Lord Whitty
Main Page: Lord Whitty (Labour - Life peer)
Lord Whitty
Lord Whitty
My Lords, I do not intend to move Amendment 38A, although the noble Baroness did not actually reject it during the previous proceedings. However, in view of the amendments that replace “Great Britain” with “the United Kingdom”, will the noble Baroness check carefully when reference is made to consultation with devolved Ministers that Northern Ireland Ministers are included at all points and that the reference in general is to Ministers rather than departments? If she is prepared to do that, I am happy not to move the amendment.
Lord Whitty
Lord Whitty
My Lords, in moving on to this large group of amendments, we move to an entirely new part of the Bill, which deals with the regulation of the nuclear industry and, in particular, with the creation of the Office for Nuclear Regulation. That body is currently operating in shadow form within the HSE.
I need to thank the Minister and her department for a number of things. This is a large section of the Bill; I said at Second Reading that it was an extremely large section. It was not seriously considered line by line in the House of Commons and we, as the House of Lords, have an obligation to look at it.
I asked the Minister to provide me with an indication of where the regulatory structure of the new ONR, as compared with the previous powers of the HSE, had changed. I thank her for the letter she sent me clearly setting that out.
I congratulate the department on an important breakthrough—it must have had a hell of a job with parliamentary counsel—in managing to put everything relating to the ONR in one place in one Bill. Noble Lords’ previous experience is that, as with the Enterprise and Regulatory Reform Act, the Financial Services Act and the Public Bodies Act, there is a tendency for parliamentary counsel always to refer back to at least one layer, and often several layers, of previous legislation. It is therefore important that most of what will apply to the ONR is here in one place. I congratulate whoever negotiated with parliamentary counsel to that effect.
However, there are still some uncertainties and a lack of clarity, and possibly some tightening up can be done. It is important that we all recognise that we are creating regulations for a new body that is to oversee a major source of our energy. It is complex and controversial in both political and public relations terms; it is changing over time; and local, national and international issues are involved. It is therefore important that we get the regulation right.
I have tabled a number of amendments, most of which are probing. Subject to what the Minister says, I doubt we shall need to return to any of them on Report. They deal with issues of scope, relations with other bodies engaged in the nuclear industry, the effect of the health and safety provisions on workers on nuclear sites and governance, finance and staff transfer.
Perhaps I may make one other general point. The noble Baroness and other Ministers will be aware that the Delegated Powers Committee, although it did not reserve its most scathing comments for this part of the Bill but for Chapters 2 and 3 of Part 2, made substantial propositions on how the order-making function under this part of the Bill should operate. Regrettably, I had not read that report, which was published on 28 June, in time to meet the deadline for tabling amendments. It would be helpful if the Minister could indicate, either in total at the beginning of that part of the Bill or as we reach the relevant clauses, how the Government intend to deal with the recommendations of the Delegated Powers Committee.
Amendment 38E and other amendments in the group deal with the scope of the ONR and its regulatory authority. The principal issue is the sites which ONR will cover. The definition in the Bill is largely in relation to sites rather than activities, although activities circularly define sites that need to have licences. We need to know which sites we are talking about because many sites which deal with nuclear and radioactive matters will not be covered by the ONR or by the regulations in the way that they are reflected in this section of the Bill. There are, of course, substantial defence sites that deal with nuclear matter and nuclear materials; there are transportation issues, not all of which seem to be covered; and there are radioactive materials, processes and operations being conducted in a wide range of sites across industry, universities, research functions and the National Health Service. Therefore, we need to be absolutely clear what the ONR relates to.
Most of the non-nuclear industry sites are not really governed by the nuclear regulations, although some of them are, and certainly not by the ONR as it will be, but we need to be clear where those divides operate. Therefore, this group of amendments seeks to make that a bit clearer. Amendment 38B would make it clear that this provision relates to civil sites. There may be some ambiguity here because defence establishments, which are, as I understand it, regulated by the Defence Nuclear Safety Regulator, often have some quasi-civilian activity. If it is clear that even those activities are excluded from the ONR, we probably need to make that clear in the Bill, and that is why I suggest that we insert the word “civil”.
Amendment 38D proposes that, once it is clear which sites we are operating on, the Secretary of State or the ONR should be obliged to provide a public list of such sites. At the moment, such sites are defined by whether they have a licence. The licences may well be listed but licences may be at various levels of scrutiny. We need an absolute list somewhere in the system of what sites the ONR regards as nuclear sites for the purposes of the Bill.
There is also a reference in Clause 57 to “associated sites”. Whereas there is a definition of nuclear sites by reference to the licence and a definition of nuclear matter and nuclear material by reference to other regulations, there is no definition of associated sites. I have therefore offered a definition, although I think that it may be far too wide. However, certainly unless we explain “associated sites”, it will be difficult to know what is and is not covered by that.
Amendment 40N deals with the issue that I have just described—that is, sites that do not yet have a licence but are moving towards being areas that would require a licence. As the nuclear industry expands on the generation side, as well as perhaps into other activities, we will expect sites to be in various degrees of preparation. Not long ago, Hinkley Point C, which I have visited on a number of occasions, did not have a licence or planning permission and it had not met all the other requirements in order to set up a nuclear power station. Obviously the functioning power stations and the ones that closed had all those things covered, but the area of Hinkley Point C could not yet be designated as a site because it did not have a licence. Every prospective nuclear power station site will have a period before it gets a licence to operate. We need to make sure that that is also covered and that it is clearly the ONR’s responsibility and, to some extent, the responsibility of other organisations, which I shall come to in a separate group of amendments.
There is also the issue of transport. It is clear that the ONR will now be inheriting from the HSE not only road transport but rail transport, which previously came under the ORR and the rail regulations. It is also clear in this draft that the ONR will cover shipping. However, aviation is a rather difficult issue. Although not much civil nuclear material will be carried in aircraft, some will be, and, if the ONR is not the regulator for its transportation by air, it needs to be made clear who is. At a quick glance, I could not see whether the CAA’s responsibilities covered this, and the Minister may be able to put me right on that, but we need to know whether, if I am suggesting that we also cover air transport, where that responsibility lies.
Therefore, in this first group, there are several issues relating to scope. It would be helpful to have some clarity now but, if the noble Baroness and her advisers feel that it would be better to write to me and other noble Lords, then I shall be perfectly happy with that. I beg to move.
Lord Whitty
My Lords, I will be very happy to withdraw the amendment and I thank the Minister very much for the clarification. I think there are still things which in some respects are not as clear as perhaps the noble Lord, Lord Deben, and I would like, and I will quickly go through them. I am grateful for the support of the noble Lord, Lord Jenkin, in relation to air transport and his general intervention. He talked a lot about the relationships with other organisations, which arise in the group after next, and that also tempted my noble friend Lord O’Neill down the same road. If my noble friend does not mind, I will not respond to that at this point. I am also grateful for the Minister’s indication about how the Government intend to deal with the report of the Delegated Powers Committee, and no doubt we can return to that on Report.
In relation to the designation of “civil” and the requirement on the list of sites, I regret that I failed to notice that there is a reference to a list of sites on page 180. That would be extremely helpful. It would clarify the issue, because I do not expect anybody would expect the AWRE at Aldermaston to appear on a civil nuclear site list but I suspect they might for the Rolls Royce engineering works. I also suspect there will be others where it is not absolutely clear. I am not arguing that they should be within the ONR’s remit, but from first principles, it will not be obvious that it is not. So, while the list will be helpful, some clarity is still needed.
Regarding aircraft, I am still not absolutely clear. Clearly the CAA does have some responsibilities here, as does the international regulatory authority, but the noble Baroness, Lady Verma, seemed to say that internal flights were already covered. Both I and the noble Lord, Lord Jenkin, could not see where that is in Clause 59, where it very clearly refers to internal shipping and internal or territorial waters for shipping and to rail and road, but not to air. I am not expecting an answer now, but to me what the noble Baroness was saying did not seem absolutely clear.
On the issue of “associated sites”, clearly my definition is too wide and I would not expect the ONR to be regulating the activity of the distillers that are putting bubbles in our bubbly. I think that operationally there is a need for a definition of associated sites. As the noble Lord, Lord Deben, said, it is more product-related, but whether they regulate that only at the point where it arrived on a licensed nuclear site is at the frontier of the ONR’s responsibility.
All I was trying to establish regarding the pre-licensing activity, which I think the noble Lords, Lord Jenkin and Lord Deben, describe—and taking Hinkley Point as an example—was that the HSE and the ONR as was and the new ONR have a responsibility well before there is any nuclear activity on that site. So that is within its area of responsibility. It is not a licensed nuclear site until the activity begins, but it has a major role in preparing for that. Therefore, it should be part of the ONR’s responsibilities. That is all that amendment was attempting to establish.
We have had an interesting and wide-ranging debate—slightly wider ranging than the actual amendment—and I thank the Minister for clarifying some of that. If her officials feel that there is more which needs clarifying, either in a letter or by way of some discussions, I would be very open to that. I beg leave to withdraw the amendment.
Lord Whitty
“( ) For the purposes of this section, the provision of section 2 of the 1974 Act with regard to information to and representation of workers on health and safety issues shall continue to apply.”
Lord Whitty
My Lords, this amendment deals with relatively bread-and-butter matters and with the effects of the transfer of responsibility for non-nuclear health and safety functions on nuclear sites from the HSE to the ONR. In various ways, we seek to ensure that there is continued protection for the workers on those sites, even though the ONR and not the HSE is now the appropriate regulator and enforcer, and that the provisions of the health and safety Act of 1974 would continue to apply.
Amendment 38E states unambiguously, for clarity’s sake, that the workers on ONR sites still have the rights provided under Section 2 of the 1974 Act. I was involved in the discussions on the 1974 Act. I cannot go back quite as far as the noble Lord, Lord Jenkin, did—to 1965—although, within three years of that Act being passed, I worked on one of the nuclear sites that it applied to. However, Section 2 of the 1974 act provides the basic health and safety rights: to information, to representation through safety reps and to consultation. I am concerned here mainly with non-nuclear matters on nuclear sites, but I want it made clear that that provision will still apply to those workers in relation to both nuclear and non-nuclear matters.
I will jump to Amendment 38U, which is perhaps a bit esoteric. It deals with existing compensation schemes for workers on nuclear sites where there is the issue of existing schemes, particularly in relation to radiation damage, and where collective arrangements were established 20 or so years ago. The change of regulations and the change in responsibility should not alter the ability of workers on nuclear sites to receive the compensation provided under those schemes, which avoid lengthy and complex legal proceedings. The Minister is looking puzzled at this. I am happy to talk to her officials outside but it is important that that is retained.
More controversially, Amendment 38T would delete the application to this sector of a change that was made under the Enterprise and Regulatory Reform Act a few weeks ago. It was pretty controversial in this House and I suspect that even those who voted for it here did not expect it to apply on nuclear sites. Writing the implications of that Act into this Bill means that on nuclear sites, whether for non-nuclear issues or for nuclear issues that are not specifically provided for in the regulations, there is no ability for a worker to seek compensation for a breach of statutory duty. Taking the economy as a whole, “breach of statutory duty” can cover a wide range of things—we had that debate the other week. However, that a breach of statutory duty on a nuclear site, for whatever reason, should not allow the worker to sue for that breach is not what the public would expect.
There is a particular sensitivity about this change applying to nuclear sites, whatever the merits of a general change. Your Lordships can imagine the situation arising where workers had been affected as a result of a breach of statutory duty by the management or the contractors on a nuclear site. If those workers were unable to sue for that breach of statutory duty, there would be outrage in every newspaper from the Daily Mail to the Morning Star. The department and the ONR need to be conscious of that and at least modify these clauses a little to ensure that that eventuality could not arise. I beg to move.
Baroness Verma
My Lords, in creating the ONR as a statutory body, it is important to ensure that the tenets of health and safety will continue to apply to the regulated community. Before I go on to respond to Amendment 38E, I should like to respond to Amendment 38U first, because it is important that I allay the noble Lord’s fears early on.
We considered in detail during the drafting of this clause that the amendment ensured that existing rights of compensation continued to remain available if people developed cancers or were subject to accidents. It is clear that it is still covered under the Nuclear Installations Act 1965, which puts in place a regime for compensating those who suffer injury or damage as a result of a nuclear incident. The regime covers nuclear incidents at nuclear-licensed sites or Crown sites, and claims are permitted to be made up to 30 years after the incident. I hope that has helped to address the noble Lord’s concerns lying behind the amendment.
In Amendment 38E, the noble Lord seeks to ensure that Section 2 of the Health and Safety at Work etc. Act continues to apply to nuclear sites in Great Britain regulated by the ONR. I can reassure him that the Health and Safety at Work etc. Act and relevant legislation made under it will continue to apply to ONR-regulated sites. This will include Section 2, and therefore I do not think that the amendment is necessary.
For clarity, amendments to the HSWA in Schedule 12 to the Bill will create the statutory ONR as an enforcing authority on nuclear sites and, as such, the statutory body will be responsible for the enforcement of all non-nuclear health and safety legislation, including operators’ compliance with the requirements for the provision of information and representation of workers. I think that that addresses the noble Lord’s fears.
Amendment 38T deals with civil liability. Clause 65 of the Bill sets out the application of civil liability for a breach of a duty contained in nuclear regulations and the safety provisions of the Nuclear Installations Act 1965.
As noble Lords may recall—I think that the noble Lord referred to it earlier—in the last parliamentary Session the Enterprise and Regulatory Reform Act amended the civil liability provisions contained within the Health and Safety at Work etc. Act 1974. The amendment would remove the provision setting out that breaches of a duty imposed by health and safety regulations would always be actionable where they gave rise to damage. Such regulations would include any made for the ONR’s nuclear safety, security, safeguards and radioactive materials transport purposes.
The amendment seeks to undermine the decision made in this House and the other place that civil liability should apply to health and safety legislation only where specific provision is made. Therefore, rather than making clear provision reversing the situation, the amendment would remove the clear wording of the existing clause, making it unclear whether a claim for breach of a statutory duty could be brought. The amendment does not seek to amend parallel provision in the Health and Safety at Work etc. Act 1974. By not doing so, it would create an unequal regime between the two major pieces of health and safety legislation in the field—this Bill and the Health and Safety at Work etc. Act. It would be inappropriate and untenable for us to create a statutory regime between the civil nuclear industry and others.
I hope that the noble Lord has found that explanation reassuring. However, if he would like further clarification and would like to meet with officials, I shall be more than happy to extend that invitation to him and to other noble Lords.
Lord Whitty
My Lords, I am grateful to the Minister for that. I am very satisfied with at least one and a half and possibly two out of three. I certainly accept her assurance that the provisions in Amendment 38U are not necessary. I was concerned that the Bill should not affect a scheme which provides a set level of damages for minor radiation activities and which has run for 30 or 40 years. I was party to the negotiations that set it up. Although there will now be very few people claiming under that scheme, there are some, and I hope that it will not be affected by the change of jurisdiction. Therefore, I am grateful for the Minister’s reassurance, which I hope is sufficient.
I do not expect the Government to change their mind about civil liability but I think that it was right for me to table this amendment because it draws attention to the consequences. The noble Lord, Lord Deben, says that we should not treat such sites any differently from any other sites. However, for all sorts of reasons, nuclear sites are dealt with differently, and the whole of this legislation deals with them differently. There is a highly subjective dimension to it and, in effect, he referred to that. If there is an incident on a nuclear site, it gets blown out of all proportion. I think that all sides of this Committee are in favour of an extension of the provision of our nuclear energy sources in this country.
We also know that it would not take a lot to turn public opinion in the wrong direction—we need only look at Germany—and for the whole strategy to fall flat on its face. It would be quite wrong if that arose because of a health and safety issue that was not provided for in the nuclear regulations, whether it concerned an omission regarding nuclear waste or nuclear material, or some other breach by the management at a nuclear plant. The reality is that the level of safety on nuclear sites, not only in respect of nuclear issues but on all others, has to be—the industry recognises this—of the highest order, and any breach must lead to a sanction.
Lord Deben
I would not want the noble Lord to mistake what I said. Of course a nuclear site, by its very nature, has to be treated seriously and differently. The Bill has a great deal of that difference in it. The issue I raised was this. The noble Lord referred to something that was not about nuclear sites but was a general statement of workers’ rights, and in particular of their ability to sue. The ability to sue here is based on a failure to meet responsibilities in a way that all of us would deplore. However, it has nothing to do with nuclear matters. Any failure in the nuclear area is already covered.
I know that the noble Lord wanted another go at what we discussed before. That is all well and good, and I would not for one moment stop him. I have done it myself and no doubt I will do it again. It takes one to see another; let us be perfectly clear about that. However, I say to the noble Lord that it is not sensible, even in his delicate way, to give people fears that are not reasonable. This question is dealt with fully in the Bill, and in other Acts. What the noble Lord is asking for has nothing to do with nuclear sites. If we were to agree to it, it would suggest that somehow or another it did. As it does not, it would be a faulty suggestion.
Lord Whitty
My Lords, I did not expect to convince the Minister, but before he stood up I had a slight hope of convincing the noble Lord, Lord Deben. Clearly, I have none whatever now. However, on a site such as Sellafield there are things that can go wrong that are not related to the handling of nuclear material but that could be fairly disastrous not only for objective reasons in terms of the damage they might do to workers and others on the site, but for the general reputation of the site. The fact that that would then lead to an inability to sue for a breach of statutory duty seems wrong. As the noble Lord, Lord Deben, indicated, I think that it is wrong in other sectors as well. However, we have special responsibility in going through the Bill to make sure that the nuclear sector is not vulnerable to things that government lawyers have changed in other respects that will have a disproportionately negative effect on the image of the nuclear industry. For that reason, I am not happy with the Minister’s reply, but I beg leave to withdraw the amendment.
Lord Whitty
“(4) Operations of the ONR under this section shall be conducted in conjunction with the Department for Energy and Climate Change.”
Lord Whitty
My Lords, I will speak also to the other amendments in this large group, to which the noble Lord, Lord Jenkin, and my noble friends Lord O’Neill and Lord Judd, have already referred. The ONR does not operate in isolation. Many other bodies—both regulatory bodies and operational, quasi-regulatory bodies—operate in this field. The ONR has relations with government departments and bodies such as the Environment Agency. I declare a recent past interest as a board member and non-executive director of the Environment Agency. In my final two years on the board, I had responsibility for nuclear matters.
The Nuclear Decommissioning Authority has huge responsibilities in relation to nuclear waste. Although not directly a regulator, it is a quasi-regulator on account of the conditions in which it deals with contracts and with the care of nuclear waste. We have referred to the Defence Nuclear Safety Regulator; there is clearly some overlap in responsibilities there. On the security side, there is also the Civil Nuclear Constabulary. There may be others. There are certainly some local authority responsibilities as well.
Lord Roper
My Lords, when I heard the noble Lord, Lord Whitty, introduce this amendment I had a good deal of sympathy with it. It seemed strange that we should be losing contact with something of such importance but having heard the last three speeches, I see the strength of the points made by my noble friends Lord Jenkin and Lord Deben and by the noble Lord, Lord O’Neill. I hope that on this occasion the noble Lord, Lord Whitty, will think carefully about this amendment.
Lord Whitty
My Lords, before the Minister replies, perhaps I might point out that most of this debate has been about a sponsoring department. I regret making what was a throw-away remark as a background to this, because none of my amendments attempt to or could reassign sponsorship responsibility from one department to another. It is entirely a matter for the Prime Minister. It is not a matter for regulation. I hope the Minister will deal with the amendments on their merits because there is clearly an overwhelming view in this Room on the matter of sponsorship. I am certainly not pursuing that today.
Baroness Verma
I am extremely grateful to the noble Lord, Lord Whitty, and I hope that I will be able to allay his fears. In fact, I think my noble friends Lord Deben and Lord Jenkin and the noble Lord, Lord O’Neill, have explained far more eloquently than I could why it is important that the DWP should remain the main sponsor body. I am extremely pleased to hear that the noble Lord, Lord Roper, has been convinced by argument and has changed his mind. That is the benefit of your Lordships’ House: we can have these detailed debates which highlight how things can be illustrated far better by people with far more experience than I have.
I assure the noble Lord, Lord Whitty, that DECC will still have appropriate statutory levers to ensure the effective delivery of policy areas for which DECC Ministers are accountable to Parliament. Such independence is a requirement of the European nuclear safety directive, which has been implemented by the UK.
I will now address the other amendments in the group, which have not had as much of an airing as the noble Lord would perhaps have liked. Amendments 38K, 38L and 38P allow for changes to how nuclear regulations are made, in particular that they could confer powers on other bodies. The Bill is deliberately focused solely on the ONR and the functions and remit that it needs to be an effective regulator. It would be a significant change of focus to make provision for conferring functions and responsibilities on other regulators and would require changes to many aspects of the Bill. In addition, any regulations made that covered the remit of another organisation could be made jointly with them, using the Bill and another more appropriate legislative vehicle. To that extent, I take the view that these amendments are unnecessary.
Lord Roper
I welcome what the Minister said about considering between now and Report the Delegated Powers Committee report on how these regulations are made for the first time. It is important that that is done and I hope she will give us some indication—perhaps in the reply which the Government will make to the committee’s report—of what is to be done on that matter. We will otherwise need to come back to this matter on Report.
Lord Whitty
My Lords, I join the noble Lord in welcoming what the Minister said. It is important that the Government give a clear response before Report to the Delegated Powers Committee’s recommendations, which affect powers under three important clauses in this section.
I appreciate the Minister’s reassurances and that she is going to give me a picture of how all this operates and who relates to whom. I should have started with that before I began drafting amendments for this complex part of the Bill. I thank noble Lords who have spoken and who, by and large, were not in support of writing much into the Bill.
I have largely dealt with the issue of relations with DECC on sponsorship. However, for the sake of historical accuracy I should say that the Health and Safety Executive and its predecessor bodies, such as the nuclear inspectorate and the Safety in Mind organisation, have frequently been in the same department as the sponsoring department for all or part of their activities. That may be tidied up by banging it into a department which has little responsibility for the industry, and that may be the right place. However, I reiterate that my amendments do not seek to change the sponsorship role but to create an important relationship between ONR and DECC. The two points at which I have inserted them relate to the nuclear security and nuclear safeguards areas, which are also covered by international obligations—and the department negotiating on international obligations, along with the FCO, will be DECC.
Clearly, the Committee’s view is that we should accept the status quo, and I will withdraw any implication that I or the Labour Party will not stick with the status quo. Without wishing to upset the general sponsorship arrangements, there is an issue of whether the legislation should at least at some point reflect the relationship with DECC as well. This is not to compromise the independence of the ONR, which is clearly set out in the early parts of this section of the Bill. I would not want to do anything to jeopardise that for the reasons that the noble Lord, Lord Deben, and others have spelled out.
As to the other regulatory bodies, I will look at the map or picture and see whether I need to come back on any specifics. However, Clause 84 refers to the co-operation between ONR and the HSE, for obvious reasons. Will the Minister look at that clause—she has no obligation to respond to this—and consider whether there should be a general requirement to co-operate with the other bodies operating within the nuclear area, without going through the specifics of my individual amendments? With that, I beg leave to withdraw the amendment.
Lord Whitty
Lord Whitty
My Lords, in moving Amendment 38R, I will also speak to the other amendments in this fairly mixed group. Perhaps Amendment 38R, and Amendment 38Q with which we have just dealt, should have been in the earlier group relating to workers in the nuclear sector. However, Amendment 38R deals with the provision that the ONR would have the ability to prohibit the employment of certain people under paragraph 10 of the schedule. Paragraph 9 provides that employment can be restricted to those who have met appropriate qualifications. I therefore wonder why we need the additional provision here; it is a relatively technical point.
Amendment 38V would make clear that the ONR is not seen as a Crown agency, whereas the HSE for most purposes is seen as a Crown agency or at least as a body which is an emanation of the state. Even where other regulators are public corporations in the form of their incorporation, there is no denial of their Crown status in legislation. I wonder whether this is simply to ensure and underline the fact that ONR employees will no longer be regarded as Civil Service employees, and therefore the inspectorates and highly technical skills that are needed by the ONR in the nuclear field can be rewarded at, probably, substantially higher rates than would be allowed under the Civil Service pay structure. That seems a slightly heavy way of ensuring that one could make appropriate market-rate payments to a very small and important sector. I hope that I can get clarification on that.
Amendments 40H and 40J relate to the provision of training, which is of course another important aspect. You do not need the quality of staff only when you recruit and pay them, you also need to continually update them within the ONR with the best possible training. Clause 8 provides that the ONR may provide training, whereas the HSE’s provisions, the equivalent of the Health and Safety at Work Act, provides that the HSE must provide training. Amendment 40J makes it clear that training is appropriate and relevant—it is not training for anything—but the lack of a requirement on the ONR to provide training needs to be addressed.
Baroness Verma
My Lords, as I said earlier, of course, I am doing my level best to ensure that the Committee gets the information. We are considering very carefully what the committee laid out.
Lord Whitty
My Lords, I thank the Minister for going through the amendments. I accept the argument in regard to people’s physical conditions, such as pregnancy, and other reasons why they should not go into certain areas, and I understand that the provision is for that. I am afraid that my suspicious and conspiratorial mind thought that it was something to do with security, with a big S, and therefore could be quite a wide and broad requirement. However, after the explanation that it is confined to those sorts of things, it is fine.
On the issue of the Crown, it seems to me that there are not many other bodies that are public bodies which have that explicit divorce from the Crown. I am not sure whether in shrinking the state, as the coalition intends to do, there is a whole range of these coming up. I assume that the ONR will never be privatised and that this is, as the Minister and I indicated, really a ruse to pay people more, which is necessary—although it is necessary for a number of other regulators, not excluding the Environment Agency’s nuclear staff, which will not be met by this change. I will not take it further now, but it is peculiar, and we will keep a weather eye open for any other use of this in relation to public bodies. We may have to consider at a later stage whether it is appropriate.
I do not want the ONR to be diverted on training, but it is the employer’s responsibility to ensure training; it does not necessarily have to provide it itself. It is explicit in the Health and Safety at Work etc Act and necessary in the HSE that the organisation has a responsibility to make sure that its people are trained up to full modern requirements. That is every employer’s responsibility but, in relation to nuclear regulation, it must be a particularly acute responsibility, which the employer ought to accept. So I do not really accept the Minister’s complacency about leaving “may” there, when “must” would reflect the status quo and what I hope is the reality of the ONR’s future regulation.
I accept that the Civil Service has changed a bit since my day when seniority used to be very important. I also accept that there is a reference specifically to pensions. But other aspects of seniority and continuous service are still relevant, including retirement dates and the point at which you can apply for, for example, early retirement on sickness or other extraneous grounds. I accept that it probably is not a point which needs to be covered in legislation. I do not think that it is a trivial point and may not be a trivial point for some of the staff who are due to transfer. With that, I beg leave to withdraw the amendment.
Lord Whitty
Lord Whitty
My Lords, this group is fairly straightforward and deals with the structure of the board of the ONR. The amendments allow us to move to increase the minimum number of non-executive members by one and to provide that among those non-executive directors there should be experience of the nuclear sector. The amendments in the name of the noble Lord, Lord Jenkin, probably express that slightly better than mine and I therefore hope that the Minister, if she does not smile on mine, will at least smile on his. The amendments also propose that the ONR board reflects at least some of the structure of the organisation from which it is coming. The HSE has always operated on a broadly tripartite basis, with employers, trade unions and representatives of workers represented on the Health and Safety Commission. The shadow ONR within the HSE also reflects that position.
I recognise that the Government are not that keen on trade unions and that regrettably, for the first time ever since 1974, through periods of government of every hue, this Government did not consult the TUC on the latest appointment to the board of the Health and Safety Commission. However, they appointed a trade union person to it. Therefore, they obviously continue to have some belief that the tripartite nature of the organisation is helpful. I think that that needs to apply also to the ONR, which operates some of the HSE’s non-nuclear functions and all the HSE’s nuclear functions. Therefore, it should be explicitly representative of people with experience as employers and people who have experience of representing employees—which, by and large, will involve trade unions.
It is very important to understand that the sector which the ONR will regulate is still quite a highly unionised sector. Although there have been difficulties, the co-operation between the workforce and the management is very important, which has been greatly appreciated at most points during the history of the nuclear sector. It also has been one in which the HSE has helped, by its structure of governance, to ensure that there is co-operation between the workforce, the management and the Government in relation to the management of the nuclear sector.
Whether in broader terms they like it or not, the Government would be wise to ensure that there is representation of the two sides of industry, as we used to say, in the nuclear industry and in the regulator which deals with the nuclear industry. Amendments 38V to 38X clear the ground for that and Amendment 38Y provides for it. I also support the amendments in the name of the noble Lord, Lord Jenkin, which, as I have said, perhaps are a better way of expressing the absolute necessity for people on that board to have experience of nuclear safety in operating their functions on the board. I would be interested to hear the Minister’s comments. I beg to move.
Lord Jenkin of Roding
My amendment has of course not been moved so I cannot withdraw it, as I am sure that my noble friend realises. I may study her remarks quite carefully, together with the advice that I have been taking on these matters. I hope that I will not need to return to this on Report, but the advice I had was that people felt pretty strongly that there had to be one non-executive director with experience in the area of the ONR. I am not quite sure whether the Bill gives them the power to do that. We hope that it should be firmly written into the Bill that they must, but I have not moved the amendment so I cannot withdraw it.
Lord Whitty
My Lords, I am somewhat disappointed by the Minister’s reply, but I should first apologise to the Committee that I did not refer in my opening remarks to the last three amendments in this group, which deal with cross-appointments. They would not be compulsory, but the Secretary of State should have the option of appointing people from other bodies with a role within the nuclear industry. It would be helpful to have something like that in the Bill, as co-ordination between agencies is aided by having non-executive directors who cross-represent. We do too little of it and, as a result, we have turf wars and misunderstandings between agencies. I could bore the Committee with some of those from my experience as a non-executive director of two such agencies and as a Minister. I agree that the Secretary of State should not be bound to do this, but the Bill should at least point him in that direction and I am disappointed that the Minister does not accept that.
On the point about pensions, this was a probing amendment. Very few regulators pay pensions to their board members. It is all part of the market rate for nuclear-trained and qualified people. I will not say any more about that in that case, as it is fine, but it is slightly odd to have that in legislation.
On the central question about the make-up of the board, it seems to me that the board, including the non-executives, must represent the best traditions in health and safety governance. That means that they have to have a high level of expertise and knowledge of the law, and of the technical and scientific areas, in which they operate. I am therefore a bit surprised that the Minister is not prepared to accept something like the amendment of the noble Lord, Lord Jenkin. It also means that the success of the Health and Safety Executive over 40 years—it has been a great success, since it has brought down the level of injuries, deaths and dangerous practices across the board in industry—has in part depended on it being seen as a collaborative effort.
The symbolism, and usually the reality, of that was that at the top level there were people representing the unions as well as the Government. Clearly, the Government still accept that view of the make-up of the HSE board even though they do not want to consult the TUC about it. Their advertisement for the board of the HSE, which I briefly considered, makes that clear.
It seems wrong that we should depart from that culture for the creation of something which is taking on responsibilities such as those of the ONR in a sector where collaboration and understanding between management and unions—and their ability to have a coherent approach to the management of risk on a daily basis—is so important, because the results of not so doing could be utterly catastrophic. The Government will regret not putting that structure in. Depending on the judgment of future Secretaries of State, they may regret not explicitly saying that they want one of the non-executive members to,
“have experience of … nuclear safety”.
It is not sufficient to say that that will be provided by the executive directors. The whole point of non-executive directors is that they can, on equal terms, discuss these issues with the executive directors. In terms of representation, it may not have the structured or corporate state kind of formal representation that was there in the origins of the HSE, although I regret the passage of that. In reality, they ought to have been able to reproduce the culture of the Health and Safety Executive at top level, and they ought to have on the board people who have experience of the main areas which are the responsibility of the ONR.
I think that it is unfortunate that the Government do not reflect that in the legislation. It is one of the things we may return to. If the Bill goes through in this form, I hope that the judgments of future Secretaries of State, whichever department is responsible, will take these things into account anyway. It would be better, frankly, if it were in legislation. That would set the tone and nature of the organisation. In the mean time, I beg leave to withdraw my amendment at this stage.
Lord Whitty
Lord Whitty
My Lords, the Committee will be relieved to know that Amendment 40C is the lead amendment in the final group for today. This group deals with aspects of the financial structure of the ONR. I am not sure that even the totality of 60 pages of regulations and another 60-odd pages of schedules makes this subject clear to me.
Amendment 40C is pretty straightforward. I cannot see in the reporting mechanism, although I am sure that this would be the fact in practice, that the report that the ONR has to give to the Secretary of State, and that the Secretary of State gives to Parliament, must include a fully audited set of accounts. That seems fairly straightforward. If it is there somewhere else in the Bill, I will withdraw, but it seems helpful to put it in the formal reporting structures.
Amendment 40D deals with borrowing. It is a probing amendment. I do not, in principle, object to the ONR being able to borrow, but it is not a provision that we find very frequently in the powers of regulators. We know that there has been some indication that the amount of public funding that the Government will give to the ONR—directly out of the taxpayers’ pocket, as it were—will be £35 million a year, I think, potentially rising to £80 million. It is a fairly hefty whack and a very important contribution.
The ability to borrow over and above that, and the ability to charge fees, is pretty unusual in a regulator. Can the Minister give us some indication of what she expects the total expenditure to be, not just the taxpayers’ and the fee income, but the total expenditure, roughly, of the ONR in its early years of operation? How much of that does she expect will need to be raised through borrowing? This is quite a delicate area. I am sure there are some public bodies that can borrow but, generally speaking, not regulators.
In the nuclear sector, speakers on previous amendments have emphasised the absolute necessity of the ONR being independent. There is a wider issue of conflict of interest over whom it would borrow from and what obligations that borrowing would provide. It is presumably not helpful if the ONR borrows from the industry it intends to regulate or anybody with connections to it. If we go ahead with an ability to borrow, there should be some pretty explicit restrictions on it. If the provision simply means that the ONR can borrow from the public works system of loans from the Government, we probably should say so. If it goes outside that, issues do arise.
This is not only an industry issue; security and safeguard issues are also involved. Would we want it to borrow from overseas sources? Probably not in most cases. In a subsequent clause we allow the ONR to operate overseas, but should it be able to borrow money to do so? Again, who will it borrow the money from to regulate or help regulate someone else’s nuclear sector? I am suspicious about this. My amendments would delete the lot but I am willing to listen to something short of that. Before we finish with the Bill, the Government need to be cautious about this and make explicit what powers we are giving it, what the limitations are and what the money is for.
On Amendment 40G, Clause 34 allows the ONR to charge fees. However, it is not clear on what basis those fees will be charged. In general, the Treasury would require regulators to charge fees based on full-cost recovery. Is that the principle on which the ONR is to operate? It is not quite the principle on which the HSE operates, but it is moving towards it. It is, broadly speaking, the principle on which the Environment Agency operates and it would be useful to know on what basis it is to charge fees to the industry and to whom in the industry it is to charge fees. Is it simply the operators of the nuclear sites and installations, or is the whole of the supply chain feeding into that operation to be charged fees as well?
Clause 79 allows the ONR to provide services to anyone, more or less, provided it has the consent of the Secretary of State. Presumably that includes overseas. In principle, it may be okay to provide the expertise of ONR staff in areas for which the ONR is not responsible—which, as I read it, Clause 79(2) to (5) allows—but that seems a bit odd. If the expertise and services it is providing are not in the areas for which the ONR was set up, you could have all sorts of odd operations. A top nuclear inspector in his spare time may also be an expert in karate or in almost any area. On the basis of this clause, the ONR could hire out its services under the label of ONR. More likely, you could get the ONR running an engineering consultancy service, a scientific and technical service or a metric measuring service using its expertise, but not in the areas for which it is responsible.
If we are going to do that, we will be creating a somewhat different beast—a beast that can diversify. As we find with quasi-public bodies that diversify, if that side concern turns into a seriously commercial money-making concern, it can distort the priorities and the nature of the organisation as well as create areas for conflicts of interest.
I hope these wide and bland powers to provide services to almost anyone will be looked at again by the Government, and that clarification will be given, if not in legislation then at least in the guidance, on how the ONR board and management will eventually operate. I beg to move.
Lord Jenkin of Roding
My Lords, I have doubts about two amendments in this group. On Amendment 40G, I am told that full cost recovery always takes place. However, you have a potential position whereby a licensee who needs to be properly regulated may be in financial difficulties and unable to pay the charges that he would otherwise have to. It may be a rare occurrence but, given that they attempt a full cost recovery at the moment, there needs to be a possibility that some essential services may not be paid for on the spot by the licensee because they do not have the money. I would be very interested to hear any other arguments.
I am unhappier about Amendment 40K. This point has been raised with me by the Nuclear Industry Association, which feels that it would be greatly to the advantage of the UK generally and the ONR in particular to be able to develop and make the best use of its expertise in markets not just in this country. The effect of eliminating subsections (4) to (9) of Clause 79 would be to reduce the ONR to its absolutely core activities. There is quite a strong feeling that that would not be to everybody’s advantage.
My noble friend referred to the effect of the Fukushima disaster and the great tsunami there, and I said earlier that it greatly enhanced the reputation of regulation in this country because of the work of Dr Weightman—but it goes wider than that. The supply chain for the nuclear industry is very much concerned with spreading its activities abroad to increase overseas earnings, and here, too, the ONR could provide valuable services and should not be prevented by the Bill from doing so. Of course, it will always be concerned primarily with its regulatory duties in this country, but it has the expertise, and will develop increasing expertise, to provide wider services and perhaps earn some money for itself and for this country. So I would be unhappy to see the elimination of those four subsections.
On the question of the account of what the total money might be, I await with interest the answer from my noble friend.
Lord Jenkin of Roding
Before my noble friend sits down I hope I may be allowed to say how much we owe to the noble Lord, Lord Whitty, for enabling us to have debated a large number of matters during the course of the afternoon. As I said earlier, I had my doubts about whether we would take the time. We will stop just half an hour short and are most grateful to him.
Lord Whitty
Flabbergasted as I am, I thank the noble Lord and others who are saying, “Hear, hear!” I wondered if we could get through a full day when I started on this process, because, in principle, we agree with the Government’s broad strategy and we certainly want an ONR which is effective, independent, vibrant and innovative. Anything I have said is not intended to restrict that. I am grateful to the noble Baroness for pointing me to paragraph 21 of Schedule 7 about the annual accounts. It would be helpful to have them all in one place, but nevertheless this seems to cover the point.
On full recovery of costs, there will be situations in which regulators cannot do that. They usually have to explain why to the Treasury, certainly if it is done on any systematic basis. There will be exceptions, but I think that the Government have said they will be pursuing the principle of full recovery of costs. I am not therefore pursuing the argument that this needs to be in legislation. At least we have a clear answer that that is the principle and that fees and costs will be covered plus the Secretary of State’s allocation of grant in aid—or whatever we call it these days.
That might still leave a gap which presumably is intended by the borrowing provisions here. As my noble friend Lord O’Neill says, I have proposed deletion, not to say that I am utterly opposed to borrowing powers, but to see to what degree the Government are likely to use them. The Minister has pretty much indicated that they would not use them that often, but they are there. Given that they are there, I think that in some capacity or another, the Government—it could be the Secretary of State in guidance, or whatever—need to be pretty careful of what kind of borrowing the ONR engage in, because this gets into the area of conflict of interest.
This also applies to my amendments in relation to what services the ONR can sell. Because my deletions would still leave subsections (1) and (2) of the clause, which allow the ONR to sell services anywhere in the world which relate to its areas of purpose—that is, nuclear safety in the widest sense—all the objectives of selling services to other states that are interested in developing nuclear power would be allowable, even if my full deletion was accepted. I am worried about a provision that says we can also sell services to anyone anywhere that are not related to our purpose. That seems to allow for a money-making venture which is not really related to the role of the ONR.
At the end of the day, through all of this, we have to remember that the ONR is a regulator. As a regulator it has to be cleaner than clean. It has to have clear sources of operation; clear standards to which it operates; clear standards for the qualification of its staff; and—yes—some limitations on what those staff and the organisation can do. To retain a genuinely world-class regulator in a very difficult and delicate field, we need to be careful not to allow any loopholes which allow a conflict of interest to be claimed, even if it is not for real. I am a bit suspicious about the issue of selling services. I think the Government should reflect on it. For now, I am happy to complete this stage—only 20 minutes in advance, regrettably—and beg leave to withdraw my amendment.