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Moved by Baroness Featherstone
1: Before Clause 1, insert the following new Clause—“Associate membership of Euratom(1) In negotiating and concluding an agreement in accordance with Article 50(2) of the Treaty on European Union on the future of nuclear safeguards in the United Kingdom, Ministers of the Crown must have regard to the desirability of becoming an associate member of Euratom.(2) The Secretary of State must lay before both Houses of Parliament a written statement detailing the progress towards achieving the negotiating objective under subsection (1)—(a) one month,(b) five months, and(c) nine months,after the passing of this Act.(3) In the event that the United Kingdom becomes an associate member of Euratom, sections 1 and 2 of this Act cease to have effect.”
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
“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.
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
I now turn to my Amendments 2 and 16, which are concerned with a review of the withdrawal from Euratom. These amendments require the Secretary of State, in consultation with other relevant interests, to produce by the end of 2018 a report to both Houses of Parliament on discussions with Euratom on the scope and conditions for a form of association with Euratom short of full membership that minimises change to the present nuclear safeguards. This report must cover the issues in subsection (2) of the proposed new clause and the legislative changes required to affect such a new partnership or association. That is, I suggest, consistent with the report of
Amendment 16 simply prevents the commencement of Clauses 1 and 2 of the Bill until this report has been laid before the Houses of Parliament and ensures that the regulations commencing Clauses 1 and 2 are subject to the affirmative procedure. This amendment has been provoked by the Government’s claims that they want to get “as close as possible” to the current Euratom regime on nuclear safeguarding but without any public evidence that they have effective measures for doing so.
The Government’s lack of transparency on this issue, like so much of their behaviour on Brexit, simply fosters a total lack of trust in ministerial assurances about good progress. Most of us have had enough of warm but vague assurances of good progress by government Ministers without any real detail or realistic timetables for actions to be completed. By “us”, I do not mean just parliamentarians but in this case the UK nuclear industry and the many talented people working in it.
I am not wedded to the precise wording of Amendment 2 and 16 or to the timetable involved. I am more than happy to sit down with colleagues on other Benches and with the Government to agree an alternative amendment or series of amendments. What I am not prepared to do is to be fobbed off with another dose of ministerial assurances on progress and that it will all be all right on the night. I want to see an amendment in this territory on the face of the Bill on Report to ensure effective action by the Government and a transparent system of regular information on progress and to minimise risk to the UK’s nuclear industry. Parliament needs to be able to assure itself that the Executive are taking effective action in an area where they instigated the change. Nobody other than the Government, this Government, required us to leave Euratom at the time of the Article 50 invocation Bill.
I now turn to Amendment 12 on a transition period. This is motivated by several concerns. The first, and most important, is the clear recognition by the ONR that a new UK nuclear safeguarding regime of the same standard as Euratom cannot be achieved by exit day on
What I cannot understand is why, when the Government seem to accept the principle of a transition or implementation period of around two years post Brexit in other areas, they rejected an amendment on Report in the Commons that did just that for the nuclear industry. My Amendment 12 is based on the Commons amendment, tweaked a bit by the Public Bill Office, and I thank it for all its help in drafting these amendments. I hope the amendment will command support across the House and commend itself to the Government. It will certainly commend itself to the industry, which is clearly very worried that without such a guaranteed transition period it will be left on exit day in an international no man’s land, outside Euratom but not within an internationally recognised safeguarding regime that would enable nuclear co-operation agreements to be concluded.
I hope we will not have the Minister saying that this issue can be left to the wider discussions on Brexit transition/implementation arrangements. We need to give our nuclear industry the certainty in the Bill that there will be a parliamentary approved transition as quickly as possible. After all, Euratom is governed by a separate treaty from membership of the EU, so why should there not be bespoke transition arrangements for withdrawal from Euratom? Again, I am more than happy to be flexible and to improve the wording of the amendment in discussion with colleagues in the House and with the Government, but the Bill should not leave this House without a clear provision for a transition period of about two years.
I say again that I support the intentions of the other amendments in this group and would like to work with colleagues on a combined set of amendments for Report. I shall listen carefully to what the Minister says but, after the performance of his ministerial colleague last night on this issue, I have to say I do not have very high expectations of a positive response. But who knows? Perhaps, after sleeping on it, the Government will have a Pauline conversion. After all, the Minister’s boss, Greg Clark, said in a profile in this week’s The House magazine:
“We absolutely owe it to businesses large and small to make sure that we are reflecting their needs”.
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.
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—
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.
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.
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—
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?
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.
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
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.
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?
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.
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.
My Lords, after the excellent introduction by the noble Baroness, Lady Featherstone, and the excellent speech by the noble Lord, Lord Warner, I listened with great attention to what was said by the noble Viscount. My conclusion, after he sat down, was that I should take a deep breath, count to three and then try to analyse where we are up to in this debate. My conclusions are: first, we have at the moment a very satisfactory set of standards; secondly, what we are offered as an alternative is a set of good intentions. We know about good intentions; they do not always lead to good standards, or even any standards being adopted at all. I say to the Minister that what persuades those of us who are taking part in this important debate, and who took part in yesterday’s analogous debates, is real anxiety about the standards this country will have in the future, and about whether we will be recognised as coming up to world standards in relation to nuclear safeguards. It was partly with that in mind that I went to look at the EU exit analysis papers at 100 Parliament Street the day before yesterday, which were referred to extensively in the night shift before we signed up to today’s morning shift. I looked in those papers for a single sentence or word about the future of nuclear safety and Euratom. I was only there for three-quarters of an hour so I only had time to read the documents twice, but I do not recall, and did not note, a single word on this issue. It worries me that it was not there because this is a key issue that should have been addressed in the advice given to Ministers, which is what those papers really are.
Therefore, I repeat a question I asked of the Minister’s colleague last night: how many meetings have so far taken place on this issue with European negotiating counterparts? Can we be given a number please? Next question: how many meetings of that kind have taken place on this issue with counterparts in the IAEA? Please can we have numbers because they will give us at least an indication of how far down the road we are towards turning the good intentions into a set of future standards? I am not wholly opposed to leaving Euratom: we may be able to do at least as well or better under other arrangements, but we have to do at least as well or better, otherwise we will serve the country ill.
I will intervene very briefly to express my support for the amendments that my noble friend Lord Warner has tabled, and the spirit behind the amendments that the noble Baroness, Lady Featherstone, has tabled.
We have analysed this problem pretty astutely and know exactly where we are. I declare an interest as chairman of the Nuclear Industry Association. The industry wants to avoid the cataclysmic consequence of exiting the European Union in March 2019 without an effective arrangement in place that will oversee nuclear safeguards in the UK. It is impossible to exaggerate the significance of getting to that point. If that is where we get to and there are no arrangements in place with Euratom at that point, I think, as the noble Viscount and others said, that it is highly unlikely that we will have a compliant safeguarding regime applying to the United Kingdom civil nuclear industry. That would be a terrible event, and I cannot exaggerate the significance or consequence of that.
My understanding, therefore, is that it is the Government’s policy to try to reach an association agreement with Euratom that will cover this transitional period of at least two years. That, I believe, is absolutely essential—because, as the noble Viscount and the noble Lord, Lord Teverson, made clear, we will not be in a position to operate an independent UK arrangement that meets international standards by March 2019. The Minister may well correct me and tell me that I am wrong about that, but I think that it is highly improbable. So it seems to me that the issue behind all these amendments is essentially one of timing. If it is the Government’s stated intention to reach an association agreement with Euratom to preserve the existing internationally recognised arrangements that apply to the UK, it is very hard to imagine why we will need this Bill to be implemented at all. If it is possible to reach an agreement under Article 206, I think, of the Euratom treaty, which specifically refers to reciprocal rights and obligations, it is certainly broad enough as a treaty provision—as I believe, the industry believes and our advisers believe—to cover the full spectrum of safeguarding arrangements covered by the Euratom treaty and we will not need the ONR to be given these new additional powers. If we can reach an agreement for a transitional period, I do not understand why that transitional arrangement cannot continue for longer, specifically in this regard in relation to the civil nuclear industry.
On the whole debate about exiting the European Union, in my humble opinion we are doing a terrible thing in leaving it and we will live to regret it—I am quite sure that future generations will point the finger at us and ask, “How on earth did you leave us with this set of problems to deal with?” I am trying very hard not to get involved in that debate but to speak specifically about the consequences for the civil nuclear industry. If Ministers are prepared to be pragmatic and look at these issues sui generis, as it were, specifically in relation to the civil nuclear industry, there is no reason at all why a two-year transitional agreement reached under Article 206 of the treaty cannot be extended in perpetuity. That, by far and away, is the best set of circumstances for us to arrive at.
The industry—I believe I can speak on behalf of it today—would much prefer that outcome to any other on offer. It offers the one thing the industry wants, which is continuity and certainty. The other option involves risk, challenge and uncertainty, which are profoundly bad for business. Much of our international civil nuclear business is dependent on the nuclear co-operation agreements that the noble Viscount referred to, and, crucially, our agreement with the United States. But let us not lose sight of one important factor. Sizewell B produces about 7% or 8% of our electricity. That power plant simply could not be maintained if it was not for the NCA that we have with the United States. It is a pressurised water reactor and the key components are US technology. If the NCA falls in March 2019 because we have not reached a transitional agreement with Euratom and we have not been able to set up the ONR with an internationally recognised nuclear safeguarding arrangement, I and many others do not see how we will be able to continue with many of these transfers of skills and technology that we depend on now.
There is no sense that I or anyone else who speaks for the industry is trying to rattle the cage here. We are just stating the facts, which are pretty blunt. It is absolutely the responsibility of Ministers now to make sure that we do not walk off the edge of this cliff. There is a perfectly straightforward path in front of them, which is summarised pretty well in the amendments tabled by the noble Lord, Lord Warner, which lay out that path for us, and the right direction for us to travel. It is about pragmatism. If we can reach an agreement under Article 206 of the Euratom treaty, we are home and dry and we will not need to do anything else, as long as the Government are showing the necessary pragmatism and willingness and the desire to support the UK civil nuclear industry in this crucial moment of challenge.
I will just lob one further bit of context into the debate. We talk blandly about the importance of the industry to our energy, our security, our low-carbon challenge and all the changes that we are trying to respond to. But what is often lost sight of in this debate is that the nuclear industry is as significant to our economy as the aerospace industry. It makes the same tax and revenue contribution and creates as many jobs; it is essential to Britain’s future as a manufacturing nation. Let us not play fast and loose with it.
My Lords, I compliment the noble Lord, Lord Hutton, on making clear from the industry’s point of view the importance of this continuity.
I will make a simple and perhaps naive and impractical point in a couple of minutes. I support Amendment 1 and the other amendments because, as I said at Second Reading and again last night when the situation with Euratom arose in Committee on the EU (Withdrawal) Bill, my interests are centred on sustaining our research and development in support of nuclear power projects. The noble Lord, Lord Hutton, just pointed out the overall importance of sustaining our interest in the nuclear industry. This topic has been followed with some concern by the Science and Technology Select Committee for many years, including during the period when I chaired that committee. I have one reservation with Amendment 1, which I will get to in a minute.
We have sustained world-competitive expertise in many areas of nuclear technology, such as waste disposal, but have relied on collaboration, especially through our membership of Euratom, in keeping up with the development of new types of reactors and of course with nuclear fusion. Research and development of this type is carried out by large teams of research engineers and scientists coming from a broad range of disciplines, and advances emerge through frequent and continuous interactions that occur when researchers get together at symposia and workshops. An idea can come from anywhere in the world. These are team projects, where advances are made through the exchange of information and close collaboration.
I recall when I first took responsibility for a large group of research engineers and scientists developing the advanced electronics for IBM’s new computers in the United States in the early 1980s. A senior engineer with decades of experience pioneering the development of computers took me aside and gave me a lecture about morale. He emphasised the importance of maintaining high morale in managing large teams of researchers working on difficult projects. The fusion project is an extremely difficult project. I was discussing this with a previous Chancellor of the Exchequer just now, who said that the results with fusion were very disappointing. Of course, it is an extraordinarily difficult project. You are trying to maintain extremely high temperatures, higher than on the sun, and trying to contain plasma in a container and then have it survive severe bombardment from neutrons. Why are we doing this project? Because it offers the ultimate solution to our energy problems. We pursue much larger scientific projects—CERN spent orders of magnitude more than we are spending on the ITER project. We have played a key role in that project and we can continue to contribute to it, but we must feel part of the team.
My point is that morale is maintained by feeling part of a team. It is very much like the Olympics. I went back home last night at midnight, and the one good thing about staying up that late was that the slalom was still on the television. We have a very fine slalom skier who trained on a plastic slope—that is a bit of technology for you. He skied brilliantly and got into the top 10, but he had one disadvantage. He did not have the other three members of the team that the Austrians, the French and the Swiss had, who radioed back the moment they got to the bottom to say, “Watch turns five, seven and nine because of the rut there”. He had to do it all on his own.
We do not want to be on our own in our nuclear endeavours: we want to be part of the team but a full member of it, not an associate member. So my unrealistic suggestion is that we go for full membership of the team and not associate membership.
I am very pleased to follow the last two speakers, because I have had associations with both of them. In the case of my noble friend Lord Hutton, I was his predecessor as chair of the Nuclear Industry Association.
In supporting Amendments 2, 12 and 17, particularly Amendment 2, I draw attention to the fact that the Bill is about reassuring the industry and the British people that we will have safeguarding regimes of a quality and a standard that will enable there to be continuing public support for civil nuclear in the United Kingdom. This is not a matter of holding the Government’s feet to the fire—although, as an Opposition Member, I largely approve of such an approach—but to make it clear that it is essential that we get reports back. The fact is that, so far—as has been evidenced by the appearance of the word “Euratom” in the withdrawal papers—that has been a pretty low priority for the Government. Frankly, we cannot trust them without something in the Bill to require there to be a report, albeit an interim one, by Christmas. That is where both the Liberal amendment and the amendment from my colleagues come in. That is not unreasonable, because the record is pretty feeble so far. At worst, we have heard platitudinous nonsense from the Government on many of these issues. We want there to be a requirement that means that their attention is focused on a particular time and date so that, before Christmas of this year, we will have an interim report on the progress that has been made. The areas covered are quite clear.
It is also fair to say that we need a transition period. The noble Lord, Lord Broers, has been riding the horse that he usually rides in respect of research and development, on which he has become an acknowledged expert. I just make the point that there is a lot more to the nuclear industry than research and development and the generation of power. We have considerable expertise in safety matters as consultants in United Kingdom companies and internationally. Our record on the decommissioning of power stations is probably second to none because we have been at it longer than anyone else and because we started building them long before most other people. However, if we are not able to keep abreast of improvements and developments, we will not be able to continue that kind of work.
As I said, the nuclear cycle involves more than just research and the generation of power, and at the moment we enjoy a pretty good position. As my noble friend Lord Hutton said, it is a not insignificant contributor to the engineering and manufacturing side of the British economy, so it is economically important. Politically, it is also important that in this House there is a consensus that then breeds confidence in the country as a whole.
These amendments will have their deficiencies. At this stage in legislation it is the stuff of ministerial responses to say that the amendments are not quite good enough, but when the case is strong enough—I think we all believe that it is—it is the responsibility of government to accept the spirit of the amendments and to go away and consult the Front Benches and interested parties to secure wording which we consider to be appropriate for the scale of the challenge that has to be met to sustain the confidence of the nuclear industry, the confidence of this House and, ultimately, the confidence of the country as a whole in the civil nuclear project in which we are currently engaged.
I will be very disappointed if the Minister tries to duck and dive on this issue. If he does, I suspect that he will get bruised when we come to consider it at the next stage. I think that there is a strong feeling about this on pretty well all sides of the House. Even the noble Viscount was somewhat half-hearted in his backing of the Government and made the point that transitional arrangements are necessary. However, for transitional arrangements to be effective, we must have reports at every stage of the process. Frankly, nine months on is not an unreasonable point at which to ask for such a report. It is not enough for Ministers simply to say, “Yes, we will come back and address the House”. We need something more concrete than that. We also need assurances that, before any further action is taken, we are given clear indications of matters relating to finance and future developments so that we can avoid the charge that we have given the Government a blank cheque in relation to a piece of our national economy which is essential to the future energy needs of our country.
My Lords, noble Lords have heard about the scale of the risk of not achieving the objective of the Bill. If you were doing a classic risk analysis in the private sector—the sort of thing that, under corporate governance, the Minister’s department requires every board to observe—you would say that there was a very high risk of not achieving that objective. Even if the Minister thought that there was only a very small chance of not doing so, if we were a board of directors he would be required to mitigate that risk. These amendments provide a pathway to mitigation—a pathway to a plan B. It is the sort of medicine that, quite rightly, the department supplies for all business and enterprise across the United Kingdom—that is, understanding the risks that they are undergoing and seeking a way to mitigate them. That is exactly what the Government and the Minister should be doing, and it is why, between now and Report, the Government have to embrace the messages that they have heard today.
My Lords, I have some sympathy for the questions raised in this debate and I start by associating myself with support for the nuclear industry and for nuclear R&D. As the noble Lord, Lord O’Neill, said, the nuclear industry was founded in this country.
I support the Bill, as I think that we need to plan for the withdrawal from Euratom in a responsible way. The Bill is relatively clear, and we have seen the draft implementing regulations, which are very helpful—I thank the Minister for that. As in other Brexit areas, the Government need to put EU provisions into UK law because many people in this country have told us that that is what they want. I believe that, as a scrutinising Chamber, we need to progress matters technically and that we should provide the powers that the Energy Ministers need to negotiate the necessary nuclear agreements and to strengthen the ONR.
However, I want to make one point which perhaps builds a little on what has been said by my noble friend Lord Trenchard. If we crash out of the EU in March 2019 or, alternatively, at the end of an agreed implementation period, will the Minister consider informing the EU at that point that we would like to reverse the bespoke Article 50 for Euratom and put up with a little bit of potential ECJ involvement—at least until an association agreement with Euratom is arranged or a relevant trade agreement with the EU is finalised? Once the air clears, the two sides will be bound to return to the negotiating table and will no doubt start to agree things on important areas such as nuclear.
I am not sure that my concern calls for an amendment to the Bill but we must avoid any risk of enhanced nuclear non-proliferation and the industry disruption and damage that would go with it. Therefore, if we could find a way of retaining some flexibility in the event of a bad outcome, that could be helpful, and I shall be grateful if the Minister has anything to say by way of reassurance. I had thought that perhaps we should not go ahead with this Bill but, by looking at it carefully, I have been persuaded that we need to get on with it.
My Lords, these amendments propose an associate membership of Euratom. In effect, they propose a deferment of our severance from Euratom and possibly even an indefinite deferment.
There is a marked contrast between the bland assurances we have received from the Government that everything regarding nuclear safeguards will be in place by March 2019 and the anxieties expressed by other parties, including, in a professionally restrained manner, the ONR, which is due to assume the duties of nuclear safeguarding. It has indicated that it is struggling to meet the deadline. The regime that it might have in place by March will be decidedly understaffed, and surely the danger that the deadline will be missed fully justifies the provisions of these amendments.
There are also anxieties regarding the ability to establish the necessary nuclear co-operation agreements with third parties in a timely manner. Such agreements depend on the existence of a nuclear safeguarding regime that is compliant with the requirements of the International Atomic Energy Agency, and it will take some time to achieve this. We are fearful that the requirement that a nuclear co-operation agreement with the USA be ratified by the Senate will give rise to a lengthy hiatus during which our nuclear industry may be deprived of some essential supplies.
There is also the matter of medical isotopes, which it is appropriate to raise at this juncture. The Minister has told us that the Government take their continued availability most seriously and assures us that this issue is quite distinct from nuclear safeguarding. Well, it is not a matter that is separate from our membership of Euratom. Euratom appears to have played a significant role in ensuring their continued and timely availability when they have been extremely scarce. By leaving Euratom prematurely we shall be prejudicing the security of our supplies, and this is a good reason for deferring our departure.
My Lords, I apologise to the House for not being able to take part at Second Reading. I have some sympathy with the intent behind these amendments. I will not go over the very interesting responses last night to the amendment of the noble Lord, Lord Hunt of Kings Heath; I would just like to make a few brief comments.
A report from the Business, Energy and Industrial Strategy Committee in other place states:
“We conclude the Government should seek to retain as close as possible a relationship with Euratom, and that this should include accepting its delivery of existing safeguards requirements in the UK”.
The MPs on the committee warned that the impacts of leaving Euratom would be “profound”, putting the UK in,
“a much weaker position to drive regulatory standards”,
at an EU level.
Last week, the EDF corporate policy and regulation director said:
“The UK still lacks the replacement rules needed to fuel its nuclear reactors after”,
the country quits the EU. EDF also told the House of Lords EU Energy and Environment Sub-Committee:
“The Euratom Treaty is currently vital to the functioning of nuclear energy generation in the UK. Failure to replace its provisions by the point of withdrawal could result in the UK being unable to import nuclear materials, and have severe consequences for the UK’s energy security”.
“the Bill does not provide enough certainty for the industry and the government should be pushing for a transitional agreement”.
My Lords, I have a couple of questions for the Minister before he replies. First, will he answer the question that the noble Lord, Lord Warner, asked about the recently published—on
We had an extensive debate on the principle of Euratom last night and I shall not repeat what I said then, but I shall speak in support of my own amendments and the others in this group. They are not perfect, as the noble Lord, Lord Teverson, said: they are substitutes, because most noble Lords in most parts of the House think it is a mistake to withdraw from Euratom and, even now, we hope to persuade the Government, one way or another, to reverse that decision.
However, the problem, which my noble friends have highlighted, is that the very integrity of this crucial industry is now at stake. Essentially, the Government want to find some way of continuing with Euratom, although they cannot spell out to us exactly what that means. This Bill is an understandable backstop so that, if they cannot agree one way or another with Euratom to continue its work, the ONR can be established as a separate nuclear safeguards regulator. Essentially, we are being asked to take this on trust.
My problem is that, first, I have no confidence whatever in the Government’s ability to negotiate a deal with Euratom. I do not know what it must be like to be a member of the Conservative Party or, indeed, the Government, but what we see is utter chaos and disagreement. For instance, the noble Viscount, Lord Trenchard, said that about 60% of medical isotopes come from the EU and 40% from outside. Last night, he suggested that leaving the EU should not impact at all on the transfer of medical isotopes from the EU. But we have not yet agreed a frictionless customs arrangement with the EU and I am not sure that, at this stage, one would bet anything at all on our seeing that negotiated—and it is but one uncertainty about what will emerge.
The letter sent by Mr Rees-Mogg and his group says, essentially, that this country must have “full regulatory autonomy” by March 2019—it must have the ability to change British rules and laws once we leave, without being a “rule taker”. But what arrangements are we then going to reach with Euratom that do not transgress the red line laid down by Mr Rees-Mogg? The Minister may say that Mr Rees-Mogg is but a Back-Bencher in the other place, but he seems to hold sway over government negotiating positions. That is why we have to assume that, actually, the Government are not going to be able to negotiate a sensible agreement with Euratom. Within government collectively, it transgresses so many of the red lines that have been laid down, one way or another, that if we are not careful, we will have to fall back on the ONR picking up this responsibility.
I respect the ONR and the evidence it gave to the Commons Public Bill Committee, which was everything you would expect of a robust regulator. My reading is that by March 2019, it could just about have enough people to do the inspections according to IAEA standards, but not to Euratom standards. But the other question is: what about the agreements that have to be reached with a number of very powerful countries? There are no guarantees at all that we could do that.
The reason we are debating and struggling with these amendments is that there is a real concern that not only the legality of the industry post-2019 is at stake here, but public confidence too. The noble Earl, Lord Selborne, who made a very good speech yesterday, talked about confidence in the industry. I am a passionate believer in this industry and I take my noble friend’s point that it is about not just research, but the fact that we have a highly skilled group of people working in it. Yes, we are experienced in decommissioning, but we now have the possibility of a renaissance in new nuclear. After having thrown away the lead we had, we can get some of that back, develop a supply chain and use the skills of our people, but we need public confidence to do that. The problem is that the Government’s position is putting that at risk because there is no confidence whatever that they can reach an agreement with Euratom and none that they can reach Euratom standards in March 2019. That is a very serious position to be in.
My Lords, I am not sure whether I heard the noble Lord set out his own party’s policy more widely on Brexit, but perhaps that will be for another day. He can then assist the Committee, but I leave that with him. I offer my congratulations and thanks to him, to the noble Baroness, Lady Featherstone, and the noble Lord, Lord Warner, for introducing their amendments. I think that it was the noble Lord, Lord Warner, who compared the response last night by my noble friend Lord Callanan to a Geoffrey Boycott innings. For those of my age and beyond, I will go for a sort of Ken Barrington type of response, so it will be long and slow. However, it is important that I get it all in to make sure that we have a proper response to the debate so that we can consider these amendments again on Report. It is also important for noble Lords to understand in this sort of Ken Barrington response that I am going to give—
The noble Lord knows that he always gets wisdom from me. I want also to say that I am not necessarily going to respond to all the points in the course of this debate because an awful lot of them apply to later amendments. Nevertheless I will give a fairly full response, but I shall start by making a pretty fundamental point, made by my noble friend Lady Neville-Rolfe. It is that we are where we are. My noble friend supports this Bill because, as she said, it is very important that we have plans in place for when we leave Euratom. We are going to leave Euratom at the same time as we leave the European Union in March of next year. That was dealt with in the notice of withdrawal Bill, now the European Union (Notification of Withdrawal) Act 2017. The legislation has been through both Houses of Parliament and has the support of the party opposite and others.
What I want to make clear to the Committee is that we are determined to continue to have a constructive and collaborative relationship with Euratom and with all our other international partners. The withdrawal of the United Kingdom from Euratom will in no way diminish our nuclear ambitions, and I make that clear to the noble Lord, Lord Broers, and others. Maintaining the continuity of our mutually successful civil nuclear co-operation with Euratom and international partners is going to be a key priority for us. As a member of the International Atomic Energy Agency we are committed to have in place nuclear safeguards. I should remind the Committee that these have nothing to do with safety. Nuclear safeguards are reporting and verification processes by which states demonstrate to the international community that civil nuclear material is not being diverted into military or weapons programmes. The United Kingdom has been a member of the IAEA since its formation back in 1957.
Under the Euratom treaty, the civil nuclear material and facilities within member states is subject to nuclear safeguards measures conducted by the European Commission on behalf of Euratom. Euratom also provides reporting on member states’ safeguards to the International Atomic Energy Agency, which conducts nuclear safeguards globally. Nuclear safeguards measures include reporting on civil nuclear material holdings and development plans, inspections of nuclear facilities by international inspectors, and monitoring, including cameras in selected facilities. I repeat that nuclear safeguards are distinct from nuclear safety, which covers the prevention of nuclear accidents, and nuclear security, which covers physical protection measures. Those are the subject of independent regulatory provisions and we shall move on to them in due course.
As was made clear by my noble friend last night and I make clear again today, the European Union and Euratom are uniquely legally joined. Euratom shares a common institutional framework, making use of the same institutions; namely, the Council, the Commission, the European Parliament and the ECJ. For example, the European Commission has an active role in shaping and enforcing Euratom rules and it currently plays a central operational role on safeguards in the UK. As was further made clear by my noble friend last night, Euratom is also subject to the jurisdiction of the ECJ.
When the Prime Minister formally notified our intention to leave the European Union in June, she also commenced the process for leaving Euratom. That notification was debated and authorised by Parliament through the European Union (Notification of Withdrawal) Act 2017 which, as I have said, had the full support of both Houses of Parliament. The United Kingdom will therefore withdraw from Euratom in 2019 at the same time as withdrawing from the European Union. That is why we need the legislation before us now to be in place.
The United Kingdom’s current nuclear safeguards regime operated by Euratom will cease to function in the United Kingdom as a result of our withdrawal from Euratom. The Nuclear Safeguards Bill will ensure that we have the right regime in place for the Office for Nuclear Regulation to regulate nuclear safeguards. I reassure the Committee that the Government are meeting the challenges that clearly lie before us. We have already made great progress in the work that we are doing to secure continuity for our nuclear industry by establishing long-term arrangements to secure nuclear safeguards. The Queen’s Speech on
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—
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.
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.
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 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 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.
The Minister referred to Article 206 and the agreement that has been arrived at with Switzerland and Ukraine in respect of training and research. Does that provision afford any opportunity for other areas to be incorporated in an agreement with Euratom? Could it be the portal for enabling us to be alongside Euratom in the way that the Ukrainians and the Swiss have been able to obtain for their preoccupations with training and research?
My understanding is that it will allow them to do that. I am not aware that Article 206 could be used further as the noble Lord suggests. If I am wrong, of course I will write to him, but it might be a matter of interpretation. I should remind him in respect of Article 206 that I stressed when I read out the Government’s response to the Select Committee that any agreement required unanimity. That is obviously quite a big “if” in these matters. If there is anything further I can add, I will write to the noble Lord.
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.
“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.
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
I turn to Amendment 12 on our future relationship with Euratom. The Committee will be aware that in her speech on
I hope that the Committee will not need to be reminded that the UK will not be a member after
“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
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
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.
In that case, are we not all wasting our time? Could the Minister say whether the International Atomic Energy Agency has already agreed in the discussions that have taken place that the contents of the Bill lead it to believe that the safeguards office will be able to demonstrate the independence it requires? If not, we are wasting our time.
The noble Lord never wastes his time, nor does he waste the time of the Committee, but I can give an assurance that discussions continue with the IAEA, which is perfectly happy that we will be able to meet the appropriate safeguards regime to meet its standards by March next year. We will discuss that on later amendments. Processes have taken place in the ONR and it is engaged in recruitment. We will meet its standards—standards similar to those met by the Americans as fellow members of the IAEA. All that will be in place; that is the point behind the Bill. It is why I do not think these amendments are necessary—we will no doubt discuss them in much greater detail on Report. I hope that the noble Lord and the noble Baroness, Lady Featherstone, who is about to respond, will be happy and feel able not to press their amendments.
I thank the Minister. I listened carefully to his arguments in response to the amendments. I think that our work is not done; I did not hear a meeting of minds at this point. What I did hear was a universal view from across the Committee that surety and certainty are not there. We will probably want to come back on this on Report. For the moment, I beg leave to withdraw the amendment.
Amendment 1 withdrawn.
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
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.