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Nuclear Safeguards Bill [H.L.]

6.34 p.m.

Lord McIntosh of Haringey: My Lords, I beg to move that this Bill be now read a second time.

This Bill will enable the United Kingdom to fulfil its commitment to adopt and implement a strengthened nuclear safeguards system by bringing into effect in the United Kingdom a protocol additional to our existing nuclear safeguards agreement with the International Atomic Energy Agency, which I will call the "IAEA", and the European Atomic Energy Community (Euratom).

It is worth looking briefly at the background to the Bill. In 1970, the United Kingdom was one of the leading signatories to the Treaty on the Non-Proliferation of Nuclear Weapons, which I shall call "NPT", mainly because I cannot say the word "proliferation" with any facility. The treaty forms the cornerstone of global efforts to prevent proliferation of nuclear weapons, and it is from this treaty that the United Kingdom's obligations and commitments flow.

As one of the methods of verifying that NPT signatories fulfil their basic obligations not to manufacture or otherwise acquire nuclear weapons or other nuclear explosive devices, non-nuclear weapon states have to conclude comprehensive safeguards agreements with the IAEA that place all their nuclear material under safeguards. In essence, this means that the state must provide information to the IAEA on all its nuclear material and facilities, and IAEA inspectors are allowed access to facilities to check that material is not being diverted to clandestine nuclear weapons programmes. While nuclear weapon states, such as the United Kingdom, are not required by the NPT to have safeguards agreements, all five--that is, the UK, the United States, France, Russia and China--have so-called "voluntary-offer safeguards agreements". In the case of the United Kingdom, our voluntary offer safeguards agreement, signed in 1976, covers all our nuclear activities for civil purposes.

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However, the need to strengthen this international nuclear safeguards system became clear when, after the Gulf War, Iraq was found to have been pursuing a clandestine nuclear weapons programme even though it had in force a comprehensive safeguards agreement with the IAEA. The international community has agreed that the IAEA needs to have additional information and rights of access to nuclear facilities and other relevant locations to give it an increased capability to detect undeclared nuclear activities. In order to provide the IAEA with these, states across the world are now in the process of negotiating and signing legally binding protocols additional to their safeguards agreements with the IAEA. The UK Additional Protocol was signed in Vienna on 22nd September 1998.

Our Additional Protocol requires the UK to provide information to the IAEA about nuclear and nuclear-related activities carried out for or in co-operation with, or otherwise relevant to non-nuclear weapon states. The information we provide, along with that gathered from other states under their additional protocols, will enable the IAEA to draw up a comprehensive picture of nuclear activity in non-nuclear weapons states. This will act as a strong deterrent to the development of clandestine nuclear weapons programmes, and should help IAEA to detect any suspicious activity at an early stage.

As of today, 45 states around the world have signed additional protocols, though only seven of these have entered into force. Other states which have signed are understood, like the United Kingdom, to be still in the process of putting into place the national laws that they need in order to be able to fulfil their obligations under their additional protocols. However, there are some, like Monaco and the Holy See, which have been able to sign and ratify the additional protocol on the same day. That is presumably because their problems are slightly less complicated than ours.

I should perhaps emphasise that the obligations in the Additional Protocol do not extend to our defence-related activities. As is the case with our existing safeguards agreement, these will remain outside the scope of IAEA oversight. This is, of course, essential for reasons of national security.

Although the legislation would impose new obligations and requirements on civil nuclear operators and the nuclear industry in the United Kingdom, they have been widely consulted and are supportive. In view of these consultations, and in the light of our experience of the Act implementing the original safeguards agreement in 1976, we expect voluntary co-operation on the part of those affected by the new measures. Indeed we are not aware of any prosecutions under the 1978 Act; those concerned have always acted responsibly and co-operated voluntarily with the department's safeguards office. In October this year the Department of Trade and Industry completed a voluntary declaration exercise--a pilot, so to speak--gathering the information which would be required by our Additional Protocol if it were already in force, to ensure that our procedures for gathering the information will be fully operational in

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time for providing the first proper declarations. This voluntary declaration exercise, which provided the IAEA with an indication of the situation in the UK as of 31st December 1998, was sent to the IAEA on 27th October. The Government believe that these declarations are complete and consistent with the terms of the UK Additional Protocol.

The burden on business of these measures is minimal. We have placed a regulatory impact assessment in the Libraries of both Houses. It shows that the estimated total cost for businesses likely to be affected by the new safeguards measures would be of the order of £150,000 in the first year. That is minimal compared to the cost of existing safeguards measures, which is over £10 million per year for British Nuclear Fuels alone. The cost to small businesses involved in manufacturing or consultancy work which would be caught by the proposed legislation would be of the order of a few thousand pounds per year.

The Government believe that industry will continue to support these measures and will continue to provide all relevant information voluntarily on request. However, in order to ensure that the United Kingdom can fulfil its international obligations even if someone fails or refuses to provide information voluntarily, primary legislation is required. The legal powers and duties contained in this Bill are those necessary to enable the United Kingdom to fulfil its obligations under our new Additional Protocol, and thus allow its entry into force.

The heart of the Bill is in Clauses 2 and 5. Clause 2 is there because much of the information the UK is required by the Additional Protocol to pass to the IAEA will not originate with the Government. Therefore this clause enables people to give relevant information to the Secretary of State unrestricted by any obligation of confidentiality or limit on disclosure which would otherwise inhibit them from doing so. The Government believe that the great majority of the information required by the IAEA from the UK will be given to the Secretary of State voluntarily by those who have it. However, there obviously needs to be a means of compelling people to provide information which the Government need so that the UK can fulfil its obligations under the Additional Protocol, even if they are unwilling to do so. Therefore Clause 2 also enables the Secretary of State to serve a notice on someone requiring them to give him relevant information, with a criminal sanction for non-compliance.

Clause 5--the other important clause--gives inspectors designated by the IAEA a right to enter various locations in accordance with the Additional Protocol, and to carry out the activities required by the Additional Protocol to be permitted at those locations. These activities are essentially designed to check information we and other countries have provided to the IAEA. The Bill makes it a criminal offence to obstruct an inspector in carrying out these functions, or to interfere with anything placed on land by an inspector in the course of exercising them.

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The remaining clauses of the Bill deal, for the most part, with ancillary matters arising from Clauses 2 and 5. Clause 3 is necessary to enable the Secretary of State to identify those from whom he requires information. This clause empowers him to make regulations requiring persons to inform him if they carry out certain types of activity or are in a class of persons likely to have certain information he may need. The DTI has produced draft regulations to illustrate the types of powers that would be obtained in regulations made under this clause. I have made these available in the Library of the House; copies are also available in the Printed Paper Office.

Clause 4 is also essentially supplemental to Clause 2. It enables an officer authorised by the Secretary of State to enter any premises in the UK to search for information needed so that the United Kingdom can comply with its reporting obligations. It is necessary to include such a power for two extreme cases. The first is where a person has not provided the information voluntarily, and has still not provided it even after being served with a notice under Clause 2, perhaps despite even being prosecuted. The second even more extreme case is where the Secretary of State for Trade and Industry does not have certain information in his possession which he is required to provide to the IAEA, and believes that the information is likely to be amended, destroyed or otherwise disposed of without being given to him. In those two extreme circumstances a justice of the peace may issue a warrant, if he is satisfied that the numerous applicable conditions in Clause 4 are met, to allow an authorised officer to enter premises where there are reasonable grounds to believe the information in question is to be found, to search for the information for the Secretary of State for Trade and Industry. By making the powers to enter property to obtain information subject to a warrant, we ensure that there is independent judicial supervision over the exercise of this power. Any warrant may require that a police constable be present when the warrant is used.

Clause 6 protects information obtained under the Bill or the Additional Protocol. It prohibits the disclosure of certain types of information except for certain purposes or in certain circumstances, and sets out penalties for disclosure in breach of those limits. The clause is aimed primarily at civil servants who deal with the information to be passed on to the IAEA, or who accompany IAEA inspectors on visits.

Clauses 7 to 12 make it an offence knowingly or recklessly to give false or misleading information under the Bill; provide persons authorised by the Secretary of State and by a warrant with the power to search premises for evidence of an offence under the Bill; and set out the penalties for breaches of the Bill and the procedure for serving notices under the Bill. Generally, under Clause 9(2) such offences are to be punishable in a magistrates' court by a fine up to the statutory maximum, which is currently £5,000, or after a jury trial by an unlimited fine. However, knowingly or recklessly giving false or misleading information under the Bill, and wrongful disclosure of information, are to be punishable in a magistrates' court by a fine

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up to the statutory maximum, or after a jury trial by an unlimited fine or by up to two years' imprisonment (or both). Clause 9 also allows persons of authority in a corporate body, or partners in a Scottish partnership, to be charged if they are involved in commission of an offence by the body or partnership.

The remaining clauses are technical. They amend the Act implementing the original safeguards agreement of 1976, to bring it into line with this Bill and with corresponding provisions of the Chemical Weapons Act 1996. They amend the Atomic Energy Authority Act 1954 and the Nuclear Installations Act 1965 to refer to IAEA inspectors designated under the Additional Protocol as well as those designated under the safeguards agreement; and they deal with the commencement, territorial extent and Short Title of the Bill.

We have given careful consideration in the drafting of the Bill to the requirements of the European Convention on Human Rights. The Government are confident that all its provisions, including the power to require the provision of information and the rights of access to premises, are fully consistent with the United Kingdom's obligations under the convention. However, I should be happy to give further details if noble Lords are interested.

To sum up, enacting this Bill will represent an important demonstration of the United Kingdom's strong commitment to nuclear non-proliferation. As a nuclear weapons state, it is important that the United Kingdom shows a strong lead through the early implementation of its Additional Protocol. This will offer a tangible demonstration to the rest of the international community of the strength of our commitment to nuclear non-proliferation.

Moved, That the Bill be now read a second time.--(Lord McIntosh of Haringey.)

6.50 p.m.

Lord Mackay of Ardbrecknish : My Lords, perhaps I should start by saying "Unaccustomed as I am to dealing with non-controversial matters". We are grateful to the noble Lord, Lord McIntosh, for his speedy delivery as he took us through the various items in the Bill. I shall have to read Hansard to make sure that I have grasped all of what he said.

We on this side accept that the Bill provides for necessary and correct changes to our law to enable the Government to fulfil their obligations under the new Additional Protocol to the UK safeguards agreements concerned with nuclear proliferation.

I think that I heard the Minister say that the Bill did not affect our country's military nuclear defence industry. I appreciate why that should be so. At the risk of straying into the controversial, perhaps I may say as a slight aside that we do not need a Bill nowadays. Thanks to a decision of the sheriff at Greenock, it seems that pretty well anyone can walk into a nuclear installation related to Trident and do more or less what they want. No offence has been created because Trident has been declared illegal by

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some international body. That is certainly not a view that we take on this side of the House; I am sure that the Government do not take that view either. Hopefully they are pursuing these matters in the Scottish courts to ensure that the decision of the Greenock sheriff does not act as an incentive to people to break into the various Trident installations in Scotland and in other parts of the United Kingdom and, so to speak, get away with it.

Although they are not quite reservations, the questions we have about the Bill are perhaps more of a Committee stage nature. However, if I ask them now it might save us time at Committee stage. The Minister can answer them either directly this evening or, if he wishes, he can write to me. Some of the questions are simply to seek confirmation so that I understand correctly what is happening in the Bill.

For example, if I am reading it correctly, it seems that the information required in Clause 2(3)(b) may be retrospective. It states:

    "The information required by a notice . . . may relate to a state of affairs subsisting before the coming into force of this Act or of the Additional Protocol".

Ministers should always try to justify a retrospective clause. Perhaps the noble Lord will explain why the Government think that they need these powers, which seem, to me at least, to be retrospective.

As regards Clause 3, I think the Minister said that the draft regulations were in the Library and the Printed Paper Office. If that is the case, I look forward to reading them. I was puzzled as to the meaning of,

    "persons of any description specified in the regulations to inform him that they are of such a description".

I was going to say to the Minister that we would want to see the regulations either before we dealt with the matter in Committee in this House or certainly before my colleagues deal with it in the other place. I am puzzled as to what exactly is meant here. The Minister is now assuring me that the regulations are there. I did not realise that. I will read them with interest. I welcome the fact they have been published. They will help us greatly to understand exactly what the Government intend. I can therefore leave that matter and move on.

As regards warrants, when he discussed Clause 4 the Minister mentioned that a constable might or might not be present, depending on the warrant. I presume the distinction will be that if the officials of the department carrying out the inspection feel that they may have some difficulty they will ask for a constable to be present and in those circumstances the warrant will allow a constable to be present. I presume that that is the case.

I have a slight worry about Clauses 4 and 5. The Minister rightly pointed out that in Clause 4 there is a safeguard that someone has to satisfy a justice of the peace before he can get an order allowing him to enter premises and make searches and so on. I welcome that. However, when I read Clause 5--this may be my inability to read legislation properly--it seems that agency inspectors will not be required to have a warrant in the same way as our United Kingdom

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people. Surely inspectors who are agents of an international body should not be given greater rights of entry than those given to agents of our Government. Should not the inspectors of the agency require a warrant from a justice of the peace as well?

When they were in Opposition, one of the fundamental points I can remember the party opposite hammering Conservative governments about was that warrants to search premises--especially to search a person's home, which I understand can be done under the Bill--should be dealt with very carefully. The warrant should be signed and agreed by a justice of the peace. I therefore wonder why there is no reference in Clause 5 to requiring a justice of the peace to give his or her permission for a warrant.

As I said, these are probably Committee points. But it will be easier if we get rid of them now because it will save me the bother of tabling an amendment that I do not really mean in order to explore them.

I read Clause 8 and then I went back to read Clause 4 because I thought I had seen those words before. Clause 8 seems to be pretty well a replica of Clause 4. I wonder why we need two clauses in the Bill which look so similar. Why cannot we have only one clause that subsumes any difference there may be? It almost defeated me to see what difference there is between the situation which would require the power to search and obtain evidence to be used under Clause 8 and the power of entry in relation to additional protocol information under Clause 4. Is this to make the Bill a bit longer so that it looks more serious? In that case, it will fall under the eye of the noble and learned Lord, Lord Simon of Glaisdale, who considers that legislation is far too long anyway. I wonder why we need those two clauses.

I notice that the Bill applies to Scotland. I am not sure that we should not say that on the face of Bills nowadays, when so many Acts of this Parliament will not apply to Scotland.

I also wonder why we do not say in Clause 12 that the Act will come into force either immediately or within three months of Royal Assent. Why is it left rather vague--that it will come into effect only on such day as another statutory instrument? I know that this is often the way of doing this. I can remember people being quite critical of it. Is it not time to ask ourselves whether we should say "This Bill is important"--as indeed it is--"We need it"? Why do we not say that it will come into force either the day after Royal Assent or within three months of Royal Assent? Why do we keep it open-ended?

I do not know whether we will need a Committee stage. That will depend on what I find in the regulations when I read them and on the Minister's reply. In general terms, we certainly welcome anything that will help prevent the proliferation of nuclear weapons. I agree with the Minister when he draws to our attention that Iraq, despite being a signatory, and all the other precautions that were supposedly there, was attempting build a nuclear capacity. We could mention a few other states which have secretly built a nuclear capacity over the years, but that would not add anything to the debate.

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With those few words, I am content to agree with the principles of the Bill and I look forward to a very short Committee stage.

6.59 p.m.

Lord Wallace of Saltaire: My Lords, we also welcome the Bill. One of those whose advice I took on the Bill said:

    "We are all in favour of the most draconian measures to protect the nuclear non-proliferation treaty".

I understand that it is the priority of all the members of Euratom to ratify as soon as possible. This requires all members to ensure that they have amended their domestic legislation appropriately.

As a university teacher, I am conscious that occasionally there are problems with foreign research students in British universities as well as elsewhere-- particularly with research teams not understanding exactly what is going on and to what use knowledge gained in British research institutions might be put in less friendly countries. Therefore, we entirely welcome the Bill and I have only a few questions.

The powers are draconian. In Clauses 4 and 8 the powers of entry and search are accessible only with the consent of a justice of the peace. I should like to ask the Minister whether he is satisfied that a justice of the peace is adequate for those sorts of powers or whether one should go to a more senior judge for such permission. I have a certain interest, as I see successive pieces of legislation and European Community regulation; I wonder when the Channel Islands and the Isle of Man come under the provisions in Clause 12 and when they do not. That is no doubt a less important point but it is one which I believe many of us wish to explore in more detail.

I wish to question the Minister on whether the Government's own defence and nuclear weapons facilities remain entirely outside the Bill. My party and others believe that in the long run, if we are to have an effective nuclear non-proliferation regime acceptable to those states which are close to becoming nuclear weapon states, that is a privilege of declared nuclear weapon states which will have to go. Not now necessarily, but it is something which the Government will need to consider.

Since this is a DTI Bill, I assume that the police referred to are regular and civil police and that the contentious issue of the role of Ministry of Defence police in a number of activities concerned with defence nuclear installations does not arise. I should be grateful if the Minister could reassure us on all those issues. With those provisos, we welcome the Bill. Like the noble Lord, Lord Mackay of Ardbrecknish, we look forward to a brief Committee stage, if one at all, and to early passage of the Bill.

7.1 p.m.

Lord Gray of Contin: My Lords, I am very glad to have the opportunity to participate in the Second Reading of the Nuclear Safeguards Bill. Anything which increases the availability of information about any aspect of the nuclear industry is good. This is an

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industry with a proud record of safety and achievement in this country, and nothing but good can come from openness and information about its workings.

At the outset I must declare an interest. I was an adviser to Scottish Nuclear Limited, later to become part of British Energy plc, for about three years, which included the period in the run-up to privatisation. However, my interest in the nuclear industry goes back nearly 30 years. For 13 years I was Member of Parliament for Ross and Cromarty, the adjoining constituency to Caithness and Sutherland in which the Dounreay nuclear establishment is located. I have been an ardent supporter of nuclear power for all that time and I am convinced that future generations will not forgive us if we abandon what is unquestionably the most efficient, cost-effective and pollution-free source of power generation. I shall return to this theme in a few minutes, but first to the Bill itself.

The Additional Protocol to the United Kingdom's safeguards agreement continues and extends the terms already agreed on a voluntary basis between the UK and the International Atomic Energy Agency. It seems to me highly desirable that nuclear weapons states, of which we are one, make information available to inspectors as to the whereabouts and use of nuclear materials already in civil use in order that they are not diverted to non-nuclear weapons states, where they are liable to be used for undercover development of nuclear weapons. Furthermore, it is important that the IAEA is given every support to gather information on nuclear fuel cycle related activities and, in particular, the manufacture of specialised equipment and research and development, even where nuclear materials are not directly involved.

Apart from explaining that the Additional Protocol of the UK safeguards agreement takes account of the UK status, note 9 of the Explanatory Notes to the Bill also goes on to point out that that involves three parties: the UK, the European Atomic Energy Community and IAEA. My point here has already been answered to some extent by the noble Lord, Lord Wallace of Saltaire, in that I was going to point out to the Minister that presumably similar legislation to this is being enacted elsewhere.

It would be useful to know also how extensive the powers of the inspectors will be. I note that in Clause 4 a warrant is required, but does that warrant entitle the inspectors to examine contract terms and other commercially confidential documents?

Clause 3 may require some consideration in Committee, if we have a Committee stage, which now seems slightly doubtful according to my noble friend on the Front Bench. This is an area which I believe we might explore a little; for example, why is it necessary to involve individuals in such detailed examination, rather than companies? Might it not be that civil liberties are being interfered with to some extent? I admit that I am not normally particularly anxious about civil liberties because I usually associate them with Left-wing agitators. However, I do not believe that that would apply in this case. Do employees who

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handle highly confidential or secret information not already have to comply with such regulations? For example, what about the Official Secrets Act? Is there any overlap as far as that is concerned? There may be further minor points concerning the Bill. If there are, we can deal with those in Committee.

I must reiterate my long-felt concern that it is most unfortunate that we should again find ourselves discussing the nuclear industry and its involvement in nuclear weapons and civil use in the same context. I fully support our involvement in both spheres, but it is not surprising that the general public still tend to link that very association. That is unfortunate. Nuclear power is one of the greatest scientific discoveries of the century, if not of the millennium. But its full potential for peaceful purposes and, in particular, for power generation will not be fulfilled until existing prejudices are set aside. Nevertheless, the need for civil nuclear power is undeniable. Fossil fuels ultimately will be wholly depleted.

Twenty years ago I was Minister of State at the Department of Energy. At that time the estimated contribution to power generation by the year 2000 of all the alternative sources of energy added together was 8 per cent. Far from reaching that target, the figure is well short of it--5.3 per cent in the European Union and, I understand, still below 6 per cent in the United Kingdom.

Nuclear power currently provides approximately 30 per cent of our power generation. In Scotland the figure is higher--more than 40 per cent. Therefore, government should be encouraging more, not less, nuclear power as well as supporting wind, wave and solar power. The same is applicable on a world-wide basis. For example, China is about to embark on a programme of coal-fired power stations. That is a huge programme and will create pollution on a horrendous scale.

With the demise of most of our old heavy industries, the reliance on fossil fuels has declined. More than half the world-wide growth in electricity demand now comes from microprocessors. Electricity uses can no longer be substituted by fossil fuels. Therefore, electricity trends will evolve on their own in a linear relationship with GDP. Electrically-driven applications, such as technologically advanced production processes using advanced computer controls, are taking over in both commercial and domestic sectors.

Electricity generation is already the largest source of CO2 emissions in the European Union--about 30 per cent of the total. This emphasises the folly in the climate change and energy tax for the rate on electricity to be three times higher than on fossil fuels. That is likely to decrease, not increase, energy efficiency. However, I realise that separate legislation deals with that point so I shall not pursue it further. In my view, even a carbon tax would be preferable to a climate change levy, particularly one which discriminates so wickedly against the nuclear industry.

All in all, I am sympathetic to the objectives of the legislation, but as this is a Second Reading debate I see no reason why I should not use the occasion to plug in

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favour of the nuclear industry overall. I would much prefer to see some positive signs of long-term support for the nuclear industry from the Government. I should like to see a greater realisation of the major role of nuclear power in reducing environmental pollution, and that any decline in the use of nuclear power in power generation will have very serious implications for the UK's long-term strategic energy and environmental policies.

The nuclear industry employs 30,000 highly skilled workers, with double that number indirectly participating. We have a competitive world-class nuclear industry underpinned by hundreds of non-nuclear support companies throughout the country. If we ignore those facts, we do so at our peril.

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