Nuclear Safeguards Bill

Lord Hunt of Kings Heath Excerpts

Committee: 2nd sitting (Hansard): House of Lords
Thursday 1st March 2018 Lords Chamber

[Lord Hunt of Kings Heath (Lab)]

My Lords, I commend the noble Lord, Lord Teverson, for this amendment. I also commend his sub-committee, which has done excellent work.

I looked with great interest at some pieces of evidence submitted to the committee, particularly that from Energy UK, which made the point that,

“Overall, the energy industry’s workforce is made of between one and five percent of EU/EEA employees”.


That is not a huge percentage, but Energy UK makes the point that,

“Although there are not a proportionately large number of non-UK nationals employed within the energy industry, the majority are employed in skilled roles which are difficult to fill from the UK resident workforce”.


The noble Lord, Lord Teverson, has already cited the evidence of EDF and referred to steel fixers. Interestingly, EDF examined the impact of restrictions on freedom of movement on its current workforce when thinking about what challenges might arise in the future. EDF said:

“For EDF Energy direct employees, … the majority of our current employees would meet the existing UK Points Based System requirements. The same cannot be said for our supply chain workforce, most of whom would not meet the current entrance criteria”.


This is a very important issue because, if freedom of movement is restricted, there is currently no route of entry for semi-skilled workers, such as construction workers, to enter the UK under the existing points system. I find it surprising that steel fixers are not classed as skilled workers, but the fact is they are not, so they would not be able to come in under the points-based system. Yet we have heard from EDF that we simply cannot meet the demands of constructing Hinkley C nuclear power station and other civil engineering demands with the number of steel fixers that we have.

The noble Lord, Lord Teverson, ended his remarks with an interesting question about the backbone of the Minister’s department. I do not think it has had a particularly easy ride. I know that it has done its best on visas for overseas students but has come up against an obdurate brick wall in the shape of the Prime Minister. But can we hope that there will be a positive response on this issue, as it is so crucial to our future industrial strategy?

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Moved by

[Lord Hunt of Kings Heath]

11: After Clause 1, insert the following new Clause—
“The ONR to become a Non-Ministerial Government Department
(1) The Energy Act 2013 is amended as follows.(2) In section 74, omit subsection (3)(a).(3) In section 77, after subsection (2) insert—“(2A) The functions of the ONR are performed on behalf of the Crown.(2B) In the exercise of its functions the ONR is not subject to the direction or control of any Minister of the Crown or of another government department.(2C) But subsection (2B) does not affect—(a) any provision made by or under any enactment; or(b) any administrative controls exercised over the ONR’s expenditure by the Treasury.”(4) In section 85—(a) in subsection (1), omit “with the consent of the Secretary of State”; and(b) omit subsection (3).(5) In section 86, omit subsection (6).(6) In section 89, omit subsection (6).(7) In section 92—(a) omit subsections (1) and (2); and(b) in subsection (5) omit “(1) or”.(8) In section 93—(a) omit subsection (2)(d); and(b) omit subsections (3) to (5).”

[Lord Hunt of Kings Heath]

My Lords, in moving this amendment, I want to explore the status and independence of the ONR. I have great respect for the ONR and its work, and I wish to enhance its status.

In this crucial area of nuclear safeguards, the ONR will replace Euratom in overseeing the UK’s obligations to meet international nuclear safeguard standards, ensuring that civil nuclear material is not diverted into military or weapons use. This is a distinct responsibility and is separate from the ONR’s current role in relation to nuclear safety. Essentially, the ONR will be policing the UK in respect of its international commitments, and on that basis its independent status needs to be enhanced.

A Cabinet Office memorandum of 2014 made the situation clear:

“Non-ministerial departments do not have direct ministerial accountability. Their need for independence from ministers is … greater than for NDPBs, and includes regulators and tax authorities”.


They are government departments in their own right. The memorandum continued:

“There will be a ‘sponsor minister’ who has residual policy responsibility for the continued existence of the non-ministerial department, the overall policy and statutory framework within which it operates, and represents the non-ministerial department in Parliament. However, a non-ministerial department operates independently of ministers, generally receiving funding directly from Parliament”,


negotiating with Her Majesty’s Treasury,

“and is accountable directly to Parliament”.

My argument is that the ONR should be established as a non-ministerial government department to recognise the important new responsibilities that it has been given. Some of the bodies that have that status—the Competition and Markets Authority, the Crown Prosecution Service, the Food Standards Agency, HMRC, Ofsted and Ofgem—have been considered by one Government or another to have needed that status to show that they are robustly independent. Looking at nuclear safeguard responsibilities, there is a very strong case for enhancing the status of the ONR in that way, and I hope that the Minister will be sympathetic. I beg to move.

[Baroness Featherstone]

I support Amendment 11. Part of Amendment 7 said something similar. It is very important that we are satisfied on this point so that we know for sure that there can be no interference and no misdoings—if that is the right word.

[Lord Henley]

My Lords, as the noble Lord, Lord Hunt, knows, I am always sympathetic, particularly to his amendments. On this occasion, what he wants are some reassurances, as does the noble Baroness, Lady Featherstone, about the genuine independence of the ONR and, importantly, that the IAEA sees it as an independent body and accepts it as such. I hope that, quite briefly, I will be able to provide those reassurances.

We have international obligations to ensure that the regulator is effectively independent. The provisions of the 2013 Act, which created the ONR and which I am sure the noble Lord knows well, were specifically designed to ensure that the ONR had appropriate independence. Those measures to guarantee its independence include providing it with independent public corporation status; significant restrictions on the Government’s ability to direct the ONR in the exercise of its functions; constraints on the conditions for dismissing senior ONR members; and transparency obligations that act as a safeguard against powers—which are already constrained—being used in an improper manner.

Noble Lords will be aware that as a public corporation the ONR is able to set its own employment terms and conditions, affording it greater freedom and flexibility than if it were a non-ministerial government department. If it were such a department, ONR employees would be civil servants, the organisation would be part of government and the level of its independence would arguably be more limited than it is now. The noble Lord, however, obviously takes another view.

In the factsheet we published on 19 February, we made it clear that the ONR is independent from government in its regulatory functions and decisions. The most important point to stress—this deals with the entire matter and goes to the core of the amendment—is that the International Atomic Energy Agency reported in 2013 that the Energy Act 2013 would,

“provide de jure independence, which will reinforce the de facto independence that ONR (and its predecessors) have enjoyed for many years”.

It is important that we listen to what the IAEA said; I cannot stress how important this is. The amendment the Committee is considering attempts to unpick the arrangements that the IAEA—the international body responsible for nuclear safeguards worldwide—considers provide the independence necessary for an effective regulatory safeguarding regime.

Having established that the ONR is independent, I would also like to note that, as well as fulfilling international obligations and best practice, this independence is crucial for the industry. It is important that the industry has recourse to appeal ONR decisions. Attempting to fundamentally change the ONR’s relationship with the Government by explicitly providing that the ONR acts on behalf of the Crown—the effect of the amendment—risks moving away from an approach deemed appropriate by the IAEA and would undermine the industry’s ability to hold the regulator to account.

I do not think I need to go any further than that. In the interests of time, it is probably best that I end there and ask the noble Lord whether he wants at this stage to withdraw his amendment. I hope that I have given him the appropriate guarantees.

[Lord Hunt of Kings Heath]

That has been a very helpful response and I am grateful to the Minister. However, I disagree with him: it is clear from the Cabinet Office guidance that a non-ministerial government department has more independence, whatever the status of officials. But he has given me considerable reassurance, for which I am most grateful, and I beg leave to withdraw my amendment.

Amendment 11 withdrawn.

Nuclear Safeguards Bill

Lord Hunt of Kings Heath Excerpts

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

Moved by

[Lord Hunt of Kings Heath]

5: Clause 1, page 2, leave out lines 18 and 19

[Lord Hunt of Kings Heath]

My Lords, we come to the end of our discussion today, and I hope that the Minister will be able to accept these amendments. As the noble Lord made clear in the debate before last, nuclear safeguarding primarily involves reporting and verification processes by which we as a country demonstrate to the international community that civil nuclear material is not diverted into military weapons programmes, so the definition of what is meant by “civil activities” is rather important.

In Clause 2, page 2, new Section 76A(5) of the 2013 Act as inserted by the Bill will allow the regulations to specify what and what not are to be treated as civil activities. The memorandum that goes with the Bill explains the reason the Government think that the power is necessary to enable further clarification of the regulating power already provided. The Government say that the phrase “civil activities” has a natural meaning, but this power enables the Secretary of State to provide greater certainty about what are and what are not civil activities. This in turn refines the purpose test contained in Section 76(1)(a) and provides enhanced certainty about when nuclear safeguard regulation can be made.

This is important, and the Delegated Powers Committee described the term “civil activities” as a concept central to the nuclear safeguards regulations. However, it says that it is not convinced that the term has a natural meaning. It takes it that it refers to non-military activities and says that if that is correct, there is no reason why that should not be made clear in the Bill. It recommends that it should be defined in new Section 76A of the 2013 Act rather than leaving it to be dealt with exclusively in regulations. My Amendments 5 and 6 essentially do just that, and I hope that the Government are prepared to accept them. I beg to move.

[Lord Fox]

My Lords, this may be an opportunity for the Minister to play an uncharacteristic square drive. I support the amendment and, with the authority of the Delegated Powers Committee behind it, I should have thought this is an opportunity to send us away with a song in our heart before the next helping. I cannot speak for the noble Lord, but I guess that if the actual definition of civil nuclear needs amendment, there is plenty of conversation to be had. I hope that the Government are able to accept the amendment.

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[Lord Henley]

I am very grateful to the noble Lord, Lord Rooker, for making that point. I followed the noble Lord into Defra some years ago. He and I know exactly what all those who have served us in the Civil Service do for us and how well they do it. If briefs ever fail, it is the failing of Ministers, and Ministers—including the noble Lord, Lord Rooker, and other noble Lords I see in this Chamber—know that it is our fault and we take responsibility for it. On this occasion, I think that everything we have said and done has been absolutely marvellous and wonderful and we will continue to argue our case.

May I now make my second attempt to draw stumps, if the noble Lord is prepared to withdraw his amendment?

[Lord Hunt of Kings Heath]

My Lords, it has been a long 24 hours for many of us, so I am delighted to say that is the nicest thing that the noble Lord has said to us. I take it that the Government will, in essence, be bringing an amendment back on Report. I am very grateful, and I beg leave to withdraw the amendment.

Amendment 5 withdrawn.

Nuclear Safeguards Bill

Lord Hunt of Kings Heath Excerpts

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

[Viscount Trenchard]

Euratom is certainly approved by the IAEA as having adequate standards. My point is that Euratom has standards that go beyond the level required by other international nuclear partners, including Japan, the United States and Australia. My point is that it is therefore not necessary to comply with Euratom standards to comply fully with the safeguards regime—

[Lord Hunt of Kings Heath (Lab)]

Will the noble Viscount give way?

[Viscount Trenchard]

Could I not continue, because I have just been interrupted? I will perhaps give way to the noble Lord in a minute.

I turn to Amendment 2, tabled by the noble Lord, Lord Warner. He refers to the supply to the United Kingdom of medical radioisotopes and their use and disposal, so far as this depends on UK membership of Euratom. My understanding is that it does not depend on UK membership of Euratom. Sixty per cent of the United Kingdom’s isotope supply comes from the EU and 40% from non-EU countries—predominantly South Africa, I think. Both are imported into the UK under fast-track procedures, and there seems no reason why that should change, whether or not we are a member of Euratom.

It is clearly essential that we avoid a cliff edge in this field, and for that reason, I look forward to hearing what the Minister has to say about the Government’s intention to avoid one. Clearly, something which replicates the effect of continued membership of Euratom during a transition period would be the easiest way to achieve that, because it will not be possible in the time available before March 2019 to negotiate and have ratified by their legislatures the four essential nuclear co-operation agreements with the United States, Australia, Japan and Canada that are our minimum requirement.

I am now happy to give way to the noble Lord.

[Lord Hunt of Kings Heath]

I just want to come back to the noble Viscount’s key point, which is that IAEA standards are less than those of Euratom. In evidence to the Public Bill Committee in the other place, the deputy chief inspector of the Office for Nuclear Regulation, which will be taking over the non-proliferation safeguarding role from Euratom under government plans, said that the result in March 2019 will be that we move from Euratom standards to standards that will mean fewer inspections and less intensity of inspections. That is surely the argument—I think the noble Viscount was hinting at this when we debated this last night—for not insisting that we establish our own regulatory function in March 2019 but carry on in some kind of relationship with Euratom. Whether it is transition, associate membership or alignment—whatever you want to call it—we should essentially continue to use Euratom until, if we insist on leaving Euratom in the end, the ONR can signify that it is up to Euratom standards.

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[Lord Hunt of Kings Heath]

We had an extensive debate on the principle of Euratom last night and I shall not repeat what I said then, but I shall speak in support of my own amendments and the others in this group. They are not perfect, as the noble Lord, Lord Teverson, said: they are substitutes, because most noble Lords in most parts of the House think it is a mistake to withdraw from Euratom and, even now, we hope to persuade the Government, one way or another, to reverse that decision.

However, the problem, which my noble friends have highlighted, is that the very integrity of this crucial industry is now at stake. Essentially, the Government want to find some way of continuing with Euratom, although they cannot spell out to us exactly what that means. This Bill is an understandable backstop so that, if they cannot agree one way or another with Euratom to continue its work, the ONR can be established as a separate nuclear safeguards regulator. Essentially, we are being asked to take this on trust.

My problem is that, first, I have no confidence whatever in the Government’s ability to negotiate a deal with Euratom. I do not know what it must be like to be a member of the Conservative Party or, indeed, the Government, but what we see is utter chaos and disagreement. For instance, the noble Viscount, Lord Trenchard, said that about 60% of medical isotopes come from the EU and 40% from outside. Last night, he suggested that leaving the EU should not impact at all on the transfer of medical isotopes from the EU. But we have not yet agreed a frictionless customs arrangement with the EU and I am not sure that, at this stage, one would bet anything at all on our seeing that negotiated—and it is but one uncertainty about what will emerge.

The letter sent by Mr Rees-Mogg and his group says, essentially, that this country must have “full regulatory autonomy” by March 2019—it must have the ability to change British rules and laws once we leave, without being a “rule taker”. But what arrangements are we then going to reach with Euratom that do not transgress the red line laid down by Mr Rees-Mogg? The Minister may say that Mr Rees-Mogg is but a Back-Bencher in the other place, but he seems to hold sway over government negotiating positions. That is why we have to assume that, actually, the Government are not going to be able to negotiate a sensible agreement with Euratom. Within government collectively, it transgresses so many of the red lines that have been laid down, one way or another, that if we are not careful, we will have to fall back on the ONR picking up this responsibility.

I respect the ONR and the evidence it gave to the Commons Public Bill Committee, which was everything you would expect of a robust regulator. My reading is that by March 2019, it could just about have enough people to do the inspections according to IAEA standards, but not to Euratom standards. But the other question is: what about the agreements that have to be reached with a number of very powerful countries? There are no guarantees at all that we could do that.

The reason we are debating and struggling with these amendments is that there is a real concern that not only the legality of the industry post-2019 is at stake here, but public confidence too. The noble Earl, Lord Selborne, who made a very good speech yesterday, talked about confidence in the industry. I am a passionate believer in this industry and I take my noble friend’s point that it is about not just research, but the fact that we have a highly skilled group of people working in it. Yes, we are experienced in decommissioning, but we now have the possibility of a renaissance in new nuclear. After having thrown away the lead we had, we can get some of that back, develop a supply chain and use the skills of our people, but we need public confidence to do that. The problem is that the Government’s position is putting that at risk because there is no confidence whatever that they can reach an agreement with Euratom and none that they can reach Euratom standards in March 2019. That is a very serious position to be in.

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[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.

Nuclear Safeguards Bill

Lord Hunt of Kings Heath Excerpts

2nd reading (Hansard): House of Lords
Wednesday 7th February 2018 Lords Chamber

[Lord Hunt of Kings Heath (Lab)]

My Lords, in one sense the Minister was right when he described this as a technical Bill. Something of the sort is clearly needed. However, it is of course highly regrettable that he has had to bring the Bill to your Lordships’ House as a consequence of what can be described only as the perverse decision to leave Euratom. My noble friend Lord Lea was right to press that point. Euratom predates the EU and comes under a separate legal treaty. The issue might be the ECJ, but it has never made a ruling in respect of any matter relating to Euratom. And Euratom works well—so well that the Government have decided that we are going to leave Euratom only to set up our own new regulator to meet Euratom standards. You could not make it up.

A number of key concerns have come from this debate. The first is that, although the Government are intending to meet Euratom standards, on their own admission they cannot do this by March 2019. That then leads to the ONR. I hold it in high respect but I am concerned about its capacity, funding and governance—the point about the independence of the ONR in the future is very important—as well as the question of time. When one thinks of the scale of the task, one has to ask whether it has the time, capacity and funding to do the job that is required, alongside the establishment of the new regulatory function. The international bilateral agreements—the NCAs—that have to be negotiated in a matter of months are also a cause for some concern.

The second area of concern is around the transition. It is not clear to me exactly what the Government are aiming for and what the fallback position will be. If the fallback plan is to say that by March 2019 we can guarantee only IAEA standards, that will certainly be unacceptable, and I think that the House will wish to amend the Bill to make sure that that cannot happen.

Many noble Lords have commented on the narrowness of the Bill. Clearly the Euratom decision goes much wider in three areas in particular. One is medical isotopes. Another is the international supply chain, which applies as much to new nuclear as it does to the decommissioning of our old stock, with all that that implies. As a former Minister for Energy who has visited Sellafield on a number of occasions, I am only too well aware of the challenges there.

There are also questions about responsibility for setting standards. If in the future that is not done by Euratom, will it be done by the UK Government? It is one thing to say that we are going to aspire to meet current Euratom standards, but life moves on and standards will evolve. The question of which standards we will meet in the future is a very important one. Are we going to set our own standards within the sphere of the IAEA, or are we going to follow Euratom standards without having any influence over them? Those are the things that we want to know. The Official Opposition do not support leaving Euratom. Failing that, we believe that there must be an equivalence, and that that equivalence must be in place by March 2019.

Looking at some of the questions in more detail, perhaps I may ask the noble Lord about the transition. First, the impression that I got from his opening remarks is that he sees this issue as being fully a part of the transition that we are negotiating with the EU, and therefore that Euratom matters cannot be considered as a separate point. The noble Baroness asked whether Article 50 could be suspended in relation to Euratom. From what the Minister said, my impression is that that is not possible because this is simply a part of the more general discussions. It would be good to know whether my assumption is right.

Secondly, what does “close association” mean? There has been a lot of discussion here and in the other place about whether, certainly during the transition period but beyond it as well, we could subcontract back the Euratom staff to continue doing what they do while, I imagine, being duly accountable to Euratom and to the ONR. That would seem to be a straightforward way of doing it. Or, could we be an associate member? What does close association mean? We are right to ask what that entails.

That brings us to what the Government seek to do. We all read the evidence given in the Public Bill Committee from the ONR itself and I pay tribute to the work that it has done, but I understand from what was said that it recruited four new people and reckoned it needed another 10 or 12 in order to make IAEA standards by 2019 and another 20 following that to meet Euratom standards. So there are two questions. If another 20 are needed over what was thought could be achieved by 2019, what is the difference in real terms between Euratom standards and IAEA standards? In other words, what is the impact of having fewer inspections of less intensity? If the Government say, “Actually, there is very little difference at all”, I would ask them why they are sticking to Euratom standards. If, actually, this is significant, it is clearly unacceptable that we allow the Bill to go through without having some guarantee that in March 2019 we will abide by Euratom standards.

On finance, a number of noble Lords expressed concern, particularly my noble friend Lord O’Neill, about the cuts to the ONR budget and whether that will impact on its capacity to carry out these new roles. I also think that there is an issue that the industry has raised. Who will pay the cost of the new regime? At the moment, it is paid out of the UK contributions to EU budgets. I suspect that the Government have in mind to make industry pay the cost in the future. We ought to know.

On current activities, on the whole issue of the international supply chain and on the question of decommissioning, clearly, as my noble friends Lord O’Neill and Lord Judd said, maintaining public confidence is crucial. As someone who very much supports the industry, who works to bring new nuclear back to the UK, it is vitally important to make sure that there are no hiccups in the international supply chain because we need the support of people, companies and goods and services from other countries. It is also important in relation to decommissioning.

A number of noble Lords mentioned research. It is clearly important. We get a lot of money through Euratom to invest in our research projects. We have a great deal of collaboration. The Government have to set out a strategy about how to ensure that we do not lose that collaboration and investment in the future.

I do not need to say very much about radioisotopes because a number of noble Lords, especially the noble Lord, Lord Carlile, went into that in great detail. I am grateful to the Minister for focusing on this, but in his opening remarks he said that he hoped that we would be reassured, because he recognised concerns, and he talked about customs arrangements being able to minimise any impact. The problem we have is that a significant part of the Conservative Party in the other place do not want customs arrangements as far as I can see. Lord knows what they want. They seem to want to take this country down to economic ruin, but the fact is that no one sitting here today could have any reassurance that the noble Lord is right about those customs arrangements. The most likely outcome at the moment is that we will walk away from those talks. What guarantees can be made about those custom arrangements? The point that noble Lords made about continuing access to the Euratom observatory was very important.

Finally, rather remarkably, I do not think that Henry VIII powers have had much of an outing here, although, as the noble Lord knows, there are a lot of regulations in the Bill, and one or two Henry VIII ones at that. Of course I understand that there does need to be some flexibility in this area, but there might be a case for looking at whether we can constrain the use of the Henry VIII powers. There is also the suggestion of a sunset clause, and I warm to the suggestion by the noble Baroness, Lady Neville-Rolfe, of reviews and annual reports, which might be another way of dealing with those issues.

Overall, this is a highly interesting technical Bill. Whether two days in Committee will be enough, I rather doubt. We are looking to seriously change the Bill to provide reassurance that, in March 2019, we will continue to have Euratom standards.

Energy: Domestic Tariffs

Lord Hunt of Kings Heath Excerpts

Tuesday 19th December 2017 Lords Chamber

[Lord Henley]

My Lords, the noble Baroness is quite right to say that bad insulation is not good for heating bills, so we would like to do better on that front. I would prefer to write to the noble Baroness in greater detail on the point she raised, but we are doing what we can to help all more vulnerable consumers with their heating bills. She will be aware of the warm home discount and the cold weather payments; and there is the winter fuel payment, which quite a number of noble Lords probably benefit from and which is worth up to £300 for a couple and £200 for an individual.

[Lord Hunt of Kings Heath (Lab)]

My Lords, the noble Lord says that Ofgem is doing a good job, but over the last few years we have seen evidence that the industry raises prices as quickly as possible and reduces them—when the international market shows a reduction in prices—as slowly as they can. Has Ofgem not used all the powers it has to intervene in the market?

[Lord Henley]

My Lords, what I made clear in response to my noble friend’s supplementary was that I believe Ofwat has done a very good job. Ofgem can do a very good job, but we agree with it that the energy market is not working as it should, possibly for the reasons the noble Lord has pointed out. That is why we have brought forward a draft Bill and are looking at what it might do. We will respond after the BEIS Select Committee has produced its report on that Bill.

Deregulation: Public Services and Health and Safety

Lord Hunt of Kings Heath Excerpts

Thursday 13th July 2017 Lords Chamber

[Lord Hunt of Kings Heath (Lab)]

My Lords, the contribution from the noble Lord, Lord Best, was immensely important and underpins the philosophy my noble friend Lady Andrews put forward. There is a real risk that the party opposite, in questioning the role of the state, which it is doing, is clearly undermining many important public safeguards.

I did not agree with much of what the noble Lord, Lord Patten, said, although I take his point on special advisers. Despite Mr Cameron’s promise before the 2010 election, he proved himself to be attracted to the appointment of special advisers if we look at the figures and the amount of money spent. The one thing I agree with the noble Lord on is this: going back 40 years, almost every Prime Minister has had a certain obsession with deregulation. The one thing that seems to characterise each of those Prime Ministers is that none of them has ever had any experience of running anything, which has led them to believe that when people come along and say, “The whole of British society is weighed down by overbureaucratic burdens”, they have tended to believe it. We have had a succession of Cabinet committees, task forces, tsars—you name it, we have had it.

The problem is that it has coloured the approach to sensible regulation that we ought to have in this country. The most important point that has been made by a number of my noble friends and the noble Lord, Lord Best, is that reputable companies do not mind proper, sensible regulations provided there is a level playing field and that there are regulators that can enforce those regulations. The problem is that if you take the Government’s very light approach to regulation, which is soft touch in terms of regulators, often the regulations they allow to continue are not properly enforced. That then allows the cowboy companies to operate and reputable companies are put at great risk. Certainly when I was Minister responsible for the Health and Safety Executive and the DWP, that is the thing that struck me most: companies would grumble about regulations, but the one thing they would say, once they had the regulations, was, “For goodness sake, ensure a level playing field and enforcement”.

The problem we have is a combination: austerity has forced local authorities in particular but other public authorities as well to almost invariably accept the lowest bid in a competitive tendering process. Whatever the Government say—one can challenge them on this and they blather on about best value—the fact is that nine times out of 10, 99 times out of 100, local authorities and health services go for the lowest tender. The combination of a deregulatory approach plus the kind of public sector tendering we have often means that the very companies we want to encourage—as the noble Lord, Lord Best, said, they are the quality companies—lose out. It is time for us to have a much more sensible approach to regulation.

I enjoyed, if that is the word, life as a Deregulation Minister—we called it Better Regulation Minister—in six departments. For some reason I was always appointed the Better Regulation Minister. It seems to be a punishment for Lords Ministers, looking at some of my colleagues. Regularly, we were summoned across to Downing Street to account for our sins, often with Prime Ministers advised by the special advisers referred to by the noble Lord, Lord Patten, who brought great experience and wisdom to their job. As we explained our dismal performance—because most of us thought that the regulations that we had were pretty good—the Prime Minister’s eyes glazed over in that awful way of his and we knew that our prospects of promotion had been put back yet one more year.

We colluded with the Civil Service and offered up old regulations which were never in any use, so we got the numbers up, but fortunately most of us were sensible and kept the regulations that were required to defend the public interest. The problem was that Ministers in the Government when they were in coalition actually believed in it, so they got rid of some essential underpinning regulations which would ensure public safety and consumer protection. Like my noble friend Lord Whitty, I am in favour of the nanny state. The reason is that it protects vulnerable people from many of the inherent problems that arise in a deregulated society.

I am sorry again to turn to the noble Lord, Lord Patten, but he and I have been debating these things, both here and in Oxford City Council chamber, for many years. He mentioned that the Government had taken this deregulatory approach to the public sector. He mentioned teachers. Unfortunately in your Lordships’ House, we tend not to have teachers in the membership, but my experience is that since Mr Gove’s unfortunate appearance as Secretary of State for Education, their autonomy has been virtually destroyed. We now have this rigid national curriculum where poor kids are focused entirely on a narrow range of subjects, where the liberal arts seem to have been completely taken out of curricula in state schools and where teachers are wholly demoralised by the lack of innovation and enthusiasm they can bring to the job.

Finally, in relation to the public sector, and seeing the noble Lord, Lord Prior, who knows an awful lot about the health service, I would hardly describe the Health and Social Care Act 2012 as an example of a Government approaching the public sector with a degree of light-touch autonomy. As he knows, it is the most extraordinary heavy-handed architecture that has ever been seen in legislation in relation to both the health service and other areas of the public sector. Sadly, the Government seem to have forgotten to bring the Bill they promised in their manifesto to lighten up the health service architecture—no doubt the noble Lord can tell us why.

My final point about regulation is the irony of Brexit. As my noble friend Lord Haskel has reminded us, the CBI reckons that, in place of the kind of regulation we have now, 32 bodies will have to be established in one way or another to regulate us post Brexit. The noble Lord, Lord Prior, will again know that medicines regulation is an excellent example of this. At the moment in the EU, we have a European regulator for medicines and then there is a national regulator. If your national regulator, in accordance with the rules, or the European regulator licenses a medicine, it can be used throughout the EU. In the future, we will have our MHRA, which is excellent, but, under the Brexit regime, to introduce a medicine in the UK you will need to go through the MHRA. The companies that do so will need a guarantee that, if they get a licence here, it will be recognised throughout the EU.

[Baroness Crawley (Lab)]

Twenty-seven countries.

[Lord Hunt of Kings Heath]

Precisely. The problem is that the European court gets involved in it, so the Government cannot agree a mutual recognition position. We have £4 billion invested in R&D in this country by the pharmaceutical sector. One result will be that it will not continue to invest, despite the fact that 14 of the top 100 medicines are now developed here. That is because it will not go through the pain of getting a licence in the UK when it also has to go to Europe: it will develop in Europe and in other parts of the world. If ever one wanted a great contrast and irony with this Government’s approach, it is that, in the mystical, deregulatory world that they wish to put into our country, the decisions they have taken are going to lead to a country which, because of Brexit, will actually have to be regulated in a very expensive way, putting at great risk our jobs, our economy and our livelihoods. Never could one see a more remarkable and ridiculous proposition than that which we have from this Government.

Brexit: Medical Research and Innovation

Lord Hunt of Kings Heath Excerpts

Monday 21st November 2016 Lords Chamber

[Baroness Neville-Rolfe]

I entirely agree with the noble Lord on the excellence of our research and development base, and on the great work being done by the research councils. I look forward to debating the way forward when the Bill on education and research reaches this House in the coming weeks. New funding has been made available today. This vision and direction of travel is excellent news for our science and research base in every part of the country.

[Lord Hunt of Kings Heath]

My Lords, the Minister ducked the question on the European Medicines Agency. Will she answer a question about the MHRA, the UK medicines regulator, which is regarded as the finest regulator in Europe and is one factor behind the large investment in medical research in the UK? In the Brexit negotiations, will she ensure that there is mutual recognition, so that medicines licensed by the MHRA will continue to be recognised throughout Europe?

[Baroness Neville-Rolfe]

I will feed the noble Lord’s suggestion into the process that is going on to make sure that we get the best deal in the Brexit negotiations on all these issues. He will know that Jo Johnson has a set up a forum with senior representatives of UK Research and Innovation to look at such matters, and that work continues in the Department of Health. This is a very important area. A lot of the detail is complex, but we are aware of that and, as I said in my opening comment, a great deal of work is going on.