Nuclear Safeguards Bill

Viscount Trenchard Excerpts

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

“We absolutely owe it to businesses large and small to make sure that we are reflecting their needs”.

[Viscount Trenchard (Con)]

My Lords, I shall refer to the amendments tabled by the noble Baroness, Lady Featherstone, and the noble Lord, Lord Warner. The noble Baroness would like us to remain a full member of Euratom but, failing that, her amendment seeks to ensure that, as far as possible, we become an associate member of Euratom on exactly the same basis as we are a member. It seems to me that in that case we might as well remain a member. However, given that the treaties seem to be so mixed up with those of the EU, I understand that the Government are in receipt of legal advice that that is not a possible option.

However, it is not accurate to say that our continued associate membership of Euratom is essential for us to adopt and have approved by our nuclear partners a proper accredited safeguards regime. An accredited nuclear safeguards regime does not depend on meeting Euratom standards, it depends on meeting standards set by the IAEA. Euratom standards are thought to be less robust on process, procedures and controls than those set by the IAEA, which concentrate more heavily on verification processes, which is one reason why you need so many inspectors.

[Lord Teverson (LD)]

I thank the noble Viscount for letting me intervene, but I honestly do not understand that. If Euratom procedures were not up to IAEA standards, it would not be approved as a safeguarding authority by the International Atomic Energy Agency itself.

[Viscount Trenchard]

Euratom is certainly approved by the IAEA as having adequate standards. My point is that Euratom has standards that go beyond the level required by other international nuclear partners, including Japan, the United States and Australia. My point is that it is therefore not necessary to comply with Euratom standards to comply fully with the safeguards regime—

[Lord Hunt of Kings Heath (Lab)]

Will the noble Viscount give way?

[Viscount Trenchard]

Could I not continue, because I have just been interrupted? I will perhaps give way to the noble Lord in a minute.

I turn to Amendment 2, tabled by the noble Lord, Lord Warner. He refers to the supply to the United Kingdom of medical radioisotopes and their use and disposal, so far as this depends on UK membership of Euratom. My understanding is that it does not depend on UK membership of Euratom. Sixty per cent of the United Kingdom’s isotope supply comes from the EU and 40% from non-EU countries—predominantly South Africa, I think. Both are imported into the UK under fast-track procedures, and there seems no reason why that should change, whether or not we are a member of Euratom.

It is clearly essential that we avoid a cliff edge in this field, and for that reason, I look forward to hearing what the Minister has to say about the Government’s intention to avoid one. Clearly, something which replicates the effect of continued membership of Euratom during a transition period would be the easiest way to achieve that, because it will not be possible in the time available before March 2019 to negotiate and have ratified by their legislatures the four essential nuclear co-operation agreements with the United States, Australia, Japan and Canada that are our minimum requirement.

I am now happy to give way to the noble Lord.

[Lord Hunt of Kings Heath]

I just want to come back to the noble Viscount’s key point, which is that IAEA standards are less than those of Euratom. In evidence to the Public Bill Committee in the other place, the deputy chief inspector of the Office for Nuclear Regulation, which will be taking over the non-proliferation safeguarding role from Euratom under government plans, said that the result in March 2019 will be that we move from Euratom standards to standards that will mean fewer inspections and less intensity of inspections. That is surely the argument—I think the noble Viscount was hinting at this when we debated this last night—for not insisting that we establish our own regulatory function in March 2019 but carry on in some kind of relationship with Euratom. Whether it is transition, associate membership or alignment—whatever you want to call it—we should essentially continue to use Euratom until, if we insist on leaving Euratom in the end, the ONR can signify that it is up to Euratom standards.

[Viscount Trenchard]

I wholly agree, as I think I said, that the right way is to continue to rely on Euratom until such time as the ONR can apply a UK-specific safeguards standards regime approved by the IAEA. My point is that it is not necessary and might not be desirable. On that, I am particularly interested in the submissions made by the Nuclear Industry Association, on which perhaps the noble Lord, Lord Hutton, will make an intervention, which I would look forward to hearing with great interest. We do not necessarily need to follow Euratom; I am not saying that Euratom standards are not at least as good as IAEA’s required standards but, in so far as they go further, it does not necessarily mean that they are safer. It may mean that they are more cumbersome or that the frequency of verifications is more—

[Baroness Featherstone]

I thank the noble Viscount for giving way. Is he aware that the Government’s declared intention is to reach the Euratom standard, regardless of this debate?

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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—

[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.

[Lord O'Neill of Clackmannan (Lab)]

Before the noble Viscount sits down, will he clarify something? He sought to give us reassurance on medical isotopes and made the point that 40% of them come from South Africa and 60% from the Netherlands and France. Can he tell us whether they are all the same, because the logistical implications of transportation from South Africa are rather different than coming from the Low Countries and north-west France? Are all isotopes the same? I do not think that they are. Which ones come from which places? Is the reassurance that he is giving us quite as robust as he would like it to be?

[Viscount Trenchard]

My Lords, I am not sufficiently aware of the detail of the proportions of different types of isotopes that come from the European Union—the Netherlands, France and Germany—but the 60% from the EU comes mainly through the Channel Tunnel, as I understand. The 40% from non-EU countries, comes through Heathrow in the main and is subject to the fast-track customs clearance procedure. That is absolutely necessary given the 66-hour half-life that applies to quite a proportion of these isotopes.

[Lord Teverson]

My Lords, I think we should allow the noble Viscount to sit down, and remind ourselves that he is not the Minister. To go back to something that the noble Lord, Lord Warner, said, in a way, none of the amendments in this group is perfect. Why are they not perfect? It is because we have given our notice to withdraw from Euratom, yet we all know that that was not the greatest thing to do. So we are now trying to claw our way back to the status quo, having given notification under Article 106a of the Euratom treaty. We are trying to find a way to get back to where we want to be, but we are not allowed to withdraw our notification under the treaty. We certainly cannot within the scope of this Bill, but perhaps under the EU withdrawal Bill there is more scope. Who knows? It does not seem so long ago that we were debating that.

I presume the Minister will confirm that we do want to achieve Euratom standards, not bargain-basement, superstore value in terms of just the IAEA standards, although those are important. Can the Minister confirm that a transitional agreement is possible and would work, and that the EU 27 are up for this? Certainly in the publication on transitional arrangements, which was published last month, Euratom is a footnote on a couple of occasions, so I presume that it is in the mix in terms of the continuing acquis during the transition period.

What concerns me most about this is the need—as the noble Viscount has said, and he is quite right—to avoid this rather more precipitous cliff edge than there is even in the other areas of transitional commercial arrangements. When the break from the treaty happens, are we certain that the International Atomic Energy Agency would be prepared to have Euratom act as our safeguarding authority during a transitional period even though we are not legally a member of Euratom? That is a fundamental question. An answer would provide a lot more clarity and perhaps enable us to come back on Report with a suitable amendment which might actually work. We are not in a position to do that at the moment because we do not have that information.

Nuclear Safeguards Bill

Viscount Trenchard Excerpts

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

[Viscount Hanworth (Lab)]

My Lords, I discern from the letter sent on 20 February by the Minister to the Lords who have participated in the various stages of the Bill so far that the Government intend to impose most of the costs of a nuclear safeguarding regime on the civil nuclear industry. It is clear that the regime will deal mainly with matters that are remote from the everyday concerns of the civil industry. Therefore, it seems inappropriate that it should be asked to bear most of the costs. Be that as it may, it is appropriate that it should be consulted regarding provisions of statutory regulations. This is not what is being called for directly in the amendments. However, unless the Government signal clearly that they intend to consult the industry, this is something they should be enjoined to do by an amendment to be brought forward on Report.

[Viscount Trenchard (Con)]

My Lords, I support what my noble friend, Lady Neville-Rolfe, just said. I would also be cautious about including in the Bill a requirement to ensure that there should be sufficient staffing, because it is not a good reason to decide whether to put in a certain control. Obviously everything the Government undertake to do must be properly staffed.

I ask the Minister to confirm whether the Government consider that a transition period will be necessary for Euratom as well as for the EU generally. I had understood that the Government expected to put in place a satisfactory accredited nuclear safeguards regime before March next year, although I understand that certain doubts have been expressed about whether that is feasible in the time available, given the necessity to obtain the consent of various other countries’ legislatures, with which we would have to establish new nuclear co-operation agreements. Could the Minister tell the Committee whether a transition period for Euratom is envisaged?

I question what the noble Baroness, Lady Featherstone, said about Euratom standards being better than IAEA standards. I understand that the Government’s intention and commitment is ultimately to reach Euratom standards, but I am not sure there is any evidence that Euratom’s standards are better than IAEA standards. Two weeks ago at a briefing by a representative of EDF, together with the NIA, we heard that, in his opinion, the safety standards set by the IAEA are more robust on process, procedures and controls than those set by Euratom and that Euratom concentrates heavily on verification processes that may or may not add anything to achieving a satisfactory level of safeguards. I look forward to hearing the Minister’s comments on that.

[Lord Teverson (LD)]

My Lords, I strongly support my noble friend’s amendment, but want to follow up what was said by the noble Lord, Lord Carlile, who made the obvious point that the more the Government keep us in touch with what is going on, the more confidence everybody, including the industry, has; we might then avoid half the debate we have every time we discuss Euratom. That is true of the whole process of EU withdrawal, but if we could just get it right in this niche area of Euratom, we could save the Government, Ministers and Parliament a whole load of time just by understanding what is going on.

To be honest, I think the Government undersell their position in this area in all sorts of ways. I thank the Minister, the noble Baroness, Lady Vere, for her letter to me in response to my question at the end of the last session about the transition for Euratom, because, so far as I could see, there was no disagreement between Brussels and the UK about it. The noble Baroness’s letter effectively confirmed that. In the legal draft framework on withdrawal and transition, there is a whole area on Euratom—I read it through yesterday; I do not have it here. In terms of the EU-UK relationship, the withdrawal from Euratom, particularly in respect of the transitional period, seems fairly well agreed, and I welcome that. The difficulty I still have is around third parties. There has been good communication on where we have got to with nuclear co-operation agreements, but I am still unclear as to whether the International Atomic Energy Agency and third countries are happy to accept that, while not being a member of Euratom, we can still use all those provisions as a safeguarding regime.

I also noted in the document the expectation of the UK to come up to Euratom standards on nuclear safeguarding. I would be very interested to hear the Minister’s explanation of that and what it means for the transition and withdrawal process.

Nuclear Safeguards Bill

Viscount Trenchard Excerpts

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

[Viscount Trenchard (Con)]

My Lords, I very much respect the expert opinion of the noble Lords who have tabled this amendment. I share their concern about whether the ONR is going to be sufficiently staffed in time, with enough appropriately qualified experts who can quickly take up all the safeguarding duties. It is also essential that the ONR should have the necessary budgets and organisation and enough duly authorised persons in order to carry out its duties. I should like to hear from the Minister that he is satisfied that this will be the case.

I should also like to ask the Minister exactly what our status is going to be during the interim or implementation period, assuming that we have managed, before March 2019, to put in place an IAEA-approved safeguards regime. This is unlikely because I think we will need most of the implementation period till the end of 2020 to establish and enter into the new NCAs, at least with our principal nuclear trading partners. Many of them have to go through their own legislatures and we have no means of guaranteeing how smoothly this will be done. I think we can be confident that it is equally in their interests to make sure that they continue the appropriate arrangements with the United Kingdom as a major player in the nuclear sector.

I feel that the noble Lord, Lord Broers, and the other noble Lords who have tabled this amendment, fail to recognise that there is an upside from our leaving Euratom. It has been suggested that it is a mistake, and that we could have remained within Euratom but left the EU. Even if this were so—and I do not know whether I believe it or not—I think there are good reasons why we would do better to have our own safeguards regime approved by the IAEA and to escape from the rather cumbersome and onerous Euratom process.

Other noble Lords were present at the briefing given by Mr Colin Parker of EDF. I have also been told by Dr Pat Upson, former director of BNFL and Urenco and former chief executive of ETC—the joint venture between Urenco and EDF—that there could certainly be advantages to the UK in having an independent safeguards regime and not seeking to replicate Euratom safeguards which concentrate too much on complicated verification processes and are less robust than IAEA requirements on process, procedures and controls.

There are those who believe that our security in this very sensitive sector will also be enhanced if we are not obliged to share all the details of our research and development programme with the 27 members of Euratom. There is, therefore, a considerable upside. Euratom is also too expensive. To replicate Euratom’s safeguards regime does not provide extra safety or security over what is required by the IAEA. I therefore have some reservations about proposed new subsection (3)(c) of the noble Lord’s amendment regarding the necessity to continue to share research and development entirely with the Euratom community.

[Viscount Hanworth (Lab)]

My Lords, I am inclined to clap a hand on my head and express my utter amazement at the absurdity of this aspect of the Brexit agenda.

We are at present attempting to mitigate the deleterious consequences of a wholly unnecessary programme of the Government for leaving the Euratom consortium. The present amendment, which is supported by all other parties, foreshadows an inevitable outcome. The programme to leave Euratom will not be fulfilled by March 2019, when we shall formally leave the European Union, and the Government will have to bid for extra time. A similar amendment ought to have been brought forward by the Government. Their need to demonstrate their faith in Brexit may have prevented their doing so. Indeed, they have fostered some dangerous delusions. At the outset, the Government evinced an unreasonable optimism in the ability of the ONR to have the necessary security arrangements in place by March 2019. They have since become convinced that they will be able to negotiate a meaningful transition period thereafter from which our nuclear industry could profit. I believe that, notwithstanding recent events, it is far from certain that a workable agreement on a transition period will be reached. Certainly, a secure agreement has not yet been reached.

The Government also have an unjustified optimism regarding the likelihood that the necessary nuclear co-operation agreements, or NCAs, will be in place in time to avert a crisis in the supply of nuclear fuels and engineering materials. Without these NCAs in place, the generation of our electricity by nuclear power and the construction of the new nuclear power stations are likely to grind to a halt. Let me elaborate on these three points in the order that I have raised them, albeit that, in doing so I am conscious that I will repeat some familiar arguments. It is necessary to do so in the face of the obtuseness of the Government.

First is the question regarding the readiness of the ONR to assume the burden of nuclear safeguarding by March next year. Doubtless the Minister will attest that the ONR has declared that it is willing and able to undertake the task, and that it is working hard to meet the deadline. One is bound to retort, “It would say that, wouldn’t it?” But it has also said much else besides, which makes it abundantly clear that the best that it could achieve by that date is a threadbare organisation that would be severely understaffed. These honest admissions on the part of the ONR of its incapacity do not seem to have registered fully with the Government. However, they may have registered with other agencies that participate in the international nuclear regime. I am thinking of the foreign organisations that will require that we should have a proficient nuclear safeguarding regime in place if they are to continue to be our suppliers.

Next, there is the Government’s optimism regarding the likelihood of our being granted a lengthy transition period to ease the demands of Brexit. We have heard a statement recently from Michel Barnier to the effect that he sees a prospect for a rapid advancement of the negotiations, but he has insisted that all this depends on the precondition of an arrangement regarding the Irish border. I wonder how this sounds in the ears of the responsible government Ministers. Have they been listening more to the upbeat tone of the delivery of the message than to the preconditions that it asserts? To many listeners the message serves only to increase the anxiety that there will be no viable transitional arrangements.

The final point to make concerns the nuclear co-operation agreements or NCAs. The importance of enacting these in good time has been stressed repeatedly by EDF, which is the owner of Britain’s existing fleet of nuclear power stations and the constructor of the first of what is planned to be a new fleet. These are surely the people to whom we should be listening. The NCAs can be established only when there is a viable UK nuclear safeguarding regime in place. There is likely to be a considerable hiatus between the time when a new UK nuclear safeguarding regime is up and running and the enactment of the necessary NCAs. The Government have said nothing about how they would accommodate the inevitable delays. As many have mentioned, one is mindful of the fact that a new NCA with the United States will require to be ratified by the Senate. This could be a hazardous and lengthy process. The US has a nuclear industry of its own. Someone in the US legislature might be minded to promote the commercial interests of the American industry at the expense of ours and at the expense of the French, who own our nuclear power stations. I believe that this amendment foreshadows an inevitable outcome. The Government will be bound to take the steps proposed in the amendment.

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[Viscount Trenchard]

My Lords, I welcome Amendment 6, proposed by the Minister. It makes a lot of sense but I do not think the House would be wise to support Amendments 7 or 9. Amendment 7 is about collaboration with Euratom in future in research and development and the import and export of qualifying nuclear material. I think we will benefit from greater flexibility by making our own decisions about research and development and committing our own funds. Of course Euratom will be an important and continuing partner for us in nuclear but we will be freed of the obligation and in the position where we will own our own research material, which of course in the JET and ITER programmes we do not. We should caution against overoptimism on what ITER is likely to bring; I understand that there is considerable scepticism in the industry about whether it is really worth the massive amount of money that it costs, and that there is some chance of a demonstration operation by 2045 if all goes well. If we were to commit funds to SMR research, by contrast, in which we in this country have several notable qualified players, we would own the outcome and could get ourselves back into the lead in nuclear by selling our new technology to others. We would have greater flexibility and the freedom not to be committed—

[Lord Fox (LD)]

I remind the noble Viscount that the two are not mutually exclusive.

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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.