Baroness Verma
Main Page: Baroness Verma (Conservative - Life peer)
Baroness Verma
Baroness Verma
Baroness Worthington
My Lords, first, I should like to thank the Minister for her very timely and quick turn-around of the letter that we have just received. It was incredibly helpful and I hope we can carry on in that spirit; it was very much appreciated.
Amendment 27 creates an additional duty in respect of the statement on the carbon intensity of electricity generation that is required under Clause 3(3). Currently, the Bill requires that an annual statement must be made once an order has been made and that that should include a summary of the means by which the carbon intensity was calculated for that year and a declaration of whether the carbon intensity has decreased or increased since the previous statement. Amendment 27 adds an additional requirement to the statement, requiring that it contains details of the actions the Secretary of State will take if intensity has increased since the previous statement.
As I have previously mentioned, carbon intensity of electricity fell dramatically in the 1990s but has since levelled off and in 2012 sharply increased. This was due to a change in the merit order thanks to high gas prices and low coal prices. On Tuesday in Committee, I stated that coal was a common enemy. What I meant to say was that inefficient, unabated coal stations are the common enemy. I apologise for not being clearer about that. Of course, coal can play a significant role in a low-carbon electricity system if it is coupled with carbon capture and storage, which is a very important technology. However, the longer these old unabated stations stay on the system, the longer we will have to wait for investment in low-carbon alternatives, since they are very profitable and can crowd out new entrants to the market.
The Bill must seek to create a legal framework for electricity market reform that provides clarity of purpose and accountability. The Bill contains significant and wide-ranging powers, but there is currently insufficient accountability. Given the implications of the measures in the Bill, it is only right that the Government should be held to account over its performance against its stated objectives. One objective is clearly to increase investment in low-carbon infrastructure and a clear measurement of success is the carbon intensity of our electricity. The requirement to deliver an annual report under Clause 3 is therefore extremely welcome. However, it does not go far enough. If progress is not being made, a statement ought to be made about what will be done to address the reasons for lack of progress.
Of course, increases in carbon intensity in any one year can come about for a number of reasons—the relative price of fuels and the carbon price are important elements that the Government are seeking to correct using the carbon floor price policy. However, there are other reasons why intensity may rise in a given year, such as weather fluctuations, which may lead to an increased demand for electricity, or low hydropower output. They may also be unplanned outages in our nuclear fleet. There are therefore circumstances outside the control of policy and government, which can affect intensity. In these circumstances, any requirement to report on actions to be taken should not commit the Secretary of State to having to act, but there should remain the option to state the reasons for the increase and then to make a case for not taking action. I want to be clear that we do not wish to ask for the impossible, but we do seek slightly more accountability.
If intensity is increasing because of policy failure—for example, if the carbon price is failing to dissuade coal burn or the number of CFDs being signed is too low to deliver sufficient investments in the infrastructure—it is right that the Secretary of State should be required to report this and to detail actions he or she intends to take to correct these failings. Another potential issue is that the UK could seek to delay the closure of coal plants planned as a result of the introduction of tighter clean air regulations. I hope that the Government will not seek a derogation of this kind, because it would have serious implications for the carbon intensity of electricity, and corrective action would then need to be taken to compensate.
The intent behind this amendment is similar to that behind Amendment 22, which was not moved, which sought to require that the duty to a lay a report before Parliament setting out policies and proposals for how the decarbonisation target would be met included a requirement that that report should be modified if it appeared that policies were not going to achieve the target. Amendment 27 has a similar sentiment but offers a much simpler way of achieving that goal. In the event that carbon intensity is not heading in the right direction, there is simply a requirement on the Government to tell Parliament what they intend to do to correct it.
This is a simpler way of achieving the aim that was set out in Amendment 22 and I hope that the Minister will give it serious consideration. The wording may not be perfect, but I think that the sentiment is correct and I wonder if the Minister might propose a workable suggestion of her own.
The Parliamentary Under-Secretary of State, Department of Energy and Climate Change (Baroness Verma)
My Lords, as the noble Baroness, Lady Worthington, has said, Amendment 27 proposes that if carbon intensity has increased from the previous year, the Secretary of State will report additional actions he or she will take to reduce carbon intensity. I agree with the noble Baroness that it is sensible that, in addition to setting up plans for meeting the target range and the progress made towards it, the Secretary of State should also explain the action he or she will take to stay on track towards the target over time. However, I do not feel that the amendment as it currently stands achieves that.
My main concern is that the amendment would require the Secretary of State to set out additional action in response to an increase in a single year and this may not reflect, as the noble Baroness has rightly said, a number of variants under which the power sector operates in practice. There are many factors that can affect year-on-year measurements of carbon intensity and she has rightly said that cold years often require higher carbon intensities. Another factor could be power stations being offline for maintenance. This has been the case in recent years with some nuclear power stations, the emissions effect of which was reported in our annual statement of emissions. While bearing these points in mind, I support the aim of transparent reporting but it must be meaningful for the power sector to do that in the context of long-term trends rather than year-to-year variations. Therefore, while I support the aim of the amendment, I need to consider further how to address it, perhaps with a view to responding to it at a later stage. With that, I hope that the noble Baroness will withdraw her amendment.
Baroness Worthington
I thank the Minister for her comments. I am very pleased that she understood that the sentiment was what we were trying to press; the exact wording needs to be worked out. On that basis, I am very happy to withdraw the amendment.
Baroness Verma
Lord Oxburgh
My Lords, I simply add my support for this amendment and urge the Minister to give it careful consideration to meet its objectives, if not the words. Previous speakers have shot all the relevant foxes, so I will not pursue any of those, but simply comment that if we had been considering this Bill two years ago I would have urged the Government to use this as their main means of regulating emissions. We could have done away with acres of complexity in the rest of the Bill. However, that is, unfortunately, water under the bridge. I hope that the Minister will give this careful consideration.
Baroness Verma
My Lords, I am extremely grateful to the noble Lord, Lord O’Neill, and of course I look very carefully at all amendments and consider their impact. I am extremely grateful to my noble friend Lord Deben for rightly raising the important points about the information that is already available and the cost burden that it may impose further down the line on consumers. We must be very careful that we do not add to what is already a large pool of requirements put on suppliers and generators.
We are concerned about accountability. The Bill places sole responsibility on the Secretary of State to meet any target range. Once that is set, recognising that it is the Secretary of State who is responsible for setting energy policy in the UK, it is he who will be ultimately accountable to Parliament. My concern about the amendment is that it would be unfair for us to ask suppliers to manage their portfolios in order to meet national carbon intensity limits because, as has been said, it would be incredibly complicated to oversee and would confuse the responsibilities of the state in setting the target range with those of suppliers by specifying the annual level of carbon intensity that they must meet.
The question of the merit order, the order in which generation is dispatched, which is currently in response to price signals, is a commercial decision for industry and I would certainly have reservations about government interfering directly with it. There is, however, a role for government in seeking to achieve decarbonisation by supporting a market framework that will make it more attractive. I think that is what the noble Baroness alluded to by prioritising low-carbon electricity. That is exactly what we are doing through contracts for difference and the carbon price floor to improve the relative economics of low-carbon generation.
Those measures provide a much better means of addressing the gap raised by the noble Lord, Lord O’Neill, under his amendment. To quote my noble friend Lord Deben in the fifth report of his Committee on Climate Change:
“The gap between actual and achievable carbon intensity will be closed as coal plant is retired as the relative cost of coal increases under the rising carbon price floor and given tightening EU legislation on air quality”.
We are reaching that point but we do not need to add extra pressures to provide further information when there is more than adequate information around.
I will finish, and ask the noble Lord to withdraw his amendment, by saying that the Electricity and Gas (Energy Company Obligation) Order 2012 and its predecessors, the CERTs and CESPs, have always required energy companies to save carbon dioxide by promoting energy efficiency measures in households. There is enough going on in the system.
Lord Deben
Before my noble friend sits down, I did not suggest that there should be further weight further down the system, I was suggesting that we are already asking all that needs to be asked for this to work.
In what has been an increasingly long life, I have discovered that in most cases it is better to have “both/and” than “either/or”. I hope that she will at least leave a chink open to consider whether there might be some advantage in something after this sort of mechanism, even if it were permissive, so that it was clear that it was something that the Secretary of State could be asked about if he had not done it. Even if she went only as far as that, it would be of considerable help. Would she be willing at least to say that before we get to Report, she will have another look at this, because it seems to me that “both/and” might be better than “either/or” in this case?
Baroness Verma
First, I stand corrected by my noble friend. Secondly, I think that the measures we are taking address the noble Lord’s amendment. If I were to take it away, my response would probably be the same coming back. For clarity’s sake, I hope that the noble Lord will feel that I have addressed his concerns and withdraw his amendment.
Baroness Worthington
I am sorry to prolong the debate but I think this is really important. I stress that, in addition to providing a solution for how vertically integrated companies can meet their carbon intensity targets, by requiring them steadily to divest and move into low carbon, you solve one of the other problems that the Bill does not currently adequately address. I am getting e-mails daily from independent generators saying, “Fine, we can get CFD but who is going to buy our power?”. We are removing the obligation from the suppliers to buy low-carbon power. One of the features of the RO until recently was that there was an obligation on suppliers to increase their renewable percentage and that gave them access to the market. There is nothing to replace that in the CFDs. So, if you are an independent generator of renewable energy, you know that you have a good product but if no one wants to buy it you are really stuck.
On that basis, this issue deserves more attention, not merely because it helps us meet the carbon intensity targets but because it helps to solve the problem that the Bill currently faces of what we are going to do about access for independent generators.
Baroness Verma
My Lords, perhaps I may quickly respond to that. It was made very clear on Report in the Commons that we would consider the concern raised by the noble Baroness on access to markets of independent generators. I am sure we will debate that when we get to that part of the Bill.
Baroness Verma
Lord Teverson
This is a useful probing amendment. One of the other areas that has not been mentioned is the interest that the Government have had in geothermal energy from Iceland, which has started to be explored. I would like to think that we could have geothermal from Cornwall that we would be absolutely certain was within this regime—maybe I will come to that later in the Bill. It is useful to start to understand this and develop these arguments, because, in terms of dedicated sources of renewable energy that we work with other nations to bring to these shores, it would be regrettable if we were not able to take the full credit for that work within the decarbonisation targets. I would be interested to hear the Government’s thinking in this area.
Baroness Verma
Amendment 36 proposes that the Secretary of State makes further provision about the meaning of “electricity generation”. Clause 4 defines carbon intensity as a measure of the amount of carbon emissions generated in grams per unit. Before I go further, I will write to the noble Baroness on SF6, because my notes do not cover that detail. I will make sure that next time they are here at hand.
The Bill covers emissions from all electricity generated within the territorial boundaries of the UK, both from power stations and auto generators, and includes the emissions from electricity before any transmission losses. This approach is consistent with our international reporting system, which the noble Baroness will know about. I should also like to reassure noble Lords that the power in Clause 4(4) enables the Secretary of State to make further provision for the meaning of carbon intensity of electricity generation and this includes any changes to the definition of electricity generation. I think this goes a little way to responding to the concerns of the noble Baroness.
Turning to Amendment 37, Clause 4 currently states that carbon intensity of the power sector includes emissions generated in Great Britain only. Although, as I said, this will apply to the UK power sector following the Government’s amendments to extend the decarbonisation provisions, this does not include emissions from interconnection or non-UK low-carbon generation. The Government considered this very seriously when we were designing these clauses. While interconnection is important, the Secretary of State cannot realistically be responsible for, and would have great difficulty in measuring, the carbon intensity of electricity generated outside the UK. Fundamentally, what is coming down the wires is simply electricity, and we could not say for certain in most cases whether it is low-carbon or not. If anything, my concern is that we would find ourselves overclaiming, when in fact the electricity being imported was from a wide range of generation sources. However, as I previously mentioned, these provisions retain flexibility so that this approach can be reviewed at a later date and changed if we feel it is necessary to do so.
I reassure noble Lords that if it becomes necessary to alter the definition of carbon intensity of electricity generation, for example to include emissions from interconnection and non-UK low-carbon sources, further provisions can be made and will be made by the power in Clause 4(4).
I hope that I am able to reassure noble Lords that the Government’s provisions already have a purpose and a sensible and logical approach for measuring the carbon intensity of electricity generation, and that a further power to amend the default definition is available should the definition need to be modified.
My noble friend Lord Teverson raised a point on thermal support. The Government announced draft strike prices last week for geothermal energy sourcing to support the development of that technology. I know that my noble friend will be extremely pleased to see that.
The noble Baroness mentioned offshore wind turbines off the coast of Ireland. As yet, we have not said anything about limiting support to specific technologies. A memorandum of understanding was signed by the Irish and UK Governments earlier this year which covers renewable technologies, and we are working closely with the Irish Government to develop further dialogue on that. On that note, I hope that the noble Baroness will withdraw her amendment.
Baroness Verma
Lord Judd
My Lords, I ought to declare an interest in the sense that, unless climate change has made a difference, I live about 10 miles due north-east of Sellafield. I also regularly use the A66, which is used by vehicles carrying nuclear materials and waste, and I also use the M6. I am sure that other noble Lords and I have that in common.
I shall start by reflecting on what my noble friend Lord Whitty said. It is good to see that the department has taken these issues seriously in the Bill. His amendments are extremely constructive and helpful in strengthening what the department obviously takes seriously, and that is right.
Perhaps I may make a couple of observations. First, I should like to pick up on what the noble Lord, Lord Deben, said. The Minister knows about my preoccupations with the recycling and waste process. I believe it is essential always to remember that this is a national responsibility and that we have to be certain that the sites selected are the best—or, at any rate, the least worst—available in the United Kingdom. It is irresponsible to get this tangled up with localism, local responsibility and so on. It is quite unfair to place on a local authority and local representatives responsibility for strategic decisions on such an important national issue. This is a national responsibility and we must approach it in that context. Of course it would be appropriate, at the right time, to get involved with local authorities on the implications, but we have to be satisfied that we are acting responsibly as a nation.
Secondly, I have often reflected in life that one of the problems that we run into as legislators is that we are inclined to think that legislation provides the answer. Of course, it does not. Legislation at its best underpins what should be in society’s behaviour and enhances the opportunities for good, effective professionalism and so on. Inadequate arrangements work exactly in the opposite direction and inhibit good action. Although sometimes with imperfect structures wonderful things can happen, it is much better and more reassuring to have the best possible structures and arrangements.
My most important point is that what matters most is the culture. It has to be a culture shared by workers and management at all levels. It cannot be the responsibility of only the safety experts or those named with a safety responsibility or the inspectorate. That is a losing game; it is like a gamekeeper trying to catch poachers. The responsibility must be central to the professionalism and culture of all those involved in this work because the hazards are considerable. From that standpoint, I hope that in our deliberations we will look at this sense of shared cultural responsibility.
I do not want to be sensationalist—it is easy to be sensationalist in an area such as this—but for those of us who live in an area like Cumbria there are too many stories of one thing after another going wrong. We have just had another massive fine imposed in the past few weeks. We have had stories of lorries coming from the Midlands with waste dribbling from them all the way across to their destination in west Cumbria. It is important to make sure that this issue is properly seized and that there is an indispensable culture of commitment in the whole nuclear operation. I want nuclear to succeed but this is essential to its success and contribution to humanity.
My final point is simply this: there is probably room for us to explore a little more the relationship between what we are talking about now and health. There needs to be full co-operation between all those involved and those operating the health services in the vicinity. Sometimes in these areas matters come to light that need attention, and I hope that that point can be taken on board.
Baroness Verma
My Lords, I am extremely grateful to the noble Lord, Lord Whitty, for his careful consideration of this part of the Bill. I will start by commenting on questions that have been raised before going through my notes to be able to answer, I hope, each amendment that the noble Lord, Lord Whitty, has raised. The noble Lord mentioned the Delegated Powers and Regulatory Reform Committee’s report. We are extremely grateful to the committee and are giving careful consideration to its recommendations and working closely with it to provide it with further documentation. I hope to get that to it very soon.
The noble Lord asked whether the Bill covered sites yet to be granted a licence. The definition of a relevant nuclear installation includes proposed installation sites, so the answer is yes. No safety critical work can ever happen unless a licence has been issued.
I start by congratulating my noble friend Lord Jenkin because next year he will be completing 50 years of continued service in Parliament and we are extremely grateful for that.
Baroness Verma
When my noble friend said 1965, I tried to remember what I was doing then and I think I was probably playing around in a nursery playschool. I am extremely grateful for the wisdom and support of my noble friend and for being able to count on his great experience when I need information and advice. He is clearly very formidable in his experience and we all greatly benefit from that, even though he sometimes poses incredibly difficult questions for me to answer. One question he posed was whether ONR still has licensing provisions in the Nuclear Installations Act 1965. The answer is that ONR will be responsible for enforcing the nuclear safety sections of the 1965 Act, including, for example, the granting of nuclear site licences.
I am also extremely grateful to my noble friend Lord Deben for his contribution. He is absolutely right about engagement and clarity. I hope that I will be able to respond with clarity to the amendments that the noble Lord, Lord Whitty, has raised. I have also learnt a new terminology today from the noble Lord, Lord O’Neill. I am always amazed at these debates at what they turn up and I can then use—probably at an event tomorrow, when I am going to be speaking on “mickles” and “muckles”. I perhaps need to get greater clarification on exactly what it means, in case I end up in huge amounts of trouble.
The noble Lord, Lord Judd, and I share sometimes opposing views on the way in which we deal with waste, but I hope that we remain in constructive dialogue on this subject. The noble Lord should understand that I still firmly believe in localism and the involvement of local people in how sites in their communities are located. While a site is always in the national interest, we must never forget that those communities have to live with whatever site is on their patch.
I turn to Amendment 38B. The noble Lord has asked that the definition “GB nuclear site” in Clause 57 should be replaced by “GB civil nuclear site”. While the ONR’s role does not extend to regulating nuclear safety on Crown nuclear sites—as the noble Lord has picked up—such as those owned by the Ministry of Defence, there is a number of licensed nuclear sites which are operated by civil contractors for defence purposes. The ONR will have overall responsibility for these sites, which include the Atomic Weapons Establishment sites at Aldermaston and Burghfield and the Rolls Royce nuclear submarine fuel production plant in Derby among others. Therefore, while I appreciate the noble Lord’s efforts to add greater clarity to the Bill here, I do not think that amending it in the way that he seeks will make the definition any clearer.
Amendment 38C extends the definitions included within Clause 57 to the rest of the Bill. This amendment, however, is not required, as the terms defined in the clause are not used without appropriate reference elsewhere in the Bill. Therefore, the noble Lord should rest assured that the terms are covered, if not at the front of the Bill.
Lord Deben
My Lords, on the controversial comment that was just made, I find it very difficult because I do not believe that the noble Lord, Lord Whitty, has quite got it right. The sort of error that would cause there to be a special need to be able to sue would be suable under the law without the breach of statutory duty, which is a very narrow statement that you can sue for the statutory duty being breached irrespective, in a sense, of the effect. The kind of concern that the noble Lord, Lord Whitty, has raised, which he does not mention but is pressing towards, is something that I cannot conceive could possibly not be available in a law case for someone who was damaged by it.
I have a particular reason why I hope that the Government will not give way to this proposal. One problem of nuclear sites—I have dealt with them for much of my adult life, with Sizewell A and Sizewell B—is that for the most part they are like any other site. One difficulty of treating them as if they are always nuclear rather than like any other site is that often quite unnecessary concerns are raised. I always remember a very small fire in a small shed a long way from the actual nuclear site, but on the nuclear periphery, and the sort of headlines that it got, whereas if it had been on an allotment there would have been no news about it at all. It became a nuclear accident.
I hope that the noble Lord, Lord Whitty, will understand that the sort of issues that might properly excite him, the Daily Mail and the Morning Star—although whether anybody would notice that the Morning Star had been excited by it would be a real question—are covered by the law in any case. To make a special exemption here would cause a problem to those of us who have to deal with those sites, because it suggests that they are so different from other sites that they should have special protection, of the sort that we talked about in the previous debate. I hope that noble Lords opposite will remember that I was not entirely a supporter of the Government on many aspects of that Bill, so it is not because I am trying to defend it. However, this amendment would be a mistake, is unnecessary and would not be worth having, because it has a disadvantage in how it treats nuclear sites that would be damaging.
Baroness Verma
My Lords, in creating the ONR as a statutory body, it is important to ensure that the tenets of health and safety will continue to apply to the regulated community. Before I go on to respond to Amendment 38E, I should like to respond to Amendment 38U first, because it is important that I allay the noble Lord’s fears early on.
We considered in detail during the drafting of this clause that the amendment ensured that existing rights of compensation continued to remain available if people developed cancers or were subject to accidents. It is clear that it is still covered under the Nuclear Installations Act 1965, which puts in place a regime for compensating those who suffer injury or damage as a result of a nuclear incident. The regime covers nuclear incidents at nuclear-licensed sites or Crown sites, and claims are permitted to be made up to 30 years after the incident. I hope that has helped to address the noble Lord’s concerns lying behind the amendment.
In Amendment 38E, the noble Lord seeks to ensure that Section 2 of the Health and Safety at Work etc. Act continues to apply to nuclear sites in Great Britain regulated by the ONR. I can reassure him that the Health and Safety at Work etc. Act and relevant legislation made under it will continue to apply to ONR-regulated sites. This will include Section 2, and therefore I do not think that the amendment is necessary.
For clarity, amendments to the HSWA in Schedule 12 to the Bill will create the statutory ONR as an enforcing authority on nuclear sites and, as such, the statutory body will be responsible for the enforcement of all non-nuclear health and safety legislation, including operators’ compliance with the requirements for the provision of information and representation of workers. I think that that addresses the noble Lord’s fears.
Amendment 38T deals with civil liability. Clause 65 of the Bill sets out the application of civil liability for a breach of a duty contained in nuclear regulations and the safety provisions of the Nuclear Installations Act 1965.
As noble Lords may recall—I think that the noble Lord referred to it earlier—in the last parliamentary Session the Enterprise and Regulatory Reform Act amended the civil liability provisions contained within the Health and Safety at Work etc. Act 1974. The amendment would remove the provision setting out that breaches of a duty imposed by health and safety regulations would always be actionable where they gave rise to damage. Such regulations would include any made for the ONR’s nuclear safety, security, safeguards and radioactive materials transport purposes.
The amendment seeks to undermine the decision made in this House and the other place that civil liability should apply to health and safety legislation only where specific provision is made. Therefore, rather than making clear provision reversing the situation, the amendment would remove the clear wording of the existing clause, making it unclear whether a claim for breach of a statutory duty could be brought. The amendment does not seek to amend parallel provision in the Health and Safety at Work etc. Act 1974. By not doing so, it would create an unequal regime between the two major pieces of health and safety legislation in the field—this Bill and the Health and Safety at Work etc. Act. It would be inappropriate and untenable for us to create a statutory regime between the civil nuclear industry and others.
I hope that the noble Lord has found that explanation reassuring. However, if he would like further clarification and would like to meet with officials, I shall be more than happy to extend that invitation to him and to other noble Lords.
Lord Whitty
My Lords, I am grateful to the Minister for that. I am very satisfied with at least one and a half and possibly two out of three. I certainly accept her assurance that the provisions in Amendment 38U are not necessary. I was concerned that the Bill should not affect a scheme which provides a set level of damages for minor radiation activities and which has run for 30 or 40 years. I was party to the negotiations that set it up. Although there will now be very few people claiming under that scheme, there are some, and I hope that it will not be affected by the change of jurisdiction. Therefore, I am grateful for the Minister’s reassurance, which I hope is sufficient.
I do not expect the Government to change their mind about civil liability but I think that it was right for me to table this amendment because it draws attention to the consequences. The noble Lord, Lord Deben, says that we should not treat such sites any differently from any other sites. However, for all sorts of reasons, nuclear sites are dealt with differently, and the whole of this legislation deals with them differently. There is a highly subjective dimension to it and, in effect, he referred to that. If there is an incident on a nuclear site, it gets blown out of all proportion. I think that all sides of this Committee are in favour of an extension of the provision of our nuclear energy sources in this country.
We also know that it would not take a lot to turn public opinion in the wrong direction—we need only look at Germany—and for the whole strategy to fall flat on its face. It would be quite wrong if that arose because of a health and safety issue that was not provided for in the nuclear regulations, whether it concerned an omission regarding nuclear waste or nuclear material, or some other breach by the management at a nuclear plant. The reality is that the level of safety on nuclear sites, not only in respect of nuclear issues but on all others, has to be—the industry recognises this—of the highest order, and any breach must lead to a sanction.
Lord Whitty
My Lords, before the Minister replies, perhaps I might point out that most of this debate has been about a sponsoring department. I regret making what was a throw-away remark as a background to this, because none of my amendments attempt to or could reassign sponsorship responsibility from one department to another. It is entirely a matter for the Prime Minister. It is not a matter for regulation. I hope the Minister will deal with the amendments on their merits because there is clearly an overwhelming view in this Room on the matter of sponsorship. I am certainly not pursuing that today.
Baroness Verma
I am extremely grateful to the noble Lord, Lord Whitty, and I hope that I will be able to allay his fears. In fact, I think my noble friends Lord Deben and Lord Jenkin and the noble Lord, Lord O’Neill, have explained far more eloquently than I could why it is important that the DWP should remain the main sponsor body. I am extremely pleased to hear that the noble Lord, Lord Roper, has been convinced by argument and has changed his mind. That is the benefit of your Lordships’ House: we can have these detailed debates which highlight how things can be illustrated far better by people with far more experience than I have.
I assure the noble Lord, Lord Whitty, that DECC will still have appropriate statutory levers to ensure the effective delivery of policy areas for which DECC Ministers are accountable to Parliament. Such independence is a requirement of the European nuclear safety directive, which has been implemented by the UK.
I will now address the other amendments in the group, which have not had as much of an airing as the noble Lord would perhaps have liked. Amendments 38K, 38L and 38P allow for changes to how nuclear regulations are made, in particular that they could confer powers on other bodies. The Bill is deliberately focused solely on the ONR and the functions and remit that it needs to be an effective regulator. It would be a significant change of focus to make provision for conferring functions and responsibilities on other regulators and would require changes to many aspects of the Bill. In addition, any regulations made that covered the remit of another organisation could be made jointly with them, using the Bill and another more appropriate legislative vehicle. To that extent, I take the view that these amendments are unnecessary.
Baroness Verma
My Lords, I am extremely grateful to the noble Lord, Lord Whitty, for allowing me an opportunity to clarify some of the points he has just raised. Amendment 38R, when read with Amendment 38Q, as the noble Lord rightly said, seeks to limit the indicative list in Schedule 6 so that it can make reference only to nuclear regulations, including provision to restrict employment on the basis of qualifications or experience. The reason that broader provision has been included in the Schedule is that nuclear regulations may need to specify situations where individuals cannot do certain jobs—for example, pregnant women working at greater risk from ionising radiations, or restrictions on employment for certain types of person for security-critical posts. While Schedule 6 is only an indicative list, it would be a retrograde step to remove the examples in paragraphs 10(a) and (b).
Amendment 38V in the name of the noble Lord, Lord Whitty, seeks to remove the explicit provision in the Bill stating that the ONR is not a Crown body and that its property is not property of the Crown. The decision to include specific provision in the Bill to establish the ONR as a body outside the Crown was not made lightly. It is, however, integral to the policy of creating a more independent, flexible and efficient regulator. Most notably, the position of the ONR outside the Crown enables its staff not to be classified as civil servants. Recruiting and retaining skilled specialists is crucial for the ongoing effectiveness of ONR and Civil Service restrictions on pay and recruitment pose a serious risk to this.
Clause 76 includes a power for ONR to provide training which relates to its purposes. For example, if new regulations were brought in, it might be appropriate for ONR to provide training to duty holders on new requirements. Alternatively, if ONR has access to certain safety or security expertise of limited supply on the open market, it might be appropriate to make best use of this by offering training to up-skill the regulated community. Amendment 40H seeks to make this power a duty. While the provision of training by the ONR might be a useful and effective tool to promote safety or security, it is not a core function of the ONR. By making this a duty, it could divert valuable resource away from its core regulatory functions. Amendment 40J seeks to ensure that the ONR carries out only appropriate and relevant training. The ONR’s power to provide training is already limited to its purposes; therefore, I am confident that the Bill already focuses sufficiently on the ONR’s role in this area.
Finally, Amendment 40P seeks to protect ONR staff’s continuous service should they move in and out of the Civil Service. I reassure the noble Lord that pension rights of ONR staff will be preserved under existing provisions in the Bill, and I refer him to paragraph 15 of Schedule 7. As for preserving their seniority, I am reliably informed that civil servants are appointed on their skills and experience and that an official record of their continuous service is not retained for this purpose.
I hope that the noble Lord has found my explanation helpful and will accordingly agree to withdraw his amendments.
Lord Roper
My Lords, could the Minister give assurances that, on the references in Clauses 68, 80 and 104, the reports of the Delegated Powers and Regulatory Reform Committee will be looked at very carefully by the department and that she will be able to give us some assurance fairly soon? Otherwise, those are matters to which we will want to come back on Report.
Baroness Verma
My Lords, as I said earlier, of course, I am doing my level best to ensure that the Committee gets the information. We are considering very carefully what the committee laid out.
Lord Whitty
My Lords, I thank the Minister for going through the amendments. I accept the argument in regard to people’s physical conditions, such as pregnancy, and other reasons why they should not go into certain areas, and I understand that the provision is for that. I am afraid that my suspicious and conspiratorial mind thought that it was something to do with security, with a big S, and therefore could be quite a wide and broad requirement. However, after the explanation that it is confined to those sorts of things, it is fine.
On the issue of the Crown, it seems to me that there are not many other bodies that are public bodies which have that explicit divorce from the Crown. I am not sure whether in shrinking the state, as the coalition intends to do, there is a whole range of these coming up. I assume that the ONR will never be privatised and that this is, as the Minister and I indicated, really a ruse to pay people more, which is necessary—although it is necessary for a number of other regulators, not excluding the Environment Agency’s nuclear staff, which will not be met by this change. I will not take it further now, but it is peculiar, and we will keep a weather eye open for any other use of this in relation to public bodies. We may have to consider at a later stage whether it is appropriate.
I do not want the ONR to be diverted on training, but it is the employer’s responsibility to ensure training; it does not necessarily have to provide it itself. It is explicit in the Health and Safety at Work etc Act and necessary in the HSE that the organisation has a responsibility to make sure that its people are trained up to full modern requirements. That is every employer’s responsibility but, in relation to nuclear regulation, it must be a particularly acute responsibility, which the employer ought to accept. So I do not really accept the Minister’s complacency about leaving “may” there, when “must” would reflect the status quo and what I hope is the reality of the ONR’s future regulation.
I accept that the Civil Service has changed a bit since my day when seniority used to be very important. I also accept that there is a reference specifically to pensions. But other aspects of seniority and continuous service are still relevant, including retirement dates and the point at which you can apply for, for example, early retirement on sickness or other extraneous grounds. I accept that it probably is not a point which needs to be covered in legislation. I do not think that it is a trivial point and may not be a trivial point for some of the staff who are due to transfer. With that, I beg leave to withdraw the amendment.
Lord Jenkin of Roding
I am extremely grateful to the noble Lord, Lord Whitty, for his kind remarks about the two amendments which stand in my name. It is very important, when you are setting up a board of this kind, to have a proper balance between executive and non-executive members. We are in an interim position concerning the executive members. The chief inspector, Dr Mike Weightman, retired earlier this year, and that was a considerable loss. He established not only a huge personal relationship but an important overseas relationship with the regulator in this country. There is great admiration from many nuclear countries overseas for our system of regulation, and a succession of chief inspectors, not least Dr Weightman himself, have made a major contribution to that.
Obviously, one has to have a strong chief executive and chief inspector, but it is also very important that one has on the board a mixture of executive and non-executive members. My amendment simply prescribes that:
“At least one non-executive member must have experience of, or expertise in, matters relevant to the ONR’s nuclear safety purposes”.
That is self-evident, but it is not in the Bill. I think that that is the right way to do that.
On the other hand, I do not agree with the amendment of the noble Lord, Lord Whitty, that there should be appointments from the NDA and the other body mentioned. They seem to me to be much too directly involved in the work of the board and of the ONR. They are among the regulated, and that is probably not right. There are a number of experts from academia and elsewhere in industry who could fulfil that role without having to look to the Government’s own bodies to provide people for the board. Under my amendment, at least one of them must have experience in the matters which concern the board. That would strengthen the board and the legislation and add to the public reputation of the ONR and its board.
Baroness Verma
My Lords, again, I am extremely grateful to the noble Lord, Lord Whitty, and my noble friend Lord Jenkin for their amendments prompting this debate.
Amendment 38W increases the number of non-executive directors on the ONR board from seven to eight, and Amendment 38X makes a corresponding change. These amendments would result in the ONR’s board having a maximum membership of 12, which is quite large for a relatively small organisation. Amendments 38W and 38X accommodate Amendment 40A of the noble Lord, Lord Whitty, which empowers the Secretary of State to appoint an executive member nominated by the Environment Agency or a member nominated by the Nuclear Decommissioning Authority. Although I fully appreciate the importance of the ONR having a strong working relationship with other regulators and relevant bodies, including the Environment Agency and the Nuclear Decommissioning Authority, such relationships are already in place and we expect them to continue when the ONR becomes a statutory body. The Bill does not prevent persons recommended by those organisations being appointed as non-executives, so I do not feel that the amendments are needed. Consequently, it is not my view that Amendments 38W, 38X and 40A are required.
Amendment 38Y sets out some areas of expertise that the Secretary of State might consider when appointing a non-executive. Nuclear matters, governance, health and safety, and employment are all areas where an ONR non-executive could have expertise, but they are not the only ones. We also need to look at areas such as finance, audit and project management, which are crucial to the effective and efficient operation of any organisation and should not be dismissed.
I do not believe that the legislation should limit the skills that a non-executive can bring to the ONR or fetter the Secretary of State’s ability to make appointments. Nor do I think that persons without a background in such matters are incapable of bringing valuable skills and experience to the ONR. On that basis, I do not believe that Amendment 38Y is required.
Amendment 40B would remove the power of the ONR to pay non-executive members, except for the HSE member, a pension or gratuity. This power helps to enable the ONR to draw upon the widest pool of suitably qualified people as prospective non-executives. It is especially relevant for those with an extensive range of relevant skills and expertise who have reached or are approaching retirement age. Such sums that the ONR might decide to pay must be approved by the Secretary of State, so there will be suitable checks on the ONR’s spending on this front. On that basis, I do not believe that Amendment 40B is desirable.
I now turn to the amendments tabled by my noble friend Lord Jenkin. These concern the expertise and experience held by the ONR’s non-executive directors in the areas of nuclear safety and nuclear security. Amendment 39 is designed to enable more than one non-executive director with security experience or expertise to be appointed to the ONR board, and Amendment 40 requires at least one non-executive to have experience relating to the ONR’s safety purposes.
As drafted, the legislation gives the ONR a skills-based board, ensuring that there is a balance of individuals with the necessary experience and expertise to provide strong governance to a modern regulator. To ensure that the ONR’s security interests are carried out in the context of wider national security policies, the legislation makes it a requirement for the board to have one non-executive director with relevant security experience. The legislation also enables more than one such non-executive to be appointed by the Secretary of State. I therefore reassure my noble friend that the current wording of the Bill does not limit the ONR board to simply one member with security experience or expertise, and on that basis I hope that he recognises that Amendment 39 is not required.
Nuclear safety expertise on the ONR board will be provided, at the very minimum, by the chief nuclear inspector, who will be an executive member. Further executive or non-executive members with nuclear safety experience can be appointed if it is felt necessary. I agree wholeheartedly with my noble friend that in the former chief nuclear inspector, Mike Weightman, we had an excellent, world-class inspector who was globally recognised, particularly given the work that he did post-Fukushima. Due to him, we have strengthened our reputation across the globe as a lead inspectorate. Tribute must be paid to Mike Weightman. His eight years of service have been highly appreciated by us all.
The ONR is an organisation whose role is predominately concerned with safety. The Government are confident that the ONR board will, without specific provision in the Bill, include individuals with the experience and expertise to provide governance in this area. Thus, experience of safety issues will be held not necessarily in one individual but across a number of members, who will bring with them a range of expertise. Therefore, I do not believe that Amendment 40 is required.
I shall just touch on the question asked by the noble Lord, Lord Whitty, concerning the presence of a member from the unions. The ONR board will be a skills-based board rather than being made up of representatives of particular stakeholders. I reassure the noble Lord that the board will not be minus just the trade unions; industry representatives will not be on it either.
I hope that the noble Lord, Lord Whitty, and my noble friend Lord Jenkin have found my explanation reassuring and that they will agree to withdraw their amendments.
Lord Jenkin of Roding
My amendment has of course not been moved so I cannot withdraw it, as I am sure that my noble friend realises. I may study her remarks quite carefully, together with the advice that I have been taking on these matters. I hope that I will not need to return to this on Report, but the advice I had was that people felt pretty strongly that there had to be one non-executive director with experience in the area of the ONR. I am not quite sure whether the Bill gives them the power to do that. We hope that it should be firmly written into the Bill that they must, but I have not moved the amendment so I cannot withdraw it.
Lord O'Neill of Clackmannan
I rise in defence of my noble friend—although we disagreed on the previous amendment. We are losing sight of what is a legitimate tactic in the process of scrutinising legislation. In order to have the Government justify what is in the Bill, we have to ask them to remove things for them to tell us why they should be in it in the first place. That is what my noble friend has sought to do in a variety of areas. No one is suggesting that the ONR will decline the invitation. It seems to be general public knowledge that one or two Middle Eastern states that are envisaging or engaged in the development of nuclear power have looked to the United Kingdom as an independent regulator separate from the supplier of the kit and the running of the kit which they anticipate having. In order for us to have a clear understanding of the powers and the responsibilities of the ONR, we have to use the rather brutal method of seeking to delete those powers from the Bill so that they can be better defined. I realise that I have spoken for about two minutes longer than I should have done, but we are making rather heavy weather of this and I hope that my noble friend’s amendments will be treated fairly, as the Minister always does.
Baroness Verma
I am extremely grateful that the noble Lord ended on his last note, because I consider everything extremely carefully, but I agree with my noble friends Lord Deben and Lord Jenkin that we must not be so restrictive on what the ONR could do to enhance its standing in the world. I would like to address the amendments of the noble Lord, Lord Whitty, as they are grouped, so that I can clarify for him the reason why we are taking the position that we are.
Amendment 40C would require that the ONR’s accounts are presented to the Secretary of State and laid before Parliament at the same time as the annual report. The noble Lord, Lord Whitty, asked whether the accounts would be made available. Accounts are already required to be audited and laid before Parliament under paragraph 21 of Schedule 7, and, in practice, the accounts and the annual report will be published together. I hope that that answers the noble Lord’s question on reporting and laying before Parliament.
Amendment 40D would remove the ONR’s powers to borrow. This is not an element of the Bill that it is intended that the ONR would use frequently, and it can be used only with the Secretary of State’s approval. It is certainly not a blank cheque, but there may be instances where the ONR’s work may require extra funding in the short term to achieve a long-term goal, and in this instance I believe that the ONR’s power to borrow money, with appropriate checks and balances, is suitable for an independent public body.
Amendment 40G, on the other hand, would seek to require the ONR to recover the full costs of an inquiry. Laudable though the intention is, we cannot always guarantee that full cost recovery will be appropriate. The costs of some inquiries may not be fully attributable to one or even a group of duty holders. We would not wish unfairly to add extra charges to business for costs not incurred by them.
I am grateful to the noble Lord for tabling Amendment 40K. It would remove provision in Clause 79 for the ONR, with Secretary of State approval, to provide services related to its expertise but not part of its purposes. My noble friend Lord Jenkin eloquently articulated how important the provision is, because of the specialist knowledge that ONR possesses, if resource were available, to, for example, assist another country with assessing the safety of a new reactor design. Under the Bill, ONR could charge for such work, including at a commercial rate. The provision of such advice would have real benefits—not just financially, but, as my noble friend said, by helping to spread the UK’s high standards of practice internationally and giving ONR inspectors wider experience.
Let me be clear: the ONR’s first priority will be to meet its obligations as the UK’s nuclear regulator. Nothing will allow us to detract from this. My noble friend Lord Deben is right; we must allow the ONR to get on with its core activities. To ensure that there are no actual or perceived conflicts of interests, any commercial work which the ONR undertakes will be only with the consent of the Secretary of State. For those reasons, I hope that the noble Lord will withdraw his amendment.
Lord Jenkin of Roding
Before my noble friend sits down I hope I may be allowed to say how much we owe to the noble Lord, Lord Whitty, for enabling us to have debated a large number of matters during the course of the afternoon. As I said earlier, I had my doubts about whether we would take the time. We will stop just half an hour short and are most grateful to him.