My Lords, there are indeed many concerns. I have yet to hear any principled criticisms regarding the objectives, operations and outcomes of the EU’s civil nuclear organisation and the framework around Euratom. Indeed, widespread dismay was expressed when it was announced that, in consequence of the leave vote, the UK must leave Euratom. The Bill sets up a parallel inspection, monitoring and regulatory regime as robust as that which exists under Euratom, to be the responsibility of the ONR.
The Euratom treaty is legally distinct from the EU treaty but it shares the same constitutional oversight as the EU: the European Commission, the Council and the European Court of Justice. Although the decision that the UK should leave Euratom is contested by some expert legal advice—and my noble friend Lord Lea—the Government have chosen to do so because of the technical jurisdiction of the ECJ, even though I understand that there has never been a case
referred to it. The Government wish to replicate Euratom’s functions and the Bill is confined to the safeguarding functions.
The International Atomic Energy Agency—IAEA—was set up also in 1957 to be the world’s intergovernmental forum for scientific and technical co-operation in the civil nuclear sector. It was set up under the non-proliferation treaty to safeguard nuclear material. Euratom also provides information on member states’ safeguards to the IAEA. Euratom and the IAEA carry out joint inspections of nuclear sites in the UK and endeavour to avoid duplication. There are, therefore, tripartite agreements the UK’s fulfilment of which relies on the UK’s membership of Euratom. The Government intend to replace these tripartite agreements with bilateral commitments whose robustness we will need to examine as the Bill progresses. Perhaps the Minister will say at this stage whether, under the Constitutional Reform and Governance Act 2010, he expects that Parliament will need to ratify these arrangements.
Leaving Euratom without the correct policy, regulatory and research framework in place will have significant implications for the UK’s nuclear and radioactive waste industries, as well as the health industry through radioisotopes, as we have just been discussing. Euratom undertakes supervision of nuclear safety, nuclear fuel supply security, radiation protection through the proper use of materials and safeguards, and research and development in nuclear fusion, as well as radioactive waste and decommissioning. As such, it impacts on many sectors of the economy, including construction and the necessary skills, manufacturing of parts, technical expertise and research.
On the Government’s insistence that leaving Euratom is included in the Article 50 letter and Bill, we agree that this Bill is necessary and that the UK must have a robust safeguarding system in place to meet our obligations. The new arrangements need to be as comprehensive as the current Euratom regime to enable public confidence in continuing high standards, to give international partners confidence in engaging in civil nuclear trade, to support the UK’s ongoing commitment to the global non-proliferation treaties and to demonstrate that the UK is a responsible nuclear state. On all these parameters, there must be severe doubt that the Government can meet these challenges in the timeframe required.
The proceedings in the other place demonstrated that the ONR could not maintain a regime equivalent to the standard set by Euratom from day one. Dr Golshan of the ONR made clear that the aim to have a system in place by March 2019 was unrealistic. The quality and quantity of inspectors required could not be recruited in time. Instead, it is likely that the UK could meet the lower standards set by the IAEA. The Government therefore need to clarify whether they are prepared to start the inspections at a lower level before increasing them to Euratom standards.
The Government recognised the issue with a ministerial Statement on 11 January which stated:
“We will seek a close association with Euratom and to include Euratom in any implementation period”.
“Any implementation period” gives the Government a further two years in which to put in place all the necessary measures. In so far as leaving Euratom has
additional and separate wording in the Article 50 letter, will the Minister confirm that this gives the Government the opportunity to secure an implementation arrangement unique to that sector, should the more general and wider exit discussions prove less fruitful? It is imperative for this Bill. There are two treaties. Can the Government clarify that the implementation period acts in relation to this situation?
The ministerial Statement stated that the intention was,
“to ensure a future safeguards regime that will be equivalent in effectiveness and coverage as that currently provided by Euratom, including consideration of any potential role for Euratom in helping to establish the UK’s own domestic safeguards regime”.
We need to explore that potential role for Euratom during the implementation period and whether this Bill needs strengthening in that regard. For example, I imagine that the Minister will confirm today that the UK could subcontract inspectors from Euratom to continue monitoring UK facilities. Practicalities must help shape the architecture necessary for Brexit, and this Bill fits into the wider Brexit discussions.
The ministerial Statement continued by stating that,
“it is vital that Government pursues all options for providing certainty for the civil nuclear industry”.—[Official Report, Commons, 11/1/17; col. 399WS.]
Our amendments in Committee will have this in mind. During the passage of the Bill through the other place, it was proposed that this close association could take the form of an associate membership—a status that is allowable under Euratom’s constitution. The reports are that this week the Government are trying to determine what they want in their future relationship with the EU. The Minister has the opportunity today. There would be little advantage to be gained from regulatory divergence for the nuclear industry outside Euratom. It is hardly a worthy answer to repeat that there is no associate membership class at present under Euratom.
Reconciling legal certainty with flexibility to negotiate presents challenges. The answer cannot include unfettered use of unconstitutional Henry VIII powers under Clause 2 to amend primary legislation. In the other place amendments to constrain those powers were proposed. We also have concerns about the use of those powers. Your Lordships’ Delegated Powers and Regulatory Reform Committee has yet to report on this Bill. We await the committee’s report with interest and will consider appropriate amendments for Committee.
The Bill is drawn up to be narrow in scope. Nevertheless, we need to be aware of all Euratom’s functions and to explore all of its facets, so that the Government can assure the industry that it will continue without disruption post Brexit. Part of the safeguarding regime will include nuclear co-operation agreements. The UK currently utilises Euratom’s NCAs to facilitate trade. Euratom has nine NCAs at present. Although there are requirements for some countries and not others, the UK will need to agree many bilateral NCAs within the necessary timeframes. Can the Minister commit to bringing these to Parliament and confirm the procedure that the Government will utilise?
It is vital that the Government make progress on developing new NCAs quickly. Given that these can only begin after the UK has satisfied the IAEA with
regard to its safeguarding regime, it is essential that the UK implements its safeguarding protocols as soon as possible. The ONR has already suffered funding cuts. Under the impact assessment recently published, it is clear that the ONR must be given all the resources it needs to take up the responsibilities included in the Bill. Can the Minister assure the House that the Government will not only commit to providing resources but will not be calling on the industry to co-fund the inspection regime through cost recovery? At present it is funded through the UK’s contribution to the EU budget.
The immediate disquiet around the announcement that the UK will be leaving Euratom focused on two clear concerns: the valuable R&D facility of the Joint European Torus—JET—programme at Culham in Oxfordshire and the supply and maintenance of medical isotopes vital to the health service. The fusion research programme supports 1,300 jobs in the UK and is instrumental in attracting the expertise the UK needs in the nuclear industry. The EU currently provides 88% of JET running costs. Given Switzerland and Ukraine’s association status with Euratom, it is imperative that the Government examine the scope of this associated membership, even if it is limited to research and development facilities. Given how much of the Brexit process will involve the UK and EU navigating an implementation period, trade and the movement of product and expertise—and seeking unprecedented solutions—should not the Government be seeking agreement on a form of association?
The continuing supply of isotopes in medicines has also been subject to questions and debates, and even today has needed extra explanatory exchanges. The UK’s regulatory regime for setting and enforcing standards for the safe use, disposal and transportation of medical isotopes is based on international regulatory requirements informed by the IAEA. The supply has implications for cross-border EU negotiations and trading, and as such merits further investigation. The issue and how relevant it is will certainly need to be examined as the Bill progresses.
Regarding radiation protection, the UK is currently implementing the Euratom basic safety standards directive, which updates the UK’s radiation protection standards. Euratom also underpins trade in nuclear materials, and this will impact on the UK’s security of supply. The replacement arrangements with Euratom will need to cover the ownership of nuclear material. I understand that Euratom appears to be seeking to retain rights over uranic material on UK territory which EU customers have the right to use.
It is a complex task to follow up on all these issues through the various framework architectures. In a briefing the Nuclear Industry Association submitted, in conclusion to its analysis of requirements for the UK withdrawal from Euratom, it drew up a checklist highlighting five actions for the Government. The first is to agree the replacement voluntary offer safeguards agreement with the IAEA and to refund and resource the ONR to establish the UK’s safeguards regime. The second is to negotiate and conclude NCAs with nuclear materials. The third is to clarify the validity of the UK’s current bilateral NCAs with Japan and other
nuclear states. The fourth is to set out the process for the movement of nuclear material, goods, people, information, services and protection, to be agreed with the Euratom supply agency. The fifth is to agree the new funding arrangements for the UK’s involvement in fusion for energy and the wider EU nuclear R&D programme. Perhaps the Minister could undertake to map out during the passage of the Bill the Government’s own plans across the field and to clarify in one place the various interlocking arms of the regulatory framework, highlighting the various measures to be enacted under various Brexit Bills to come. I am sure that would be very helpful to all noble Lords.
Labour believes that the best way to maintain nuclear safeguards and protect the nuclear industry is to achieve an equivalent arrangement with Euratom, at least in the implementation period. The Government were reckless to rule out continuing Euratom membership, making the ECJ a defining characteristic.
The Bill is only one small part of the picture. Clarity and certainty for the industry are still missing. I have outlined our five key concerns. We will seek to address them all during consideration of the Bill.
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