Nuclear Safeguards Bill

Lord Grantchester Excerpts

Report stage (Hansard): House of Lords
Tuesday 20th March 2018 Lords Chamber

[Lord Grantchester (Lab)]

My Lords, I thank the noble Lord, Lord Broers, for tabling this amendment, to which we have added our names. I will say again what the amendment does so that we can be clear. The amendment delays the UK’s withdrawal from Euratom until the required agreements that will allow the civil nuclear industry to continue are in place. These required agreements are listed and have been debated at length in Committee. They are not in place at the moment and there is widespread opinion that they will not be— indeed cannot be—ready before exit day in March 2019 and, in respect of the proposed new subsection (3)(c) on international agreements, before the end of any transition period yet to be fully agreed.

In saying what the amendment does, we should also be clear what it does not do. It does not stop the withdrawal of the UK from either the EU treaty or the Euratom treaty. It does not seek that the UK will remain permanently either in the EU or in Euratom. The problem in scrutinising this Bill in your Lordships’ House is that the Government have been reluctant to give clarity to their negotiations—about what is and what is not included in them and how far they apply to nuclear safeguards and the Euratom treaty. The Government have even been reluctant to spell out exactly what immediate standards will be adhered to on exit day. I thank all sides of the House for the persistent challenges that have come to the Government and for remarks made again today examining the situation. I also thank the Minister for recognising the importance of this issue and providing what further assurances the Government are prepared to give. But the risks remain.

The conclusion is that the UK cannot set up its own Euratom-standard safeguards regime in time. In this situation it is only responsible that this House should insist on a delay. The importance of maintaining the UK’s integrity to be part of an international civil nuclear order cannot be overstated. Once the vital international safeguards standards have been met and agreed, withdrawal of the UK from the Euratom treaty can proceed. This may well take longer to achieve than even the transition period may be able to offer.

The Government will want to claim that the amendment is defective. That is the default position, since the Government always state that the two treaties of the EU and Euratom are legally joined. That the two treaties share common institutions is not to be denied, but the Government have not come forward with their legal advice for the interpretation that they cannot be separated. There are two distinct treaties. As was discussed last night in amendments to the withdrawal Bill, the UK was a member of Euratom distinct from the EU treaty, because this was the case before the UK joined the EU. Furthermore, in the Prime Minister’s letter of 29 March 2017 to President Tusk, she deliberately mentions both withdrawal from Euratom under Article 106a of the treaty establishing the European Atomic Energy Community and withdrawal from the EU. They are, therefore, separate.

Article 106a has never been invoked and was not mentioned in the drafting of the EU (Notification of Withdrawal) Bill, which the Government insisted could not be amended. So the amendment does not try to undo anything legislatively that has already been agreed by Parliament. The Government claim that power to withdraw from the EU includes the power to withdraw from Euratom, so they make it a tautology in their opinion, and make no further reference or inclusion of Euratom. It can be argued that the noble Lord, Lord Broers, wishes to insist on the principle that leaving Euratom be delayed until the UK is ready. It is Labour policy to remain a part of agencies such as Euratom, as has been stated in the other place. The Government can perfect any drafting at Third Reading.

The Prime Minister herself, in her Mansion House speech on 2 March, stated that the Government want to explore with the EU how the UK can remain part of EU agencies. She mentioned three—namely, the European Medicines Agency, the European Chemicals Agency and the European Aviation Safety Agency—and went on to explain the reasons. By accepting this amendment, the Government can, in their determination to be in close association with Euratom, keep withdrawal from Euratom in suspense while they explore how far adherence to EU rules can still be beneficial to the UK. The Government have expressed this wish repeatedly without further definition. In a letter to my noble friend Lord O’Neill of Clackmannan dated 28 February, the Minister stated that,

“the Government’s focus is on the outcome rather than the means”.

That means that the House needs to focus on the outcome of the amendment.

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[Baroness Vere of Norbiton (Con)]

My Lords, Amendments 4 and 5 seek to place a time limit, also called a sunset, on use of the power in Clause 2. I would like first to explain how Clause 2 works.

Clause 2 contains the power to amend by regulation the Nuclear Safeguards and Electricity (Finance) Act 1978, the Nuclear Safeguards Act 2000 and the Nuclear Safeguards (Notification) Regulations 2004. It can amend those three pieces of legislation only, and amendments can only be those in consequence of a “relevant safeguards agreement”, that being very specifically an agreement relating to nuclear safeguards to which the UK and the International Atomic Energy Agency are parties.

This is a narrowly drawn power to enable the amendment of references in this legislation to provisions of safeguards agreements with the International Atomic Energy Agency—which I shall refer to simply as the agency. This legislation enables the agency to carry out its activities in the UK, including by providing it with legal cover for activities of its inspectors in the UK. For the UK to have a domestic safeguards regime in future, it is essential that the legislation specified in Clause 2(1) can be amended to make correct reference to new safeguards agreements that the UK enters into with the agency.

The legislation cited in this clause is extremely unusual in that it makes detailed references to specific provisions of international agreements. As such, these references—for example, to articles—are likely to change as a result of any amendment of, or change to, those agreements. The power in the Bill is therefore necessary to make the changes to the relevant legislation to update those references when the new agreements are in place.

The UK’s safeguards agreements with the agency, and the agency’s ability to perform safeguards activities in the UK in accordance with those agreements, are absolutely fundamental to the agency’s application of safeguards in the UK. While the power is narrow, it is essential and underpins the entire regime. The unavoidable nature of negotiations means that we are tied to timing uncertainties and this power constitutes the only way we can address that uncertainty.

The Delegated Powers and Regulatory Reform Committee agreed that the power in Clause 2 is necessary and appropriately framed. It recognised that it is intended as a way of reflecting the new agreements with the agency required to establish the UK’s civil nuclear safeguards regime, and recommended preventing the use of the power after a period of two years had expired.

The Government accept the principle of the committee’s recommendation, and of Amendment 5, that we should not retain this power for an indefinite period. However, the regime is heavily reliant on wider international negotiations and it is therefore of the utmost importance that the power is not sunsetted prematurely. Prematurely sunsetting this power could result in the relevant provisions becoming ineffective, leaving the UK without an effective domestic safeguards regime and in breach of any new international safeguards agreements put in place with the agency. The potential consequences of such failures are serious. The UK’s reputation as a responsible nuclear state would be damaged.

The international negotiations relevant to this power are unprecedented in their nature. I consider it essential to retain a provision enabling the UK to adapt to any circumstances affecting the timing of the commencement of international safeguards agreements between the agency and the UK. I hope that, in the light of my explanation, noble Lords will feel able not to press their amendment, and the House will feel able to support government Amendment 4. I beg to move.

[Lord Grantchester]

I speak to our Amendment 5, which is in this group. In Committee, we proposed that the power of the Secretary of State to enter into relevant international agreements without parliamentary approval be limited to a two-year period. The Government have accepted the principle but wish to extend the power to five years, as the Minister has proposed. We accept that this power is necessary and that there is oversight in its use through the Constitutional Reform and Governance Act 2010.

However, I would like to press the Minister on why the Government think that a two-year period that coincides with any transition period could be insufficient to conclude necessary wider international agreements. We certainly do not wish to leave the UK without an effective domestic safeguards regime, in breach of any new international safeguards agreements put in place with the IAEA, but the Minister has not properly explained why she thinks it could be premature if this sunset clause were brought in at a period of two years.

The government amendments seek a further three years beyond the end of any transition period. Can the Minister clarify the kind of agreement she thinks could still be outstanding? I wonder whether included here could be the circumstances already drawn attention to in the earlier amendment of the noble Lord, Lord Broers, under proposed new subsection (3)(c), regarding international agreements with third countries, whereby the NCA agreement with, for example, the US could well take longer than any transition period. He argued for a suspension to our leaving Euratom.

[Baroness Vere of Norbiton]

I thank the noble Lord for his contribution. It is clear that the sunset provision we are discussing relates to the arrangement with the agency; it does not cover the nuclear co-operation agreements. Those are separate agreements.

We have thought very long and hard about the sunsetting of this—I think it falls into the territory of known unknowns—and we believe that two years is certainly too short and that five years is the right length. There may be circumstances that we cannot possibly foresee at this time that will make it necessary for the sunset clause to exist for slightly longer. We have now agreed—we hope, because nothing is agreed until everything is agreed—the implementation period. I think that noble Lords should take quite a lot of comfort in that implementation period in that, during that period, our safeguard arrangements will still be provided by Euratom. Indeed, it gives us an extra 21-month period for these arrangements to be put in place. Nevertheless, I think that the five-year period is appropriate. We have looked at the recommendations of the DPRRC and agree with them. A period of five years is the most appropriate time.

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[Lord Hunt of Chesterton (Lab)]

My Lords, an important point about Euratom is that it had a research programme on connecting fusion and fission. A long-range problem in the nuclear industry is finding ways of dealing with nuclear waste. As the Euratom programme showed, one way of doing that in future would be to connect it to fusion, because fusion produces fast neutrons that can process waste and give it a shorter half-life. That is an extremely important issue, and the people who will be able to work on it will have a very broad range of specialties, not just the narrow range that experts have at the moment.

[Lord Grantchester]

I commend the noble Lords, Lord Teverson and Lord Warner, for bringing back this amendment on Report. It concerns an important issue: that the UK must address the skills that are needed in the UK. The problem of labour supply with the necessary skills beyond those present and available in the UK will need to be addressed by several industries—and none more crucial than the power industry, in relation not only to new build but to the continuing need for decommissioning.

EDF is certainly correct to identify the importance of the specialisms needed to deliver Hinkley Point C on time. The noble Lord, Lord Warner, drew attention to this and to the Immigration Rules. With restrictions on freedom of movement, currently no route is identified for the many categories of workers to enter the UK under the points system in order to fill the vacancies envisaged. It is crucial that the Minister’s department underlines the importance of the issue to the Home Office and comes up with a solution. It will be needed in the best interests of the UK’s civil nuclear industry.

[Lord Henley]

My Lords, I am grateful to the noble Lord, Lord Teverson, for moving his amendment, and for the contributions of other noble Lords. I accept that it will continue to be important to attract—as the noble Lords, Lord Hunt and Lord Warner, and my noble friend Lord Selborne put it—the brightest and the best, to ensure that we maintain our excellence in the nuclear field. This amendment, however, is somewhat more limited in scope than that. Our future immigration system will be set out shortly and it would not be right for me to go into it. As my right honourable friend made clear in his Statement on 11 January, we will ensure that businesses and communities, as well as Parliament, have the opportunity to contribute their views before any decisions are made about the future system that the Home Office will be developing.

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[Lord Fox]

Following my noble friend Lord Teverson’s excellent explanation for the reason for this amendment, on the long-named programmes and systems in proposed new subsection (2), can the Minister tell the House whether these are built on existing systems that are being adapted or will they be built from scratch? The Minister may have to write to me in answer. Also, on the nature of the IT companies delivering these, is there competition in delivering systems such as this or is this a very specialist area with a small pool to fish from and not much choice, which of course leads to price escalation?

[Lord Grantchester]

I thank the noble Lord, Lord Teverson, for raising the important issue of the information technology systems necessary for nuclear safeguards. I also saw the written Q&A from the noble Lord and I thank the Minister for replying so swiftly. In Committee, the importance of understanding the full inventory costs in IT management systems was debated. The Government clarified that the full implications of the mechanisms that the ONR will need to set up are matters that could be included in each report that the Government will undertake. It can only build confidence that Parliament will be reassured through any audit process that the UK’s regime will be costed, reported and certified to be robust.

[Lord Henley]

My Lords, I am grateful to the noble Lord, Lord Teverson, for moving his amendment. He and the House really want two things. They want substantive reassurances and details of further reporting. I asked to have this amendment grouped with Amendment 6, which to some extent deals with this matter. We propose to put such reporting on the face of the Bill, and progress with the information technology systems required for the safeguarding regime will fall within that reporting duty. I hope that the noble Lord will feel that he does in due course get sufficient information. In the meantime, I will give an update about what is happening. As the noble Lord, Lord Fox, said, I might have to write with further detail later on, but let us see how the quarterly statements take place to see whether they provide sufficient information. If not, noble Lords can come back to me.

The overall system of safeguards is generally referred to as a state system of accountancy for and control of nuclear materials. The noble Lord referred to that in my original Written Answer. That is also known as an SSAC. The last time I came across SSAC it was the Social Security Advisory Committee, but that was in another world and another place. We will not go there now. As part of this, the ONR plans to put in place an IT system which it refers to as the safeguards information management and reporting system. I do not know how you pronounce “SIMRS” so we shall refer to it by its initials. The SIMRS is aimed at enabling the ONR to obtain and process the information necessary to ensure timely submission to the International Atomic Energy Agency of the reports required by any future safeguards agreements with the agency. The SIMRS will also enable submission of any specific reports required by supplier states as part of nuclear co-operation agreements.

The ONR has estimated that it will cost some £10 million—the figure I gave some weeks ago in Committee—to establish a UK SSAC, and the SIMRS is included as a part of this overall estimate. A pre-qualification questionnaire in relation to the SIMRS was recently advertised on the Government’s digital marketplace. Sixteen suppliers responded, of which six have been invited to respond to the invitation to tender by 6 April. Responses to that tender will provide more certainty on estimated costs, and the ONR expects to let the contract in early May.

I of course take note of what the noble Lord, Lord Warner, warned about IT systems from his experience with the health service and the Home Office. We are all aware of problems that new IT systems can have. I do not think that what we are proposing here is on the scale of what the National Health Service needs, but I accept that there can be problems. We and the department have a duty to examine that as carefully as we can. I give an assurance that we will do that as far as is possible.

Put very simply, that is where we are at the moment. We will keep noble Lords updated. We have accepted my Amendment 6, as amended by the amendment moved by the noble Lord, Lord Hunt. There is no need to further complicate the Bill’s proceedings by adding this amendment, which duplicates what we already have. Therefore, I hope that the noble Lord will feel able to withdraw his amendment.