Nuclear Safeguards Bill

Baroness Vere of Norbiton Excerpts

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

[Lord Grantchester]

My Lords, we have added our names to Amendment 4 in the name of the noble Lord, Lord Warner. It is Labour policy to remain a member of Euratom or to continue equivalent arrangements with it. The Conservative Government have been reckless to reject immediately the UK’s membership of Euratom. Your Lordships’ discussion in Committee last night on the withdrawal Bill highlighted how the Euratom treaty is distinct from the EU treaty. The Government state that, because there is an overlap of membership, with the same nation states as are in the EU, it is part of the same organisation. However, the two treaties are legally distinct, which has not been contradicted by the Government.

The Minister said this morning that both organisations are uniquely and legally joined. He needs to explain how they are so legally. It is reckless to make the theoretical and technical oversight of the European Court of Justice a defining reason, when the UK is far from ready to undertake its own safeguards regimes to the standard maintained by Euratom. The ECJ has never been called on to make a ruling.

Furthermore, the Government have committed to continue as far as possible through negotiations to be in close association with Euratom. They must be exhaustive in their endeavours and report back to Parliament on the outcome. If it is no longer possible to establish an association, they must say so, with reasons.

Amendment 9, in the names of the noble Lords, Lord Teverson and Lord Fox, and the noble Baroness, Lady Featherstone, map out further agreements to be pursued before withdrawal. It requires the Secretary of State to request “a transition period” so that the UK,

“can continue to benefit from existing nuclear safeguard agreements”,

with the approval of the IAEA, that the ONR is the approved UK safeguarding authority. My noble friend Lord Hunt of Kings Heath has spoken to Amendment 12 on the transitional period. It must be recognised that approvals of nuclear co-operation agreements are sequential to the recognition by the IAEA that the UK safeguarding standards are sufficient. Although these NCAs may be progressing, their ratification will necessarily take some time and may spill over into any transition period. We endorse the sentiments behind Amendment 9 as crucial to maintaining the UK as a credible internationally recognised nuclear state operating to international standards.

Amendment 14, in the name of the noble Lord, Lord Carlile, would insert a new clause stating that before leaving Euratom the Government must publish a report detailing agreements reached with Euratom to ensure compliance with international non-proliferation agreements and lay appropriate regulations to give effect to their implementation. We understand and are in unison with the importance noble Lords on all Benches place on the highest standards, the nearest equivalence, the closest association, with any necessary transition period, to replicate the regime currently operated under Euratom. We support the amendment of the noble Lord, Lord Warner, that says the Government must keep Parliament informed regarding the ongoing UK status with Euratom. The noble Lord, Lord Teverson, has also said that it is far from clear where we will be in March 2019, when timing is such a critical issue.

[Baroness Vere of Norbiton (Con)]

My Lords, I thank noble Lords for the opportunity to address this important set of issues around the UK’s future relationship with Euratom. As my noble friend Lord Henley said, the EU and Euratom are uniquely legally joined. Noble Lords will be aware that when we formally notified our intention to leave the EU, we also commenced the process of leaving Euratom. I repeat my noble friend’s assurances, however, that the Government want to maintain the continuity of our mutually successful civil nuclear co-operation with Euratom and other international parties when we leave the EU.

The first half of the proposition of Amendment 4 —that,

“it is no longer possible to retain membership of Euratom”—

has already passed. On 29 March 2017 the Prime Minister notified President Tusk of the United Kingdom’s intention to withdraw from Euratom. We are withdrawing from Euratom but we want a close relationship with it in the future. I believe that it would be deeply irresponsible of Parliament to pass an amendment which, quite explicitly, prevents us from using the powers in this Bill until we have attempted to do exactly the opposite of what the Article 50 letter says we are doing. That leaves the second half of the proposition: that we achieve, “an association with Euratom” that means that it is Euratom rather than our own regulator, the ONR, that carries out safeguarding in the UK after we leave the EU. To reiterate the point made by my noble friend, while the Euratom treaty allows for the conclusion of association agreements that allow third parties to participate in some Euratom activities, these agreements have so far been limited primarily to research and training activities.

This amendment would require us to have explored every avenue and concluded that,

“it is no longer possible”,

before we make regulations to enable the UK’s own domestic regime. That presents enormous timing difficulties and will introduce a risk of the one thing I believe everyone agrees we must avoid—being left with nothing in place from day one of Brexit. I do not believe that the industry would support such a position. We simply cannot await the outcome of the future relationship discussions before we use the regulation-making powers in the Bill. Of course, it may all happen very quickly but, then again, it may not. It would be deeply irresponsible to put ourselves in a position where we cannot exercise the powers in the Bill.

[Lord Warner]

I am sorry to interrupt the Minister’s debut on the Bill. I am trying to make clear that I am not asking the Government to stop proceeding with the Bill; all I am asking them to do is to set out on a piece of paper the nature of their future association and relationship. The Front Bench keeps avoiding that issue. I do not use the words “associate membership”, I use the word “association”. I am willing to change it to “relationship”. What I am trying to get the Government to do is set out how they see their relationship with Euratom—because they have acknowledged that they will have a relationship with it in some way—and what that relationship will cover. If we could get some clarity from Ministers on that, we would not be having these endless discussions about the issue.

[Baroness Vere of Norbiton]

I thank the noble Lord for his intervention. I am on paragraph 11. I have many more paragraphs to go and I hope that in those paragraphs I will be able to keep him very happy indeed.

I understand and share the sentiment of wanting to maintain a close relationship with Euratom. The noble Lord, Lord Warner, mentioned this relationship and it could indeed include any of the things that he mentioned, but they are subject to the negotiations. However, we have already stated very clearly that the Government will seek a close and effective association as part of phase 2 of the exit negotiations with the European Commission. What we cannot accept is that the regulations must await a definitive outcome of talks which are by their nature uncertain in both timing and result. It is therefore vital that we continue to work to enable the set-up of a domestic safeguards regime, and to have ready the bilateral safeguards and nuclear co-operation agreements that we will need to function as a responsible nuclear state from day one of exit.

This approach will reassure the international community that the UK remains committed to nuclear non-proliferation, and will provide clarity to industry that it will continue to be able to move vital materials, parts and expertise once we leave Euratom. There can be no question of waiting until we know the outcome of the negotiations on our future relationship before we can put in place our own arrangements. The implications of not having the right systems operating from when Euratom safeguards arrangements no longer apply are too serious for industry and for our position within the international civil nuclear community.

[Lord Teverson]

Can we actually make this clear? I have not heard anyone in this Committee saying, “Please, Her Majesty’s Government, do not do anything until this thing is finished”. We are not asking for anything to be delayed, we are saying, “Please get on with it”, but we need some information on the way; we have to have some idea of the destination, and Brussels wants some idea of the destination by 22 March and then in October. If it does not happen, what are the contingency plans? We are not asking for anything to not happen now. I do not think the Minister understands that. Did I hear anybody say that?

--- Later in debate ---

[Baroness Vere of Norbiton]

I thank both noble Lords for their interventions. I will make a little progress because I think I will be able to make them both a little happier—although I am fairly sure that I will not get all the way.

I recognise the importance of providing Parliament with clarity on our future relationship with Euratom. The Written Ministerial Statement of 11 January includes a commitment to provide quarterly updates on progress.

I turn now to Amendment 9, in the name of the noble Lord, Lord Teverson, which would require the Secretary of State to seek a transition period in the event that the UK is unable to secure new international agreements with the IAEA and nuclear co-operation agreements—or NCAs—with key third parties by 1 March 2019. I will address NCAs first. It may be helpful for me to set out that the UK does not itself have any requirement for NCAs to be in place for trade in nuclear-related items to continue—but some of our key trading partners do. In the US it is a legal requirement; in Japan, Canada and Australia it is a very strong policy commitment. That is why those four NCAs are our priority. It is quite right to stress how important this is: an NCA must be in place before such trade with these countries can take place. Each of these four countries recognises the importance of putting in place bilateral NCAs to ensure uninterrupted co-operation and trade in the civil nuclear sector, following the UK’s withdrawal from Euratom.

There are also a number of countries, in addition to the four priority ones, with which we wish to discuss our ongoing nuclear co-operation to ensure that appropriate arrangements are in place to allow continuity of trade. But in those cases—

[Lord Carlile of Berriew]

I am grateful to the Minister for giving way. I suspect that she is now on paragraph 15, but she is not answering this debate, which is about whether Her Majesty’s Government are prepared to provide specified information to Parliament on certain criteria. What she is telling us would all be very interesting if we had not heard it many times before, but it is a dissertation on the roles of different organisations. Can we please have an answer to this debate? It is 4.32 pm on a Thursday and I would have thought that it could be answered in a few paragraphs—maybe numbers 47 to 50.

[Lord Teverson]

I was happy with the answer that the Minister was giving about NCAs.

[Baroness Vere of Norbiton]

With the greatest respect, I did not interfere in the writing of the speech of the noble Lord, Lord Carlile, and I will crack on a bit further to answer the points raised by the noble Lord, Lord Teverson, as I too think this bit is very interesting. We are talking about these additional countries because we are obviously going to have to set up NCAS with them, too, for trade to continue. I assure noble Lords that discussions on the four priority NCAs started a while back and are progressing well. They are on track to be completed before the UK leaves the EU. I can also assure noble Lords that this Government, as part of their planning process, have factored in the time necessary to seek parliamentary ratification of the agreements both in the UK and in third countries. This will enable the NCAs to come into force from the moment that Euratom arrangements no longer apply to the UK.

I turn now to the UK’s discussions with the IAEA. Noble Lords will be aware that the UK began formal discussions with it some months ago to conclude new safeguards agreements that would replace those between the UK, IAEA and Euratom when the Euratom arrangements are no longer applicable. These discussions, which began some months ago, as my noble friend Lady Neville-Rolfe mentioned, have been constructive and fruitful, and substantial progress has been made. I can be a little more specific: formal negotiations started last September and there were several rounds of preliminary meetings before that. There have been two rounds of negotiations so far, which have made substantial progress. I hope that that is helpful.

The amendment asks that the IAEA should recognise the ONR as the approved safeguards authority in the UK, as mentioned by the noble Lord, Lord Teverson. I will make it clear that the IAEA’s focus in respect of the UK’s safeguards lies with the voluntary offer agreement and additional protocols rather than with the domestic legislation underpinning the domestic regime or the UK Government’s arrangements for fulfilling their commitments. However, as I have set out, the Government have already held productive and fruitful discussions with the IAEA on the UK’s future safeguards agreements and understand what the IAEA requires of us in setting up the system. It is not necessary to consult on the detail of legislation or on the ONR’s readiness to implement the new regime with the IAEA.

As my right honourable friend the Secretary of State for Business, Energy and Industrial Strategy set out in his Statement to the House in September last year, the Government are seeking new agreements with the IAEA that follow exactly the same principles as the existing ones. This will ensure that the IAEA retains its right to inspect all civil nuclear facilities and to receive all current safeguards reporting, ensuring that international verification of our safeguards activity continues to be robust.

In addition to this, the Secretary of State set out on 11 January the Government’s intention to update the House on our overall progress with Euratom, including on the EU negotiations and other important matters such as international agreements. I trust that these reports, the first of which we expect to provide in a few weeks’ time—indeed, just before the Easter Recess—will reassure noble Lords that significant and substantial progress is being made. Indeed, noble Lords will be able to see it for themselves and will no doubt bring it back to the House to discuss, should they wish.

Amendment 15, tabled by the noble Lord, Lord Carlile of Berriew, inserts two new subsections and seeks to require that, by 29 March 2019, the Secretary of State must present to Parliament a substantially detailed report, along with draft regulations implementing any agreements reached with Euratom relating to safeguards, and have such regulations approved by both Houses. Amendment 14 seeks to prevent the substantive provisions of the Bill coming into force until regulations under Amendment 15 to implement safeguards agreements with Euratom have been approved. While I have sympathy with the noble Lord’s aim of ensuring robust parliamentary scrutiny, the process set out in Amendment 15 would not be appropriate. As we have already discussed in our deliberations on this Bill, I am confident that there are appropriate processes in place to ensure proper parliamentary scrutiny of the substantive powers in the Bill. Noble Lords can be assured that the regulations establishing a UK safeguards regime under the powers in the Bill will be subject to the draft affirmative procedure.

I turn now to the report proposed in this amendment. We have been open about our strategy for withdrawal and our future relationship with Euratom. In the Written Ministerial Statement on 11 January, we outlined a twofold approach under which we are seeking a close association with Euratom through our negotiations with the European Union. I refer noble Lords to the Written Ministerial Statement. It goes into some detail about our specific objectives in relation to a close association with research and training, continuity of open trade arrangements and close and effective co-operation on nuclear safety. This is a very broad ambition of ours, and it goes much further than the nuclear safeguards that we are specifically talking about today. Simultaneously with these discussions about our broader relationship with Euratom, on which we will report to your Lordships’ House every three months, we are putting in place measures to ensure that we can operate as an independent and responsible nuclear state from day one.

As noble Lords will be aware, we are planning negotiations on a possible implementation period. The Government have confirmed that they intend to include Euratom matters. This implementation period will start after the date that we leave the European Union. This must be taken into account. We are being open with our plans for a domestic regime, and we have been clear on our intentions for the new domestic regime. As made clear in the Written Ministerial Statement, the Government intend to be able to put in place a robust regime equivalent in coverage and effectiveness to that currently provided by Euratom. To put this more clearly, and for the avoidance of doubt, we would be meeting IAEA standards on day one and working our way to Euratom standards as soon as possible thereafter. A key but inevitable difference will be that reporting and assurance activities would be carried out by the ONR rather than Euratom.

The approach of using a domestic body rather than a supranational one to operate a domestic safeguards regime is common among other non-Euratom countries, such as the US and Canada, whose safeguards regimes consist of a state regulator, with the IAEA providing independent international verification. This approach necessitates some differences in the approach of the regime but we do not consider it to necessitate a reduction in standards. To be absolutely clear about independence, it is the international oversight provided by the IAEA and the inspections carried out by its inspectors that underpin the independence of nuclear safeguards around the world. As I have already mentioned, we have committed to providing Parliament with quarterly reports on progress from across the Euratom programme. These reports will include a section on ONR capacity and readiness as well as on research, which was mentioned by the noble Lord, Lord Fox.

Before I close, I want to return to the comments made by the noble Lord, Lord Carlile, about the meeting that he attended with officials. I want to flesh out the Government’s consultation strategy on this because I fear he thinks it is narrower than is truly the case. The Government continue to have discussions with the nuclear industry on the future of the nuclear safeguards regime. In addition to official-level engagement, Richard Harrington, the Minister for Energy and Industry, held a representative industry stakeholder forum in September. There have been further forums since then and the next one will take place on 5 March. The Government have provided the industry with pre-consultation drafts of regulations that we propose to make, and in late February we held a technical workshop on the draft regulations with key nuclear operators.

I hope my explanations have provided sufficient reassurances to noble Lords, and that the noble Lord feels able to withdraw his amendment.

[Lord Broers (CB)]

My Lords, I would like to catch the Minister before she sits down, if that is possible. The noble Lord, Lord Fox, and I have mentioned research and development. Resources to sustain that research and development come through Euratom. Have the Government said anything about how these resources are going to be sustained in future?

[Baroness Vere of Norbiton]

I thank the noble Lord, Lord Broers, for that comment. I did have a little more flesh on that particular bone so I shall share it now. On the question of research, the Government’s objectives are set out in our recent future partnership paper, Collaboration on Science and Innovation. We are seeking a close association with the Euratom research and training programme, including the Joint European Torus and International Thermonuclear Experimental Reactor, or ITER, projects. The Government have already guaranteed our share of the funding for the Oxfordshire-based JET fusion reactor until the end of 2020, demonstrating our commitment to continued collaboration.

[Lord Teverson]

My Lords, I found part of the Minister’s statement extremely useful and I thank her for that, particularly on the NCA question.

However, there is an issue on which I would like clarity; I think it is very straightforward, and I ask this in a very positive tone. It is the Commission and the EU 27’s offer and negotiating position on transition that the whole of the Euratom acquis is also included in the broader EU transition agreement. Are the British Government in line with that, and will they go down that route as well? I do not hear that we are rejecting it. We have potential issues with the initial situation over residents and people on the EU side, but are the Government saying they are going to have the Euratom acquis as part of the transition that will be agreed, whether that is until the end of 2020 or the two years? If they were saying that, it would take a lot of pressure off what we are talking about as long as the IAEA was happy with it. That seems a very straightforward question and I presume there is a government policy on it. In the response today to Barnier’s negotiating position I did not see any contesting of the Euratom side of it, so I presume we are going ahead and agreeing that transition in March.

[Baroness Vere of Norbiton]

I thank the noble Lord, Lord Teverson, for that interesting question. If it is okay, I shall write to him, because I should like to find out more information about what we are allowed to say at this time.

[Lord Warner]

I beg leave to withdraw the amendment.