Nuclear Safeguards Bill

Lord Henley Excerpts

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

Moved by

[Lord Henley]

That the Bill be now read a second time.

[The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Henley) (Con)]

My Lords, before I set out the context surrounding, and the key features of, the Nuclear Safeguards Bill, I think it would be helpful to explain again the meaning of nuclear safeguards. Investing a little time in this will, I believe, help with our discussion of this important but rather technical issue.

Nuclear safeguards are about non-proliferation and demonstrating that the United Kingdom is a responsible nuclear power. Nuclear safeguards are the reporting and verification processes that nuclear states use to demonstrate to the international community that civil nuclear material is not diverted into military or weapons programmes. The Bill has a very specific purpose in a very technical area: it ensures that the United Kingdom can put a domestic civil nuclear safeguards regime in place.

It is important to make clear at the outset, as it is key to understanding the subject matter covered by the Bill, that civil nuclear safeguards are entirely distinct from nuclear safety and nuclear security. Nuclear safety concerns the prevention of nuclear accidents, and nuclear security concerns physical protection measures. Both nuclear safety and nuclear security are already the responsibility of the Office for Nuclear Regulation and are unaffected by the Bill.

As a responsible nuclear state, the United Kingdom is a committed member of the International Atomic Energy Agency, which provides international oversight of civil nuclear safeguards. The United Kingdom has voluntarily accepted the application of international safeguards through agreements with the agency and is seeking to conclude new agreements with the agency that follow the same principles as our current agreements. We were a founder member of the IAEA back in 1957 and we continue to be at the forefront of its activities. Leaving Euratom will not change that.

The United Kingdom’s nuclear safeguards regime is currently provided primarily by Euratom with some support from the Office for Nuclear Regulation. The European Union and Euratom are uniquely legally joined, so when the Prime Minister formally notified our intention to leave the European Union, she also commenced the process for leaving Euratom. The United Kingdom therefore served notice of its intention to withdraw from Euratom at the same time as withdrawing from the European Union. The Bill therefore enables the United Kingdom to ensure that a domestic nuclear safeguards regime can be put in place when Euratom safeguards arrangements no longer apply to the UK.

The United Kingdom’s withdrawal from Euratom will in no way diminish our nuclear ambitions. Maintaining the continuity of our mutually successful civil nuclear co-operation with Euratom and international partners is a key priority for us. We remain absolutely committed to the highest standards of nuclear non-proliferation, including safeguards, and the United Kingdom will remain a committed member of the global architecture that provides the framework for non-proliferation.

Civil nuclear safeguards and reporting, by assuring the international community about the proper use of certain nuclear materials, underpin international civil nuclear trade. Alongside the consideration of this Bill in the House of Commons, the Government have been engaging in negotiations with the European Union, the IAEA and third countries. The United Kingdom has held several rounds of discussions with the European Union in the first phase of negotiations and there has been good progress on Euratom issues.

Negotiations with the IAEA on future voluntary agreements for the application of civil nuclear safeguards in the United Kingdom have been constructive and fruitful, and substantial progress has been made. Substantial progress has also been made in negotiations to put in place new nuclear co-operation agreements. In particular, constructive progress has already been made in discussions with key partners such as the United States, Canada, Australia and Japan.

It is clear that we need continuity and must work to avoid any break in our civil nuclear safeguards regime if we wish to support the United Kingdom’s nuclear industry and its nuclear research community. A civil nuclear safeguards regime and safeguards agreements with the IAEA are critical for the continued operation of our civil nuclear industry and research. As set out in the Written Statement laid on 11 January, our strategy for withdrawal and our future relationship with Euratom is two-fold: first, to seek, through our negotiations with the European Commission, a close association with Euratom; secondly, and simultaneously, to put in place all the necessary measures to ensure that the United Kingdom can operate as an independent and responsible nuclear state from day one. This is vital to ensure continuity for industry, whatever the outcome of negotiations.

We will also seek to include Euratom matters within any negotiated implementation period. The Government also made the commitment to report back to Parliament every three months, by way of further Written Statements, about overall progress on this strategy, including in respect of negotiations. We have been working closely with the Office for Nuclear Regulation to ensure that it can be ready to take on new responsibilities for a domestic safeguards regime, in place of Euratom’s current regime.

As my predecessor, my noble friend Lord Prior, set out in a Written Statement on 14 September 2017, our intention is for the new domestic regime to exceed the standard the international community would expect from the United Kingdom as a member of the IAEA. The Government are aiming to establish as soon as possible after the United Kingdom’s withdrawal from the European Union a robust regime that is as comprehensive as that currently provided by Euratom.

[Lord Rooker (Lab)]

I am sorry to interrupt the Minister, but this issue was raised recently in the EU Energy and Environment Sub-Committee inquiry into energy security. The ONR cannot be independent in the same way that Euratom was. The accounting officer is appointed by the DWP accounting officer. The chair of the ONR is appraised by the DWP. How can it be sold to the IAEA that the ONR is as independent as Euratom?

[Lord Henley]

My Lords, I will take advice but my understanding is that the IAEA does not have concerns about this issue, which is part of the ongoing discussions with that body. As I said, discussions have taken place and they will continue. The Bill will be considered in this House for some weeks and in due course, I will give a further reassurance to the noble Lord to make sure that he and others are satisfied that the ONR can perform this role.

Perhaps I may continue with my remarks. Currently, under the Euratom treaty, all members including the United Kingdom subject their civil nuclear material and facilities to nuclear safeguards inspections and assurance which is carried out by Euratom. Euratom then reports specific information on member states to the IAEA, which has international oversight for those nuclear safeguards. The Nuclear Safeguards Bill ensures that the United Kingdom can put this domestic regime in place and it will enable the ONR to oversee nuclear safeguards when Euratom safeguards arrangements no longer apply to this country.

To ensure continued international verification and oversight of the United Kingdom’s safeguards, as I have said to the noble Lord, we will continue in our discussions with the IAEA to agree replacement voluntary safeguards agreements that reflect the fact that the Euratom arrangements no longer apply to the United Kingdom. This Bill provides us with the ability to implement those new agreements as well as the new domestic regime that underpins them.

[Lord Lea of Crondall (Lab)]

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

[Lord Henley]

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

[Lord Lea of Crondall]

No.

[Lord Henley]

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

[Lord Lea of Crondall]

No, not true.

[Lord Henley]

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

[Lord Lea of Crondall]

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

[Lord Henley]

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

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

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

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

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

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

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

[Lord Carlile of Berriew (CB)]

I am grateful to the noble Lord for what he has just said, but are we to take it that the sentence in the factsheet on the Bill that was given to your Lordships’ House at some very useful meetings still applies in relation to radioisotopes:

“This will be part of the broader negotiations of the UK’s future with the EU”?


If so, will he tell us what that means?

[Lord Henley]

My Lords, it is exactly the same as what I have said—as part of our broader negotiations we will obviously want to ensure that, in the words I think I used, a future customs arrangement with the European Union is as frictionless as possible. We understand the importance of these matters. It is as frictionless as it can be at the moment; we want to make sure that that continues. I do not believe that it is strictly relevant to the Bill but it was important to bring the matter up. I am very grateful to the noble Lord, Lord Hunt, for tabling an amendment, which will be discussed, to another Bill, but I want to give assurances that the Government are doing everything we can to make sure that such imports are frictionless, just as their export from Europe will be frictionless and just as they are frictionless in their export from Europe to non-EU countries at the moment. It is a matter of giving assurances as to what the Government can do and I hope that that will help to reassure noble Lords.

[Lord Warner (CB)]

I did not quite understand what the noble Lord was saying in his attempts to reassure us about Euratom’s observatory. As I understand it, the observatory was an important part of smoothing out problems when there were supply issues around radioactive isotopes. Is he saying that the observatory will continue for all those who have the benefit of being in Euratom but those who leave will not have any equivalent benefits and it is impossible for the UK to achieve such access to those benefits?

[Lord Henley]

It is a body set up by Euratom for Euratom, therefore it has an interest in ensuring safe export from the EU. There is no problem of the export of radioisotopes from the EU to non-EU countries. We want to make sure that when we are no longer part of Euratom that continues to be the case. That is why I am trying to give assurances based not only on what is coming out but on what the United Kingdom Government can do at our end. I hope that that will deal with the noble Lord’s problem.

[Lord Warner]

I do not think that that answers the point. The noble Lord is saying that they will go on helping to smooth out the supply to EU countries, but the UK will be left over here somewhere, unable to benefit from that if there is a world shortage of radioactive isotopes. That seems to me to be what he is saying: will he just confirm that that is what he is saying?

[Lord Henley]

I have a sneaking suspicion that the noble Lord is deliberately misunderstanding me. What I am trying to make clear is that we have to deal with not only what we want to import but obviously what is being exported from Europe. Euratom has an interest in what is being exported. Euratom is quite able, through the advice offered by the European Observatory on the Supply of Medical Radioisotopes, to look after the export of such radioisotopes. We have an interest in their export because we will be importing them as a non-EU country in the future. What I wanted to do is to give the noble Lord, if he will accept it, and other noble Lords an assurance that everything that can be done by the Government, and everything that is relevant in the negotiations, is being done to ensure a continued supply from European countries, just as there will continue to be supply from countries such as South Africa, from which we also import medical radioisotopes. I hope I have given sufficient assurance to the noble Lord, Lord Warner, that he will accept that we are doing what we can. As I made clear earlier, I do not think it is relevant to this Bill but I wanted to deal with the concerns raised by the noble Lord, Lord Hunt, and others during the passage of the EU withdrawal Bill.

The powers in the Bill give the existing independent nuclear regulator—the ONR—a new role to regulate nuclear safeguards, alongside its existing role, which it performs very well, regulating the United Kingdom’s nuclear safety and security. The Bill sits alongside other work around our future relationship with Euratom, the IAEA and third countries. Of course, we do not know what the final arrangements will be so we are doing what any responsible Government would do by being ready to put in place a civil nuclear safeguards regime for the United Kingdom through the Bill. I reiterate that although the United Kingdom is leaving Euratom, we will continue to support Euratom and want to see continuity of co-operation and standards and a close future partnership with it. I beg to move.

--- Later in debate ---

[Lord Henley]

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

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

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

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

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

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

[Lord Lea of Crondall]

My Lords—

[Lord Henley]

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

[Lord Lea of Crondall]

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

[Lord Henley]

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

[Lord Lea of Crondall]

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

[Lord Henley]

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

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

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

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

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

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

“in consequence of a relevant safeguards agreement”;

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

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

Bill read a second time and committed to a Committee of the Whole House.

Nuclear Safeguards Bill

Lord Henley Excerpts

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

[The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Henley) (Con)]

My Lords, I am not sure whether I heard the noble Lord set out his own party’s policy more widely on Brexit, but perhaps that will be for another day. He can then assist the Committee, but I leave that with him. I offer my congratulations and thanks to him, to the noble Baroness, Lady Featherstone, and the noble Lord, Lord Warner, for introducing their amendments. I think that it was the noble Lord, Lord Warner, who compared the response last night by my noble friend Lord Callanan to a Geoffrey Boycott innings. For those of my age and beyond, I will go for a sort of Ken Barrington type of response, so it will be long and slow. However, it is important that I get it all in to make sure that we have a proper response to the debate so that we can consider these amendments again on Report. It is also important for noble Lords to understand in this sort of Ken Barrington response that I am going to give—

[Lord O’Neill of Clackmannan]

We want wisdom, not Wisden.

[Lord Henley]

The noble Lord knows that he always gets wisdom from me. I want also to say that I am not necessarily going to respond to all the points in the course of this debate because an awful lot of them apply to later amendments. Nevertheless I will give a fairly full response, but I shall start by making a pretty fundamental point, made by my noble friend Lady Neville-Rolfe. It is that we are where we are. My noble friend supports this Bill because, as she said, it is very important that we have plans in place for when we leave Euratom. We are going to leave Euratom at the same time as we leave the European Union in March of next year. That was dealt with in the notice of withdrawal Bill, now the European Union (Notification of Withdrawal) Act 2017. The legislation has been through both Houses of Parliament and has the support of the party opposite and others.

What I want to make clear to the Committee is that we are determined to continue to have a constructive and collaborative relationship with Euratom and with all our other international partners. The withdrawal of the United Kingdom from Euratom will in no way diminish our nuclear ambitions, and I make that clear to the noble Lord, Lord Broers, and others. Maintaining the continuity of our mutually successful civil nuclear co-operation with Euratom and international partners is going to be a key priority for us. As a member of the International Atomic Energy Agency, we are committed to have in place nuclear safeguards. I should remind the Committee that these have nothing to do with safety. Nuclear safeguards are reporting and verification processes by which states demonstrate to the international community that civil nuclear material is not being diverted into military or weapons programmes. The United Kingdom has been a member of the IAEA since its formation back in 1957.

Under the Euratom treaty, the civil nuclear material and facilities within member states are subject to nuclear safeguards measures conducted by the European Commission on behalf of Euratom. Euratom also provides reporting on member states’ safeguards to the International Atomic Energy Agency, which conducts nuclear safeguards globally. Nuclear safeguards measures include reporting on civil nuclear material holdings and development plans, inspections of nuclear facilities by international inspectors, and monitoring, including cameras in selected facilities. I repeat that nuclear safeguards are distinct from nuclear safety, which covers the prevention of nuclear accidents, and nuclear security, which covers physical protection measures. Those are the subject of independent regulatory provisions and we shall move on to them in due course.

As was made clear by my noble friend last night and I make clear again today, the European Union and Euratom are uniquely legally joined. Euratom shares a common institutional framework, making use of the same institutions; namely, the Council, the Commission, the European Parliament and the ECJ. For example, the European Commission has an active role in shaping and enforcing Euratom rules and it currently plays a central operational role on safeguards in the UK. As was further made clear by my noble friend last night, Euratom is also subject to the jurisdiction of the ECJ.

When the Prime Minister formally notified our intention to leave the European Union in June, she also commenced the process for leaving Euratom. That notification was debated and authorised by Parliament through the European Union (Notification of Withdrawal) Act 2017 which, as I have said, had the full support of both Houses of Parliament. The United Kingdom will therefore withdraw from Euratom in 2019 at the same time as withdrawing from the European Union. That is why we need the legislation before us now to be in place.

The United Kingdom’s current nuclear safeguards regime operated by Euratom will cease to function in the United Kingdom as a result of our withdrawal from Euratom. The Nuclear Safeguards Bill will ensure that we have the right regime in place for the Office for Nuclear Regulation to regulate nuclear safeguards. I reassure the Committee that the Government are meeting the challenges that clearly lie before us. We have already made great progress in the work that we are doing to secure continuity for our nuclear industry by establishing long-term arrangements to secure nuclear safeguards. The Queen’s Speech on 21 June last year included our intention to take up the powers that will set up a domestic nuclear safeguards regime, and that is what this Bill seeks to do.

[Lord Fox]

My Lords, perhaps I missed them, but what are the long-term arrangements that have already been established?

[Lord Henley]

My Lords, will the noble Lord bear with me? I said that I was going to play a fairly long innings and I want to explain these matters in full. There is no point in the noble Lord interrupting at this stage. I am going through this carefully and slowly in order to explain what we are going to do to make sure that we have the right things in place for when we leave Euratom and the EU in March of next year.

Our intention is for the new domestic regime to exceed the standard that the international community would require from the United Kingdom as a member of the IAEA. It will be run by the Office for Nuclear Regulation which, as the Committee will know, already regulates nuclear safety and nuclear security. We will also be agreeing a new voluntary offer agreement with the IAEA. I believe that we all recognise the special contribution—

[Lord Warner]

I am sorry to interrupt the Minister, but can he say what discussions have actually taken place with the IAEA to get to that point of an agreement before March 2019? What is the plan of meetings for those discussions that have taken place and are planned to take place?

[Lord Henley]

My Lords, discussions have already taken place with the IAEA. We will continue with those discussions to make sure that we are in the right place at the right time. If the noble Lord will bear with me, I will continue with my speech and set these things out in the proper manner.

[Lord Warner]

I understand what the Minister is saying, but none of us has moved amendments this morning that in any way suggest that we would not be leaving Euratom by next year. We have accepted that for the purposes of this debate. We are not slow learners: we do not need to be taken rather slowly through the arguments that we went through last night.

[Lord Henley]

My Lords, I am sorry if the noble Lord feels that he is not a slow learner. At times, I have felt that he and other noble Lords have been a bit slow on these things. That is why I am trying to spell it out very carefully and very slowly and I will continue to do so. I hope to make it clear so that the Committee and the House will understand that we will have the appropriate civil nuclear safeguards regime in place by next year, which is of paramount importance for us at that stage. We have had already considerable discussions with Euratom. There will be further discussions with the IAEA. I will not go into the details but I can no doubt write to the noble Lord in due course.

In a sense, this is an amending Bill. As noble Lords will be aware, it will amend the Energy Act 2013 by creating new powers so that we can put in place regulations that offer detail on the domestic safeguards regime, such as accounting, reporting, control and inspection arrangements. It also creates the limited power that I referred to earlier which we will get to in later amendments, allowing us to amend the Nuclear Safeguards and Electricity (Finance) Act 1978 and others. That power will mean that references in that legislation to existing international agreements can be updated once new international agreements have been reached. We will discuss that in greater detail later on.

I have listened carefully to what has been said on the agreements that we have before us on Amendments 1, 2, 12, 16 and 17. These amendments taken as a group cover the fundamental issue of the United Kingdom’s future relationship with Euratom and our strategy pertaining to this. I fully appreciate the sentiment and the intention behind these amendments. I shall try to address them all.

On Amendment 1, the new clause proposed by the noble Baroness, Lady Featherstone, would require Ministers, when negotiating and concluding the withdrawal agreement, to have regard to the desirability of associate membership of Euratom, and require the Government to report periodically to Parliament the progress to that end. Noble Lords will have heard many times before that there is no such thing as associate membership of Euratom. I made that clear at Second Reading. It is important that discussions on this matter focus on the actual treaty. The concept of associate membership does not exist in the treaty. Given the frequency with which the point comes up, I start my response by reading out exactly what the Government said to the BEIS Select Committee on this point in the autumn:

“There are two different articles in the treaty that deal with the relationship between Euratom and third countries. One of them is Article 101, which enables the community to enter into agreements with third states. That is the one that has been used in the research and training context with Switzerland. That requires a qualified majority vote. The other one is Article 206, which enables the community to conclude an agreement establishing a formal association involving reciprocal rights and obligations. That is the ‘association with’ part, not being an associate member. That requires unanimity.”


It is indeed the case that the Ukraine and Switzerland each have a form of association agreement with Euratom, but those agreements cover only research and training activities. Neither covers nuclear safeguards activities. These countries are not associate members of Euratom. Wanting to maintain a close relationship with Euratom is this Government’s stated objective so we need no persuading on that point. We have already stated very clearly in Statements to the House that the Government will be seeking a close and effective association with Euratom as part of the next phase of negotiations with the EU. We have made clear the desirability of this aim and that it forms part of our negotiation strategy.

I fully recognise the importance of providing clarity on the progress of the Government’s plans for withdrawing from Euratom and our ambitions in respect of a future relationship with Euratom, which the noble Lord, Lord Warner, asked about earlier; it is relevant to Amendments 2 and 16, which I will deal with later.

--- Later in debate ---

[Lord O'Neill of Clackmannan]

The Minister referred to Article 206 and the agreement that has been arrived at with Switzerland and Ukraine in respect of training and research. Does that provision afford any opportunity for other areas to be incorporated in an agreement with Euratom? Could it be the portal for enabling us to be alongside Euratom in the way that the Ukrainians and the Swiss have been able to obtain for their preoccupations with training and research?

[Lord Henley]

My understanding is that it will allow them to do that. I am not aware that Article 206 could be used further as the noble Lord suggests. If I am wrong, of course I will write to him, but it might be a matter of interpretation. I should remind him in respect of Article 206 that I stressed when I read out the Government’s response to the Select Committee that any agreement required unanimity. That is obviously quite a big “if” in these matters. If there is anything further I can add, I will write to the noble Lord.

[Lord Hunt of Kings Heath]

The Minister is being very helpful. It is the first explanation we have had as to why the Government are leaving. He talked a lot about the influence of the EU over Euratom’s activities, which is no doubt something that we can test and explore. But I do not understand what “close association” means. The Government clearly could not go for a formal association because the relationship would be one in which the EU would set the rules, and we know that the Government have drawn a red line against that. Does “close association” mean that we would basically subcontract the inspectorate from Euratom to work under the auspices of the ONR, with the ONR as the regulator? Does it mean that, despite everything that the Government have said, we hope that we can simply replicate Euratom rules and that it will somehow oversee it, which seems unlikely? Until we know what the Government want to get out of Euratom, it is difficult to know whether the Bill will meet the circumstances if no close association at all is agreed.

[Lord Warner]

Can I amplify something from what the noble Lord, Lord Hunt, said? If the Minister looks at my Amendment 2, he will see that the suggested new subsection (1)(a) refers to,

“a report on the progress of discussions with Euratom on the scope and conditions for a form of association with Euratom”.

It does not talk about associate membership. Listening to what he said about what the Government aspire to sounded remarkably like seeking,

“a form of association with Euratom”.

In clarifying the Government’s intentions for the noble Lord, Lord Hunt, will the Minister explain the difference between what the Government want and the wording in my amendment? I am quite happy to change the wording if it helps the Minister.

[Lord Henley]

I was coming to the noble Lord’s amendment to make quite clear our ambitions for that future relationship and how we see it developing, before I was interrupted first by the noble Lord, Lord Hunt, and then by his noble friend Lord Warner interrupting him. I will now deal with how we want to ensure proper clarity on where we are going. The information I will provide to the Committee particularly relates to Amendments 2 and 16 from the noble Lord, Lord Warner.

The noble Lord will remember that we made a Written Ministerial Statement on 11 January. I am sure that he knows it off by heart by now. It included a commitment to continue to provide quarterly updates—it is information that noble Lords particularly want in this matter—addressing the progress on the wide range of issues relating to Euratom exit. That will include progress on those negotiations, but also on how they will develop into our future relationship with Euratom, as well as progress made by the ONR on establishing the United Kingdom’s domestic safeguards regime. I cannot tell where those negotiations will take place. The noble Lord will have to bear with me. What he wants, as far as I understand it from his Amendment 2 and the other amendments, is a guarantee that information will be provided by the Government. All I am saying is that we have made one Written Ministerial Statement—actually, we have made more than one—and we will continue to do so. That reporting commitment goes far further than the proposed amendment, by keeping Parliament regularly updated on the key issues that have been raised. I hope the Committee will welcome the fact that we will continue to provide further updates on those. The noble Lord, Lord O’Neill, asked for one. There will certainly be one before the Easter Recess.

I turn to Amendment 12 on our future relationship with Euratom. The Committee will be aware that in her speech on 22 September 2017 in Florence my right honourable friend the Prime Minister set out her desire for an implementation period after the United Kingdom has ceased to be a member of the EU. This is now well understood in the EU and I do not think that the amendment is consistent with this position. It remains the Government’s intention to ensure continuity for the nuclear industry and to avoid the possibility of the cliff edge that noble Lords referred to for the industry on exit day.

I hope that the Committee will not need to be reminded that the UK will not be a member after 29 March next year, whether an implementation period can be agreed with the Commission or not. That much is clear. If it is not, I will repeat from page 1 of the letter that the Prime Minister sent to President Tusk:

“I hereby notify the European Council in accordance with Article 50(2) of the Treaty on European Union of the United Kingdom’s intention to withdraw from the European Union. In addition, in accordance with … Article 50(2) as applied by Article 106a of the Treaty Establishing the European Atomic Energy Community, I hereby notify the European Council of the United Kingdom’s intention to withdraw from the European Atomic Energy Community. References in this letter to the European Union should therefore be taken to include a reference to the European Atomic Energy Community”.


In other words, there can be no question of separately attempting to prolong our membership of Euratom beyond the point at which we leave the EU. That is a very different matter from having an implementation period, which is something we are aiming at. That is a period after we have left the EU and Euratom, during which we continue to be covered by the EU acquis. By “acquis” we mean the regulatory framework that applies to EU member states. In exchange, the Government expect that the United Kingdom would be able to continue to benefit from its current access to the EU’s markets for the duration of the implementation period.

Again, I must emphasise that any agreed implementation period is not a way of delaying our departure from Euratom. It is a way of making the transition smooth, rather than sudden. My reason for asking noble Lords not to press their amendments is simple: the amendment does not seek to establish an implementation period after exit; it seeks a transitional period before exit. My honourable friend the Minister for Business and Energy set out on 7 February that there can be no question of separating the situation for Euratom from that of the wider EU. The two are, as we know, uniquely and legally bound. Again, I made that clear at earlier stages.

Finally, I turn to Amendment 17, which seeks to require the Government to lay a strategy for maintaining existing arrangements once the UK withdraws from Euratom and for this to be considered by both Houses before the main substantive provisions of the Bill can be brought into force. As I have said, the Government have made it absolutely clear that they will seek a close and effective association with Euratom in the future. As was mentioned in the Written Ministerial Statement, the Government set out the principles on which our Euratom strategy is based, including to aim for continuity with current relevant Euratom arrangements, to ensure that the United Kingdom maintains its leading role in European nuclear research, to ensure that the nuclear industry in the UK has the necessary skilled workforce, and to ensure that on 29 March 2019 the United Kingdom has the necessary measures in place to ensure that the nuclear industry can continue to operate. In respect of our future relationship with Euratom, we will also seek a close association with Euratom’s research and training programme, including the Joint European Torus and the International Thermonuclear Experimental Reactor projects. We will also want continuity of trade arrangements to ensure the nuclear industry can continue to trade across EU borders, and to maintain close and effective co-operation with Euratom on nuclear safety.

The Committee will be fully aware that the nature of our future relationship with Euratom is part of the next stage of negotiations, which is yet to begin. An implementation period may well be agreed and we hope that it is, but there are no guarantees. In any case, without such a period the United Kingdom will legally leave the EU and Euratom in March 2019. The Bill and the regulations made under it are crucial to make sure that we can establish that domestic nuclear safeguards regime to meet international safeguards and nuclear non-proliferation standards when Euratom’s safeguarding arrangements no longer apply in the United Kingdom. From that point, the United Kingdom will be responsible for its safeguards, including having its own state system of accounting and control.

[Lord Rooker]

In that case, are we not all wasting our time? Could the Minister say whether the International Atomic Energy Agency has already agreed in the discussions that have taken place that the contents of the Bill lead it to believe that the safeguards office will be able to demonstrate the independence it requires? If not, we are wasting our time.

--- Later in debate ---

[Lord Henley]

The noble Lord never wastes his time, nor does he waste the time of the Committee, but I can give an assurance that discussions continue with the IAEA, which is perfectly happy that we will be able to meet the appropriate safeguards regime to meet its standards by March next year. We will discuss that on later amendments. Processes have taken place in the ONR and it is engaged in recruitment. We will meet its standards—standards similar to those met by the Americans as fellow members of the IAEA. All that will be in place; that is the point behind the Bill. It is why I do not think these amendments are necessary—we will no doubt discuss them in much greater detail on Report. I hope that the noble Lord and the noble Baroness, Lady Featherstone, who is about to respond, will be happy and feel able not to press their amendments.

[Baroness Featherstone]

I thank the Minister. I listened carefully to his arguments in response to the amendments. I think that our work is not done; I did not hear a meeting of minds at this point. What I did hear was a universal view from across the Committee that surety and certainty are not there. We will probably want to come back on this on Report. For the moment, I beg leave to withdraw the amendment.

Nuclear Safeguards Bill

Lord Henley Excerpts

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

[Lord Teverson (LD)]

My Lords, I thank the noble Lord, Lord Rooker, for having gone through all that. That session of the committee which I chair was an eye-opener. That is why I tabled my Amendment 10, which we will consider in the next sitting of the Committee. The amendment is about labour mobility, which is an absolutely key factor in terms of not just safeguarding but the nuclear industry as a whole. I look forward to continuing that debate on that occasion and very much agree with the comments of the noble Lord, Lord Rooker.

[The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Henley) (Con)]

My Lords, I hope that I can respond to and deal with the various points that have been made. I am very grateful for all the contributions that have been made, particularly from my former noble friend, the noble Baroness, Lady Featherstone, who stressed that she wanted reassurances. I think that was the gist of what the noble Lord, Lord Rooker, said as well. He was seeking reassurances on when the ONR would be ready and whether we would meet the appropriate standards under the IAEA and so on.

I will refer back to the letter that I sent to all noble Lords, to which the noble Lord referred, and remind them of that. I also remind the Committee that we have committed to a domestic nuclear safeguards regime that is equivalent in effectiveness and coverage to that currently provided by Euratom. That is the commitment that we have made and I repeat it to the noble Lord, Lord Grantchester. That means a level of inspections and other regulatory arrangements—it is not just inspections—that goes beyond the normal international standards as applied by the IAEA that would be expected from the United Kingdom: for example, additional assurance and verification activities at additional facilities.

It is crucial that we meet all those international standards following our withdrawal from Euratom. Compliance enables the United Kingdom to discharge international commitments and would also underpin international nuclear trade arrangements with key partners such as the US, Canada, Japan and Australia. It is right therefore that the ONR focuses its efforts on ensuring that the United Kingdom is able to meet those standards immediately on withdrawal from Euratom and seeks to move to Euratom standards as soon as possible thereafter. The important thing is that we get to the IAEA—I hope I have got the letters in the right order; it is difficult to remember sometimes—as soon as possible thereafter.

[Lord Rooker]

We all have the same problem.

[Lord Henley]

I am grateful to the noble Lord, Lord Rooker, and I will not refer to his socks, which might have been distracting me.

I also say to the noble Lord that we will be ready; the ONR is sure that it will be ready and we are working closely with it to ensure that it will be in a position to regulate the new civil nuclear safeguards regime following our withdrawal from Euratom. The ONR is in the process of expanding its safeguards function by recruiting and training additional inspectors, building additional institutional capacity and developing necessary IT systems.

The ONR requires a multidisciplinary team to be able to deliver safeguards responsibilities. The staff essential to its safeguards function include safeguards inspectors as well as nuclear material accountants and information management and reporting specialists—so a whole range of different specialists. Current estimates—I set this out in my letter—suggest that the ONR would require a team of 20 to 25 staff, which would include at least nine safeguards inspectors, with the precise number depending on the exact requirements of the domestic regime set out in regulations. I remind the Committee again that we have made the regulations available to the House, and I am sure that noble Lords are studying them in some detail.

The ONR already has 11 safeguards officers in post, who are all in training to become safeguards inspectors by 29 March 2019. It is my assessment, and that of my honourable and right honourable friends in the department who have specific responsibility for this as the Ministers responsible, that, based on current progress, the ONR will be in a position to deliver to international standards on withdrawal from Euratom.

However, the speed with which the ONR is able to move from international standards to a domestic nuclear safeguards regime that is precisely equivalent in coverage and effectiveness to Euratom standards obviously depends on a wide range of factors. In particular, timing will depend on negotiations with the EU and negotiations on future co-operation with Euratom and the level of its involvement in the United Kingdom’s safeguards. The ONR estimates that, to be able to deliver its functions—I emphasise its independence—to a standard equivalent in effectiveness and coverage to Euratom, it may require a team of around 30 to 35 staff, which would include around 20 safeguards inspectors.

The ONR is already—again, as I made clear in the letter—actively recruiting and interviewing further candidates to meet this level. I cannot give precise levels as to exactly where it is at this moment, but it is actively recruiting and interviewing. The first phase of recruitment last year was successful: four individuals were recruited and are currently in training to become safeguards inspectors. A further recruitment campaign is under way. Successful candidates will join the ONR’s training programme, and ONR assesses—again, this is its assessment—that it will take 12 to 18 months to upskill new recruits to inspector level.

I hope that the publication of preconsultation versions of draft regulations in January, which set out more detail on the proposed domestic safeguards regime, indicates our genuine intention to deliver standards that are broadly equivalent to the Euratom regime as quickly and effectively as possible. However, the important point to get over to the Committee—

[Lord Judd]

My Lords—

[Lord Henley]

Can I just complete a sentence before the noble Lord intervenes? The important point is that it will be able to deliver the standards that are broadly equivalent to the Euratom regime as quickly and effectively as possible. I give way now.

[Lord Judd]

I am very grateful. The Minister used the word “broadly”, which is very significant. Can he tell us a little more about what he means by that?

--- Later in debate ---

[Lord Henley]

As I think I made clear at Second Reading, I am not quite sure whether the noble Lord, Lord Judd, has fully grasped the difference between safeguarding and safety. On safeguarding, the important point is that we meet our commitments to the IEA—

[Noble Lords]

IAEA.

[Lord Henley]

I will try to get it right. We will meet those without any problem at all. Those are the same as the commitments that the United States and other weapon states—an expression that the noble Lord probably does not like—have to meet, and we will meet them. Euratom’s commitments are slightly different, and so that applies to ourselves and the French as the two weapon states within Euratom. They are marginally different. We will get to those in due course, but we will meet the appropriate standards under the IAEA by next year, just as we do now.

[Lord Judd]

Again, I am grateful to the Minister for giving way. Can he clarify one point? He said that he is not sure that I have grasped the difference between safety and safeguards. He is quite correct because I simply do not understand how there is a dividing line between the two. I just do not accept that that is the situation—the two are intimately related.

[Lord Henley]

My Lords, I could go back but I think that I would try the patience of the Committee if I repeated a great deal of what I said at Second Reading and at other points about safety. The ONR has been dealing with safety for many years and it will continue to do so. Safeguards are another matter. In effect, they relate to the transference of certain things, ensuring that they cannot be used for nuclear warheads or whatever. Safeguards are different from safety. This Bill relates to safeguards and that is what we are trying to get over to the noble Lord. We will meet our IAEA standards on safeguards under this Bill once we have the powers so to do.

I hope that that provides noble Lords—with the possible exception of the noble Lord, Lord Judd—with the appropriate assurances. I hope that the noble Lord, Lord Grantchester, will feel that the information I have provided is sufficient in stressing that we will have a domestic nuclear safeguards regime equivalent in effectiveness and coverage to that currently provided by Euratom. That is what the Bill is intended to do. We are leaving Euratom. We have to make sure that we have the appropriate safeguards regime in place, and that is what the Bill tries to do.

[Lord Rooker]

Perhaps I may come back on that point. We are in a very vulnerable position, are we not? As a country, we have not been in charge of safeguarding; Euratom has been doing that. It is quite clear that international staff, with free movement under Euratom, have been doing the work. We are hoping to create a cadre of inspectors who will upskill people from various offices, but I have no idea of the industry salaries and so on. We have recruited only four inspectors. Are they UK or EU citizens? I am curious and would like to know that. Are we applying any contractual arrangements to people once they have been upskilled?

Once they have been upskilled to carry out safeguarding, Euratom will be their world—not the UK. The career or job enhancement opportunities and so on will be marvellous for the individuals in question, but I am concerned about my country. Are we placing any restrictions on them? Are we going to say, “We’ll upskill you and get you trained but, by gum, you’ll have to work in the UK for five years”? I do not know whether that will be the case but if we do not do something like that, we will be laying ourselves open to the vagaries of the market. We are entering a completely new area here. We cannot recruit fast enough—we have only four inspectors so far. Upskilling these people places them in a very advantageous position. I am really supportive of that—I want them to be upskilled and better qualified, and to have the freedom to move to better jobs if they do not like what is on offer in the UK. Presumably they will not all be British. They might take advantage of getting skilled and then, because of how we have treated foreigners since the referendum, say, “Right, we’re off to the rest of Europe”. Therefore, are any restrictions being placed on upskilling and training these people?

[Lord Henley]

The noble Lord is enjoying himself, although I do not know why.

[Lord Rooker]

Answer the question.

[Lord Henley]

I am answering the question but the noble Lord is enjoying himself. The ONR is recruiting and will make sure that it has the right people to provide the appropriate safeguards regime on 29 March next year to meet IAEA standards. Obviously we are not going to impose restrictions on where employees go thereafter. Is this a new policy being developed by the party opposite, that once people are trained in any job, they cannot move on and have to stay? These people will be employed by the ONR, and it is then a matter for the ONR to make sure that they have an attractive career and wish to continue working for the ONR. I am sure they will find that it is an attractive career and will want to stay

I am equally sure that they will do the job very effectively and that the ONR will feel confident that, with its recruitment processes, it can provide the appropriate safeguarding regime to make sure that we meet IAEA standards by 29 March next year.

[Lord Teverson]

My Lords, I think it was the noble Lord, Lord Grantchester, who mentioned the requirement for information technology systems, which is always the other area that needs to be looked at. When we get to my amendment in the next Committee sitting, I will certainly come back on the points that the noble Lord, Lord Rooker, raised about churn, as that is important. However, are we also confident that we will have information technology systems in place? What nature will they take, in a very broad sense? Will they be Excel spreadsheets or something more involved?

--- Later in debate ---

[Lord Henley]

I know that Liberal Democrats live and die for Excel spreadsheets. They find them enormously exciting, although I do not understand that. However, the noble Lord makes a very good and serious point. This is not just about the appropriate individuals to be trained; it is also about equipment. Yes, again, the ONR is happy that it will have the appropriate equipment and IT systems in place for 29 March. The ONR has given a commitment that it will be ready to provide the right service, so that we can meet those IAEA commitments next year. It is very easy just to talk in shorthand about the number of people on the ground, but as the noble Lord, Lord Teverson, says, spreadsheets, which Liberals find very exciting, and other equipment are probably also involved. Yes, all of that will be ready—I can give those commitments.

[Lord Judd]

There is one other matter. Of course, one of the results of what has been in place, very successfully, under Euratom is the international nature of the inspection. We have to recognise that the implications of something going seriously wrong are not confined to British frontiers; there are implications for people—men, women and children—beyond our frontiers. How are we going to ensure that in the arrangements we make, we retain international confidence that we are taking, and are seen to be taking, that responsibility seriously, and are not judges in our own courts?

[Lord Henley]

The noble Lord talks about international obligations. The important thing to remember about the initials IAEA is that the first letter stands for “International”. It is an international body, we have been signed up to it since 1957 and we continue to be so. It will offer those guarantees.

[Lord Grantchester]

I hesitated to respond to the Minister because I was not quite sure what he was saying. Is he saying he accepts our amendment, because he seems to be saying that we will maintain our standards to the Euratom standards?

[Lord Henley]

As all noble Lords will know—particularly those who have been on the Front Bench in government from time immemorial—the lovely word “resist” appears at the top of the brief. No, I am not accepting the amendment. It does not add anything to the Bill. All I am doing is providing the appropriate commitment that we will meet the right standards at the right time.

[Lord Grantchester]

My Lords, I am still confused by the way the Minister goes from one stance to another, saying that he will meet these standards but somehow feels it is inappropriate to have that on the face of the Bill.

I am not satisfied with the Minister’s responses and I do not think the rest of the Committee is either. This is the key challenge to the Government—that they can and will do what they propose in order for there to be a credible nuclear industry in the UK, operating to Euratom standards. The noble Lord, Lord Fox, made a compelling remark earlier, saying that the Government have not appreciated the situation and undertaken a risk assessment of their handling of Euratom issues. On a corporate risk register—one axis being low and high impact, and the other axis being high and low probability—leaving Euratom must be placed at the worst quartile: high probability of an unsatisfactory outcome, coupled with high impact.

We will certainly be appreciating the Government’s response across all the Committee’s amendments, in order to determine the best framework to propose on Report. I beg leave to withdraw the amendment.

--- Later in debate ---

[Lord O'Neill of Clackmannan]

With the Liberals.

[Lord Henley]

We have had rather a lot of history lessons. I am grateful to the noble Lord, Lord O’Neill, for reminding us of the late Willie Ross. I remember his technique when in opposition of calling Divisions just for the sake of having one, so that he could go out to have a cigarette—but that was in another world and another time, and now we have to go further away to have a cigarette than is possible in the time it takes to have a Division.

The noble Lord also reminded me of the first ever committee I was on, many years ago. I remember with great pride when the Chief Whip approached me and asked me if I would go on the Joint Committee on Statutory Instruments. Many noble Lords will remember being asked to go on to such a committee, either in this place or the other place, and feeling that it was a great honour and how important it was. JCSI did a very good job and was very important, but not nearly as important—and I think we are all very grateful for it—as the Delegated Powers and Regulatory Reform Committee, which can look at the merits of the legislation. We are very grateful for its reports. We have taken note of exactly what it has said in relation to the amendment. We will look very carefully at those recommendations and I hope to be able to give a positive response in due course. I do not think that I can give that response at the moment because the words that are being queried—“civil activities”—have, as someone put it, their natural meaning, and we would accept that. But it might be that a change has to be made. I put it to the noble Lord, Lord Grantchester, that we will look very carefully at this matter and between now and Report we can have further discussions and see whether amendments are needed.

With that, I hope that the noble Lord will be prepared to withdraw his amendment. At that point, going back to the cricketing analogies that we had earlier, we might at this stage draw stumps.

[Lord Rooker]

I want to break the rules and come to the defence of the Box. It is quite unfair to attack the briefs that Ministers have. The briefs may be poor not because of those who prepared the brief but because of the policy behind it. We should not level an attack at the civil servants in the Box.

[Lord Henley]

I am very grateful to the noble Lord, Lord Rooker, for making that point. I followed the noble Lord into Defra some years ago. He and I know exactly what all those who have served us in the Civil Service do for us and how well they do it. If briefs ever fail, it is the failing of Ministers, and Ministers—including the noble Lord, Lord Rooker, and other noble Lords I see in this Chamber—know that it is our fault and we take responsibility for it. On this occasion, I think that everything we have said and done has been absolutely marvellous and wonderful and we will continue to argue our case.

May I now make my second attempt to draw stumps, if the noble Lord is prepared to withdraw his amendment?

[Lord Hunt of Kings Heath]

My Lords, it has been a long 24 hours for many of us, so I am delighted to say that is the nicest thing that the noble Lord has said to us. I take it that the Government will, in essence, be bringing an amendment back on Report. I am very grateful, and I beg leave to withdraw the amendment.

Nuclear Safeguards Bill

Lord Henley Excerpts

Committee: 2nd sitting (Hansard): House of Lords
Thursday 1st March 2018 Lords Chamber

[Lord Teverson]

My Lords, as we are in Committee, it may be helpful if I quote article 77 of the draft treaty published by the European Commission yesterday, which is specifically around nuclear safeguards. It states:

“The United Kingdom shall implement a safeguards regime applying a system offering equivalent effectiveness and coverage as that provided by the Community in the territory of the United Kingdom until the end of the transition period”.


That accepts that there is to be a transition period, as long as we are not in a no-deal situation. There is a transition period—there is no disagreement between us and the EU about that—but the EU expects that to be at Euratom standards. I cannot see that that can be any different if we remain within the acquis during that period, which I think both sides are agreed to anyway.

[The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Henley) (Con)]

My Lords, I start by offering my apologies to the noble Lord, Lord Grantchester, as he did not receive a copy of that letter. I will make sure that copies are made available. I thought that I had arranged for copies of all the letters—those I sent on the 20th, the one on the 28th to the noble Lord, Lord Carlile, and the one from my noble friend, I think again on the 28th, to the noble Lord, Lord Teverson—to be placed in the Library. After 40 years in this House, I still do not quite know exactly what that means—I think one can go along to the Library and get a copy, but I leave that to noble Lords. I will certainly make sure that copies are made available to all those who want them.

[Lord Grantchester]

One does not wander to the Library just in case there might be something there, so it would be useful.

[Lord Henley]

I fully accept that. I think the idea is to make it clear that they have been made public and are available. I will make sure copies are made available to noble Lords.

Before dealing with precise matters relating to the amendment, I shall say a word or two about the implementation period and transition because that was raised by my noble friends Lady Neville-Rolfe, who has great experience in this matter as a former Minister in the department that I have the honour to represent, my noble friend Lord Trenchard and the noble Lord, Lord Teverson, who was in receipt of a letter from my noble friend Lady Vere. The second paragraph of that letter sent on the 28th stated that details and terms of an implementation period have yet to be agreed, that it is assumed that the United Kingdom will no longer be a member state of the EU or the EEA during the implementation period, that the base case for the length of the period is around two years and that the UK will continue to mirror the EU acquis—the entire EU legal framework—during that period.

We also note that the Commission has published its draft of the withdrawal agreement. The noble Lord, Lord Teverson, referred to this. It is just a draft at the moment. The exact content of the United Kingdom’s withdrawal agreement from the EU will be a matter for negotiation, and we are working hard to deliver the best possible outcome for the UK while making good progress on negotiating our deep and special future partnership with the EU. I do not think I can take the noble Lord or the Committee any further on that matter at this stage.

Amendments 7 and 18 ask for much greater consultation to be set down in law. My noble friend Lady Neville-Rolfe was rather worried by the precedent, should it be enacted, that we make a Written Ministerial Statement at certain stages. I hope I can give the appropriate assurances about what we intend to do to keep Members of the Committee and the House fully informed about what we are doing over the course of the coming year.

First, I shall clarify my Second Reading response to a question from the noble Lord, Lord Hunt of Kings Heath, I think, about the potential cost to industry of the new regime. I referred only to the cost to the ONR of setting up the domestic regime. The department has already committed to allocate to the ONR the funding necessary to establish the new regime. In respect of ongoing funding—the matter which this amendment is aimed at addressing-–I can make a clear commitment now that a decision on cost recovery and charging arrangements will be subject to close engagement with industry and other key stakeholders, as well as public consultation.

We intend to publish a public consultation and an impact assessment on the regulations later this year. I repeat to the Committee that we have made those regulations available in draft already. It is estimated that the ongoing costs of operating a domestic safeguards regime—

[Lord Davies of Stamford (Lab)]

Can the noble Lord give an assurance to the Committee that the industry will not be penalised as a result of Brexit—that is to say that the contributions that will be required of it post Brexit to fund the new regulatory regime that he has been describing will not be greater than any costs that it currently incurs under the present Euratom regime?

[Lord Henley]

The noble Lord will obviously not expect me to give firm commitments of that sort in advance of any consultation. This is a matter for consultation, but we are talking about the need to make sure we have the appropriate safeguarding regime. We are already charging industry, as he puts it, for the cost of safety and other matters. As I said, I will not give any commitment of that sort because this is a matter for consultation, but I will say that the ongoing costs of operating a proper domestic safeguarding regime—I am not talking about safety or security, but purely about safeguarding—will be broadly in line with the current cost to Euratom of its safeguards activity in the United Kingdom. This is estimated to be about £9.5 million a year, as set out in the impact assessment for the Bill.

I turn to the outstanding issues raised in Amendment 7. As the Committee will be aware, the Bill already requires that before making regulations under new Section 76A of the Energy Act 2013, the Government must consult the ONR and any other persons the Secretary of State considers appropriate. This is consistent with the approach for making nuclear regulations under Section 74 of the 2013 Act, which the noble Baroness will be familiar with. The amendment seeks to include a duty to consult both the IAEA and the National Audit Office. I agree wholeheartedly with the importance of consultation on the new domestic regime—I stressed that at Second Reading. Consultation is of vital importance in the development of any new regulatory system and even more so with a subject of such national importance.

As I have already made clear, we have published a pre-consultation draft of the regulations and have already begun early engagement with the industry on this. Prior to this, and since the referendum, the Government have had detailed and ongoing discussions with the nuclear industry and other interested parties. We have made it clear that the development of these draft regulations establishing the new regime will be subject to detailed consultation with both the regulator and industry, with which we have already been engaging.

The Committee will be aware that it is not standard practice for the Government to consult international bodies such as the IAEA on matters of detailed domestic legislation, and for good reason. The IAEA’s focus and expertise in respect of the United Kingdom’s safeguards lies with the voluntary international agreements rather than with the domestic legislation underpinning the domestic regime. The amendment also proposes including the NAO. I believe the NAO plays an incredibly important role, but I do not think that mandatory consultation, as proposed by this amendment, is appropriate, as it already has an established process for scrutinising public spending for Parliament.

We look forward to continuing to work closely with industry and other stakeholders to take the development of the new domestic regime forward. I particularly welcome, at this stage, any comments noble Lords make on the draft regulations, which were published in January and which I imagine all those interested in the Bill have been studying with great care ever since.

Amendment 7 would also require the Secretary of State to lay before Parliament a Written Statement that the ONR has the capacity and independence to implement a new safeguards regime. Again, the Committee will be aware that the Government have already committed to provide Parliament with quarterly reports on progress from across the Euratom programme. They will include information on ONR capacity and readiness.

We accept the immediate importance of this issue; that is why I wrote to all Peers on 20 February. I hope that the noble Lord, Lord Grantchester, received it and I think others did as well. I wrote twice on that day to all noble Lords and I have copies of those letters, but I do not think it is necessary to refer to them. At the same time, a bit later I also wrote to the noble Lord, Lord Carlile. Again, I have that letter available here and will make it available to other noble Lords if—

[Lord Carlile of Berriew]

In the Library?

[Lord Henley]

I will make it available in the Library, as well as to other noble Lords who want copies of it.

To summarise briefly what I tried to set out in that letter, and for the benefit of the Committee, we are working closely with the ONR to ensure that it will be in a position to regulate the new safeguards regime. The ONR is in the process of expanding its safeguards function by recruiting and training additional inspectors, building additional institutional capacity and developing the necessary IT systems. I want to stress—having made a visit to Sellafield, which has two of the three sites in this country where nuclear safeguarding takes place, with a senior representative from the ONR and others—that on the information given to me it is my assessment, based on current progress, that the ONR will be in a position to deliver to the international standards as required by the IAEA on withdrawal from Euratom in a year’s time, in March 2019.

[Lord Grantchester]

At this stage, I intervene only to ask: is the Minister aware of the full costs of all the measures to be implemented to enable the ONR to go ahead with this regime, or is that work still in progress?

[Lord Henley]

As I said earlier, we think that the costs will be broadly in line with the current costs of what we pay to Euratom, which is £9.5 million a year. But there may be certain funds to pay for the changeover, which again I dealt with at Second Reading by saying that money would be made available for it. Ongoing costs will be broadly in line with where we are, and that will be satisfactory.

[Lord Grantchester]

I apologise for coming back to the Minister but, as I understand it, we are talking about two items. One is the ongoing cost of £9.5 million, which I quite agree is defined already by the EU’s contributions to us for the Euratom programme. I meant the full cost of the set-up, which initially had a £2.275 million contribution from the contingencies fund. What does he think the full cost will be, and is he happy and confident that it will be kept within that contingency fund? Has he now completed the inventory and can he update us on what the full cost may be of implementing all the measures necessary?

[Lord Henley]

I think I answered that question at Second Reading and gave a figure to the noble Lord. Rather than trying to guess or remember what I said on that occasion, I will write to him. But I am perfectly happy that we have made that commitment. There will be sufficient funds and then there will be ongoing costs—the noble Lord is right to distinguish between the two—and again, we are happy about that.

[Lord Fox]

When the Minister writes that letter, and assuming we all get it, can he please include some indication of the Euratom assets that will be assumed by the new organisation and some estimate of the liability that comes with those assets?

[Lord Henley]

Obviously the noble Lord is right that assets belonging to Euratom are in there. I do not think I am giving away any secrets if I say that on my visit I saw physical things that were Euratom assets; there will also be software and other things. I am sure that deals will be done as part of the negotiations, and some of those will be transferred over. I do not think I can go any further at the Dispatch Box and I would not want to, but if there is anything more that I can say in a letter then I shall. I will make sure that my letter goes to all noble Lords by whatever means in this inclement weather—we will get it to the noble Lord—and place copies in the Library, which is where people like to find them.

[Baroness Neville-Rolfe]

Email is also very useful these days.

[Lord Henley]

My Lords, we have discovered email. I can use all possible methods.

I have given the assurance that I will ensure that noble Lords are kept informed. As I think I have made clear, I do not think the amendments are necessary or, for that matter, particularly helpful, and I hope the noble Lord will accept that we will do our bit to keep all noble Lords appropriately informed of these matters and will make the precise Written Statements that are necessary at the appropriate moment. With that, I hope the noble Baroness, Lady Featherstone, will feel able to withdraw her amendment.

[Baroness Featherstone]

Having listened to the debate across the House, I think it appropriate that I ponder what the Minister has said. For the moment, I am happy to beg leave to withdraw the amendment.

--- Later in debate ---

[Lord Henley]

My Lords, I accept that this is a probing amendment and that the noble Lord wanted to go wider than the Bill itself and beyond safeguarding to problems facing the entire nuclear industry, and in particular the need for skilled workers. The noble Lords, Lord Hunt of Kings Heath and Lord Teverson, are worried about whether I and the department have sufficient backbone to take on the Home Office and others in these matters. I give him an assurance that we accept the importance of getting the right skilled workers in, just as we always have. I understand the importance of that because on my recent visit to Sellafield I saw some of the construction work and how very specialist it is. It is not just the skilled workers but the type of concrete that has to be used and all such matters—other noble Lords will know this far better than me. More generally on that point, BEIS knows that there are shortages in certain areas and will do its bit within government to make sure that the Home Office understands the importance of our being able to attract the right staff more generally.

On the question of having the right staff in the very specialised field of nuclear safeguarding, the amendment attempts to ensure freedom of employment for specialists employed in that area. That is obviously a matter of particular interest in the light of the Government’s preparations for establishing the domestic nuclear safeguards regime which, among other important work, means securing high-quality safeguards staff in the right quantity for the ONR.

We are working very closely with the ONR to ensure that it is in a position to regulate the UK’s new civil nuclear safeguards regime that will follow withdrawal from Euratom. That includes, among other preparations, recruiting and training additional inspectors and building additional institutional capacity. I have already outlined the ONR’s staffing numbers and estimates. I referred to that in the letters sent on 20 February—so all noble Lords should have had copies of those, even the noble Lord, Lord Grantchester.

Given the importance of attracting the right staff to work in this specialist field, the Government are committed to ensuring that the United Kingdom nuclear industry has the required skilled personnel to deliver robust regulatory regimes. The Prime Minister has been clear that we will always welcome those with the skills and the expertise that we need, whether they come from Europe or the rest of the world—as we do now. We will also ensure—if the noble Lord will bear with me—that we manage our immigration system in the way that best serves the national interest. That is why we will be using our best influence with the Home Office—and I am sure that the Home Office in due course will be able to respond. I give way now to the noble Lord.

[Lord Fox]

Picking on the language, the Minister talked a number of times about skilled people. The noble Lord, Lord Hunt, made the point that the definition of “skilled people” is the problem. Will the Minister acknowledge that issue and carry that point in the discussions he is having with other agencies?

[Lord Henley]

As I said, we are in discussions with the ONR in relation to the Bill to make sure that it can get people with the appropriate very specialist skills that we need for safeguarding. That is why we are going to have the right regime in place by next year.

The noble Lord then asked me to go further on the more general point—it might be construction for the nuclear industry or a whole host of other things. Yes, BEIS will continue to operate as it always does and to offer help and guidance to the Home Office as it develops policy in this field.

[Lord Fox]

For information, some of the researchers who work in the nuclear fusion project, for example, are paid below the threshold that gives them the privilege to come into this country. We are not just talking about steel fixers but about quite serious researchers who, because they have taken an academic career, are not paid above the threshold. So it is a very serious issue.

[Lord Henley]

I am fully aware of the concerns of the noble Lord and of the industry. Obviously it is a matter for the Home Office to develop these policies, and I am very grateful that a Home Office Minister—just by chance—happens to be sitting near me; she will listen to this and take it back to her colleagues. I repeat that we are satisfied that we can deal with safeguarding. Our concerns, the noble Lord’s concerns and other concerns will be dealt with. Proposals for a future immigration system will be set out shortly. That is something that my right honourable friend the Secretary of State for Business, Energy and Industrial Strategy will play his part in.

The noble Lord said that his amendment was a probing one. I hope that I have given the appropriate assurances for him to withdraw it.

[Lord Teverson]

I thank the Minister for his response. No doubt this debate will continue when we debate the Brexit and energy security report on the Floor of the House. I will just say—to all Ministers who are present—that the whole of history tells me that this is going to be a very difficult ask. It seems obvious, in terms of getting it right for the nation, that it ought to happen, but I suspect that it will be a lot more difficult than perhaps the Minister hopes. I will reflect on the answer and see whether there is anything more exacting we can say on Report—but at this stage I beg leave to withdraw.

[Lord Teverson]

I thank the noble Lord for his contribution. He is absolutely right. Experts are needed not only for decommissioning but for keeping going the existing fleet of nuclear power stations, which provide some 20% of low-carbon energy to our energy system at the moment. We also need nuclear co-operation agreements so that we have not just people but spare parts and everything else for this sector. I can see that the Minister wishes to intervene.

[Lord Henley]

I just want to interrupt the noble Lord to offer him one further statistic to indicate how long this will continue. Again during my trip to Sellafield, I was reminded that decommissioning there will continue well into the next century—in other words, the grandfathers of the people who will be working on it then have not yet been born.

[Lord Teverson]

The whole area of the financing and decommissioning of Sellafield is the subject of another debate—and a contentious one—which we will not get into. At this stage, I beg leave to withdraw my amendment.

--- Later in debate ---

[Lord Henley]

My Lords, as the noble Lord, Lord Hunt, knows, I am always sympathetic, particularly to his amendments. On this occasion, what he wants are some reassurances, as does the noble Baroness, Lady Featherstone, about the genuine independence of the ONR and, importantly, that the IAEA sees it as an independent body and accepts it as such. I hope that, quite briefly, I will be able to provide those reassurances.

We have international obligations to ensure that the regulator is effectively independent. The provisions of the 2013 Act, which created the ONR and which I am sure the noble Lord knows well, were specifically designed to ensure that the ONR had appropriate independence. Those measures to guarantee its independence include providing it with independent public corporation status; significant restrictions on the Government’s ability to direct the ONR in the exercise of its functions; constraints on the conditions for dismissing senior ONR members; and transparency obligations that act as a safeguard against powers—which are already constrained—being used in an improper manner.

Noble Lords will be aware that as a public corporation the ONR is able to set its own employment terms and conditions, affording it greater freedom and flexibility than if it were a non-ministerial government department. If it were such a department, ONR employees would be civil servants, the organisation would be part of government and the level of its independence would arguably be more limited than it is now. The noble Lord, however, obviously takes another view.

In the factsheet we published on 19 February, we made it clear that the ONR is independent from government in its regulatory functions and decisions. The most important point to stress—this deals with the entire matter and goes to the core of the amendment—is that the International Atomic Energy Agency reported in 2013 that the Energy Act 2013 would,

“provide de jure independence, which will reinforce the de facto independence that ONR (and its predecessors) have enjoyed for many years”.

It is important that we listen to what the IAEA said; I cannot stress how important this is. The amendment the Committee is considering attempts to unpick the arrangements that the IAEA—the international body responsible for nuclear safeguards worldwide—considers provide the independence necessary for an effective regulatory safeguarding regime.

Having established that the ONR is independent, I would also like to note that, as well as fulfilling international obligations and best practice, this independence is crucial for the industry. It is important that the industry has recourse to appeal ONR decisions. Attempting to fundamentally change the ONR’s relationship with the Government by explicitly providing that the ONR acts on behalf of the Crown—the effect of the amendment—risks moving away from an approach deemed appropriate by the IAEA and would undermine the industry’s ability to hold the regulator to account.

I do not think I need to go any further than that. In the interests of time, it is probably best that I end there and ask the noble Lord whether he wants at this stage to withdraw his amendment. I hope that I have given him the appropriate guarantees.

[Lord Hunt of Kings Heath]

That has been a very helpful response and I am grateful to the Minister. However, I disagree with him: it is clear from the Cabinet Office guidance that a non-ministerial government department has more independence, whatever the status of officials. But he has given me considerable reassurance, for which I am most grateful, and I beg leave to withdraw my amendment.

Nuclear Safeguards Bill

Lord Henley Excerpts

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

Moved by

[Lord Henley]

1: Clause 1, page 2, leave out lines 18 and 19

[The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Henley)]

My Lords, I shall speak also to Amendments 2 and 12.The amendments place the definition of “civil activities” in the Bill. The House will be aware that the term “civil activities” forms a key part of the main regulation-making power set out in new Section 76A(1)(a). Regulations can be made for the purpose of ensuring that qualifying nuclear materials, facilities or equipment are available only for use for civil activities, so the meaning of “civil activities” is one of the elements that determine the scope of the safeguards regime that can be made through those regulations.

I am grateful to the Delegated Powers and Regulatory Reform Committee for its recommendation on this matter: that a definition of “civil activities” should be, so far as is possible, placed in the Bill, supplemented by a power where necessary to develop its meaning in regulations. Having considered the committee’s recommendation on this matter, I am pleased to have been able to table this government amendment, which places the definition of “civil activities” in the Bill. This definition takes into account the continuing work on the draft regulations which will underpin the Bill, on which we are intending to consult by June.

It is important to emphasise again the fundamentals of what safeguards actually are and what we are hoping to achieve with our new domestic regime. Safeguards are nuclear non-proliferation reporting and verification processes by which states demonstrate to the international community that civil nuclear material is not diverted into military or weapons programmes. Nuclear safeguards measures include: reporting on civil nuclear material holdings and development plans; inspections of nuclear facilities by international inspectors; and monitoring, including by cameras in selected facilities.

As the House will now be well aware, nuclear safeguards are distinct from nuclear safety, which regards the prevention of nuclear accidents, and nuclear security, which is physical protection measures. Nuclear safety and nuclear security are the subject of separate regulatory regimes operated by the ONR.

The new domestic civil nuclear safeguards regime which we are developing is designed to ensure that we can robustly demonstrate to the international community that civil nuclear material is not being diverted into military or weapons programmes. I hope that the House will therefore agree that the proposed definition of “civil activities”, which has the concept of “peaceful purposes” at its core, suitably recognises this international commitment while including helpful detail on the types of activities covered by safeguards.

Although the committee accepted that it might still be necessary to supplement this definition with a power to embellish its meaning in regulations, I have not found that to be necessary. The amendment removes the existing power to specify in regulations activities that are or are not to be treated as “civil activities” and replaces it with a definition on the face of the Bill without creating another power. It therefore reduces the number of powers created by the Bill.

I hope that the House will agree that the amendments satisfactorily address the recommendations of the Delegated Powers and Regulatory Reform Committee. I commend them to the House and beg to move.

[Lord Hutton of Furness (Lab)]

My Lords, I welcome the tabling by the Minister of this amendment. It is always a good idea to see on the face of legislation the definition of terms used in it. It is helpful.

I quite understand why the Minister would want to confine the definition of “civil activities” to things carried on for peaceful purposes; for example, in relation to the production, processing and storage of nuclear material—it is within the safeguarding arrangements and makes sense; the same is true for the purposes of research and development. What I do not understand is why he has felt it necessary to use the words,

“carried on for peaceful purposes”,

in the context of generation of electricity, because I am not aware that the generation of electricity is ever for anything other than peaceful purposes.

[Lord Hunt of Kings Heath (Lab)]

My Lords, I will enjoy the Minister’s response to my noble friend’s question. I welcome the amendments brought by the Minister; they follow our discussion in Committee and the recommendation of the Delegated Powers Committee. However, on his eloquent defence of our having this Bill before us, the Bill would be quite unnecessary if the Government were to reverse their decision to leave Euratom, which remains for many of us unfathomable and unjustified.

[Lord Henley]

On the last point of the noble Lord, Lord Hunt, it is not necessary to rehearse all the arguments that we have been through on this matter because the decision has been made to leave Euratom. As he knows, that was dealt with in the transition Bill, which received a large majority in another place and is now an Act. It is a done deal. That is where we are and we have legislated on that issue.

On the more detailed technical point raised by the noble Lord, Lord Hutton, about electricity generation carried out for non-peaceful purposes, I have not got a clue and will take advice on the matter. I am assured by those drafting the Bill that this was the appropriate and proper way to deal with this matter. We wanted to ensure that we did not need to keep a residual power so that we could come back to this and make further amendments. That would have upset the noble Lord, Lord Hunt, who would have accused me of retaining a Henry VIII power to seek further amendments to the primary legislation. By tabling this amendment and drafting it in that way, I have been able to make sure that there is not even that residual power. That is the proper way to go forward.

Having said that, I will write to the noble Lord, Lord Hutton, to give him an idea about electricity generation that is carried on for non-peaceful purposes, if such an answer can be found. I will make that information available to other noble Lords as they so wish.

Amendment 1 agreed.

Moved by

[Lord Henley]

2: Clause 1, page 2, line 23, at end insert—
““civil activities” means—(a) production, processing or storage activities which are carried on for peaceful purposes;(b) electricity generation carried on for peaceful purposes;(c) decommissioning;(d) research and development carried on for peaceful purposes;(e) any other activity carried on for peaceful purposes;”

--- Later in debate ---

Many noble Lords have spoken up about the risks that the Government are taking. We will support this amendment in a Division and urge Members of the House to undertake the only responsible action available to maintain the necessary and proper safeguards—that is, by voting in favour of the amendment.

[Lord Henley]

My Lords, I hope that I can persuade the House that it could be irresponsible and would create confusion and doubt to support this amendment in a Division, as the noble Lord, Lord Grantchester, wishes to do.

The amendment seeks to require Ministers to request, as part of the negotiations with the EU, that the United Kingdom does not leave the Euratom treaty if it does not have certain agreements or arrangements in place by 1 March next year—that is, four weeks before exit day. Those agreements or arrangements are set out briefly in paragraphs (a), (b) and (c) of new subsection (3) proposed in the amendment, and I will deal with those in due course.

The noble Lord, Lord Grantchester, also made it clear that the amendment is not about stopping us leaving Euratom. He might give us that assurance but, listening to some of the other speeches, I am not sure that that is necessarily the wish of others, who have made it clear that they would like us to stay in Euratom—a point made in earlier interventions by the noble Lord, Lord Hutton, and others.

At this stage, it is important to remind the House that when my right honourable friend the Prime Minister gave notice last year of our intention to leave the European Union, she also commenced the process for leaving Euratom. The power to make that notification has already been debated at considerable length in both Houses of Parliament and authorised by the European Union (Notification of Withdrawal) Act 2017. That notification has been accepted by the European Union. The United Kingdom will therefore withdraw from Euratom at the same time as withdrawing from the European Union. That, as I put it to the noble Lord, Lord Hutton, earlier, is a done deal.

I commend all noble Lords’ commitment to ensuring that all the necessary measures are in place so that the United Kingdom can operate as an independent and responsible nuclear state upon withdrawal from Euratom. It is essential that the civil nuclear industry is not adversely affected by the UK’s withdrawal from either the EU or Euratom and that it can continue to operate with certainty. I underline the word “certainty”. That is our top priority and the reason for the Bill. It is why we are bringing forward all the regulations that sit beneath it—of which noble Lords will have seen draft versions—and the reason for the work the ONR is doing to put in place a regime, and that my department is doing to secure the agreements we need with the IAEA and key international partners. I will reiterate this point until the House understands the extent to which the UK stands ready to operate as an independent and responsible nuclear state from day one of exit.

The first quarterly update to Parliament, which will be available before the Easter break, will demonstrate our significant progress on this front, and I will share some of the details with the House shortly. Before I do so, however, I will address the crucial issue of the timing of our withdrawal from the Euratom treaty and the timings provided for in this amendment.

The amendment’s proposed suspension period for Euratom withdrawal is in conflict with the transition period already agreed by the UK and the European Union. This has been referred to by several noble Lords, including the noble Lord, Lord Teverson, and my noble friend Lord Trenchard. The agreement is for a transition period running from 30 March 2019 to 31 December 2020 and will include all of the Euratom acquis. To be clear, the agreement reached in Brussels on 19 March is that the transition period will include the continued delivery of the Euratom safeguards regime in the UK, and the UK will continue to be covered by Euratom-level agreements with third countries during that period. Clearly, this will take effect after the UK has left Euratom, whereas this amendment refers to a period prior to the implementation of Euratom withdrawal—one of the reasons why it is not satisfactory. The amendment is, therefore, at odds with national government policy and as such mandates a request that we know is futile.

In terms of the overall principle of the amendment, I must be clear that an attempt to mandate a particular stance in negotiations, in the way that this amendment seeks to do, does not belong in primary legislation. I cannot, therefore, accept this amendment but I understand that the House will want reassurances that we have in place the international agreements that we need on safeguards.

I turn to progress on securing those new bilateral safeguard agreements. We have made very good progress in negotiating these with the IAEA, which I will simply refer to as “the agency”—I have problems with the initials, as noble Lords may have noticed. Both the UK and the agency are clear that the new agreements should follow the same principles and scope as the current trilateral agreements.

The amendment also addresses relevant international agreements with other nations—the NCAs. To be clear, the United Kingdom is not a party to nuclear co-operation agreements concluded by Euratom with other nations. These are concluded by Euratom on behalf of the member states. I understand, however, that the intention of this amendment is to cover agreements Euratom currently has in place with third countries.

As the House will be aware, the Government have prioritised putting in place nuclear co-operation agreements with those nations which have a legal or policy requirement for them to be in place as a prerequisite for civil nuclear trade. We are on track to conclude, and to secure third-country and UK ratification of, all such agreements that are essential to ensure a smooth withdrawal from Euratom in advance of 2019, in particular those with the US, Canada, Australia and Japan. We have held positive and constructive discussions with each of these four countries and remain on track to ensure that these agreements will be in place in time.

[Lord Hutton of Furness]

Have Her Majesty’s Government received any assurance from the Government of the United States that this legislation will be in place, having passed through both Houses of Congress, in time to ensure that there is no break in trade? Has he received that assurance?

[Lord Henley]

My Lords, I am not aware of any such assurances. It is important that we get this legislation in place in good time. That is why I hope that we will complete Report today and Third Reading next week, and the Bill will receive Royal Assent some time after the Easter break. I do not know what is happening in the United States but I can assure the noble Lord that negotiations continue. We believe that we are on track to achieving the NCAs which are necessary. As I said, the important NCAs that we need are with the US, Canada, Australia and Japan. The amendment seeks relevant international agreements with those nations with which we have exercised rights within the last three years, which would include others that are not relevant. The important ones are those four—the ones that we trade with—and I give an assurance that we are on track. We have held positive and constructive discussions with each of these four countries and remain on track that those agreements will be in place in time.

All sides recognise the mutual interest in having these agreements in place to replace the Euratom agreements on which the UK currently relies. As I have said, discussions have been constructive; the substance of the new agreements is planned to follow very closely what is in the existing agreements. I am confident that sufficient progress is being made in this area, including on draft texts and ensuring that respective ratification processes and timetables have been taken into account in the planning.

Our substantial progress in international negotiations, coupled with our swift action to establish a legislative and regulatory framework for a domestic safeguards regime, not least via this Bill, means that we will be ready for exiting the Euratom treaty no matter the outcome of wider government negotiations on Brexit. The core aspects of this element of Amendment 3 will therefore already be met, and are therefore unnecessary.

Crucially, I must also bring the House’s attention to the fact that the effect of this amendment would extend to covering a number of additional agreements which, de facto, are not required to ensure a smooth withdrawal from Euratom. Introducing such requirements into the Bill will unnecessarily create huge risks and uncertainties to the UK’s ability to operate as an independent nuclear state from March 2019. I refer the noble Lord, Lord Hutton, particularly to proposed new subsection (3)(c) of the amendment, which could cover NCAs that Euratom has concluded with Uzbekistan, Kazakhstan, Argentina, and Ukraine. As I have previously set out, none of these countries has a legal or policy requirement for an NCA to be in place to facilitate nuclear trade. Requiring us to put agreements in place with each of these countries before we withdraw from Euratom would be a fruitless exercise which could jeopardise our work to establish a civil nuclear safeguards regime for the UK with all the essential agreements in place.

Further, proposed new subsection (3)(a) refers to an agreement between the UK and the agency to recognise the Office for Nuclear Regulation as the approved UK safeguards authority. I would like to make it clear that the agency’s focus in respect of the UK’s safeguards lies with the voluntary offer agreement and additional protocol, rather than the domestic legislation underpinning the domestic regime, or the UK’s arrangements for fulfilling its commitments. It is the Government—not the ONR—who enter into these agreements, and therefore the Government who must uphold these commitments, regardless of whether or not we choose to delegate obligations to an independent domestic regulator. The additional agreement referred to in Amendment 3 as distinct from the voluntary offer agreement is therefore unnecessary, impractical, and in no way required for a smooth withdrawal from Euratom.

As I and ministerial colleagues have emphasised throughout the passage of this Bill—this has been echoed by all those taking part in this and earlier debates—certainty for the industry is essential. Creating a situation where we are compelled to secure agreements—

[Lord Warner]

I am sorry to interrupt the Minister as he comes to his peroration. Will he answer the question asked by the noble Lord, Lord Hutton, in more detail? Can he give a categorical assurance to this House that there is no risk of Sizewell B closing down as a result of the Government’s failure to put in place all the things that he assured us of by 29 March next year? As he will know, it is of a US design and relies on imported spare parts and maintenance arrangements, and generates about 8% to 10% of the UK’s electricity.

[Lord Henley]

The noble Lord is asking whether that NCA with the United States will be completed. I have given all the assurances I can that it will be and I cannot go any further than what I said in response to the noble Lord, Lord Hutton. With that in mind, what I was trying to make quite clear in what the noble Lord, Lord Warner, described as my peroration was the need for certainty for the industry, and this amendment would remove that certainty. The amendment would create a situation where we are compelled to secure agreements that we do not need and it runs counter to what the Government are doing: creating certainty. Even if this amendment were technically correct, its impact would be to introduce further uncertainty and potential disruption to an industry by casting doubt over establishing the domestic safeguards regime in the long term. I do not believe that can be the intention of the noble Lords who tabled it.

I believe we are on track to provide continuity and that this amendment is not only unnecessary but exacerbates the risks that it seeks to remove. I hope with the assurances I have given, and with the explanation of the weaknesses in the amendment, that the noble Lord will withdraw it.

[Lord Broers]

My Lords, I very much appreciate what the Minister said with respect to the progress the Government are making to seek these agreements—it is essential that we get agreements with our major partners. I do not feel that the amendment, as it is, will put us in great danger by going beyond our major partners, but perhaps such adjustments could be made in the other place.

I do feel, however, that I have heard too many assurances that have not been fulfilled. In a case of such great importance, this amendment would secure what may be relatively straightforward, as the Minister said. We are well on the way to gaining most of these agreements already so it should not be too burdensome, but I wish to test the opinion of the House.

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Moved by

[Lord Henley]

6: After Clause 2, insert the following new Clause—
“Report on nuclear safeguards
(1) The Secretary of State must, in respect of each reporting period, prepare a report containing information about nuclear safeguards.(2) Information about nuclear safeguards includes information about—(a) international arrangements relating to nuclear safeguards to which the United Kingdom is (or is proposed to be) a party, and(b) the establishment in the United Kingdom of arrangements relating to nuclear safeguards.(3) A report under this section must be laid before Parliament after the end of the reporting period to which it relates.(4) There are four successive reporting periods, each of which is a period of 3 months.(5) The first reporting period is the period of 3 months beginning with the day on which this Act is passed.”

[Lord Henley]

My Lords, in moving Amendment 6 I shall speak also to my Amendment 10. This group includes Amendments 7 and 9, of which Amendment 7 is an amendment to my Amendment 6. Therefore, I take it that after I have spoken the noble Lord, Lord Hunt, will move his Amendment 7, and we can then debate the general issues. At this stage I shall speak to Amendment 6, and I shall respond to the noble Lord’s words on Amendments 7 and 9 in due course.

We all agree about the importance of ensuring that the industry can continue to flourish in trade, regulation and innovative nuclear research, no matter what the outcome of negotiations with the European Union or the final terms of our withdrawal from the EU and Euratom. Whatever the outcome and terms, we obviously want to see this great industry continue to flourish. We have made substantial progress in ensuring that the United Kingdom can operate as an independent and responsible nuclear state from day one, and we are committed to being transparent to Parliament about our work in this area. We have taken seriously the requests from Members of both Houses, across all parties, for regular, detailed updates about nuclear safeguarding arrangements in this country.

I agree that it is vital that Parliament is able to assure itself that the Government are taking effective action in relation to nuclear safeguards. In order to promote a transparent system of regular information on progress, my right honourable friend the Secretary of State for Business, Energy and Industrial Strategy committed to provide quarterly updates on overall progress on Euratom negotiations, going further than the proposed amendments at the time. The House will be aware that we plan to publish the first such update at the end of this month. This is even sooner than originally envisaged, coming three months since the publication of our January statement. As the end of the three months would fall during the Easter Recess, a decision was made to bring forward the publication of the first update so that it will be laid before Parliament rises.

Further updates will be made available every three months, with the next one scheduled for June 2018. I listened very carefully in Committee and I understand that noble Lords across the House would like something more than hopeful reassurances; for that reason Amendments 6 and 10 would place a statutory duty on the Secretary of State to provide quarterly reports on nuclear safeguards, covering both domestic and international matters, for the first year after the Bill receives Royal Assent. We will come on to the other amendments but I hope that our Amendments 6 and 10, as well as the current commitment under the Written Ministerial Statement of 11 January to report on wider matters relating to our withdrawal from Euratom, demonstrate our continuing commitment to provide information and clarity to Parliament and provide sufficient reassurances to noble Lords. I will listen very carefully to what the noble Lord says about his Amendments 7 and 9, in his name and those of a slightly varying list of supporters, and deal with them at the end of the debate. In the meantime, I beg to move.

Amendment 7 (to Amendment 6)

Moved by

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[Lord Broers]

My Lords, I will make some brief remarks in answer to the noble Viscount, Lord Trenchard. The research we are talking about here is not necessarily just in fusion—it includes fusion, but that is a great big project—but in areas that are ancillary to a certain extent but terribly important. Research is going on everywhere into radioactive waste disposal, but we happen to lead that. I do not think that this defeats the noble Viscount’s ambition—which is my ambition—that our own industry does a lot and gains a lot from that. It also gains a lot from being accepted by the community, so that when our advances come up, others will use what we did. The same is true of radiological protection, which is always a problem with workers around nuclear plants. So it is not just the new reactors, although the one gap in our knowledge is what is happening to the new generation fission reactors beyond the EPRs that people are working on. We really need international collaboration.

With respect to our own ambitions, I entirely support the noble Viscount in terms of SMRs. We are dying to get going—to be specific Rolls-Royce is dying to get going—on SMRs. In fact, Rolls-Royce tells us they are spending £1 million a month keeping that programme alive and waiting for the Government to make a decision on the competition which I hope will come.

Also, in fusion, there is Tokamak Energy. This is a very ambitious small company which feels it can contain fusion in a spherical tokamak, which is a fascinating thing. I should love to spend a lot of time talking about it. It is a very clever and effective way to up the efficiency of the use of the magnetic field to confine the plasma. So there is more to this research than just a few of the most obvious things. I think that is greatly in support of Amendment 7. I also support Amendment 6. I agree with the noble Lords, Lord Fox and Lord Hunt, who mentioned this. I think the independent review is designed to help the Government and not be a hindrance.

[Lord Henley]

My Lords, I want to begin by adding to something that the noble Lord, Lord Fox, said. He said that I repeatedly say, “I believe, I believe”, and that the House has to take it on trust. I hope this goes beyond me and officials within the department. We have seen what is happening when it comes to nuclear safeguards—

[Lord Fox]

I should say that was not intended in any way to impugn the noble Lord’s integrity in his answers.

[Lord Henley]

I was not suggesting that the noble Lord was doing that in any way whatsoever.

Since Second Reading, I have visited Sellafield—well, obviously I have visited it on occasions in the past because it is in my home county, but I visited it again—just to see what nuclear safeguarding amounts to. After all, Sellafield contains two of the three sites that will be relevant in terms of nuclear safeguarding. I cannot say that a one-day visit has turned me into an expert in any way. I would not want to claim that, but I can say that I can go beyond, “I believe”, and say “I have seen”.

[Noble Lords]

Oh!

[Lord Henley]

I am amusing the clerical members of the Cross Benches and I will try to restrain from doing so. Perhaps they thought I was making some sort of evangelical speech.

Let me start by dealing with the two amendments. While expressing my deep sympathy for them, I do not think they are necessary, but I want to give some indication as to how importantly we take them. I am grateful to various noble Lords who welcomed the original amendment, which is government Amendment 6.

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[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.

[Lord Fox]

Can the Minister confirm that the issues rehearsed in this debate have been presented by DBEIS to the Home Office and the people drawing up these Immigration Rules?

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[Lord Henley]

As I remember, the last time we debated this, by chance—I may be misremembering—a Home Office Minister was sitting next to me. I can confirm, however, that the Home Office is fully aware of the concerns expressed in debates of this sort, and we will make sure that it continues to be so. It is important to us that we continue to—as I put it—access the best talent. As the noble Lord will be aware, we have already doubled the number of available visas in the tier 1 exceptional talent review, and will be looking at changing Immigration Rules to enable world- leading scientists and researchers under the tier 1 route to apply for settlement after three years and to make it quicker for highly skilled students to apply for work in the United Kingdom after finishing a degree. We are, therefore, relaxing the labour market tests where appropriate.

The crux of this amendment, which relates to safeguarding staff—the Bill has been drafted in that way and so the amendment must be too—attempts to ensure the freedom of employment of specialists employed in that field. This is clearly a matter of particular interest in the light of the Government’s preparations for establishing a domestic nuclear safeguards regime, which, among other important work, means securing the right quality and quantity of appropriate safeguarding staff in the Office for Nuclear Regulation. Given the importance of attracting the right staff to work in this specialist field, the Government are committed to ensuring that the ONR has the right personnel. I can give the House a bit of information: in the most recent recruitment round for two further posts in this field there were 112 applicants for the ONR to look at. We will continue to work with the ONR to ensure that it has the right staff to regulate the UK’s new civil nuclear safeguards regime. Those figures show that there is no shortage, certainly in the world of recruiting and training the appropriate inspectors and building additional institutional capacity.

The noble Lord will not be surprised if I do not go into this, because he will then ask for further details. If I give him an assurance that the amendment is possibly itself defective and not suitable for inclusion, and he accepts that in spirit there is no need for it—since the Government are committed to ensuring that we have the right specialists and the Home Office continues to work in this field—I hope that he will feel able to withdraw Amendment 8.

[Lord Teverson]

I thank the Minister for his reply. It is good to have some figures: can we have more of them in these interactions around groups? I also remind the Minister that he regularly mentions the highly skilled and the talented. That may, I agree, be the case in nuclear safeguarding, but in a lot of Brexit areas, perhaps including some areas of the nuclear industry, the need is far broader. However, I take his point in regard to this Bill.

I also recognise that this issue will inevitably be fought out during the immigration Bill that we will eventually get. I am delighted that we will have another opportunity to debate Euratom in another Bill, to pursue sanity and perhaps get some change in this area. I therefore accept the noble Lord’s challenge—as it were—and his assurances about taking up these issues in the future immigration Bill, which we continue to await with interest. In the meantime, I beg leave to withdraw the amendment.

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[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.

[Lord Teverson]

My Lords, I thank the Minister and welcome his undertaking that the IT systems will be included in the regular reporting. It would be useful if the Minister could answer my noble friend Lord Fox’s question about whether they are starting from zero or whether we are effectively modifying existing systems.

[Lord Henley]

I give an assurance to write to the noble Lord, Lord Fox.

[Lord Teverson]

I welcome that and on that basis beg leave to withdraw the amendment.

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Moved by

[Lord Henley]

10: Clause 4, page 4, line 38, leave out “Section 3,” and insert “Section (Report on nuclear safeguards), section 3,”

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Moved by

[Lord Henley]

12: The Schedule, page 7, line 3, leave out “76A(5) or (8)” and insert “76A(8)”

Nuclear Safeguards Bill

Lord Henley Excerpts

3rd reading (Hansard): House of Lords
Tuesday 27th March 2018 Lords Chamber

[The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Henley) (Con)]

My Lords, I have it in command from Her Majesty the Queen to acquaint the House that Her Majesty, having been informed of the purport of the Nuclear Safeguards Bill, has consented to place her interests, so far as they are affected by the Bill, at the disposal of Parliament for the purposes of the Bill.

Nuclear Safeguards Bill

Lord Henley Excerpts

Ping Pong (Hansard): House of Lords
Wednesday 6th June 2018 Lords Chamber

Moved by

[Lord Henley]

That this House do not insist on its Amendment 3, and do agree with the Commons in their Amendment 3A in lieu.

3A: After Clause 3, insert the following new Clause—
“Request for continuation of existing arrangements
(1) The Secretary of State must make a relevant request to the European Council if neither of conditions 1 and 2 is met at the beginning of the period of 28 days ending with exit day.
(2) Condition 1 is that all of the principal international agreements have been signed.
(3) Condition 2 is that—
(a) one or more of the principal international agreements have not been signed, but
(b) in respect of each agreement that has not been signed, arrangements for the corresponding Euratom arrangements to have effect in relation to the United Kingdom after exit day—
(i) have been made, or
(ii) will, in the Secretary of State’s opinion, have been made before exit day.
(4) A “relevant request” is a request, in relation to each principal international agreement that has not been signed and in respect of which subsection (3)(b) does not apply, for the corresponding Euratom arrangements to continue to have effect in relation to the United Kingdom after exit day until—
(a) the principal international agreement comes into force, or
(b) arrangements have been made for the corresponding Euratom arrangements to have effect in relation to the United Kingdom until further notice.
(5) The “principal international agreements” are—
(a) agreements relating to nuclear safeguards to which only the United Kingdom and the International Atomic Energy Agency are parties;
(b) agreements relating to nuclear safeguards to which the United Kingdom is a party with, respectively, the governments of Australia, Canada, Japan and the United States of America (and for this purpose “agreement” includes an agreement or other arrangement that modifies or supplements an existing agreement).
(6) A reference in this section to “the corresponding Euratom arrangements” is a reference—
(a) in the case of an agreement referred to in subsection (5)(a), to whichever of the Safeguards Agreement and the Additional Protocol corresponds to the agreement;
(b) in the case of an agreement referred to in subsection (5)(b), to whichever of the agreements to which Euratom is a party with the government of Australia, Canada, Japan or the United States of America corresponds to the agreement (and for this purpose the reference to an agreement to which Euratom is a party includes any agreement or other arrangement that modifies or supplements the agreement).
(7) In this section—
“exit day” has the same meaning as in the European Union (Withdrawal) Act 2018 (and references to before or after exit day are to be read accordingly);
“the Safeguards Agreement” and “the Additional Protocol” have the same meaning as in the Nuclear Safeguards Act 2000;
“signed”, in relation to a principal international agreement, means signed by both parties to the agreement.”

[The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Henley) (Con)]

My Lords, as the House is aware, the amendment in lieu was proposed by the Government in the House of Commons in response to Amendment 3 made on Report in this House. Although the Government opposed Amendment 3 on Report, my honourable friend Richard Harrington and I have listened very carefully to the arguments and concerns put forward in both this House and another place about ensuring continuity for the nuclear industry. I hope that this amendment in lieu exemplifies the commitment to compromise and to engaging with Parliament that I believe the Government have demonstrated throughout the passage of the Bill.

Amendment 3 would have required that, where particular agreements relating to nuclear safeguards were not in place on 1 March 2019, the Government would have to request that the UK’s withdrawal from Euratom be suspended until those agreements, or continuation arrangements, were in place. This amendment in lieu would, like Amendment 3, apply 28 days before exit day, on 1 March 2019. Under this amendment, if any principal international agreement were not signed and no other equivalent arrangements in respect of unsigned agreements had been made or would be made before exit day, the Secretary of State would have to ask the EU for,

“corresponding Euratom arrangements to continue to have effect”,

in place of the unsigned agreements. The relevant agreements are those on safeguards between the United Kingdom and the International Atomic Energy Agency—the voluntary offer agreement and the additional protocol—and the four priority nuclear co-operation agreements with the United States, Canada, Japan and Australia.

Although the Government were not able to agree to Amendment 3, the House of Commons has made this amendment in lieu, which I hope the House will agree addresses its concerns on this matter. I beg to move.

[Lord Broers (CB)]

My Lords, as one whose name was on Amendment 3, it gives me pleasure to support the replacement of that amendment with Commons Amendment 3A. The Commons amendment supports the basic proposals that we put forward in the Lords amendment but is more detailed and will better ensure that, if adequate agreements are not in place 28 days before exit day, the Secretary of State must request the continuation of the present Euratom arrangements. Amendment 3A more tightly defines the request that the Secretary of State must make and the relevant principal international agreements, and seeks to eliminate other possible ambiguities.

I would also like to say how much I welcome the Government’s acceptance of other Lords amendments, particularly the one that specifically points out that civil nuclear activities for peaceful purposes include production, processing or storage activities, electricity generation, decommissioning, research and development—a particular interest of mine—and any other peaceful nuclear activities.

Overall, I observe that the way this Bill has been handled is an excellent example of what can be achieved when there is constructive collaboration between the political parties, we Cross-Benchers and even between the Lords and the other place. Our parliamentary system has really worked well in this instance and it is my sincere, if naive, hope that this admirable spirit of collaboration continues throughout the consideration of all of the other Brexit-related Bills.

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[Lord Grantchester (Lab)]

My Lords, it is a moment to be enjoyed when a Government Minister brings back to your Lordships’ House an amendment that all sides can resoundingly support. This amendment in lieu is in essence the amendment agreed on Report—admittedly, more deftly drafted—to ensure a responsible, less risky and more certain transition from the Euratom-monitored safeguarding regime to a uniquely robust regime operated by the ONR to full international recognition. The final version of the Bill is a vindication of the work of your Lordships’ House and the Government are to be congratulated on finally getting the legislation correct in the other place. While some noble Lords would contend that the Government had no need to trigger withdrawal from Euratom, given the difficulties around the notification letter and the Article 50 Bill, the House was right to focus this Bill on securing that the withdrawal from Euratom should proceed on a sound basis, satisfying all the contingencies that could arise during the process. This amendment in lieu allows the House to reflect on the fact that it has fulfilled its role successfully. Let us examine that in detail.

First, the Bill strengthens Parliament’s oversight and improves transparency by putting the Government’s reporting commitments on a statutory basis. Secondly, on the recommendations of your Lordships’ Delegated Powers and Regulatory Reform Committee, the Bill puts a further definition of “civil activities” on the face of the Bill and sets a time limit on the Government’s use of so-called Henry VIII powers. Thirdly, the Bill provides further information to the report that the Government will be making periodically. It may include arrangements with Euratom relating to nuclear research and development, as well as the import and export of qualifying nuclear material such as medical isotopes. The facility at Culham and the JET programme will be pleased with this outcome.

Finally, in this amendment in lieu the Government are agreeing that the practical realities of the UK’s withdrawal from Euratom will need to be recognised. The Euratom arrangements will cover all the conditions and standards to allow a continuation of trade and non-proliferation certification without disruption, interruption or dilution. At all times, whether phased or not, the UK’s withdrawal will not be put at risk and will not jeopardise the present status of operating within fully recognised international IAEA standards in place. The implementation period is still to be fully agreed and put on a statutory basis. It will qualify under Section 3(b) as a corresponding Euratom arrangement. This will allow a further period in which the Government can recruit and train inspectors. In addition, from exit day, we are satisfied that, where needed, the amendment would cover the six vital agreements necessary to maintain the status quo. Two of them cover agreements with the IAEA and there is one for each of the four countries with nuclear co-operation agreements: namely, the USA, Canada, Japan and Australia.

I am grateful to the Minister for his letter following our meeting to discuss the amendment. Together with the Minister in the other place, Richard Harrington, and the noble Baroness, Lady Vere, he has put considerable effort into recognising and addressing valid concerns in both Houses throughout this process. I thank him and his team for co-operating with us on the Bill. The nuclear industry can be reassured that it may not need to face a cliff-edge moment and that the UK will continue to work constructively with Euratom. All sides recognise that the UK still has some way to go, yet we now have the right framework to bring that about.

In conclusion, I thank the House for its support and those who have participated so persistently and decisively in the Bill, namely the noble Lords, Lord Broers, Lord Warner, Lord O’Neill, Lord Carlile, Lord Teverson, Lord Hutton and Lord Fox, the noble Baronesses, Lady Featherstone and Lady Neville-Rolfe, and the noble Viscount, Lord Hanworth. I certainly cannot forget my noble friend Lord Hunt on the Front Bench, with the expert assistance of Grace Wright in Labour’s support team. This Bill has been a fusion of all the talents: it is a job well done.

[Lord Henley]

My Lords, I thank the noble Lord, Lord Broers, for both his support for the amendment and for setting such a good and welcoming tone for the debate. I thank all other speakers for their positive remarks—although I accept that there are still challenges ahead, as the noble Lord, Lord Teverson, put it. As I made clear during the passage of the Bill, I want to continue to provide information to the House as we proceed to make sure that everyone is happy with what we are doing to ensure that the right arrangements—or the appropriate insurance policy, as my noble friend Lord Inglewood and the noble Baroness, Lady Featherstone, put it—are in place.

The House will be aware that the passing of this Bill is just one of the steps needed to establish new nuclear safeguards arrangements for the United Kingdom. It is only one aspect of the Government’s efforts to maintain close and effective arrangements on civil nuclear co-operation, safeguards and safety with Euratom and the rest of the world. To that end, we have made good progress both at home and abroad. The Office for Nuclear Regulation has enhanced its organisational capacity and capability to deliver the future safeguards regime. I assure the noble Lord, Lord Hunt, that we have increased its available funding to £10 million, which includes the procurement of the new IT system. I assure the noble Lord, Lord Teverson, that we will do all that we can to make sure that the system is appropriate. We are also recruiting and training a large number of new inspectors and strengthening the institutional capacity to deliver the project within budget.

We will soon consult on nuclear safeguards regulations. An early draft of that was provided to this House. The department and the Office for Nuclear Regulation will continue to engage stakeholders individually and through wider events. I assure the House that only this morning, in Vienna, the IAEA board of governors formally approved new bilateral international safeguards agreements with the United Kingdom to replace the current agreements, which include Euratom. We expect that they will be signed tomorrow. The conclusion of these agreements, which will take effect once Euratom arrangements cease to apply to the UK, once again demonstrates this Government’s sustained commitment to the civil nuclear sector, international safeguards and nuclear non-proliferation.

I can further reassure the noble Lord, Lord Teverson, that on 4 May, as I think he is aware, the Government signed a new nuclear co-operation agreement with the United States of America. That will be ratified by Congress and laid before Parliament before ratification in the UK. Again, I will make sure that the House is kept informed of that process. On further NCAs, good progress continues to be made to put in place respective arrangements with Australia, Canada and Japan ahead of March 2019. Again, I will inform the House when that happens.

As part of EU exit negotiations the UK and the EU have agreed the terms of an implementation period, as the House will be well aware, running until the end of December 2020. That means that existing Euratom arrangements, including international agreements, would continue during this period.

I hope that I have given all appropriate assurances to noble Lords who have taken part in the short debate on this Motion. I beg to move.

Motion agreed.