Nuclear Safeguards Bill

Lord Warner Excerpts

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

[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.

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[Lord Warner]

My Lords, I have been around government as a civil servant, special adviser, Minister and parliamentarian for about 50 years, and during that time I have been involved in a lot of legislation. I cannot recollect a Bill so reckless and so alienating to a major UK industry as this one. The briefing from the Nuclear Industry Association, representing 260 companies, is damning. It does not agree with the Government’s position that in law we have to leave Euratom on exit from the EU in March 2019, which probably rather annoys the Minister, and it does not believe that this Bill will have us ready to do so in time. It wants a transition period if the Government insist on leaving Euratom, and if we cease to be a member of Euratom it wants some form of continuing relationship. As other noble Lords have said, there is a real risk that our role in international R&D in this industrial sector will be seriously damaged by leaving Euratom, and how do we participate in the international nuclear market outside Euratom? These are big questions which the Minister and the Government do not seem to have considered.

The Government virtually ignored the NIA’s views and advice during the Bill’s passage through the Commons. To add insult to injury, the Government have not come clean on how the new UK safeguarding arrangements will be funded. In these circumstances, most normal Governments would not plough on with legislation against a major industry’s advice, especially when that advice is supported by a major overseas company—EDF—with which the Government have recently contracted to deliver a major nuclear infrastructure project at Hinkley Point.

But then they are no ordinary Government. They are, as the noble Lord, Lord Lamont, memorably described an earlier Conservative Government,

“in office but not in power”.—[Official Report, Commons, 9/6/93; col. 285.]

We have this Bill because the Prime Minister cannot face down that sect within the Conservative Party which was rather entertainingly described by the noble Lord, Lord Macpherson, in a newspaper article this week as “latter-day Jacobins”. I thought that was a bit unkind to the Jacobins, because some of them were quite entertaining. This sect goes into spasm at the very mention of the European Court of Justice, and Euratom is just unlucky enough to be within the jurisdiction of the ECJ.

So, according to the Bill, we have to leave Euratom at 11 pm on 29 March 2019, ready or not—no matter that the ECJ appears never to have pronounced on any aspect of Euratom’s activities since the UK joined; no matter that the European Union (Withdrawal) Bill provides for UK courts after exit day to take account of ECJ jurisprudence in making their judgements; no matter that we have not yet fully implemented the latest EU directive on nuclear safety standards, which we were involved in negotiating; and no matter that we cannot discharge the standards for nuclear safeguarding to the same level as Euratom before the currently specified exit date.

Last September, in her Florence speech, the Prime Minister said that the status quo should continue for what she called,

“an implementation period of around two years”.

Yet when the Opposition tried to amend the Bill in the Commons to give effect to this approach by staying in Euratom after March 2019 for a transition period of up to two years, the Government marshalled their forces to vote it down. This is despite the fact that the Government will not be operating at the same safeguarding standards as Euratom because they will not have sufficient inspectors in post. I shall be putting down an amendment at the close of this debate to reintroduce a transition period for this sector, irrespective of what happens on wider Brexit issues. I hope that others across the House will support such an amendment.

I turn now to the subject of medical radioisotopes, which others have discussed and which, it is important to emphasise, are vital for NHS diagnosis, treatment and research. I have been seeking clarification on the role of Euratom in regulating the use and disposal of these isotopes from Ministers. In parliamentary replies from the Health Minister, it is clear that the use and disposal of these materials are governed by a set of standards that,

“have in some cases been informed by Euratom standards”.

Despite my best efforts, it is far from clear what happens to these safeguarding standards for NHS patients and staff when we leave Euratom. As I understand it from the Minister, the Bill will not cover medical isotopes—nor, as I also understand it, will the ONR have any responsibility for them. So, as things stand, at 11 pm on 29 March 2019, the overarching Euratom framework of safeguards that seems to have some relevance to the use and disposal of medical isotopes will simply disappear. In its place, a mishmash of UK agencies will be involved. This seems to be a diminution in the safety reassurances for NHS patients and staff that exist now. If I have got this wrong, I should be grateful if the Minister and his health colleagues would explain to us all in writing why it is not so before Committee.

Despite the Minister’s attempt at reassurance, I want to return to the issue of security of supply of medical isotopes, which the noble Lord, Lord Carlile, elegantly exposed. Noble Lords know that these isotopes have a very short effective life—a matter of a few hours, in some cases—so they have to be delivered to the end user very quickly. They are critical to many treatments of serious conditions, to diagnostic applications and to furthering research into new treatments. Their importance is growing for use in medical advances at a time when the sources of supply of the raw material—ageing nuclear power stations—are diminishing.

The UK has no domestic supplier. About 60% of our supply comes from the EU, and the remaining 40% comes from elsewhere but may arrive in the UK via an EU supplier. We know from past experience that there can be supply problems with these isotopes. That is why the Euratom observatory was set up—to help with supply problems for EU members when they arise. My understanding is that we lose that help when we lose Euratom and, as far as I can see, there is no game plan for replacing it. Moreover, being in the EU customs union makes it easier to ensure a “frictionless” —to use that phrase—passage of isotopes from supplier to UK end user. However, the Government have rejected being in either “a” or “the” customs union with the EU from exit day next March. Michel Barnier has made it clear that the Government’s current Brexit plans would create “unavoidable” barriers to goods and services. I suggest that this is seriously bad news for the supply of medical isotopes.

In the last few days the Government have published what I can only describe as a somewhat fanciful partnership paper on future customs arrangements. Even if the proposals were a practicable basis for an agreement with the EU, which they are not, they certainly could not be put in place by next March across 28 countries. So my question for the Minister is: how are the Government going to safeguard the timely access of NHS patients to medical isotopes after next March? Again, perhaps he could write to us with an explanation before Committee, as I shall certainly be tabling an amendment on this issue as well.

This is an inadequate and ideologically driven Bill that damages established safeguarding processes and procedures that we were involved in shaping and keeping up to date. Even if it were justified, it should not be implemented in such a rapid timetable. Moreover, because of the Government’s totally misguided and fantasy approach to the future customs relationship with the EU, the timely supply of medical radioisotopes to the NHS and its patients will be put in great jeopardy. If the Government are not going to listen to industry’s serious concerns about the Bill, I suggest that it is up to this House to do the job for them.

Nuclear Safeguards Bill

Lord Warner Excerpts

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

[Baroness Featherstone (LD)]

My Lords, I am sure that the Minister, in listening to the Second Reading debate in this House, could not have failed to get the message that leaving Euratom, necessitating the re-creation of its safeguarding capabilities and duties in another body set up to mimic it exactly, is an absurdity and a folly. If he were in any doubt, around 11 pm last night a number of noble Lords—among them, my noble friend Lord Teverson and the noble Lords, Lord Hunt, Lord Warner and Lord Carlile—let him know their opinion of this matter, too.

There was no vote to leave Euratom. Euratom is separate from the EU. Of course, we benefit from our membership, with Euratom regulating the civil nuclear industry, including safeguards for nuclear materials and technology, disposal of nuclear waste, ownership of nuclear fuel, and research and development. Despite our disputing the actual legal necessity of leaving Euratom, the Government are going ahead with the Bill as a failsafe. Amendment 1 seeks to attain associate membership of Euratom. We sought in our original amendment to retain full membership, but, sadly, this was deemed out of scope.

In the Written Statement that the Government laid on 11 January, they said that they want,

“a close association with Euratom”.

But the Government wanting a close association and having one in place are not the same thing, nor have they yet defined what they mean by an association that is “as close as possible”. It would be very helpful if the Minister could indicate what has been said so far about associate membership, and what the answer was during negotiations to date when the suggestion was first put on the table that we want a close association with Euratom, if indeed it was put on the table at all. Was there any problem? It is unimaginable to me that anyone on the other side of the negotiating table would have any problem with us staying in Euratom or, if we are not doing so, having an associate membership. Has the European Commission given its view on this to date?

Our problem with the good intentions of the Government in this regard is that they are undefined, so we want clarity and certainty on this important matter. We want an associate membership that replicates exactly our membership of Euratom—nothing more, nothing less. So what will be required of us in order to have an associate membership? Is it a matter of cost? What would be asked of us, above and beyond what is required now? Amendment 1 has been laid to ensure that the Government, in their negotiations and agreements in accordance with Article 50(2) of the Treaty on European Union, on the future of nuclear safeguards in the United Kingdom must have regard to the desirability of becoming an associate member of Euratom. I am sure—at least, I very much hope and expect—that this will be pretty much at the top of the Government’s list of things to do, if only to avoid the extra works, cost, aggravation and uncertainty in recreating what we have already as a member of Euratom.

So that we can be sure that the Secretary of State is carrying out this duty, the amendment requires that he must lay before both Houses a Written Statement informing us of the progress he is making towards achieving that negotiated outcome. Our preference would be to forestall actually leaving Euratom at all, unless and until such an associate membership is in place. However, as that is apparently not possible, the amendment asks that Statements be made at particular intervals post the Act receiving Royal Assent. If we were to succeed in negotiating an associate membership and effectively remain in Euratom, the rest of the Bill need not apply. I beg to move.

[Lord Warner (CB)]

My Lords, I shall speak to Amendments 2, 12 and 16, which are in my name in this group. We had a good warm-up late last night for this first day in Committee on this Bill, with the Minister’s colleague doing what I thought was a rather good imitation of Geoffrey Boycott: occupying the crease but not showing much flair in his run gathering. In that debate on withdrawal from Euratom that we had in Committee on the European Union (Withdrawal) Bill, it was clear that the mood of the House was that this was a rash and ill-considered action by the Government, and that the Government would do well to reconsider their position on withdrawing from Euratom in the interests of the future of the nuclear industry in the UK. I have little doubt that we will return to this issue during our later consideration of the withdrawal Bill and I do not intend to traverse that ground again today, although I still consider that cancelling the withdrawal from Euratom membership would be the best course of action in the public interest.

Today, I want to focus on two issues that continue to cause concern in the industry and among many of us in this House: first, whether the Government have a credible plan for putting in place an internationally acceptable nuclear safeguarding regime in the UK in time for our departure from Euratom; and, secondly, whether this can be done by EU exit day on 29 March 2019. These two issues are inextricably linked in my view, and that is why I have grouped my Amendments 2, 12 and 16 with the related amendments in this first group. I have to say to the Minister that how the Government respond to amendments on these concerns in this Bill will, I suspect, determine how the House deals with the Euratom issue in the withdrawal Bill. I assure the Minister that that is not a threat but a piece of friendly advice.

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[Viscount Trenchard]

I am well aware that the Government have explained that their policy is to meet Euratom standards, and I am not saying that that would be in any way a bad thing, but I understand that there is a problem over the timescale it would take to reach Euratom standards. Nevertheless, I question whether it is necessary or desirable to meet Euratom standards in full because, as I said, many in the industry consider the IAEA standards better as far as process, procedures and controls are concerned. I think I have now concluded my remarks.

[Lord Warner]

Before the Minister sits down—

[Noble Lords]

Oh!

[Lord Warner]

Well, I am sure the noble Viscount is in the Prime Minister’s thoughts for ministerial office. I am a bit confused about where he is on completing either IAEA-acceptable standards or Euratom standards by 29 March 2019. Is he saying that he accepts that neither of those standards will be met by March 2019, therefore we need a transition period and therefore he supports my amendment on a transition period?

[Viscount Trenchard]

I am saying that I believe it is not possible by March 2019 to achieve the necessary nuclear co-operation agreements with our four key partners, principally, and that therefore we will not be in a position to operate our own nuclear safeguards regime. I believe the ONR could manage to establish recognition of its own nuclear safeguards regime in that timescale, but—because we will not have the NCAs or an agreement with the EU on nuclear in that timescale—I look forward to hearing from the Minister how the Government propose to avoid a cliff edge in the nuclear industry.

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[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.

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[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.

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Tabled by

[Lord Warner]

2: Before Clause 1, insert the following new Clause—
“Review of withdrawal from Euratom
(1) The Secretary of State must, in consultation with relevant interests, by 31 December 2018, lay before both Houses of Parliament—(a) a report on the progress of discussions with Euratom on the scope and conditions for a form of association with Euratom that does not extend to full membership but which minimises the changes to current arrangements for nuclear safeguards; and(b) a report on the legislative changes that would be necessary to introduce arrangements described in paragraph (a).(2) The report under paragraph (1)(a) must cover—(a) the future application of Euratom safeguarding standards;(b) the future of nuclear research and development activities within a Euratom framework;(c) aspects of future working with Euratom members in relation to the civil nuclear supply chain so far as this depends on UK membership of Euratom;(d) the supply to the United Kingdom of medical radioisotopes and their use and disposal so far as this depends on UK membership of Euratom.”

[Lord Warner]

I listened carefully to what the Minister said. I did not hear anything which suggested that there was not still an existential threat to the UK civil nuclear industry. There were some useful nuggets to help me redraft my amendment to make it more compliant with the language that the Government seem to be using—so I shall read Hansard carefully—but I can promise the Minister that I shall be back on Report with an alternative amendment.

Amendment 2 not moved.

Nuclear Safeguards Bill

Lord Warner Excerpts

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

[Lord Judd (Lab)]

My Lords, I strongly support my noble friend and the amendment that he has moved. As I said in our deliberations last night, we must never forget that the issues with which we are dealing have implications not just for us, our children and immediate future generations, but for hundreds and perhaps thousands of years ahead. We have to get it right. There can be no confusion or compromise; there has to be fool-proof action right through, with continuity. There can be no gaps. We must have from the Minister categorical assurances that the Government have in place arrangements that will ensure that continuity when we leave. If we cannot have those assurances, the situation is impossibly grave, because anything can happen in even a short time if the adequate provisions are not there.

One very specific issue on this is that we know, from the Government’s own statements, that for our next generation of nuclear energy we are highly dependent upon expertise from outside the UK, because we do not have the expertise ourselves. What I do not understand is how we can have adequate—indeed, fool-proof—inspection teams working, and how we can have the quality and experience necessary for those teams, if we do not have that quality and experience available to develop our own energy. There seems to be an illogicality here. This is why it is crucial that the Government again have absolutely watertight arrangements about which they can tell the House to cover what happens if we foolishly come out of Euratom.

I have not heard those absolute, categorical assurances, or even begun to hear what the real arrangements will be. This matter is deeply grave. I have great respect for the Minister; I know he is a thoughtful man who will take on board the point being made. It is therefore crucial that this afternoon we have cast-iron evidence that the Government really have the situation under control.

[Lord Warner (CB)]

My Lords, I rise to support this amendment and congratulate the noble Lord, Lord Grantchester, on his drafting skill in producing words that will not inflame the Government or, in particular, the—misnamed—European Research Group and its red lines. The amendment in no way implies that we, the UK, will go back into Euratom, however much most people in this Chamber wish we would. The noble Lord has kept clear of that dangerous territory and I congratulate him on that.

Indeed, there is nothing in the amendment that goes against government policy. The Government say that they aspire to achieving the safeguarding standards of Euratom but by another method than the current set of arrangements. That is all that the amendment tries to do. Indeed, it may help the Government in securing accreditation by the IAEA when it comes to the ONR being recognised as up to snuff in its standards. That accreditation is essential, as many people have said today, for us as a country to secure nuclear co-operation agreements. This is a helpful and well-constructed amendment, which the Government would be well advised to accept.

[Lord O’Neill of Clackmannan (Lab)]

My Lords, I support this amendment. It is not just a question of maintaining the standards that have been established but of putting us in a position where we will be able to meet and address new challenges. I happened to be in Tokyo on the day of the Fukushima disaster and tsunami. I was in the company of a group of nuclear engineers and no sooner had the messages come over the television than they were on their BlackBerrys, communicating with their international colleagues—because there is an international nuclear community—and working out the extent of the damage.

It was shortly after that, on our return, that the Nuclear Installations Inspectorate leadership was appointed to lead the international examination of the Japanese nuclear capability. We were seen to be at the forefront of that. That is a heritage that we want to maintain, and this amendment very succinctly addresses that challenge. It is important, therefore, that the ONR—the successor to the NII—is able to do that. We know that this will have implications for staffing, salaries and for the general financing—which we will come to later—but the point is that it would be desirable to have in the Bill a commitment to maintaining our current position, which is partly due to our membership of Euratom and partly due to the excellence of our inspection and monitoring capabilities.

It is incumbent on the Government, therefore, to give a commitment that they will seek to maintain the quality and standards that we currently enjoy and our capability in contributing to international nuclear safety. This is not something that should be in any way antithetical to what the Government seek to do; the amendment is no reflection on their commitment but it would enhance the Bill and I see no reason why, if not the wording, the spirit of this amendment could not be addressed. As I said in an earlier intervention, the point of Committee stage is to indicate areas of concern and, if the Government are prepared to accept the consensus around this Chamber on the matter, it is incumbent on them to return with the appropriate wording that enables us to proceed. In this instance, we have a very good blueprint from my noble friend Lord Grantchester, as my friend the noble Lord, Lord Warner, has said, for what is required. I do not think the Minister really has anywhere to hide on this issue and I would like to think he will be able to co-operate with us in enhancing the Bill to take account of the dynamic challenges that nuclear safeguards in the future will require.

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Moved by

[Lord Warner]

4: Clause 1, page 2, line 15, at end insert—
“(3A) No regulations may be made under this section unless the Secretary of State has laid before both Houses of Parliament a statement certifying that, in his or her opinion, it is no longer possible to retain membership of Euratom or establish an association with Euratom that permits the operation of nuclear safeguarding activity through its administrative arrangements.”

[Lord Warner]

My Lords, I hope this next amendment will not ensure that we descend into the “end-of-the-pier show”, as we seem to be in danger of doing from time to time. I am very sorry that the Minister has taken the line he has on Amendment 3, and I have no expectations whatsoever that I will get a sympathetic response to Amendment 4.

I want to say a little about why I tabled this amendment. I am genuinely confused as to what the Government want their future relationship with Euratom to be—I simply do not understand. I understand that they want to withdraw from membership, but the Minister talks quite warmly from time to time about having some future relationship. I think “relationship” is probably a safe term to use: we do not talk about “associate membership” or “association”, but a “relationship”. He seems to want that relationship because Euratom provides a comfort blanket in all this. Many in this House are rather desperately looking for some kind of comfort blanket regarding what the situation may be at about 11 pm on 29 March 2019.

The Government’s position is very odd. They are staunchly determined to say that they expect the ONR to be up to meeting the IAEA accreditation standards by that date. However, they are singularly silent about whether that accreditation will actually be achieved in time for us as a country to put in place a series of nuclear co-operation agreements by 29 March 2019. I hope that I can tempt the Minister to say something about that.

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[Baroness Vere of Norbiton (Con)]

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

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

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

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

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

“it is no longer possible”,

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

[Lord Warner]

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

[Baroness Vere of Norbiton]

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

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

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

[Lord Teverson]

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

[Lord Warner]

I put in this provision about regulations only out of sheer frustration because one cannot get any information out of the Front Bench about what that relationship will be. I am not seriously going to stop the Bill proceeding but there is a very high level of frustration across the Committee that the Government cannot explain in any way what relationship they are aspiring to. For example, do the Government want to talk to Euratom about seconding some inspectors to the ONR for a period of time to get it over the hurdle of the transition to a UK regulator? That is the kind of specific thing which it would be quite sensible to discuss. No one is going to stop that. We just want to know what the Government are trying to do.

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[Baroness Vere of Norbiton]

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

[Lord Warner]

I beg leave to withdraw the amendment.

Amendment 4 withdrawn.

Nuclear Safeguards Bill

Lord Warner Excerpts

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

[The Earl of Selborne (Con)]

My Lords, in the draft transition agreement published yesterday the entry on Euratom is in green, which appears to demonstrate that there is some progress being made, apart from any legal complication which might emerge from the woodwork. The Government have committed themselves to a close association with the Euratom research and training programme. The Secretary of State has also committed to report back to Parliament every three months about overall progress on Euratom, with a first update expected before Easter. All so far so good, but this does not change the position that a default clause, such as this amendment suggests, might be sensible.

The only reason I have heard why this amendment will not or cannot be accepted is that, by our own folly, we have already given notice that we are leaving Euratom, come what may. My noble friend on the Front Bench described it as a done deal—which of course it is in terms of the Act we have already passed—but that is not the best of reasons for rejecting this amendment. After all, one Bill can amend a previous Act and if we find that the default position is needed in order to make sure that we do not fall between poles between one Bill and another, I should have thought that a fallback position such as that suggested by this rather sensible amendment would at least be worthy of serious consideration.

I recognise that the assurances given by the Government, and indeed by our Minister here, are helpful so far as they go—I have enumerated them just now—and that the disastrous decision to leave Euratom may ultimately be irreversible, but I will be listening to the Minister’s response to this debate with great care.

[Lord Warner (CB)]

My Lords, I strongly support this amendment. I want to focus on the one issue that will cause me to vote for this amendment if my noble friend puts it to a vote. That is the way that the Government have been playing Russian roulette with our energy security by the ill-considered and ideological rush to leave Euratom without being sure that an equivalent regime is properly in place. The jeopardy this places the UK in is well set out in the latest briefing from the Nuclear Industry Association. The Government are doing a very unusual and risky thing in ignoring the advice of the nuclear industry’s experts simply because of their obsession with the jurisdiction of the European Court of Justice, which, let me remind the House, has never intervened in a Euratom matter during the duration of Euratom’s life.

There is little evidence that it is possible to secure UK accreditation from the IAEA and negotiate a raft of new nuclear co-operation agreements with other countries before exit day. As the NIA briefing makes clear:

“Without access to Euratom’s NCAs and common market, the nuclear new build programme, nuclear could be seriously affected”.


Clearly, a responsible Government would stay in Euratom and not risk the disruption and uncertainty to a critical industry that departure brings, but not this Government. They claim that they will secure an equivalent alternative set of arrangements to membership of Euratom by exit day. Their backstop for failure seems to be that by the end of the transition or implementation period they are trying to negotiate with the EU. Despite yesterday’s upbeat gloss put on the negotiations of a transitional period, no such arrangements have yet been agreed by the Council of Ministers; they may well not be before the Bill leaves this House. Even if they are agreed before Royal Assent they will not provide for a transition period beyond the end of 2020. That may still not be long enough to secure all the new NCAs the UK needs, especially with the United States.

As the NIA briefing makes clear, without these agreements the trade in goods and services to maintain our existing nuclear reactors—these generate 21% of the UK’s electricity—is put in jeopardy, as is the building of new reactors. Sizewell B is particularly vulnerable because it relies on an NCA with the United States, and a new NCA is effectively a treaty, which requires congressional approval.

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[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.

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[Viscount Trenchard]

I accept what the noble Lord says but if you are bound to commit, through the Euratom programmes, to a greater amount of funding for the sector as a whole, that could effectively mean that you were constrained in what you do on your own. I am not saying we would not wish to contribute or to continue to participate, but it would be our decision on whether we participated or not. We would recover the right to make decisions and to apply our research and development funds, which we would then own in so far as they were invested in programmes that we were running independently.

On Amendment 9, I do not see the need for the taxpayer to have to fund a further independent reviewer. The IAEA will ensure that we follow the approved safeguarding regimes, check and verify our safeguards regime and ensure that we work only with verified customers.

[Lord Warner]

My Lords, I support Amendments 7 and 9, and I compliment the Government on Amendment 6. I remind the noble Viscount, Lord Trenchard, that scientific research, in this area or anywhere else, is now overwhelmingly collaborative. If you do not get in the game collaboratively, you find that some of your best researchers and ideas are rapidly transferred abroad to someone else who is much more interested in collaborative research. We have moved on from being a Great Britain that does all this stuff ourselves to being a collaborative, global, international participant in research, including in this area. That is one of the reasons why I support Amendment 7; I think it takes us in the right direction. I am sure that the noble Lord, Lord Broers, whose amendment last night I sadly missed, will want to say a bit about that.

I am really pleased that we have come back to talking about medical isotopes and having a report that keeps Parliament up to date in that area. There is huge concern outside this House about whether the supply chains around medical isotopes will be sufficient to cope with the needs and demands of NHS research and NHS patients.

On Amendment 9, after the last debate that we had before the vote, you would have to be one of life’s perennial optimists—I am not a Liberal Democrat so I do not join that particular club—to believe that everything is going to be okay by March 2019. I suggest to the Minister that he might find it useful to have an independent reviewer who can make independent reports to Parliament to convince sceptical parliamentarians such as me and, I suspect, a few others in this House that good progress is being made on some of the critical issues. That is why I support Amendments 7 and 9.

[Lord Fox]

My Lords, I support Amendment 9, to which my name is appended, and I commend the Government on Amendment 6 and support Amendment 7. I echo the words of the noble Lord, Lord Warner: not even the Liberal Democrats are optimistic enough to imagine that everything is going to be in place in time. That is why we believe this is a helpful amendment to the Government and to the Minister. We heard in the debate on Amendment 3 that the stakes are high in achieving what needs to be achieved in time. I believe, en passant, that for the noble Viscount, Lord Trenchard, to use the cost as a reason for not having something like this in place is a little like trying to save the money that is down the side of the sofa when the whole house is potentially at stake. I suggest that cost is not a reason for not doing this.

The stakes are high. I will not rehearse them again but the Committee has heard scepticism, concern and worry from a vast array of people about whether the finish line can be crossed in time. The Minister—this is in no way reflects scepticism of the Minister himself—has stood up on a number of occasions and said everything is in order and we need not worry. Almost every statement he makes begins with, “I believe”. That is the problem; at this point, to some extent it is difficult to go beyond a belief system. Amendment 9 would put in place an independent voice, someone who was marking the Government’s homework but was not the Government. This is not a question of doing the work of the IAEA; it is a question of following and tracking the Government’s progress in getting to the finish line.

I echo the noble Lord, Lord Warner: this could be very useful for the Government in helping to give reassurance. It would be another voice to prove that the Minister was correct—if he was. When the noble Lord, Lord Hunt, says that this is not an aggressive amendment and not intended to be unhelpful, I know, because I participated in the discussion around this amendment, that it is genuinely not intended to wreck or harm the Bill in any way. It is intended to give support and some further credibility to the argument that things are moving in the right direction.

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[Lord Teverson]

My Lords, I remind Members of what the Euratom treaty says in Article 2(g)—that, in order to perform its tasks, the community shall,

“ensure wide commercial outlets and access to the best technical facilities by the creation of a common market in specialised materials and equipment, by the free movement of capital for investment in the field of nuclear energy and by freedom of employment for specialists within the Community”.

I have not taken the whole of the article, or of part 2(g), into the amendment, but rather the important post-Brexit part, which concerns the free movement of nuclear specialists. I will not make a long speech because I believe that this is self-evident. The Government have an industrial strategy around the nuclear sector: to expand it and for it to be part of where this country goes economically.

We have heard in previous debates that our most important need in the short term is to have a functioning safeguarding authority, whether that is Euratom or—as soon as that stops—our own Office for Nuclear Regulation. We need those bodies, and that body in particular, to function. We have a shortage of qualified people in this area and a shortage of specialists in the industry more generally—although the amendment is, because of the Bill, primarily around safeguarding. Therefore, it must be in the interests of the Bill, and of the country at large, to ensure that we maintain the mobility of those specialists in the nuclear industry and the nuclear sector, so that we maintain this benefit post Brexit and post our membership of Euratom. That is why the amendment is absolutely appropriate to the Bill and is of great importance not just to this sector but to our national security.

I very much hope that the Minister will be able to give a greater reassurance—perhaps higher up on my noble friend Lord Fox’s Richter scale of assurances—than we have received so far that this area will be looked after by the Government, that we will not be browbeaten by the Home Office into having a minimal circulation of specialists, and that this country will benefit from those with the experience and skills that will enable us to perform in this sector, not just in safeguarding but in the nuclear sector more broadly. I beg to move.

[Lord Warner]

My Lords, I have added my name to this amendment because, like the noble Lord, Lord Teverson, I remain concerned about the industry’s access to the workforce that it will need once the UK leaves Euratom. I suggest that the free flow of essential specialist staff could well dry up unless the Government are reasonably energetic in the guarantees that they give them. As the noble Lord, Lord Teverson, said, this is not just a safeguarding workforce issue; it affects the whole sector, as was very well brought out in the Nuclear Industry Association’s briefing. I shall not go into detail on that but it is clear that we need a very skilled workforce coming to this country to help both in maintaining existing reactors and, even more significantly, in building new ones, as well as in the safeguarding area.

With regard to the regular reports that the Government will give to Parliament on progress in the safeguarding area, it is a bit disappointing that we did not manage to get into the Bill a specific reference to the need for an essential specialist workforce. I hope that the Minister will take this suggestion in the spirit in which it is offered, and perhaps he might encourage his officials, when they are producing these reports, to say something about the progress that is being made, particularly with the ONR getting the specialist staff that it needs.

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[Lord Warner]

My Lords, I support the amendment, but I do not expect us to go for our hat trick of votes on it. I speak as someone who had the misfortune to inherit the NHS IT system as a responsibility. I also had some experience in the Home Office of IT systems. Things never work out the way that noble Lords think they will. They are usually delayed and they usually malfunction a bit when they are first introduced and used. My question for the Minister is: has he got a plan B and what is it, if this IT system does not come online to time? At the end of the day, the ONR will still have some responsibilities to discharge. If it does not have the IT system, how will it go about discharging its responsibilities?

[Lord Fox]

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