Brexit: Competition and State Aid (EUC Report)

Lord Lea of Crondall Excerpts

Thursday 24th May 2018 Lords Chamber

[Baroness Noakes (Con)]

My Lords, when the UK took the momentous decision to leave the EU nearly two years ago, the underlying rationale for the EU committee structure in your Lordships’ House was largely destroyed. This was set up to scrutinise EU proposals that would impact the UK. According to my countdown app, just before I rose to speak, there are only 311 days and 11 hours before we leave the EU. Much of what we are now scrutinising is unlikely to be implemented in the UK, and so scrutiny, at the moment, has little or no meaning. I had expected that the EU Select Committee and its six sub-committees—absorbing the energies of 70 or 80 noble Lords—would, by now, have been reduced and streamlined. But the committees have been busily converting their purpose to scrutinising Brexit. Since the referendum, over 30 reports entitled “Brexit this” or “Brexit that” have been issued. There is a clear role for your Lordships’ House in holding the Government to account in this hugely important policy area, but I query whether we have got the balance right, either in the use of our own resources or—more importantly—in the burden we impose on the Government, given the scale of their task in preparing for Brexit. That both Ministers and officials have dealt with your Lordships’ scrutiny in good heart is a tribute to them. But the question that I pose to the House is whether we should be acting in this way and whether we are being reasonable and proportionate.

The report that we are considering today is from the sub-committee that has the internal market in its title—though it does not deal with goods or financial services and might better be called the “odds and ends” EU sub-committee. I am a member of this odds-and-ends sub-committee and, despite my views on the utility of the EU committee work at the moment, I pay warm tribute to the noble Lord, Lord Whitty, for being an excellent chairman.

[Lord Lea of Crondall (Lab)]

I am grateful to the noble Baroness for giving way. Does she not agree that, on this question of how Brexit would affect state aid, my noble friend Lord Whitty, in his role as chairman, has made a number of observations that show how important and topical it is? I do not understand why the noble Baroness is taking this opportunity to criticise the role of the network of sub-committees. This is a good example of it doing its job very well.

[Baroness Noakes]

My Lords, I was only trying to say that I thought the amount of effort being devoted to this particular aspect of government policy could be regarded as disproportionate, given that the fundamental rationale for the EU Select Committee and sub-committees was to scrutinise the proposals emerging from the EU which would affect the UK. It has stretched its current terms of reference to deal with Brexit matters but, since there is a large number of sub-committees with a large number of noble Lords involved, we tend to produce reports on a very large number of issues, many of which overlap and cover the same underlying issues; for example, mobility of labour. I am merely challenging the proportion; I am not challenging whether any particular aspect of any particular report is or is not interesting or useful.

Perhaps I may continue. I will not deal with the report overall, because the noble Lord, Lord Whitty, has already ably summarised that. The Government have provided a very speedy reply which is comprehensive within the constraints of the current state of negotiations with the EU, which is entirely understandable. The response indicates—although it is too polite to say so in terms—that our report did not identify any new issues beyond those already on the Government’s own list of Brexit things to do. I think that that supports my critique about how well your Lordships’ House is spending its time.

I shall focus on two areas: mergers and state aid. On mergers, one important implication of our leaving the EU is that we will no longer be subject to the decisions of the Commission and the jurisdiction of the European Court of Justice in relation to mergers which affect solely the UK. At the moment, the Commission can and does claim exclusive jurisdiction over mergers which engage no issues whatever outside the UK. These are inevitably the larger transactions affecting the UK. It is right and proper that these cases should return to the exclusive competence of the Competition and Markets Authority.

Of course, mergers that cross the border between the EU and the UK may become a little more complex in future in that both the Commission and the CMA could be involved. The one-stop shop is currently a convenient mechanism for businesses involved in cross-border EU-only mergers. But many mergers engage interests that go beyond the EU and thus may well inevitably involve more than one global competition authority, and the loss of the overall one-stop shop will barely affect those. In my view, the loss of the one-stop shop is therefore a marginal issue.

The report rightly emphasises the desirability of strong co-operation mechanisms going forward, and there need to be mechanisms to allow the sharing of data. But in practice this is unlikely to affect merger cases, because the parties should be happy to agree to data sharing in order to speed up clearance processes. None of our witnesses thought that data sharing and co-operation will in practice be a showstopper.

There was also general agreement that our overall competition policy, for mergers in particular, would not change markedly post Brexit. That is partly because there is a broadly converged global approach to competition and mergers. However, Brexit will allow the UK to develop incrementally; for example, in faster and more responsive processes and in more innovative solutions. We will be free to develop in ways that our own Parliament determines. Our courts can develop their own jurisprudence and, in particular, will not be constrained by the ECJ’s overarching principle of developing the EU internal market. So the general view was that not much is likely to change for now but that we will in future be able to change our policy in ways that suit our economy. That, in my view, is the one big message from this report.

I will turn briefly to state aid. The report is clear, as the noble Lord, Lord Whitty, has already pointed out, that state aid rules are not a major issue for the UK economy at the moment; indeed, the UK is one of the smaller countries in the EU in terms of spend on state aid per head of population. The UK managed perfectly well without a state aid authority before we joined the EU, but it seems that we will not be able to leave without one. There seem to be two reasons for this. First, it is likely that any future free trade agreement will need something to guard against unfair competition due to state aid. Secondly, a bizarre consequence of devolution is that we will apparently need an authority to determine whether there are state aid distortions within what we now have to call the UK’s own internal market.

Since our report was issued, the Government have confirmed what was widely suspected, namely that the CMA will take over the state aid authority role. In that connection, it was good to see that the CMA has received nearly £24 million this year in connection with Brexit preparations and an additional £3 million for additional staffing for the additional caseload. The CMA, in evidence to our committee, was itself relaxed about the adequacy of resources for the task given to it, and I see that one of its executive directors, Dr Michael Grenfell, reiterated that in a speech this week.

I have a couple of questions for my noble friend the Minister about the Government’s role in relation to the CMA, and these touch on the CMA’s independence. First, at present the Government appoint the board of the CMA. In future, the CMA, as the state aid authority, will be sitting in judgment on the Government’s actions from a state aid perspective. This is quite unlike other public sector bodies. Does my noble friend agree that the independence of the CMA, which I know the Government value, needs to be underpinned by appointment processes which are demonstrably independent of the Government? The judicial appointments model offers a useful precedent here.

Secondly, the Government have issued to the CMA what they describe as a “strategic steer”. Do the Government think that that will continue to be appropriate once the CMA has assumed a new role in relation to state aid? It seems to me that a strategic steer comes perilously close to being a direction to the CMA by the back door, and that would clearly be wholly inappropriate in relation to state aid decisions.

Thirdly, within the strategic steer, the Government currently commit to a presumption that they will accept the CMA’s recommendations but allow for policy override. I do not think that that will be good enough for state aid responsibilities. Will my noble friend agree that the Government will need to show a firmer commitment to abide by the CMA’s decisions in relation to state aid?

Those are points of detail. The main message is that no burning issues arise from this report, and certainly none that the Government are not already fully engaged on.

Energy Security: Gas Production

Lord Lea of Crondall Excerpts

Tuesday 17th April 2018 Lords Chamber

[Lord Henley]

My Lords, I hope that we are giving every possible encouragement to the shale gas industry. We think that the economic impact of shale, both locally and nationally, could be very large indeed. There will be opportunities for jobs and energy security, and in a great many other areas, through supporting that industry.

[Lord Lea of Crondall (Lab)]

My Lords—

[Lord Stephen (LD)]

My Lords—

Small Businesses: Retention

Lord Lea of Crondall Excerpts

Wednesday 21st February 2018 Lords Chamber

[Lord Henley]

Again, my Lords, I am not going to make promises at this stage about what we will do because, as I made clear, we want to consider the consultation. We have also made clear that we recognise that retention, which is common in the construction industry, can have negative impacts. That is why we set up the Small Business Commissioner to assist on late payments. As the noble Baroness will be aware, we had a debate on that matter only the other day. Things are happening. Things will continue to happen. We will continue to look at that consultation and we will then take action.

[Lord Lea of Crondall (Lab)]

My Lords, will the Minister comment on the ongoing role and remit of the Financial Conduct Authority, not only on the narrow point but on such questions as its relation with the big four auditing companies? Is this within the scope of this separate inquiry?

[Lord Henley]

I think the noble Lord is going somewhat beyond the Question on the Order Paper and I do not think I ought to comment on that at this stage. We are looking at the practice of retention. I have made clear where we are, and we will act when appropriate.

Nuclear Safeguards Bill

Lord Lea of Crondall Excerpts

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

[Lord Lea of Crondall (Lab)]

This part of the noble Lord’s speech suggests that it is a given that we are leaving Euratom, and the noble Lord is nodding in assent. Is he not aware that leaving the European Union does not necessitate leaving Euratom? If we were to stay in the European Economic Area by switching to being a member of EFTA, there is a whole raft of EU agencies which people can still belong to. Are the Government, even at this late stage in the negotiations, not clear about that?

[Lord Henley]

My Lords, I do not think that the noble Lord has been following what has been happening in this House and in the other place. We have the European Union (Withdrawal) Bill going through at the moment and last year we had the Bill which in a sense set off Article 50, which has gone through. By those means we are committed to leaving the EU and for that reason—

[Lord Lea of Crondall]

No.

[Lord Henley]

Yes, my Lords, we are leaving Euratom. That is the case, and the simple fact is that we have to make provisions for leaving Euratom and that is why we are doing this.

[Lord Lea of Crondall]

No, not true.

[Lord Henley]

The noble Lord says that what I have said is not true. I would ask that he withdraw that remark. We are leaving Euratom and that has been made clear.

[Lord Lea of Crondall]

I will withdraw that particular remark which used the words, “not true”, but if we stay in the European Economic Area, we would have withdrawn from the European Union but would still be able to be part of these agencies.

[Lord Henley]

My Lords, Euratom consists of the 28 members of the EU and no others. There are two countries which have some sort of associate membership, but that would not be appropriate for us. Being members of EFTA would not do that. The noble Lord will have to accept that we are leaving Euratom. That is the case and we therefore need to make provisions. If the noble Lord will bear with me, I will now tell him about the Bill.

Clause 1 will amend the Energy Act 2013 to replace the Office for Nuclear Regulation’s existing nuclear safeguards purposes with new nuclear safeguards purposes which reflect the nature of the new regime. The ONR will reflect the new nuclear safeguards regime primarily using its existing relevant functions and powers. Clause 1 will also amend the Act by inserting new powers so we can set out in regulations the detail of the domestic safeguards regime, such as accounting, reporting, control and inspection arrangements.

Clause 2 will create a limited power—I stress limited power—enabling consequential amendments to be made to the Nuclear Safeguards and Electricity (Finance) Act 1978, the Nuclear Safeguards Act 2000, and the Nuclear Safeguards (Notification) Regulations 2004. It is a very narrow power that will mean that references in that legislation to existing agreements with the IAEA can be updated once international agreements have been reached.

In addition, in January we published two sets of pre-consultation draft regulations to support consideration of the powers in the Bill, on which we have been working closely with the ONR. The Government are committed to an open and transparent approach as they continue to develop these regulations, which set out the detail of the domestic civil nuclear safeguards regime. We expect these draft regulations to continue to evolve in response to comments from and consideration by noble Lords and other stakeholders. To that end, the department is planning a series of stakeholder events and workshops in addition to the public consultation on the regulations, which we intend to take place later in the year. The drafts we eventually consult on will, of course, in certain respects differ from the working drafts that we have provided for the benefit of Parliament.

I now turn to one final issue that is not strictly relevant to the subject of the Bill but has been raised in another place and in meetings that I and others have had with noble Lords. It is the question of medical radioisotopes. I appreciate that the noble Lord, Lord Hunt of Kings Heath, has tabled an amendment to the EU withdrawal Bill on this very issue. It might be that that would be a better place to discuss these matters in due course rather than here. I could not possibly comment on what might be the appropriate Bill, other than to say that I do not think that it is, strictly speaking, relevant to this Bill, but because of the concerns that been expressed on this issue, it would be right for me to make a few points and give assurances to the House that the supply of medical radioisotopes is, and will continue to be, a very high priority for the Government. We share that concern about the well-being of patients receiving such treatment that results from being able to import such materials in good time, bearing in mind the relatively short lives that medical radioisotopes have.

We have made it clear that Euratom currently does not place any restrictions on the export of medical radioisotopes to countries outside the European Union. As they are not classified as special fissile material they are not subject to the international safeguards regime or to the approval of the Euratom Supply Agency, which governs the supply of special fissile materials. Although its role does not extend to ensuring the supply of medical radioisotopes, the Euratom Supply Agency established in response to the last shortage crisis in 2012 the European Observatory on the Supply of Medical Radioisotopes. The observatory aims to consolidate and share information between the EU, European Union member states, international partners, the medical community and industry stakeholders on supply, but crucially it does not have a decision-making or executive role in responding to shortages.

However, the Government recognise the concerns that changes to our customs arrangements after our withdrawal from the European Union could potentially affect the timely supply of medical radioisotopes. Therefore I offer an assurance to the noble Lord, Lord Hunt, and other noble Lords who have raised this point that the Government are committed to minimising any impact such changes might have. I have had meetings with counterparts in the Department of Health and Social Care and Her Majesty’s Treasury to step up our work in this area. We are working across government to prepare domestically and to negotiate a future customs arrangement with the European Union that ensures cross-border trade in this area is as frictionless as possible.

--- Later in debate ---

[Lord Lea of Crondall]

My Lords, first, I will refer again briefly to the question I raised in my earlier intervention about the umbilical—or otherwise—relationship between EU membership and Euratom membership. I am endeavouring merely to ascertain the objective truth about this matter. It cannot be a matter of opinion; it must be somehow a matter of fact. I hope that the Minister, if he cannot give a more definitive answer today, will put a letter in the Library giving the facts of the matter, because I think it may be more complicated than either he or I have stated, but it needs to be clarified.

I will mention just one relevant anecdote. I happened to chair a meeting in 1961 at the Cambridge Union for Seán Lemass, the Taoiseach—the Prime Minister of the Republic of Ireland—and he took the opportunity to announce to Irish TV Ireland’s accession to Euratom. Of course, it was not until 1973, 12 years later, that Ireland, along with the UK and one or two others, actually joined the EEC. So there was no umbilical connection at that time and I think the degree of umbilical-ness is perhaps being exaggerated. The registration regulations may well have changed since then but I am not sure how umbilical it is—or the opposite. Unless I am totally wrong, I suspect that I am following a train of thought which the noble Baroness, Lady Neville-Rolfe, was hunting for on the same point.

It is clear from the debate that there is a strong feeling in both Houses that we should be seeking as a minimum some form of associate membership of Euratom. I do not know whether there is such a thing. My view is that there is a clear option in principle if we stay in the EEA.

Another point that I would like to mention which has not yet been raised, but been implied by many, is that there is a very strong multinational dimension to all aspects of this, not only in the scientific co-operation but in the generation of power. We only have to think of EDF, the Chinese, the Japanese and so on. We are inevitably under the umbrella, and one of the strongest umbrellas for technical co-operation on standards is Euratom. As many noble Lords have said, the Office for Nuclear Regulation will do its best but, according to the note that I have, the Government have cut the grant to the ONR between 2015-16 and 2019-20 by 70%. How can it deal with all this extra work?

I shall not go into any more detail about the red lines on the European Court of Justice, because they are very tangential to this decision. However, if the UK were to leave Euratom, we would need to have a properly resourced regulatory framework in place by exit day. Everybody has pointed out the difficulty of doing that. Euratom currently employs about 160 staff, 25% of whom focus on UK installations. Without Euratom’s infrastructure and resources that work is likely to fall to the Office for Nuclear Regulation, which currently employs eight professional staff. Those are relevant numbers. We are placing extra responsibilities on the ONR but are not providing extra resources to fulfil them or, as far as I know, holding any open conversations, certainly with the trade unions, about how the regime would be funded.

I have a couple of specific points to put to the Minister, perhaps for response later. First, have the Government given any thought to the liability that they are taking on with regard to purchasing or obtaining existing Euratom equipment in UK facilities? By taking ownership, would that then make the ONR and/or BEIS liable to facilities for the decommissioning, removal and disposal of that equipment were it not to be used or replaced? The decommissioning, removal and disposal of contaminated equipment is not easy and will come with a price tag. Secondly, what is the purpose behind Euratom equivalence, which my noble friend Lord Whitty mentioned? Who will the ONR be expected to satisfy by performing Euratom-style inspections using video surveillance and equipment to verify that nuclear material has not been diverted from peaceful purposes? It is already known that the UK has a weapons programme, and we already have security cameras and portal monitors mounted on our sites to protect against theft and neutron monitors to provide a safety function. What benefit is there to the UK in providing our own internal verification of our own UK declarations? Those measures will not be recognised by bodies external to the UK as we are self-verifying, therefore not providing any independent verification.

--- Later in debate ---

[Lord Henley]

My Lords, I will come to the Henry VIII powers later, and I am grateful that the noble Lord feels that he does not want to discuss them in much detail at this stage. I believe that only this evening the Delegated Powers Committee has been looking at them. I hope that, on this one occasion, we will get a clean bill of health. But I think that noble Lords opposite who have been Ministers will know that there are occasions when Henry VIII powers are necessary. Moreover, all of them have probably been guilty at one time or other of having introduced legislation containing a Henry VIII power. However, I shall get to that later and touch on it briefly.

The noble Lord, Lord Fox, and the noble Baroness, Lady Featherstone, both wanted a much wider debate. I think that the noble Lord, Lord Fox, suggested that I was hiding behind the narrow remit of this Bill. That is not so. He wanted me to join in a wider debate on the nuclear industry, nuclear research and development and all those matters. I have given assurances about our commitment to the nuclear industry because they are important in relation to the Bill. I have also given assurances about how we will continue to invest in research and development, and I hope that my noble friends Lady Neville-Rolfe, Lord Inglewood and Lady Bloomfield will accept them. We are committed and, again, I hope that the noble Lord, Lord Broers, will accept that. But now is the not the time to be debating the wider issues. The noble Lord, Lord Fox, who acts as if he is some simple ingénue and cannot find ways of getting these matters debated knows perfectly well that there are plenty of means of securing a full debate on the nuclear industry, and no doubt he will institute one in due course.

The important matter at the moment is to debate this Bill at its Second Reading because it deals with a crucial point; namely, that we are leaving Euratom. I am grateful to the noble Lord, Lord Hunt of Kings Heath, for saying that although he regretted the fact that we will be leaving Euratom, he accepted that since we are doing so, there is a need for the Bill and, as I understand him, it is not the job of the Official Opposition to prevent it getting on to the statute book. What he wanted to ensure is not only proper scrutiny, but that we should provide the appropriate assurances that in a year’s time the ONR will be in the right place to take on the new responsibilities that it will have. I hope that I can deal with those points in the course of my remarks.

I shall start with the need to leave Euratom and repeat once again the point I have made that the Euratom treaty is legally distinct from the European Union treaty, but it has the same membership of all 28 states and makes use of the same institutions. Noble Lords will recall that the decision to leave Euratom formed part of the consideration by both Houses of the European Union (Notification of Withdrawal) Bill, which is now the European Union (Notification of Withdrawal) Act 2017. It is a done deal and we are leaving. It therefore behoves this House and another place to make sure that in a year’s time we are in the right place; that is, where the noble Lord, Lord Hunt of Kings Heath, wishes us to be.

It is important to say, in particular in response to the questions put by the noble Lord, Lord O’Neill, about maintaining public confidence because it is so important to the nuclear industry as a whole—here we are going wider than the question of safeguards—that this does not mean that we should not continue to have a relationship of some kind with Euratom, and we shall continue to discuss these matters. Our withdrawal will in no way diminish our nuclear ambitions or, I believe, our high international standing on nuclear matters. Maintaining the continuity of our mutually successful civil nuclear co-operation with Euratom and with international partners is a key priority. We will continue to have a constructive, collaborative relationship with Euratom. The United Kingdom is a great supporter of it. We have been working on its standards and we will continue to do so.

Our strategy is to continue to seek a close association with Euratom while putting in place all the necessary measures to ensure we can operate as an independent and responsible nuclear state from day one.

[Lord Lea of Crondall]

My Lords—

[Lord Henley]

Just before I give way to the noble Lord, I remind the House that I gave way six times in the course of my introduction. One of the six who intervened, the noble Lord’s noble friend Lord Rooker, has not felt it fit to stay, but I give way to the noble Lord, Lord Lea.

[Lord Lea of Crondall]

I was going to pick up a totally fresh point that has just been made, but if the noble Lord does not want to deal with it I will leave it. I am sure he will write a letter on many of these points.

[Lord Henley]

My Lords, I am always more than happy to take interventions. As I said, I took a total of six in the course of my earlier speech. I will of course write to the noble Lord and others on points that I cannot manage, particularly on points that are relevant to the Bill. Some of the interventions, when we got a bit confused about nuclear safeguards and nuclear safety, went somewhere beyond the Bill’s scope.

[Lord Lea of Crondall]

It is a very simple point. The noble Lord has made a fresh point along the lines that we have no basis on which we can do other than be a rule-taker. I thought that most people who are adamant that we must leave the European Union and all of its manifestations object to anything that leaves them in the position of rule-taker instead of rule-maker. The noble Lord is now saying, “Let’s keep being a rule-taker from Euratom”.

[Lord Henley]

I said nothing of the sort. I hope that the noble Lord will look very carefully at what I said. I said that we want to continue to develop our relationship with Euratom but that, of course, we will not be in it. Therefore, it is important for us to set up alternative arrangements, which is what this Bill is about, so that we can have the appropriate nuclear safeguards regime in place. Similarly—this point was made by the noble Lord, Lord Teverson, and others—we want to make it clear that we will have nuclear co-operation agreements with other countries around the world. We already have some, but our officials are engaging with some key international partners, including the United States, Canada, Japan and Australia, to ensure that we have essential nuclear co-operation agreements in place to ensure uninterrupted co-operation in trade and the civil nuclear sector. I confirm to the noble Lord, Lord Grantchester, on his questions on how we want to develop any further nuclear co-operation agreements, that our intention would be to present any new agreements to Parliament, as is appropriate, prior to the Government’s ratification, as provided for in the Constitutional Reform and Governance Act 2010.

I turn to medical radioisotopes, which have exercised a great many noble Lords. This is important. I am not sure that I can add much to what I said at the beginning, other than to stress how important the Government consider this issue. We will continue to make sure that appropriate arrangements are in place at our borders to allow their seamless import into this country. When I talked about customs arrangements I was not talking—if the noble Lord, Lord Hunt of Kings Heath, will bear with me—about a customs union but just about the usual arrangements that HMRC is responsible for, to make sure that things can come through quickly, particularly things that have a very short life, as the noble Lord, Lord Warner, and others reminded us, and as I think I reminded the House at the beginning. The important point to get over is that we take this very seriously, we will continue to discuss it and I will certainly write to all noble Lords, and in particular to the noble Lord, Lord Warner, to make it quite clear what we are doing. I will write before Committee and will probably continue to write on other occasions throughout the course of the Bill.

I turn to the role of the ONR and whether it feels that it can implement the necessary changes in the timescale that is before it. The first point to get over is the simple question of funding. I can give an assurance to the House that the Government are making another £10 million available to set up the new regime. When noble Lords talk about cuts to the funding that has been available to the ONR in the past one should remember—I think that there has been a degree of “economy with the actualité”, as someone once put it—that the ONR is actually very well funded and that changes to the level of the grant it gets from government are only a very small part of the overall ONR budget, which is actually growing and not shrinking. More than 90% of the ONR’s budget is recovered from industry; it is not coming from government. The safeguards work is being paid to ONR directly from BEIS’s budget, so I can again give the assurance to the noble Lord, Lord Hunt of Kings Heath, that there will be no charge on industry to pay for safeguarding work. The charges to industry are to cover other matters and, as I said, more than 90% of its budget comes from those sources.

It is important to get over just what the ONR is doing and the Government’s commitment to make sure that we have a robust regime that is as comprehensive as that currently provided by Euratom. Euratom standards, as has been made quite clear by me, by other Ministers and by many speakers in this debate, are considerably higher than those that other bodies would achieve. Achieving such international standards will allow the UK to discharge its international commitments and will underpin international nuclear trade arrangements with countries such as the United States, Canada, Japan and Australia.

The ONR is in the process of developing an expanded safeguards function by recruiting and training additional inspectors, building additional institutional capacity and developing necessary IT systems. It is aiming to have in place sufficient staff, including inspectors, from 29 March 2019 to meet international standards as applied by the IAEA. Current estimates suggest that the ONR would require a team of some 20 to 25 staff, which would include up to 17 safeguards inspectors. It already has 11 safeguards officers in post who are all in training to become safeguards inspectors by 29 March 2019. The ONR estimates that, to be able to deliver its functions to a standard broadly equivalent to Euratom standards, it may require a team of around 30 to 35 staff, which would include around 20 safeguards inspectors. It is actively recruiting and interviewing further candidates. The first phase of recruitment last year was successful: four individuals were recruited and are currently in training to become safeguards inspectors. A further recruitment campaign is under way. Successful candidates will join the ONR’s training programme and the ONR assesses that it will take a further 12 months or so to upskill new recruits to inspector level. So we have confidence that the ONR will be able to get up to the appropriate level. We also have confidence that, if necessary, it will be able to recruit from abroad. We are working with the Home Office to make sure that whatever happens with our future immigration system, that will be set out shortly and we will be able to ensure that the right people can get in at the right time.

The final matter raised by the noble Lord, Lord Hunt of Kings Heath, was the Henry VIII power. I admit that it is a Henry VIII power. It is quite clear that it is a Henry VIII power. I cannot remember who very politely said—I think it was the noble Lord, Lord O’Neill—that it was just drifting into being a Henry VIII power. It is a classic Henry VIII power—it is seeking to amend primary legislation by means of secondary legislation—but it is as limited as it can be. Clause 2 can amend any of the three Acts that I mentioned in my introduction,

“in consequence of a relevant safeguards agreement”;

in other words, it is limited to changes as a result of the safeguards agreement and can be only in consequence of that. It cannot be used in any other way. It is very specifically drawn. It is limited to those consequential changes and sets out the three pieces of legislation that may be amended. I look forward to hearing a little more about the views of the Delegated Powers Committee and I hope that it will, for once, give the Government a clean bill of health.

I hope I have dealt with most of the points that are relevant to the Bill but obviously I will write to noble Lords in due course, as is appropriate. In the meantime it behoves me only to beg to move that the Bill be now read a second time.

Parental Leave: Statutory Pay

Lord Lea of Crondall Excerpts

Tuesday 9th January 2018 Lords Chamber

[Lord Henley]

My Lords, I think that success would look like fathers and mothers being able to take the appropriate leave with the appropriate support so that they could manage those early weeks and months with a newborn child and properly adapt their lives. That is what we are trying to do with the original proposals for shared parental pay and leave, and that is why we want to improve them.

[Lord Lea of Crondall (Lab)]

Does the Minister recall that, when parental leave was first put on the agenda in Brussels, his party was very much opposed to it? It has been demonstrated in the last 15 years that this is a very useful and progressive part of our industrial system but that, as with other things agreed on a common basis across Europe—from pro rata to different types of atypical workers, as well as the gender question—it needs fairly strict rules to make it effective.

[Lord Henley]

My Lords, I do not recall what the noble Lord asks me to recall but I can say that this scheme was introduced by this Government—or, rather, by the previous, coalition Government. It is working reasonably well but with a very low take-up. I said in earlier answers that we obviously want to look at that to see whether it can be improved so that it can benefit more people and more couples.

Industrial Strategy

Lord Lea of Crondall Excerpts

Monday 27th November 2017 Lords Chamber

[Lord Henley]

My Lords, I will not be tempted on that final question to make an announcement on Heathrow. The noble Lord mentioned our poor record on productivity. I accept that we have a poor record on productivity, but against that one should remember that we have a good record on employment. If one looks at countries that sometimes have a better record than us on productivity but a worse record on employment, I think most people would prefer to be employed rather than unemployed in that respect. It is worth remembering that those who are not employed are not going to figure in productivity. So there are swings and balances in this respect. All I can say to the noble Lord at this stage is that we have recognised our poor record on productivity, and that is why the White Paper seeks to address it and puts it as one of the fundamental things we have got to do. We have a poor record not only on productivity but on the imbalance in productivity across the regions.

[Lord Lea of Crondall (Lab)]

My Lords, the Minister has just made a very interesting point about the interaction between employment levels and productivity levels. In a static world, you could have more employment, very low levels of pay and very low levels of productivity. In a macroeconomic sense, the measure of productivity is simply the output of the economy divided by the number of people at work. Within the firm, how—unless I have missed something—are the Government proposing to engage workers’ representatives in improving their world market share? There are targets—such an unfashionable word now, it is almost the same as saying Gosplan—but are we not missing out on some notion that we have to raise our sights in terms of targets for world market share and targets within the firm? The only targets there seem to be in the firm at the moment are to increase the share price and the distance between the board of directors and the average worker. Will the Minister say a little more about how he sees improved consultation and decision-making and joint work between the management, senior boards and shop-floor workers, whether in manufacturing, services or any other part of the economy?

[Lord Henley]

I am glad the noble Lord recognises the success of our policies in encouraging improved employment levels. That is very important. I was stressing the importance of improved employment levels only in relation to productivity. As the noble Lord will recognise, the simple fact is that we could have higher productivity but higher unemployment. One of the downsides of our growth in employment has been that weakening in productivity. We are seeking to address that. That is what the White Paper is all about. As regards relations between employers and management, that is a matter for companies themselves to look at in their own light.

International Investment

Lord Lea of Crondall Excerpts

Tuesday 17th October 2017 Lords Chamber

[Lord Prior of Brampton]

My noble friend makes a number of very good points. First, as he rightly says, the 4,200 people who work at Short Brothers have some outstanding, world-class engineering skills, and the fact that Bombardier and Airbus have come to this agreement is extremely good news for all of them. Secondly, as far as civil nuclear power is concerned, he is absolutely right. Hinkley depends on Chinese investment, as indeed do many economies throughout the world. I think that it would be very foolish of us to be at all concerned about the Chinese investing in our civil nuclear power industry. The Chinese will probably build 150 nuclear power stations in their own country over the next 10 years, and they will unquestionably be among the world’s best when it comes to building and operating nuclear power plants. We should take the fact that they are investing in the UK as a very good thing.

[Lord Lea of Crondall (Lab)]

My Lords, does the Minister agree that Boeing has for many years been a classic example of indirect support of the military-industrial complex—to use General Eisenhower’s phrase—in the United States through defence expenditure, R&D and so on, and that the same applies to high-tech industries generally? Therefore, is it not a fact that we have to scrutinise matters very carefully and take a robust view of our long-term strategic interest when it comes to the arguments that keep flying around across the Atlantic?

[Lord Prior of Brampton]

The noble Lord is absolutely right. Boeing has been hugely supported by the American defence industry since the Second World War at least. He is right that we should vigorously defend any claims that Boeing has against the British Government’s support of Bombardier in Northern Ireland.

Euratom

Lord Lea of Crondall Excerpts

Thursday 20th July 2017 Lords Chamber

[Lord Whitty (Lab)]

My Lords, I thank the noble Lord, Lord Teverson, for tabling this debate and I agree with what he has said. I intervene for only two reasons: first, to underline the importance of Euratom; and, secondly, to draw more general conclusions for the way in which the negotiations on leaving the EU are being carried out. I have a long-standing concern about and support for the nuclear industry, but I hesitate to say that it is now half a century since I worked for the AEA at Harwell and Culham. Even in those days you needed international agreements on the transport, storage and use of fissile and radioactive materials. During our membership of the EU, all that has been provided by Euratom. The organisation is also vital to the development of nuclear power, which in turn is vital to help us reach our targets on carbon-free energy supplies, both in this country and around the world. This is even more important because ownership of the UK nuclear industry is almost entirely in the hands of overseas firms.

Euratom is also vital to the development of nuclear science and research, and to keeping that expertise and facilities available in this country, in particular the important Joint European Torus at Culham and its fusion research. It is also vital, as the noble Lord has just said, to the provision of medical supplies and treatments. Radioisotopes are used to treat many key diseases including cancer, cardiovascular conditions and brain problems. I would venture to say, given the demography of this House, that many of us depend for our quality of life on such treatments and the continued high standards of safety and security of supply of such treatments. Euratom is also vital as a part of the non-proliferation treaty and therefore to world peace.

Legally speaking, initially the Government could not really make up their mind whether the vote to leave the EU inevitably meant that we would have to leave Euratom. As late as last December we were told that the Government were still,

“assessing the legal and policy implications of the vote to leave, including the potential implications for the UK’s membership of Euratom”.

Because Euratom was originally a separate treaty before the treaties were consolidated, it was arguable that we could differentiate even in the consolidated treaty. Legal opinions differ, but it would have been possible to argue that we could remain a full member of Euratom had it not been for the Government’s obsession about the jurisdiction of the ECJ, which in practice has not often intervened in Euratom business.

[Lord Lea of Crondall (Lab)]

Does my noble friend recall that the Republic of Ireland joined Euratom a long time before it joined the European Economic Community? In fact, I chaired a meeting in Cambridge in 1961 at which the Taoiseach said that Ireland was going to apply to join Euratom, which of course was a staging post to joining the European Economic Community, but equally that demonstrated that they are not exactly the same thing.

[Lord Whitty]

My Lords, I agree with my noble friend, who goes back even further than I do. The issue of whether we could continue to be a member of Euratom ought still to be live in the initial withdrawal discussions because it will define the way in which we will withdraw from the European institutions. If the Government are not prepared to seek full membership of Euratom, they must at least publicly state their objective of having full associate membership so that we can still have some influence over how the standards are set, the areas in which research is directed, and the funds that are related to those.

If the Government do not treat Euratom as somewhat different from the rest of the treaty and show that they can have a different sort of relationship, they are in effect defining Euratom and its agencies as EU agencies. I have with me a list of 34 EU agencies and in all cases the industries and organisations which participate in those agencies want to retain something very close to the status quo. This morning my Select Committee was discussing aviation and the issues around the European Aviation Safety Agency. The same is true in food standards, chemicals, banking and so forth. The industries want to retain a position within those agencies that is as close to the status quo as possible. The way in which we treat Euratom may well be the template for the way in which we deal with all the other agencies. I hope that the Government will take on board the very widespread view that most of those agencies work to our economic, social and environmental advantage. We should try to retain as close a relationship as possible in these negotiations.

Taylor Review of Modern Working Practices

Lord Lea of Crondall Excerpts

Tuesday 11th July 2017 Lords Chamber

[Lord Prior of Brampton]

My Lords, I concur entirely with part of what my noble friend said: that black cabs in London provide a remarkable service. However, Uber provides a remarkable service in many respects. As the noble Baroness, Lady Hayter, said, it is now an extremely valuable and important service. I do not think that there is any contradiction in having a successful Uber service, or one similar to it, running alongside the excellent black cab service in London.

[Lord Lea of Crondall (Lab)]

My Lords, I think it is apparent that this side of the House would not agree with the Minister’s throwaway line that,

“the system is working quite well”.

That is not the theme of the report. Nor is it true, if one looks at manifold evidence from public opinion polls, that job security is not prevalent as an issue and a worry for almost all classes of worker. It is being economical with the truth to make generalisations about workers preferring casual hours to guaranteed hours. There may be some people—students are a good example, out of term time or even in it in some cases—who prefer such hours, but does the Minister accept that you cannot get a mortgage on a zero-hours contract? Has the Minister done any research on whether that is true? If not, will he do some research and let the House know, perhaps in a letter? Is it possible to get a mortgage on a zero-hours contract? If it is not, does that not mean that we live in a two-class society—with different types of contract of employment —in respect of one of people’s most vital needs: to be able to get a mortgage, with those on such contracts falling away financially from people who are able to buy a house?

[Lord Prior of Brampton]

My Lords, on the noble Lord’s general point about the underlying theme of the report, I shall quote to him from the beginning of it—these are Matthew Taylor’s words and not mine—where he says of our flexible labour market that,

“the British way is rightly seen internationally as largely successful”.

Everything that comes through this report tells us that while the system is not perfect it is actually working quite well.

The noble Lord is right that even where people are working quite a few hours under a zero-hours contract they still find it very difficult to get a mortgage because the mortgage company sees it as zero hours. That is why one recommendation of the report, and it is an eminently sensible one, is that where an individual consistently works a number of hours on a zero-hours contract, after a year they can request that it be converted to a fixed-hours contract. That is one of the report’s recommendations that we will take extremely seriously.

Brexit: Aerospace and Automotive Industries

Lord Lea of Crondall Excerpts

Tuesday 14th March 2017 Lords Chamber

[Lord Prior of Brampton]

My Lords, in both the aerospace and automotive industries, for a number of years we have had an extremely close partnership between industry and government, to the benefit of both parties.

[Lord Lea of Crondall (Lab)]

It is reassuring for this side of the House to see the noble Lord, Lord Tebbit, scraping the barrel. To enable integrated production around Europe, is it not just a question of tariffs? As the Road Haulage Association said, instead of needing one piece of paper to get from Munich to Toulouse, for example, we will need 60 pieces of paper, unless we are part of a European arrangement for all these technical standards.

[Lord Prior of Brampton]

My Lords, the integrated supply chains that have developed over a number of years are not just limited to the EU. The aerospace industry is a case in point: its supply chains are global supply chains—and, of course, under WTO rules there are no tariffs for aircraft or aerospace parts. We should raise the horizon away from just the European Union.