Nuclear Safeguards Bill

Lord Lea of Crondall Excerpts

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

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that particular remark which used the words, “not true”, but if we stay in the European Economic Area, we would have withdrawn from the European Union but would still be able to be part of these agencies.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

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[Lord Lea of Crondall]

My Lords, first, I will refer again briefly to the question I raised in my earlier intervention about the umbilical—or otherwise—relationship between EU membership and Euratom membership. I am endeavouring merely to ascertain the objective truth about this matter. It cannot be a matter of opinion; it must be somehow a matter of fact. I hope that the Minister, if he cannot give a more definitive answer today, will put a letter in the Library giving the facts of the matter, because I think it may be more complicated than either he or I have stated, but it needs to be clarified.

I will mention just one relevant anecdote. I happened to chair a meeting in 1961 at the Cambridge Union for Seán Lemass, the Taoiseach—the Prime Minister of the Republic of Ireland—and he took the opportunity to announce to Irish TV Ireland’s accession to Euratom. Of course, it was not until 1973, 12 years later, that Ireland, along with the UK and one or two others, actually joined the EEC. So there was no umbilical connection at that time and I think the degree of umbilical-ness is perhaps being exaggerated. The registration regulations may well have changed since then but I am not sure how umbilical it is—or the opposite. Unless I am totally wrong, I suspect that I am following a train of thought which the noble Baroness, Lady Neville-Rolfe, was hunting for on the same point.

It is clear from the debate that there is a strong feeling in both Houses that we should be seeking as a minimum some form of associate membership of Euratom. I do not know whether there is such a thing. My view is that there is a clear option in principle if we stay in the EEA.

Another point that I would like to mention which has not yet been raised, but been implied by many, is that there is a very strong multinational dimension to all aspects of this, not only in the scientific co-operation but in the generation of power. We only have to think of EDF, the Chinese, the Japanese and so on. We are inevitably under the umbrella, and one of the strongest umbrellas for technical co-operation on standards is Euratom. As many noble Lords have said, the Office for Nuclear Regulation will do its best but, according to the note that I have, the Government have cut the grant to the ONR between 2015-16 and 2019-20 by 70%. How can it deal with all this extra work?

I shall not go into any more detail about the red lines on the European Court of Justice, because they are very tangential to this decision. However, if the UK were to leave Euratom, we would need to have a properly resourced regulatory framework in place by exit day. Everybody has pointed out the difficulty of doing that. Euratom currently employs about 160 staff, 25% of whom focus on UK installations. Without Euratom’s infrastructure and resources that work is likely to fall to the Office for Nuclear Regulation, which currently employs eight professional staff. Those are relevant numbers. We are placing extra responsibilities on the ONR but are not providing extra resources to fulfil them or, as far as I know, holding any open conversations, certainly with the trade unions, about how the regime would be funded.

I have a couple of specific points to put to the Minister, perhaps for response later. First, have the Government given any thought to the liability that they are taking on with regard to purchasing or obtaining existing Euratom equipment in UK facilities? By taking ownership, would that then make the ONR and/or BEIS liable to facilities for the decommissioning, removal and disposal of that equipment were it not to be used or replaced? The decommissioning, removal and disposal of contaminated equipment is not easy and will come with a price tag. Secondly, what is the purpose behind Euratom equivalence, which my noble friend Lord Whitty mentioned? Who will the ONR be expected to satisfy by performing Euratom-style inspections using video surveillance and equipment to verify that nuclear material has not been diverted from peaceful purposes? It is already known that the UK has a weapons programme, and we already have security cameras and portal monitors mounted on our sites to protect against theft and neutron monitors to provide a safety function. What benefit is there to the UK in providing our own internal verification of our own UK declarations? Those measures will not be recognised by bodies external to the UK as we are self-verifying, therefore not providing any independent verification.

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[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.