Draft Electricity and Gas etc. (Amendment Etc.) (EU Exit) Regulations 2019 Draft Electricity network codes and guidelines (Markets and trading) (Amendment) (EU Exit) Regulations 2019 Draft Electricity and gas (Market Integrity and Transparency) (Amendment) (EU Exit) Regulations 2019 Draft Gas (Security of Supply and Network Codes) (Amendment) (EU Exit) Regulations 2019 Draft Electricity Network Codes and Guidelines (System Operation and Connection) (Amendment Etc.) (EU Exit) Regulations 2019

Alan Whitehead Excerpts

Tuesday 26th February 2019 General Committees

[Dr Alan Whitehead (Southampton, Test) (Lab)]

It is a pleasure to serve under your chairmanship, Sir Graham; I am sure that you will have an interesting time chairing this debate on the five statutory instruments before the Committee. Perhaps I ought to say that I will not necessarily discuss the statutory instruments in the same order as the Minister, because I did not have any forewarning about the order that she would discuss them in. I am not criticising; I am merely saying that it may be difficult to establish the debate effectively, but I will do my best.

[Claire Perry]

Will the hon. Gentleman accept my apology for that omission? We have used the opportunity of many of our SI debates to have a very constructive conversation, so I apologise to him. I will take account of what he said, should we have the pleasure of doing this again.

[Dr Whitehead]

I thank the Minister very much for those comments. I sincerely hope that we will not have the pleasure of doing this again in a hurry because, among other things, I had to read all five SIs to get the sense of them. I have tried to place my concerns about them in descending order of importance. Therefore, I will not necessarily talk about them in the same sequence as the Minister, but I hope what I say will be reasonably intelligible.

Before proceeding, perhaps I ought to say that I appreciate the need to undertake code revision and to deal with the transmission code arrangements in such a way that they become properly operable within the UK on the day of a no-deal Brexit, which the Minister and I are both sincere in hoping will never come about. Nevertheless, we need to ensure that that is done, so far as is possible. This afternoon, I will talk not about that process itself, because it is necessary, but about some concerns over the nature of how it is being brought about in the SIs. The Opposition do not intend to oppose any of the SIs, but we do want to place on the record—and hopefully get the Minister’s comments on the record—our concerns over how the process has been brought about through the passage of the statutory instruments.

I will start with the draft Electricity Network Codes and Guidelines (System Operation and Connection) (Amendment etc.) (EU Exit) Regulations 2019, which take the regulations that have set common standards for transmission system operations across member states and translate that arrangement into a UK arrangement—a new arrangement as far as TSOs are concerned. As the Minister alluded to, that will cover transmission system operations not only in England, Wales and Scotland, but in Northern Ireland, which has a different transmission system operations arrangement and, indeed, a different regulator. It nevertheless comes under the draft regulations for the purpose of the legislation that is required to bring all of this within a UK-wide ambit.

As the Minister said, Northern Ireland and the Republic of Ireland have separate regulatory systems, but the transmission system and the energy market are completely integrated. Indeed, the Minister referred to the System Operator for Northern Ireland—SONI. That is not one of the few Japanese companies that is retaining its investment in Great Britain, but the operator of the Northern Ireland system. That operator has to operate in very close collaboration, including code congruence, with the system operator in the Republic of Ireland. That is because, among other things, two regulators deal with one grid and there is one single market as far as wholesale is concerned. That means that it is absolutely necessary that the codes between those two system operators are as congruent as possible in order to make the operation of a single grid effective.

It is quite clear that those codes will not be congruent in the case of a hard Brexit. As the explanatory memorandum to the SI makes clear, the network codes—“connection codes”—which come from the EU regulations are in the process of being incorporated into existing national regulatory frameworks, in order to make them accessible and familiar to UK parties. The document states—glass half full:

“The process of incorporation has been largely completed”.

An alternative way of saying that is: “the process of incorporation has not been completed”.

The Department states that it is the intention that those codes not incorporated already into a system to make them coterminous,

“will be created in domestic law under the powers of the Electricity and Gas (Powers to Make Subordinate Legislation) (Amendment) (EU Exit) Regulations 2018 as soon as practicable after exit day.”

That means that legislation to make those codes congruent will not be in place by exit day, nor for quite a while afterwards, because it will be a question of getting a new piece of legislation through this House to carry out the rest of the code congruence work.

Strictly speaking, that means that the single grid will operate on convergent codes and not be legally watertight. The Minister has effectively said this afternoon that, in practice, good will between all people will ensure that electricity continues to flow and the market continues to operate. However, we need to be clear that will be done essentially on a good-will basis and not on a legal basis. Considerable risks are attached to the fact that those codes will not be congruent. If there are major issues about code compliance on both sides of the border, as far as the grid is concerned, there will be no easy way to remedy that if there is a hard Brexit. That is my strong concern about the regulations.

I turn to the draft Electricity and Gas (Market Integrity and Transparency) (Amendment) (EU Exit) Regulations 2019. As the hon. Member for Kilmarnock and Loudoun said, that covers the implementation and scope of REMIT regulations. REMIT is a very effective system. It came into UK legislation via regulation and is therefore not the subject of a separate raft of legislation. Nevertheless, it operates very effectively as far as the UK is concerned. It is a system that aims to prevent market manipulation and insider trading in energy markets. It does so through the registration of participants, the reporting of energy data and the publication of inside information that would have an impact on prices. That registration, reporting and publication is done through EU agencies. The purpose of this SI is to transfer that into UK arrangements, so that, as much as possible, UK reporting and transparency work as they did previously in the EU.

However, it is clear from this SI that not everything that is currently undertaken by REMIT will be incorporated into UK legislation. It is stated that the regime that is being legislated for will commence four weeks after Brexit day, but will apply only to registration, inside information and transparency data. Other forms of reporting, such as data relating to transactions in wholesale markets, will not start until the regulator has reviewed the market data requirements. It is suggested that if the regulator decides to implement full market data reporting, as currently required under REMIT, a further three months’ notice of commencement will be given.

That means that only a part of REMIT will indisputably come into UK operation on a guaranteed basis. The regulator will have the opportunity upon review to translate the rest of the REMIT regulations into UK operation, but it may decide that the further pieces of reporting and data transfer relating to transactions in the wholesale market will not be part of the UK reporting arrangements. If that happens, there seems to be nothing that we in this House can do about it. Perhaps the Minister will indicate that there is something we can do about it. Perhaps she will say that we have effective legislative control over bringing the whole of REMIT into UK concerns, and that we are not just hoping that the regulator, which presumably will have concerns about resources, procedures and various other things, will complete the transfer. It would have been a good idea to undertake the whole of the transfer in this SI. I am not sure why there is only a partial transfer. I would be grateful for the Minister’s comments and reassurances on that.

The draft Electricity and Gas etc. (Amendment etc.) (EU Exit) Regulations 2019—the titles are getting a little more ragged as we get through the process—relates to the licence conditions concerning transmission and interconnections, which arise from the Gas Act 1986, the Electricity Act 1989 and the Utilities Act 2000. Those Acts all contain substantial references to EU directives. That is fine, as far as England, Wales and Scotland go, but there is a problem, in terms of translation, with Northern Ireland. I have already said that Northern Ireland has a completely coterminous grids arrangement with southern Ireland, and that there is a single energy market.

The explanatory memorandum states that no changes have been made to the definition of a single energy market,

“due to a practical need for the definitions of the SEM in Ireland’s and Northern Ireland’s legislation to continue to align, (which they currently do).”

It continues:

“This course of action will better preserve the stability of the SEM”.

Again, practically, that will mean that, if there is a hard Brexit, there will be a different regime concerning licensing and collaboration on licensing in Northern Ireland and in the rest of the United Kingdom. For Northern Ireland, a number of references to relations with the EU concerning those licences will be left in, as will EU arbitration arrangements. As the Minister mentioned, it may well be the case that, through good will, this actually works in practice. However, we ought to be very clear that there will not be congruity between the licensing arrangements—not in this instance between Northern Ireland and southern Ireland, but between Northern Ireland and the rest of the UK. I would be interested to hear whether the Minister thinks that that may create particular issues or whether she is confident that can be overcome at an early stage.

The fourth statutory instrument, the draft Gas (Security of Supply and Network Codes) (Amendment) (EU Exit) Regulations 2019, provides for co-operation to safeguard security of gas supply between member states and for solidarity between groups when a member state finds itself unable to supply households or essential services. Again, that is included in existing UK legislation through an EU regulation. At present, should the UK have a problem with our gas supply, there is a solidarity arrangement that requires other member states to come to our aid. Equally, if someone gets their gas supply cut off by the Russians, we have a reciprocal obligation, where we can, to come to their aid. I appreciate that that is not perhaps a central issue—the Minister and I have had discussions on this previously. The security of UK gas supplies is not a particularly interconnector, grid-based, serious European issue. Nevertheless, this SI cuts off all those methods of collaboration and solidarity—necessarily, because we will no longer have a member state’s obligation to act in solidarity or to come to other member states’ aid. However, we need to remember that they are required to come to our aid as well. The current regulations also include regional assistance arrangements. Since we will not be in any region, we cannot be part of any regional assistance arrangements either.

Will the Minister clarify whether she thinks that that is the end of the matter and the end of co-operation and solidarity, and that by simply revoking these arrangements in this particular SI, nothing of the sort will happen in the future? One hopes, in terms of common sense and fairness between ourselves and EU member states, that some sort of gas interconnection solidarity arrangement might continue. Does the Minister have any intention to pursue by other means such an arrangement, which could be beneficial both for us and for EU member states in the future, just as this arrangement has been beneficial for us in the past?

Finally—Sir Graham, you will be delighted that I am coming to the word “finally”—the Minister mentioned the unfortunate episode concerning the capacity market. She knows that we are talking today about what would happen in the event of a no-deal Brexit and about all these arrangements that currently pertain because we are a member state. The arrangements concerning the capacity market, which arise from state aid permission by the European Union in the first instance, also arise from the fact that we are a member state. If we are not a member state on 1 April, we will not be bound by those arrangements. In the event of a no-deal Brexit, does the Minister intend to restore the operation of the capacity market in the UK immediately, given that she would not be beholden to any UK arrangements concerning the operation of the capacity market on that date? Or does she intend to review the operation of the UK capacity market on the basis of what was decided in the European courts, regardless of whether we are bound by the state aid arrangements that pertained previously within the EU? I would be interested in hearing from the Minister whether she has any plans in that direction, and if so what they are.

Small Modular Reactors

Alan Whitehead Excerpts

Wednesday 20th February 2019 Westminster Hall

[Dr Alan Whitehead (Southampton, Test) (Lab)]

I congratulate the hon. Member for Copeland (Trudy Harrison) once again on securing this important debate. I want to concentrate on the wording of the motion, because we are talking about small modular reactors. A number of hon. Members have concentrated not only on the potential for small modular nuclear reactors, but on the wider issues relating to the nuclear programme. The hon. Member for Barrow and Furness (John Woodcock), my hon. Friend the Member for Ynys Môn (Albert Owen) and the hon. Members for Carlisle (John Stevenson) and for Dwyfor Meirionnydd (Liz Saville Roberts) all talked, in one way or another, about the disappointments that have followed the closure or suspension of the existing nuclear programmes, which have featured large nuclear plants. Of course that has been a dreadful disappointment, and a potentially serious problem, for those parts of the country.

It is tempting to say that small modular nuclear reactors are the solution to the problem of size for the future. They are certainly capable of being replicated by modular construction in a way that large plants generally cannot be; they can be deployable locally; they can be deployable on a large number of sites, rather than just the big nuclear sites that recent developments have concentrated on; and they may be able to fit into the future energy market in a way that large power, whatever its origin, might find increasingly difficult. There are a lot of potential positives to small modular nuclear reactors, provided that they can do better, cost-wise, than the nuclear reactors in front of us at the moment.

What concerns me about some of the early information about small modular nuclear reactors is that they do not appear likely to be any cheaper than existing nuclear reactors. I refer to a 2016 report that the Government commissioned about their likely cost. The initial cost is projected to be 30% higher than for existing nuclear plants. As that research projects, the learning curve that would go with the modularisation of those reactors—I am talking about first-of-a-kind—would probably mean that, if several such plants were deployed, the costs could be level with present nuclear plants within 10 years. However, as we have seen recently with Wylfa, one of the issues was the apparent cost of the nuclear plant coming forward, in relation to the power going out to the public, and the unwillingness of Hitachi to go ahead with it, despite substantial assistance from the Government of up to about £75 per MWh for production.

First, it is clear that small modular nuclear reactors have to get their costs down to be viable. The Minister needs to be apprised of that. The Government claim to have invested substantial amounts of money over a period of time in the development of small modular nuclear reactors. There was a competition in 2016 and the then Chancellor—

[Ian Paisley (in the Chair)]

Order. I encourage the hon. Gentleman to bring his remarks to a close.

[Dr Whitehead]

I think I may have a bit of time, but I will make sure that the Minister can get his comments in.

[Ian Paisley (in the Chair)]

You have been speaking for five minutes and 50 seconds.

[Dr Whitehead]

I will try to draw my remarks to a close as rapidly as I can and make only this point on the funding of small modular nuclear reactors, because it is important. The Government initially said that £250 million was available for research, development and a competition. That competition did not take place. That figure was recently replaced by £58 million of funding, which was subsequently reduced to £44 million. Only £4 million of that has been spent, on developing initial feasibility studies for those who want to develop small modular nuclear reactors—

[Ian Paisley (in the Chair)]

Order. I really have to ask you to conclude.

[Dr Whitehead]

Will the Minister clarify what is being spent at the moment on supporting small modular nuclear reactors, and how that will support the development of cheaper and more effective small modular nuclear reactors in future? That is the imperative.

Draft Shipments of Radioactive Substances (EU Exit) Regulations 2019

Alan Whitehead Excerpts

Monday 18th February 2019 General Committees

[The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Richard Harrington)]

I beg to move,

That the Committee has considered the draft Shipments of Radioactive Substances (EU Exit) Regulations 2019.

Usually, for such occasions, Mr Gray, it is written into my speech that it is a pleasure to serve under your chairmanship, but with you it is a real pleasure.

Today, according to the news this morning, MPs are quaffing champagne—we always “quaff” it—on the ski slopes, but here we are not. We have quaffed a few confectionary items, if one can quaff those, but I am in Committee to talk about the draft regulations that were laid before the House on 21 January 2019.

This new draft statutory instrument is being made under powers set out in section 8(1) of the European Union (Withdrawal) Act 2018. The regulations will address specific inoperabilities arising from the UK’s withdrawal from the European Atomic Energy Community, which is known more commonly and colloquially as Euratom, and will only come into force on exit day in the event of no deal between the UK and the EU. The draft instrument corrects deficiencies in retained EU law by revoking and replacing Euratom regulation 1493/93 on shipments of radioactive substances between EU member states.

The new draft regulations demonstrate the UK’s continuing commitment to the highest safety standards in radioactive substances’ control. The instrument will apply to the whole of the UK. The regulations will ensure that prior written declarations must continue for shipments of sealed radioactive sources from the EU into the UK in the event of no deal. They will allow the UK’s competent authorities to check that our importers of sealed radioactive sources comply with the requirements for safe storage, use and disposal of sources before shipments are made from the EU to the UK.

The process of advance declarations maintains the oversight of UK authorities with respect to the destinations and recipients of sealed sources that are shipped into the UK. Therefore, in relation to imports, the draft regulations provide continuity for regulators and operators in a no-deal scenario. The instrument will cover the shipment of the sealed radioactive sources from EU member states to importers. For the record, it is important to point out that a “sealed radioactive source” is a radioactive material encapsulated by another material, usually metal, to prevent exposure. In common language, that would be a box—but not just any box.

Sealed radioactive sources are widely used in industry, agriculture and medicine—for example, in special devices to inspect the quality of welds on gas and water pipelines during construction, to kill harmful bacteria in food or cancer cells in medical patients, or to sterilise medical equipment. About 100 businesses in the UK import sealed radioactive substances, and the vast majority of them are in England. The draft regulations do not delay or restrict our ability to import such sources from the EU, as their primary purpose is simply to provide continuity with existing practices.

Following exit, our importers of sealed radioactive sources from the EU will be required, as now, to make prior written declarations to demonstrate that they comply with national requirements for the safe storage, use and disposal of sealed sources before shipments from the EU to the UK can take place. The declaration is sent to the relevant competent authorities in the UK, which will acknowledge receipt, much as they do now. Those authorities are the Office for Nuclear Regulation for nuclear site licences, it being the regulator of such sites; and the different environment agencies for non-nuclear site licences: the Environment Agency in England, the Scottish Environment Protection Agency, Natural Resources Wales and the Northern Ireland Environment Agency.

The importer forwards a declaration and acknowledges receipt to the EU-based exporter before the shipment can be made. Declarations can last up to three years and cover more than one shipment, in the same way as under the previous process, and we will continue to recognise all declarations made before exit day following our withdrawal from the EU. Shipments can continue to be made under existing declarations unless and until those declarations reach the end of their life span.

In the event of no deal, as a result of the UK’s no longer being a member state, it will not be possible for the system to continue to operate in exactly the same way, because we will be a third-party state. The instrument will maintain current arrangements in so far as possible, with three areas of operational change. I am sure the shadow Minister will be very interested in those differences, but I have been through them very carefully and I believe they are necessary.

First, the instrument will apply only to imports from the EU into the UK. It will not apply to our exports to the EU, as the Euratom regulation does now, because, unfortunately, it reflects the UK’s position outside the EU. The instrument can cover only the arrival of shipments in the UK, because that would be the only thing within our power in the event of our leaving the European Union without a deal.

Secondly, the obligation for exporters in EU member states to submit a quarterly return of all shipments will no longer apply, because we will not be able to place an obligation on EU exporters to submit such a return to a UK-based competent authority, as the Euratom regulation does.

Thirdly, the instrument places a legal obligation to make a prior written declaration on the UK importer, whereas the Euratom regulation placed a legal obligation to obtain a prior written declaration on the EU exporter. That technical legal change is made for obvious jurisdictional reasons, but it will make no difference to what is required in practice. The practical requirements for obtaining the declaration for UK importers remain the same. The changes do not place any additional practical requirements on industry or regulators.

The shadow Minister normally asks me for an impact assessment. In this case, as the one-off cost to all industry will be between £1,400 and £9,100, the impact will be de minimis and absorbed as part of day-to-day business. It is just about getting used to the new technicalities; the process really is the same.

[Dr Alan Whitehead (Southampton, Test) (Lab)]

indicated assent.

[Richard Harrington]

I do not know whether Hansard can indicate that the shadow Minister nodded, but he did. That happens rarely during my speeches, but in this case it did. He may well have denied it, in which case I would have had to set the record straight.

Subject to Parliament’s approval of the draft regulations, guidance on their operation will be published online in March, alongside targeted operator engagement. Officials have engaged with affected operators and stakeholders through a number of forums and channels, including the Environment Agency’s small users liaison group and the radioactive substances policy group. I am pleased to say that the instrument was drafted in collaboration between officials in my Department and those in the devolved Administrations, as well as the different environment agencies and the ONR.

In conclusion, the draft regulations are essential to demonstrate our commitment to the highest safety standards in the area of radioactive substances control and ensure maximum continuity for UK importers.

[Dr Whitehead]

It is a pleasure to serve under your chairmanship, Mr Gray. The Minister may correct me if I am wrong, but I think the draft regulations are pretty much the last of the various SIs that have been put in place to create a regime in the UK that is as good as the Euratom regime. I did not intend to be quite as kind as this will sound, but I think we have got to a position where pretty much everything is in place. That cannot be said for every area of regulation, but we are almost there as far as the future of Euratom is concerned.

[Richard Harrington]

I can confirm that this is the last Euratom SI for no deal. As usual, the shadow Minister is very well informed.

[Dr Whitehead]

There is the small matter of chasing an agreement with Japan, but that is a different matter.

[Richard Harrington]

A mere technicality.

[Dr Whitehead]

Indeed.

It would be remiss of me not to welcome the fact that we have now got to the final point, and therefore today we do not want to stand in the way of the regulations proceeding. However, I ask the Minister for a brief explanation of one particular aspect, which is bound up to some extent with the fact that, as he said himself, what was previously a two-way process in regulations now becomes a one-way process, because we have no means of forcing anybody in an EU country to make declarations in a way that we might like, and we will therefore record receipt, rather than across the board, as far as exchanges are concerned.

That concerns me to the extent that the Minister has talked this afternoon of sealed sources of radiation. He stated that those are in a special box. They are effectively in a box, but they are sealed, to make what can be highly dangerous radiation not impactful on anybody who is dealing with it. So it will be sealed in metal, or glass, or whatever, to make it non-impactful on the outside.

The current regulations cover a second category—unsealed sources. That does not mean unsealed to the extent that they are on a paper doily laid out for everyone’s approval. The safety of those materials should give cause for concern, but they are not in the same category as the materials that have to be sealed so as not to harm anybody outside. They are called unsealed, but they are still protected, and we ought to know about them as far as possible.

The problem is that previously, the transit of both sealed and unsealed material could be traced one way or another, either through the forms that had to be filled in before material was transported, or they would be subject to a three-monthly report of the transit of all materials, which was held within the EU but available to all member states. Now that will not be available to us any more, so in principle we will have no knowledge of what is happening to the transport, both in and out, of unsealed nuclear material.

I do not wish to hold up this particular SI, but I nevertheless invite the Minister to reflect upon whether, for the longer term, that is an entirely satisfactory way to do things. The explanatory memorandum states that that is not a matter of great consequence, but I would have thought that what happens to the transport of these items is important, so that we do not face a possible future scandal of missing material, or material going to the wrong place or into the wrong hands, or performing the wrong role. We ought to have some known record of what is going on.

I may have misunderstood how this SI will work, and perhaps we will in some way have a record, but on the face of it, it looks as though we will have a record only on the basis of voluntary arrangements by the shippers, and not a definite and certain arrangement for those shipments.

On the overall arrangements for sealed goods, I absolutely agree with the Minister, and I also agree with him that there should not be an impact assessment for this SI, because the same things are going backwards and forwards, and it is not a question of there being any serious changes in procedures; it is just a question of how those procedures are being organised. However, there is a question to be answered about sealed and unsealed materials, and I hope the Minister can answer it in a way that puts my mind at rest about the procedures.

--- Later in debate ---

[Richard Harrington]

I am flattered by the compliments from my two hon. Friends, and by the good grace with which the hon. Member for Southampton, Test has responded throughout the progress of the 2018 Act and the statutory instruments that have followed. Every time, we hope that he will be late so that we can start without him and the illustrious Opposition Whip will have to deal with the issues, but he has never let us down—or at least, he has never let the Opposition Whip down.

The hon. Gentleman’s points are interesting. Being who he is, he will be aware that advance declarations have never applied to unsealed sources, so that is not new.

[Dr Whitehead]

Just to clarify, that has always been my understanding. It is a question of what goes into the three-monthly declarations from the EU about all transport—unsealed and sealed. That was previously the source from which one could keep a record of what was going on.

[Richard Harrington]

Perhaps I can answer by saying that that does not pose a concern, because the devolved environmental permitting regime allows the UK environment agencies to require sites that receive sealed and unsealed radioactive sources to record their receipt. Under the EU regulations, as I have explained, the import of unsealed sources was captured only by the quarterly returns. As that is no longer a requirement, unsealed sources are not covered by the regulations, so it is a completely different matter with a completely different system.

To answer the question of my hon. Friend the Member for The Cotswolds about Sellafield and the Public Accounts Committee report, if he will indulge me, I think it would be better for me to write to him on the subject or for us to meet to discuss it.

Draft Ecodesign for Energy-Related Products and Energy Information (Amendment) (EU Exit) Regulations 2019

Alan Whitehead Excerpts

Monday 11th February 2019 General Committees

[Dr Alan Whitehead (Southampton, Test) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Paisley. I note that you can get from one end of the Committee corridor to the other far more quickly than I can. That is something to bear in mind for future meetings.

I find this evening’s discussion quite complex, and not only because of the complexity of what is before us. By the way, I think I will be saying this fairly regularly in Delegated Legislation Committees: this matter should not be before us in the shape of an SI. We are increasingly getting to the position where we cannot properly scrutinise these matters. This is one example of that. I find the subject quite complex not because of the complexity of the stuff before us, important though that is—I thank the Minister for providing a rapid guide to it in its complexity—but because of what might happen in terms of eco-design, energy labelling, and, as the Minister mentioned, the CE label mark in the event of a no-deal Brexit. What will happen in terms of the operation of those different marks and their acceptability? The Minister mentioned that the CE labelling would be acceptable in the UK for a limited period, but we have had no clarification of what the regime for energy labelling, for example, is likely to be.

The legal position immediately after a no-deal Brexit is that, even though the standards will be the same, those EU labels will not be acceptable in the UK, and vice versa. Third parties, certainly after a short period, will have to undertake two separate regimes of labelling, even though the standards may be identical. As far as I understand it, there has been no discussion of how those labelling arrangements might be acceptable on an interchangeable basis, provided that the regime is the same.

I welcome the fact that the Minister assured the Committee that, as we adopt these new requirements in the event of a no-deal Brexit, the various regulations that comprise the eco-design and eco-labelling specifications will not be in any way amended as a result of the draft regulations—that is to say, the arrangements will be identical in substance, as far as having the same regime is concerned. If we are to have anything that is usable immediately post a no-deal Brexit, it will be very important that it is absolutely clear that EU and UK arrangements are identical. If the Minister can shed a little light on that, I would be very grateful.

Let us assume that the arrangements will be identical. In that case, we have the following position: there is a body of regulations and arrangements that makes the design of energy-related products fit for sale and use within the EU. Obviously, under such circumstances as we are discussing, the eco-design arrangements regarding items fit for sale and use would hopefully be grafted wholly on to the UK position.

Then we have the eco-labelling information, which arises from the eco-design. It is the sticker that we see on fridges, freezers and other items that gives us the energy rating and other things. As the Minister said, that will be subject to a redesign by the EU shortly after we will have left in the event of a no-deal Brexit. When that happens, that will presumably also have to be incorporated into UK regulations in order to keep that UK-EU equivalence going.

The third pillar of this, although it is not exactly what the draft regulations are about, is the CE labelling, which sits over all the other things. The eco-design is what makes the product saleable. The eco-labelling is the information that should be provided to the public as a result of the design. The CE label is what makes anything, including energy-related products, saleable and useable throughout the EU. Anything that will be sold in the EU has to have that CE label on it.

In the explanatory memorandum there is a passing reference to the fact that all that will be subject to the CE marking framework. It indicates that the UK marking that will replace the CE marking will be introduced by the draft Product Safety and Metrology etc. (Amendment etc.) (EU Exit) Regulations 2019. My understanding is that until that statutory instrument is introduced and replaces the CE marking with a UK marking, the rest of this falls down because they are all subject to that arrangement. Although that SI has been published, I understand that it has not been laid or discussed in Committee.

It is rather important that we receive some kind of assurance that that statutory instrument will go through before the possible occurrence of a disorderly Brexit. If it does not, the set will be incomplete. What we are discussing will have no substance because there will not be a regime to enable the CE marking that oversees the whole process to be replaced with a UK marking. The Minister says the UK has indicated that there will be a time-limited period—I do not know whether that is unilateral or negotiated and whether it will be months, years or weeks. It would be helpful for the Minister to give an indication of how that might work.

There is likely to be a pretty chaotic arrangement to determine who will have what standards affixed to their products for sale in the UK from Europe. A European piece of electrical goods sold in the UK will have to have a European energy standard attached to it and, presumably, on the other side, an identical UK thing stuck on. I hope the eco-design will be the same, although there are indications in this SI that the Secretary of State will have powers to alter those arrangements if necessary. I would have thought that the Secretary of State would do such a thing at his or her peril, inasmuch as that would throw out the possibility of any alignment of standards for future reference out the window.

That emphasises the need to keep the arrangements aligned, because I anticipate that there will have to be discussions and arrangements for how those things work in the long term. These regulations provide no solution to that. All they do is provide a regime that allows standards to be maintained in the UK; they give no indication of how the trading arrangements will work from the EU to the UK, the UK to the EU and third parties to both the UK and the EU in future. That is a particularly dangerous area for us to go into.

Although I understand that these regulations are necessary to align with what exists in the EU, they lack clarity about how the regime will work in the longer term. Does the Minister have any intention to make further clarifications, or will further statutory instruments come our way to give us further definitions? One has to be in the pipeline very shortly in order to sort out the CE regulations, but there may be others to sort out those trading regulations. I am interested to hear from the Minister whether it is the Government’s intention to clarify any of those positions about what is acceptable for trading purposes in different parts of the UK.

My reading is that it is not about whether arrangements themselves are parallel and equal in their effect but about whether, if a label is placed on a sale item in the UK or the EU and that label is not valid, even if the background is, the product can be sold. Unless there are good arrangements at least for the time-limited period the Minister mentions, or better oversight arrangements for that trading, even with the regulations in place we are potentially in for a period of complete chaos. Potentially, goods will be prevented from going into a country or an area as a result of people not having the right bit of labelling on them, even if the regulations are, as the Minister indicates, good and sound regarding the environmental and energy consequences of the sale items.

Although the Opposition do not intend to oppose the regulations, we think that a lot remains to be done to clarify how the arrangements will work. I look forward to hearing from the Minister whether that work will be done in time for the Brexit we all hope will not occur on 29 March—a disorderly Brexit that causes these problems to arise in the first place.

[The Chair]

I do not see anyone else energetically bobbing to catch my eye, so I call the Minister.

Draft Storage of Carbon Dioxide (Amendment and Power to Modify) (EU Exit) Regulations 2018

Alan Whitehead Excerpts

Monday 28th January 2019 General Committees

[Dr Alan Whitehead (Southampton, Test) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Bone. I cannot resist commenting on the interesting circumstances: with the extension of SIs, we are going into different Committee Rooms, and I am used to having a rather closer relationship with the Opposition Front Bench than I have this afternoon.

[Claire Perry]

With the Government Front Bench.

[Dr Whitehead]

Sorry, with the Government Front Bench—the Minister usually has a closer relationship with the Opposition Front Bench. That does not mean, of course, that we shall be particularly far away from each other on the proposals in the SI this afternoon.

Essentially, the SI transposes three sets of regulations that underpin different aspects of the UK’s regime for carbon dioxide storage, including the regulations that should be adhered to, the circumstances of termination of licences that should be adhered to and the access for infrastructure. Those matters are contained in different sets of regulations, all of which stem from the EU carbon capture and storage directive. Obviously, in the event of a no-deal Brexit, we would not be a member state as defined by the directive. Therefore, it is necessary to secure the effect of those regulations without referring to our being a member state. As the Minister said, it is very important that we do maintain the effect of the regulations.

I would like the Minister to confirm that in her opinion—this is certainly my opinion—the changes made in today’s SI merely serve that purpose and do not do anything to the substance of those three SIs. My understanding is that their substance remains exactly as it was.

[Claire Perry]

I am very happy to clarify that the hon. Gentleman’s understanding is correct: this is simply a transposition exercise.

[Dr Whitehead]

I suppose that I could be a little curmudgeonly by saying that it would be rather nice if we had some carbon capture and storage to put into those regulations. We do not at the moment, so in a sense nothing will actually change with the regulations coming on stream, inasmuch as there is nothing that will be regulated or licensed, or indeed terminated, by the transposition of the regulations. I hear what the Minister says about the intentions for carbon capture and storage in the future. I hope that it will indeed proceed rapidly, after its previous setbacks, and that the regulations will be necessary sooner rather than later.

I do not have any particular cavils or quibbles with either the intention or the practice of what is being done today. Indeed, I very much support the idea that we must have a good, solid carbon dioxide storage licensing and regulation regime. That is what there has been previously and what there should be in the future. The draft regulations will ensure that that is the case, so I am very happy to inform the Committee not only that we do not wish to divide the Committee, but that we support these changes.

Draft Carriage of Dangerous Goods (Amendment) Regulations 2019

Alan Whitehead Excerpts

Monday 28th January 2019 General Committees

[Dr Alan Whitehead (Southampton, Test) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Bailey. I have to notify the Committee that the credit that I might have had for speaking briefly should be applied to my speech on the SI that we debated earlier. I will not be brief on this legislation, because there are really serious issues with it.

I appreciate the purpose of the legislation. Unlike with other SIs that we have debated, the purpose is not simply to transpose what was already in legislation to a circumstance in which we are no longer in the EU. Indeed, the SI that we talked about earlier was a straightforward transposition of material that had already been in legislation. It was simply a case of noting that we would no longer be a member state and therefore the regulations should apply in exactly the same way, but with those provisions.

This SI places certain elements arising from Euratom directives into UK legislation. In so doing, it makes a number of provisions that I think we ought to look at very carefully. Before we do that, I have to raise two particular concerns, one of which I think is probably fatal to the legislation as it stands. The first issue that I would like the Committee to at least note is that this is actually the second time that this instrument has been laid. An instrument was laid on 13 December and was withdrawn, and a second instrument, with precisely the same title, was relaid on, I think, 20 December. This is a very minor point, but there may be some confusion as to which version we are talking about today, because version 1 is still up on the internet. I hope that we have version 2 before us this afternoon.

If we compare version 1 with version 2, which is in front of us—the version that was relaid just before Christmas—we see that although there are minor changes, such as to a date in a piece of earlier legislation, there is also a major change. The first version stated that an impact assessment would be available, but in the second version there is no mention of an impact assessment. That has disappeared between 13 and 20 December. Was there ever an impact assessment? If there was, why was the second version of the SI amended to indicate that there was none, and if there was not, why was it referred to in the first version of the SI? There is a bit of a mystery there, and it is quite important: if there is an impact assessment, it ought to be before us today.

The second issue, which is far more procedurally serious, is that the SI makes an amendment to the Transfrontier Shipment of Radioactive Waste and Spent Fuel Regulations 2008. The part of the SI that that amendment appears in is not a particularly crucial one, but it is nevertheless important: it places within the 2008 regulations an annex from Euratom regulations, which contains a variety of values that are important to our current proceedings. Members might ask, “What is the problem with that?” The central problem is that when we met last week to discuss the Transfrontier Shipment of Radioactive Waste and Spent Fuel (EU Exit) Regulations 2018, we agreed to a change in those regulations—we all agreed to it; there was no opposition. That change, among other things, revoked the Transfrontier Shipment of Radioactive Waste and Spent Fuel Regulations 2008, so we are discussing amending regulations that we have revoked. The transposition of that annex into the new regulation will have no force at all, because the 2008 regulations no longer exist.

There are provisions about the amount of time over which revocation takes place, but I have consulted on this issue, and it appears the objective position is that we are trying to amend something that has been revoked, although it is not clear whether that affects the whole of the SI or only one part of it. In any event, we are seeking to put through on an unamendable basis a piece of legislation that is manifestly defective in its drafting. Mr Bailey, I seek your guidance as to what the procedure might be under these circumstances: whether we should go through with this statutory instrument—pass it through and out the other end, then think about it subsequently, knowing that we have passed into legislation something that is defective—or whether there are remedies available at an earlier stage in the process.

[Jim Fitzpatrick (Poplar and Limehouse) (Lab)]

My hon. Friend is raising a fundamental point about what we are doing this evening. Does he think it would be appropriate for the Minister to clarify on a point of order whether we are trying to amend something that does not exist, or whether the guidance that we have received from my hon. Friend—who is highly regarded in these matters, and who will have done his research—is in some way, shape or form in error?

[Richard Harrington]

I am not trying to flatter the shadow Minister, but I work with him a lot and listen very carefully to what he has to say. Usually, the answers to his questions are extremely complex and I have to do my homework to understand them. However, in this case, my recollection of last week—I will ask my officials for clarification—is that the Transfrontier Shipment of Radioactive Waste and Spent Fuel (EU Exit) Regulations 2018 were for the event of no deal only. Therefore, I do not believe his point is relevant; perhaps we will discuss that, but that is my understanding. It is a very constructive and, I am sure, well-researched point, but I think it misses the no-deal point—heaven forbid there is no deal.

[Dr Whitehead]

The citation and commencement of the regulations that we passed last week stated that they will come into force on exit day, whenever that is. Although that is when the SI will come into force, the revocation applies from when it is made, so it carries forward into legislation. That does not alter the fact that, although another SI will come into force on exit day, we are seeking to amend something that does not exist. Both statutory instruments come into force on exit day, regardless of whether there is no deal or a deal, because they have been made properly through the parliamentary process. If we pass these draft regulations, that is what will happen.

I am grateful to my hon. Friend the Member for Poplar and Limehouse for his intervention. We ought to think very carefully about whether we are able to proceed with these particular draft regulations, in the absence of a definitive view that, given what we know now, they are not defective and can be voted on and put in legislation.

[Richard Harrington]

It seems to me that last week we debated draft regulations, but they have not yet been made. That is why, respectfully, I do not think the hon. Gentleman’s point is valid.

[Richard Harrington]

If I may intervene again, Mr Bailey, I am certain that is the case, but if the shadow Minister wishes to have a meeting I will be very happy to put his mind at rest. It would involve going into details with lawyers and so on; I do not think I can do that now. Irrespective of what happens with the SI, I owe him that courtesy and will be very pleased to do that.

[Dr Whitehead]

I thank the Minister for that offer; I am sure I will take it up. Thank you, too, Mr Bailey, for your guidance on whether we could proceed. I thought we probably could. Nevertheless, what we end up with will not simply fall because it is contingent legislation; when exit day comes upon us, it will be defective because it amends something that no longer exists and therefore has no force. At the very least, it will be necessary to consider whether further legislation needs to be put into place to correct that before exit day. That is the minimum I would expect under the circumstances. It cannot just be brushed under the carpet; it is a serious issue relating to the force of the proposed legislation. Obviously, if we sit together and knowingly make legislation that does not work, we can at some stage be held accountable for that. Therefore, we need to take the matter very seriously.

[Richard Harrington]

If that were the case, it would be my responsibility and that of the Government, and not the responsibility of the hon. Gentleman, who has made his point very clearly.

[Dr Whitehead]

I thank the Minister. I personally take the view that we are all in this room together making this legislation and we all have an equal responsibility for making sure that it works, regardless of whether we are members of the Opposition or of the Government. My comments are made in that spirit, not in the spirit of opposition, because I want the legislation to work as well as possible.

[Richard Harrington]

rose—

[Dr Whitehead]

I have not yet come to the substance of what I am going to say, but I will give way.

[Richard Harrington]

For the record, I accept that comment in the spirit in which the shadow Minister made it. I did not think for one moment that it was a political point. He has made a very valid point and I hope I have answered it, but I accept the fact and take responsibility for that.

--- Later in debate ---

[Dr Whitehead]

I thank the Minister for that point. I think I have voiced my concerns in the best way I can, so perhaps we should move on to discuss the rest of the SI.

My other substantive point is about the status of exposure to radiation. The regulations list two ways in which an emergency worker may expect be exposed to radiation. The Minister has rightly stated that the regulations include a central new element, which is the definition and identification of “emergency worker”. That is someone involved in the carriage of radioactive and hazardous materials—typically the driver of a vehicle that is transporting nuclear waste and other material. The expectation set out by the regulations is that the employer of that emergency worker has to ensure that they have the necessary information and training in the event of an emergency. The emergency could be one of a variety of things, such as the vehicle developing a leak or breaking down, or the danger of exposure to radiation, potentially as a result of an accident, and the emergency worker should have the training and knowledge required for such circumstances.

Regulations 8 and 9 set out the dose limits to which an emergency worker may be exposed—the limit that emergency planning should ensure is not exceeded. Regulation 9 focuses on reference levels and states that the dose should be kept below 100 mSv, which is the measure of radioactive intensity to which someone is exposed,

“or the emergency specific reference level if applicable.”

Regulation 8 states:

“Regulation 12 of the 2017 Regulations”—

meaning the overall limits—

“does not apply to an emergency worker, where that emergency worker…is engaged in preventing the occurrence of a radiation emergency; or…is acting to mitigate the consequences of a radiation emergency.”

It continues:

“An emergency worker may be exposed to an effective dose not exceeding 500mSv whilst they are undertaking the activities set out in sub-paragraph (1).”

We therefore have a picture of a general reference level of 100 mSv, although over what period is not specified—nor is the period that the 500 mSv relates to—which can be exceeded under the circumstances of an emergency being realised.

If members of the Committee are still with me, which I am sure they are, they will know that the reference level should refer to the Ionising Radiations Regulations 2017, which set out the maximum dose to which employees over the age of 18 should be exposed. For the purpose of regulation 12, schedule 3 to those regulations sets the limitation as,

“100 mSv in any period of five consecutive calendar years subject to a maximum equivalent dose of 50 mSv in any single calendar year”.

That is subject to exceptional circumstances. The normal anticipated dose for employees and trainees of 18 or above is 20 mSv in any calendar year. In using the definition of someone being an emergency worker, we appear to have substantially exceeded the reference levels set out for employees in the 2017 regulations.

Secondly, the instrument sets out that, in emergency circumstances where that level is understandably exceeded, if someone is engaged in preventing the occurrence of a radiation emergency—that is, if a lorry driver is really grappling with the circumstance that has arisen in that nuclear emergency—the level should not exceed 500 mSv. The Minister stated that that is in line with more recent IAEA guidance about restricting the exposure of emergency workers.

Indeed, the guidance in the IAEA regulatory arrangements is that the other values may be exceeded in emergencies and that the actual level is 500 mSv, but let us look at the circumstances under which that guidance applies. It states:

“This value may be exceeded under circumstances in which the expected benefits to others clearly outweigh the emergency worker’s own health risks, and the emergency worker volunteers to take the action and understands and accepts these health risks”.

That is classified under life-saving actions, or actions to

“prevent severe deterministic effects and actions to prevent the development of catastrophic conditions that could significantly affect people and the environment”.

The category is set out for Chernobyl meltdown-type arrangements, where someone, having been fully apprised of the circumstances, knowingly volunteers to put themselves in a life-threatening situation and literally puts their life on the line through life-saving actions or large actions to deal with a nuclear emergency and the environmental concerns that may arise from it.

Those are not the emergency worker arrangements set out in these regulations—the two do not match. Either the regulations have simply drawn the exposure values too highly, or they have not taken account of the circumstances under which those exposure values might be contemplated. In drawing up the emergency worker arrangements, the draft instrument never covers that particular point raised in the IAEA regulations. It simply mentions possible radioactive nuclear carriage emergencies for which someone could receive training. It does not state that they must agree to take the action or should understand those health risks, unless general training and action is somehow regarded as someone signing away their life and health on each occasion that they drive a nuclear truck.

The draft regulations are completely inadequate in dealing with the proper safety arrangements for people who transport nuclear materials, and actually open the door to a great deal more exposure for those people than I think any of us would regard as reasonable in such circumstances. I appreciate that there are circumstances of nuclear emergency where that exposure may be necessary in order to take action to deal with it. However, those circumstances are not laid out in the draft regulations. In coming to its conclusions, the IAEA envisages an entirely different series of circumstances regarding the possible level of exposure.

The draft instrument ought to be taken away and redrafted, not only for the reason I have suggested—because it does not work—but because it does not appear to have a firm grip on the circumstances, or the escalation of circumstances, that might be necessary to deal with levels of nuclear radiation exposure. Unless the IAEA guidelines are properly written into the draft instrument, we will simply allow various people to put themselves in much greater danger than they sign up for as emergency workers. We should not easily contemplate signing that away.

--- Later in debate ---

[Richard Harrington]

I thank the hon. Members for Southampton, Test, for Kilmarnock and Loudoun and for Poplar and Limehouse for their contributions. I will try to deal with the majority of their points.

I certainly respect the point made by the hon. Member for Poplar and Limehouse that the Opposition may feel it necessary to vote against the measure because, as the shadow Minister argued, it is invalid because it is contradictory. I fully respect that point, particularly given the Whip’s guidance. As you will know from your long parliamentary experience, Mr Bailey, one tends to do what Whips advise one to do, and that is particularly true in the case of the hon. Member for Blaenau Gwent. I will try my best briefly to dissuade them.

First, I will try to put to bed the point about the impact assessment, which was mentioned in the first version of the draft regulations but not in the second version. I think the difference was between the versions published on 13 December and 20 December. The decision was taken not to carry out an impact assessment simply because it was viewed as de minimis. There is a de minimis threshold of £5 million. The instrument makes no changes that would involve a significant impact on business, charities, voluntary bodies or the public sector, so we decided not to carry out an impact assessment. That was quite within the rules. I apologise for the confusion, but we had to take a decision, and that is what we decided. Hon. Members may disapprove of that, but there is no impact assessment because the impact is de minimis. It is not the case that there was one and we did not like it so we thought it should be hidden.

I think I answered in interventions the point about contradictions in the legislation. That may or may not be acceptable to the Opposition, but there is no point in my repeating it.

I turn to the point about dose limits for emergency workers’ exposure to radiation. I think everyone shares the intention of ensuring that that does not happen, but if it does the rules are very clear. The whole thing really is very complicated. It is certainly true that planning for an emergency scenario is very different from planning for a normal work scenario. The 500 mSv limit applies only in the circumstances set out in paragraph 8(1)(a) and (b) of the schedule. I do not think the IAEA was thinking only of catastrophic scenarios; I think it was generally allowing for lawful exposures with the intention of reducing harm. That is a very relevant point, but it is very complicated.

I am afraid I gave up physics at the age of 16, for the very good reason that I had failed my exams in it, but the dose limits in the Ionising Radiation Regulations 2017 apply generally to work with radiation. Paragraph 8(1) of the schedule disapplies them in the case of an emergency, because they could cause the employer to commit a criminal offence in dealing with such emergencies. That is why it sets a reference level appropriate to emergencies.

[Dr Whitehead]

I have given my speaking notes to Hansard, so I have to do this from memory, but does the Minister consider that the regulations as they stand give effect to what is in the IAEA definition of exposure to radiation—the knowledge and understanding that is required, and the informed consent that must be given if that high level of radiation is to be permitted under those circumstances? I cannot see anything in the regulations that says that, and I would be interested if the Minister could point me to anything in the regulations that requires that informed consent to be provided for under those circumstances, as is set out in the IAEA regulations.

[Richard Harrington]

I consider my response satisfactory and I am prepared to write to the hon. Gentleman on the specific point he brought up. He did very well without his speaking notes.

Returning to the 500 mSv reference level, it transposes an EU directive and brings us into line with international standards. Those might not be the right standards, although we think they are, but it is certainly absolutely in line with them. It is meant as a reference level for planning purposes, and reflects an upper limit. It does not mean that that level is acceptable or normal, but it gives an upper limit. The goal in any emergency plan is, of course, to minimise exposure—that is the whole purpose of the draft regulations—but regulations must set a ceiling, and the definition of an emergency would include doses far below that level.

Repeating the point that the hon. Member for Kilmarnock and Loudoun, the SNP spokesman, made, the levels are intended to apply to an emergency situation. Any operator regularly exposing the public to nuclear emergencies would face other sanctions from the appropriate authorities. It is not just these draft regulations that would be relevant in such a case.

I hope that I have explained the points that were brought up by Opposition Members. Despite those points, I certainly in every way commend the draft Carriage of Dangerous Goods (Amendment) Regulations 2019 to the Committee.

Question put.

Draft Transfrontier Shipment of Radioactive Waste and spent fuel (EU Exit) Regulations 2018

Alan Whitehead Excerpts

Tuesday 22nd January 2019 General Committees

[Dr Alan Whitehead (Southampton, Test) (Lab)]

It is a pleasure to serve under your chairmanship, Sir David. I will leave it at that, because I am concerned about the spread of so-called “pleasure creep”, where one has to put a number of nouns, adjectives and adverbs in front of the word “pleasure” to indicate that it really is a pleasure. I will be straightforward and stick to what I have just said.

The statutory instrument is essentially a very sensible piece of work to ensure that after exiting the EU we have in place the authorisation, certification and all other necessary arrangements to allow radioactive waste to transit properly—the Minister mentioned some 300 shipments a year. Previously, that was all done essentially under the aegis of Euratom; the question of having those arrangements, certainly as far as transfer to Euratom countries was concerned, did not come before us.

The Euratom arrangements also applied to trans-shipments that were not to Euratom countries but were under the aegis of Euratom as far as such trans-shipment arrangements were concerned. Trans-shipments to Japan, Australia and various other places were effectively covered by the fact that Euratom had an arrangement with those countries; we did not need a separate one. Now, we will have to have separate arrangements under all those circumstances, which is what this SI effectively does. It does so by revoking the 2008 regulations, and then—as is stated in the explanatory memorandum—largely replicates them

“by laying down broadly equivalent procedures”.

My comment to the Minister, which I have made on a number of other occasions when we have had these discussions about similar SIs, is that the broadly equivalent procedures seem to replicate quite well what would have happened under Euratom, given how the regulations are written. I would like the Minister to confirm that he is satisfied that that is the case. Obviously, I have not been able to compare regulation with regulation, but I assume that that is the basis of the “largely replicates” quote.

[Richard Harrington]

I confirm, as the shadow Minister has asked me to, that he is absolutely right: the new regulations broadly replicate the 2008 regulations, and there is no material difference at all.

[Dr Whitehead]

I thank the Minister for that. That is exactly what I had anticipated he would say, and I am grateful that he was able to say it.

The second issue relates to the quantity and concentration of consignments that trigger the need to define a shipment as a transfrontier shipment under the terms of the SI. I am sure that the Minister will have been party to the translation of regulations determining that: those regulations have been changed from a 2008 Euratom Council directive to a more recent directive in order to get those definitions right. In so doing, at least some reference to Euratom Council directives appears to have been preserved, but I assume that reference is only for purposes of definition, not of jurisdiction. I guess that the Minister will be able to put my mind at rest on that point as well.

[Richard Harrington]

I confirm that the hon. Gentleman’s mind should be at rest on that point.

[Dr Whitehead]

I thank the Minister for that. My final brief point follows from the one the Minister made about the total cost of these arrangements, which is indeed very modest: as he has said, it is between £1,700 and £6,000 every three years. Those extra costs arise from the fact that, on occasions, transfrontier shipments will have to accede to both the existing Euratom regime and the new regime being created in this country. If a cost went from Euratom to the new transfrontier shipment arrangements, then there would be no net cost; that additional cost arises only when the cost is being doubled up. That is my understanding of the situation.

[Richard Harrington]

That is my understanding of the situation as well. As usual, the shadow Minister has nailed this. That is exactly the case.

[Dr Whitehead]

That is good. My observation—I think I am still under five minutes—is that the cost could be mitigated were we to make some kind of associate arrangement with Euratom in the future, perhaps in the long term. Obviously, the SI is predicated on the fact that we will have no arrangement with Euratom post 31 March, but if there is a longer associate arrangement—as was discussed a little while ago during the passage of the Nuclear Safeguards Act 2018—those costs would presumably not arise and that very modest additional cost would therefore be dissolved. That is just an observation about the future. I hope the Minister will be able to encourage the idea that we might have a future closer arrangement with Euratom, even though we will no longer be members of Euratom. I have just discussed one of the minor things that would be facilitated by such an arrangement.

I think hon. Members will have gathered from those remarks that we do not oppose the draft regulations. Indeed, we wish them success and hope they can be applied in the most expeditious way possible.

Nuclear Update

Alan Whitehead Excerpts

Thursday 17th January 2019 Commons Chamber

[Dr Alan Whitehead (Southampton, Test) (Lab)]

I thank the Secretary of State for his statement, but he must recognise that the Government’s new nuclear strategy, adopted by the Conservatives and spearheaded by their Liberal Democrat coalition partners in 2013, is now in complete meltdown. The Government have reacted far too slowly to ongoing concerns from nuclear partners, such as Hitachi’s UK nuclear arm Horizon, which have been raising concerns over funding mechanisms since purchasing the project from RWE and E.ON back in 2012. Today’s decision to withdraw from the Wylfa nuclear power plant lays a significant blow on our economy.

The company’s statement reads:

“Horizon Nuclear Power has today announced that it will suspend its UK nuclear development programme”.

That sounds very much like not only is Wylfa on the chopping block, but so, perhaps, are plans for Hitachi’s other nuclear project—the Oldbury nuclear power plant in Gloucestershire. The Secretary of State has stated that Hitachi wants to work on new projects at Wylfa and Oldbury. What does that mean in the light of the clear statement Horizon has made this morning?

Only two months ago, the Government’s lack of clarity over funding for new nuclear led Toshiba to withdraw from its new nuclear project in Moorside. With the three reactors expected at Moorside and two each in Wylfa and Oldbury, that makes a total of 9.2 GW of new nuclear energy that will not now be built. Can the Secretary of State tell us where he will find this power—not only through the next winter, but over the next 10 years?

The long-term coherence of the UK capacity arrangements is now significantly disrupted. With the capacity market also falling foul of legal challenge, these elements add up to a strategic energy sector that is now being grossly mishandled by this Government. Now that their nuclear plan has gone up in smoke what plan can the Secretary of State spell out to us for finding new backers for these projects? Given the apparent capacity constraint, is he intending to uprate the coming contracts for difference auction, removing the caps on capacity and funding that he has imposed to provide further opportunity to build new renewable energy capacity to replace what has been lost?

For this plant at Wylfa alone, Hitachi had planned to invest £16 billion. Does the Secretary of State have contingency plans, rather than warm words, that he can announce today for the economies of Anglesey and north Wales, where Wylfa was projected to create up to 10,000 jobs at peak periods of construction and 850 permanent jobs? For that matter, what about Moorside and the plant it lost two months ago? Government dithering leading to the cancellation of that plant has seriously undermined the UK’s energy security, its decarbonisation goals and the economy of Cumbria. The people of Moorside expected the plant, and roads, infrastructure and even apartment blocks had been built in preparation, all of which will now go to waste.

I come back the issue of Wylfa. Given that it is the Welsh economy that has lost £16 billion of inward investment, will the Secretary of State think about the £1.3 billion—less than a tenth of the price—required to build the Swansea tidal lagoon?

Given that energy is one of the sectors that creates the most carbon, today’s news deepens our profound concern about the Government’s ability to meet their own climate targets. The Labour party is proud to have announced our goal of reaching net-zero greenhouse gas emissions before 2050 and we congratulate the Government on attempting to catch up with our green ambitions. But given that the clean growth plan was already falling short and the Government were already failing to meet those targets, can the Secretary of State give us some detail today on how he expects to meet UK carbon budgets in the light of today’s developments? Can he assure us he is not intending to replace the low-carbon power that has been lost with new fossil fuel plants?

Finally, there appears to be some confusion about what was and was not said about nuclear power when the Prime Minister met Japanese Prime Minister Shinzō Abe last week. Did she raise Wylfa nuclear power station when she met the Japanese Prime Minister? It is an odd coincidence that this decision from Japan-based Hitachi has come so close to those meetings. Either they talked about the project and what was said was unsatisfactory, and the project was cancelled, or the Prime Minister did not think it worth mentioning, and it was still cancelled.

Confidence in the Government is a very live question today. The people of north Wales and Moorside have every reason to have none in this Administration.

[Greg Clark]

I will respond to the hon. Gentleman’s points, but I will start by saying one thing about nuclear investment. I have been clear in maintaining my support and that of the Government for new nuclear, but, for investments of over 60 years, a degree of cross-party support is required for those commercial investments, which, as we have seen, are difficult to secure.

The hon. Gentleman expressed disappointment that the investment was being suspended, but he himself has said we do not need nuclear power. The Leader of the Opposition has said he is passionately opposed to nuclear power and nuclear weapons in equal measure, the shadow Chancellor said he would end nuclear power within the first 100 days of a Labour Government, and the new Welsh First Minister said:

“I think the attitude to nuclear power we have here in Wales is to be sceptical about it”.

If we in this House want to encourage international investors to invest in new projects, it behoves us to express solidarity and consistency of purpose.

I have been very clear about why Hitachi made this decision. We understand it. It is was commercial decision. The hon. Gentleman did not say whether he would have gone further than we were willing to go. Is he proposing that we take more than one third of the equity—in effect, take Government control and all the risk attached to such an investment? He did not say whether we should be providing a contract for more than £75 per MWh, which would go straight to the bills of customers—both industrial and residential. It is hard to say how we can go beyond financing all the debts. I think, then, that fair-minded Members would accept that we have made a substantial and generous offer, but unfortunately it has not been possible to achieve the outcome that all sides wanted.

The hon. Gentleman asks how we can continue discussions and why the company has suspended, rather than cancelled, the proposals. It is for the reasons I have said. We are going to look at new financing models, including the regulatory asset base model recommended by the Public Accounts Committee. I think it makes sense to do that.

On our future energy needs, the hon. Gentleman was wrong to talk about the next 10 years, because we are talking about supplies beyond that. There is no issue with the future security of supply; National Grid itself has said that. Plans for Wylfa are long term and there is time for the market to react to this announcement. In many ways, the challenge of financing new nuclear is one of falling costs and greater abundance of alternative technologies, which means that nuclear is being out- competed. Far from there being a difficulty with future supply, those are the reasons why the competitiveness of nuclear is more difficult.

The hon. Gentleman mentions the other projects, including at Moorside in Cumbria. As I said, that decision was taken for different reasons, but in the review and the White Paper we will publish, that model will be available to all such sites. Finally, in the case of other renewables, we have seen a great expansion in renewable capacity, and that will continue. He mentioned the case of the Swansea tidal lagoon. No one is more enthusiastic than I about innovation and new technologies, but the truth is that the costs of the proposed project were three times that of Hinkley Point C, and a full programme would make a tiny contribution to our energy supply for a much greater cost.

I hope that we can work together in the weeks and months ahead. The hon. Gentleman is an expert and a dedicated student of energy policy. In considering the White Paper, I hope that we can agree an approach that will command the support of international investors, so that this country can continue to be a nuclear nation.

Draft Justification Decision Power (Amendment) (EU Exit) Regulations 2018

Alan Whitehead Excerpts

Wednesday 16th January 2019 General Committees

[Dr Alan Whitehead (Southampton, Test) (Lab)]

It is a pleasure to serve under your chairmanship, Sir Henry. It will be a pretty brief pleasure today, because my understanding is that the draft regulations are simply a device to place into UK law what was previously determined by European provisions. As the Minister outlined, that is necessary because forthcoming justificatory decisions—most notably the decision on the new reactor design for Bradwell—will need to be made within UK rules. If those rules are not in place, the justification process obviously cannot get under way.

As the Minister says, the draft regulations have a pretty obscure title, but they are about taking a cost-benefit approach that ensures not only that new reactor designs are safe, but that the overall environmental effect of ionising radiation from the operating activities of reactors and other devices is justified. Those activities are important, and it is important that we regulate them properly so that in the event of an abrupt Brexit, or even a Brexit that includes a considerable period of adjustment, we have a regime that is fit for purpose. This statutory instrument is part of that; it is not exactly in the same mode as our recent discussions about the future of Euratom, but it is nevertheless in the general area of requiring proper provisions within UK powers after Brexit.

As far as I understand it—I would be grateful if the Minister formally confirmed this—in this instance the justificatory powers themselves are essentially contained in the justificatory powers secondary legislation of 2004, and no malfeasance has been done to those regulations; this process just shifts the operation of those regulations into a UK position. That is my understanding, and I trust that it is the Minister’s as well.

Draft Nuclear Safeguards (EU Exit) Regulations 2018

Alan Whitehead Excerpts

Tuesday 15th January 2019 General Committees

[Dr Alan Whitehead (Southampton, Test) (Lab)]

It is a pleasure to serve under your chairmanship for the second day running, Mr Sharma. As the Minister says, clearly your presence instilled in me a modicum of brevity, which I hope I can continue this afternoon.

[Ian C. Lucas (Wrexham) (Lab)]

Hear, hear.

[Dr Whitehead]

I knew I would get support for that.

This statutory instrument is really about two things: first, getting in place the regulations that will govern the process of nuclear safeguarding—inspections and all the other activities that go with it—and secondly, placing regulation into the hands of the Office for Nuclear Regulation. The draft regulations before us are pretty extensive and obviously it is not possible to go through them line by line—certainly it has not been possible for me, although it may have been possible for other Committee members.

I take it—it would be helpful if the Minister confirmed this—that according to the explanatory memorandum to the SI, some of the changes made are minor and consequential amendments to legislation, and the regulations as drafted a pretty exact parallel to what was the case under Euratom, and therefore enable that full range of inspection to take place to Euratom standards. Is that the Minister’s understanding?

[Richard Harrington]

That is my understanding, and I am very pleased to put that on the record.

[Dr Whitehead]

The second part of the question before us is the position of the ONR in this matter. As I am sure hon. Members will know, the ONR has a large number of functions. The nuclear safeguards function is being added to the ONR’s overall set of responsibilities, where previously it was undertaken separately by inspectors appointed by, working for and embedded with Euratom. The inspectors who will undertake the work will now be within the purview of the ONR. As the Minister noted, questions were raised during the passage of the Nuclear Safeguards Bill about the recruitment of inspectors in the number required to carry out the function and how that would be done between the time of the Bill’s passing and now. The Minister made some comments both yesterday and today about the recruiting process undertaken by the ONR.

It is sort of good news that the recruiting process seems to have gone well. Certainly we raised some concerns during the passage of the Bill about how that would be done and whether it would be possible in the time available. The Minister said at the start of the Bill process that the aim of the inspection regime was to carry out an inspection regime as good as that under Euratom from the word go. Indeed, the impact assessment accompanying the SI states that 30 to 35 staff will be needed,

“to be able to deliver its functions”—

that is, the ONR’s functions—

“to a standard equivalent in effectiveness and coverage as that currently provided by Euratom”.

That is the gold standard as far as staffing is concerned. The Minister said both yesterday and today that additional inspectors had indeed been appointed and that the ONR’s recruitment target for the first phase has been met: 16 safeguards officers are in place, he said, which is seven more than the minimum of nine required to deliver the regime at the end of March. As I understand the position, we have inspectors in place to carry out inspection to an international standard, but not to the level previously set out in the regime overseen by Euratom.

The explanatory memorandum for today’s SI states:

“It is intended that these agreements”—

the international agreements mentioned yesterday and today—

“combined with these Regulations, will allow ONR to establish a new regime which will deliver international standards from day one of exit, building, over time, to be equivalent in effectiveness and coverage to that currently provided by Euratom, and which will exceed international standards.”

The reality is that as far as the ONR is concerned, our present level of recruitment of inspectors allows us to get by, but does not allow us to reach Euratom standards. Although that seems to be a satisfactory recruitment process in terms of getting to those international standards, it falls fairly well short of the aim of the ONR’s operation, as indicated at the time of the Bill.

It may be that since the SI deals with a potential abrupt and total EU exit on 29 March, being able to carry out inspections that meet an international standard on 1 April is all that is required, but I would be interested to hear from the Minister how quickly it is proposed that we can get up to those Euratom standards, perhaps during a transition period. That inspection regime was set out as the gold standard at the time of the Bill, and meeting its standards appears to still be the intention of the Government. I hope the Minister will be able to assure me on that point, and perhaps add a few points about the further recruiting process necessary to get us to that position.

The second issue I will raise is the cost of setting up the ONR to carry out its new functions. As Members who sat on the Nuclear Safeguards Public Bill Committee will recall, we were informed by—among other things—the explanatory notes to the Bill that the cost of setting up the ONR, its computer systems and so on was potentially up to £10 million. Now, we see in the explanatory memorandum for this piece of legislation that the cost of that task will be something like £28 million.

I wonder why there is that substantial variation between what we were told at the time of the Bill and what is before us today. Is it just that the estimates were wrong at the time of the Bill? Is it that additional costs have been added on to the setting up of the ONR? Is it perhaps that, given the situation we find ourselves in, we will technically still be within the Euratom orbit for 20 months should there be a transition period following Brexit? Presumably, those Euratom inspectors would continue their work for that period of time while the newly recruited inspectors work alongside them. Is it that additional cost that is creating those very inflated figures? On its face, it looks like the estimates that we were given at the time of the Bill were way out, and while the running costs appear to be about the same as was suggested at the time of the Bill, that figure looks very different. I ask the Minister to enlighten me about why there is such a difference, and whether he himself is happy with it, since I think that money will come out of Departmental funds. In any event, that substantial difference can be happily passed through as we move towards implementing this new regime.

Subject to the answers to those two questions, we do not intend to oppose the statutory instrument, because we think that it is very important that the regulations, and proper running of the system under the ONR, are fully in place as soon as possible. We therefore welcome the fact that the regulations are, as far as I can see, clearly in place and that we will be able to get up and running with an inspection regime from a very early stage.

[Richard Harrington]

I thank the shadow Minister for his two very interesting and significant points. First, on the matter of staffing and ONR recruitment, 30 to 35 staff was an estimate, including administrators, that the ONR made for the number of staff that it required. It now has a team of 20 in place—that is 16 and four—including inspectors and nuclear material accountants. The ONR is satisfied with progress to date. That is all I can say. That was the estimate in the first place, but it is very satisfied that what it has will provide the ability to deal with international standards, but not yet the gold standards to which the hon. Gentleman referred. At this stage, the ONR is satisfied and believes that it may require fewer people in total than it first thought. It is not because of a lack of recruitment or of suitable people. It knows the legal duty it has to fulfil; its legal brief is to get to Euratom standards as quickly as it can. I would not like it to be thought that this is a failure of recruitment or anything like that. However, we rely on the ONR, because it is the regulator.

[Dr Whitehead]

I thank the Minister for that information. It may well be the case that there will be a period of parallel running during a transitional period. After all, the regulations are essentially designed to start us off in a no-deal Brexit. If there is another form of Brexit, there will be a transition period. Is the Minister’s intention to continue with the reporting arrangements that he set out for the House at the time of the passing of the Bill, to give a regular update on those sort of changes as the new regime gets under way?

[Richard Harrington]

Yes, it is our intention to do so, exactly as we have been doing up to now. I know that the hon. Gentleman, and I hope many people, will read such updates. They will certainly be provided, as we said.

The second point concerned the financial side—the increase in costs between the original estimates and the impact assessment produced today. The hon. Gentleman is correct. The transitional costs have increased since the ONR has had more information and we have had a better understanding of its activities. The difference in cost is based on what we estimate to be higher costs during an implementation period to get to Euratom standards. They reflect the fact that the ONR will be able to deliver an international standard safeguards regime from 1 April 2019, and that we will develop the regime to achieve Euratom equivalents by 2021. The hon. Gentleman is correct that that is an increase in cost. Best endeavours were used to do the estimate but, as it has become reality, the costs have come out higher.

Question put and agreed to.