therefore, we will debate these regulations and then, I hope, as I seek to earn my sweeties from the sweetie cupboard, we will move on to the final Motion in my name.

There are two sets of related regulations being considered today, each requiring a separate vote— that is possibly why the noble Lord, Lord Adonis, would like us to have two separate debates. The Nuclear Safeguards (Fissionable Material and Relevant International Agreements) (EU Exit) Regulations define the terms “fissionable material” and “relevant international agreements” for the purpose of the sections of the Energy Act 2013, as amended by the Nuclear Safeguards Act 2018. These terms are used in the related Nuclear Safeguards (EU Exit) Regulations 2018, which will be considered in due course, and set out the detail of the legal framework for our new domestic safeguards regime.

I begin by emphasising that the two sets of regulations are essential to establishing our domestic regime whether we leave the EU with a deal or not. The powers to make this secondary legislation are found in the Energy Act 2013, as amended by the Nuclear Safeguards Act 2018. The territorial extent and application of these regulations is England, Wales, Scotland and Northern Ireland.

Nuclear safeguards are accounting, reporting and verification processes designed to assure and demonstrate to the international community that civil nuclear material is not diverted unlawfully into military or weapons programmes. As was made clear during the passage of the Nuclear Safeguards Act, nuclear safeguards are separate and distinct from nuclear safety and nuclear security.

The nuclear industry is of key strategic importance to the United Kingdom and our departure from the EU in no way diminishes the ambition that we have set out in the nuclear sector deal. The UK has a long and distinguished record as a responsible nuclear state and was a founding member of the International Atomic Energy Agency in 1957. The IAEA ensures that states are honouring their international legal nuclear safeguards obligations in connection with the Treaty on the Non-Proliferation of Nuclear Weapons, the NPT. While not bound by the NPT, the UK has voluntarily accepted the application of two safeguards agreements with the IAEA: a voluntary offer agreement and an additional protocol, as defined in these regulations. These bilateral agreements will replace the trilateral safeguards agreements between the UK, the IAEA and Euratom, and ensure that we continue in our role as a responsible nuclear state when Euratom arrangements no longer apply. The ratification of these agreements was approved by Parliament at the end of last year.

To enable continuity of civil nuclear trade with our international trading partners, the Government have prioritised having in place nuclear co-operation agreements with Australia, Canada, Japan and the USA, as required by these countries. NCAs are legally binding treaties that allow states formally to recognise their willingness to co-operate with each other on civil nuclear matters.

--- Later in debate ---

[Baroness Altmann (Con)]

I hesitate to participate in this debate, given that this is a very complex issue, but I imagine that members of the public and the industry would wish to be assured that the House is scrutinising issues of such significance from the point of view of public safety. I note that the Secondary Legislation Scrutiny Committee drew these draft regulations to the attention of the House in view of the important issues of public policy.

I note from the committee’s report that there will be ways in which our nuclear safeguards will be deficient after March 2019 relative to Euratom, notwithstanding that they meet international obligations. I would be grateful if my noble friend could help the House understand in what way those deficiencies will manifest themselves in the event that we leave with no deal or, if we leave with a withdrawal agreement, during the interim period—before, as I understand it, our standards will meet the Euratom standards by the end of 2020.

[Lord Henley]

My Lords, I hope that I can deal with most of the points that have been made in the debate by noble Lords. If I miss any, perhaps on Regulation 4, we will be able to catch up on them. The noble Lord, Lord Redesdale, said that he had only one speech for both sets of regulations but I am sure that he will want to come in again if I fail to address his points.

First, the noble Lord asked whether we needed an NCA with Euratom. I can give an assurance that an NCA is not required for these regulations. Secondly, he regretted what he described as the demise of the nuclear industry. It is sad that last Thursday we had to make the announcement that I think he was referring to. I offered to repeat the Statement made by my right honourable friend in another place but, sadly, the House did not feel that necessary.

It is obviously a difficult situation, although I do not accept that we are looking at the demise of the nuclear industry—I think that it has a future. Being one of the world’s great optimists, the noble Lord should remember that some of the problems facing new developments in the nuclear industry—and we are still committed to seeing what we can do there—are possibly down to the success that we have seen in renewables, with the costs of offshore, onshore, wind and solar coming down. That makes the costs of nuclear, for example, much harder to deal with. We would like to bring those costs down but I do not think that they are likely to drop as much as has happened in the case of some renewables. Similarly, the costs of renewables include the cost of electricity storage, which, again, is coming down. Therefore, I suspect that the noble Lord, rather than being a Jeremiah, should always take a positive approach to changes and always look on the bright side of life, if that is possible.

I turn to the noble Lord, Lord Adonis. I am grateful that he referred to the debate in another place on 14 January, and I will certainly pass on to my honourable friend Richard Harrington the noble Lord’s welcome for his response to that debate, which I think dealt with most of the points that he raised. However, in my incompetence, I muddied the water and raised further points for the noble Lord. I hope that I will be able to deal with his concerns relating to additional qualifying material and the extra information required for the Secretary of State.

On additional qualifying material, all operators will provide accountancy and control plans to the ONR. That is a new requirement, which will come into effect in January 2021. The noble Lord also asked about the principal requirements of Regulation 45, which concerns the notification of receipt, production and transfer. That regulation requires an operator of a qualifying nuclear facility or other person to notify the Secretary of State of the receipt of a relevant item or qualifying nuclear material, the production, processing, derivation or fabrication of a relevant item from another relevant item or from obligated qualifying nuclear material, and the proposed transfer of a relevant item, together with details of the transferee and their location.

I turn to the process for NCAs and the questions raised by the noble Lord, Lord Grantchester, particularly in relation to Japan. I made it clear that we had concluded new agreements with Canada, the US and Australia. The situation is slightly different with Japan, in that, as I think I made clear in my opening remarks, a bilateral NCA is already in place. It will remain in place following the UK’s departure from the EU and therefore it is not necessary to conclude a new one. We have had detailed discussions on this and are in negotiations to ensure that we have appropriate arrangements in place with Japan to allow the agreement to remain operable after our exit from Euratom.

I note the remarks made by my noble friend Lady Altmann on the comments from whichever committee it was regarding these orders. I give an assurance that, with these orders, we are making sure that we have broad equivalence; we will have the same protection in place as existed before.

[Lord Grantchester]

It appears that there may be an issue with Japan. The Minister says that there is an agreement and we do not need to do anything but also that there are discussions about whether the agreement will remain operable. Could he clarify whether there are any issues at all with Japan?

[Lord Henley]

I am not aware of any issues. As I said, we have an NCA in place with Japan that goes back to 1998. That will remain in effect but, obviously, we want to continue discussions just in case. If I can help the noble Lord any further I will write to him, but that will probably not be necessary.

Motion agreed.