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General Committees

Debated on Tuesday 15 January 2019

Delegated Legislation Committee

Draft Merchant Shipping and Other Transport (Environmental Protection) (Amendment) (EU Exit) Regulations 2018

The Committee consisted of the following Members:

Chair: Phil Wilson

† Allan, Lucy (Telford) (Con)

† Clark, Colin (Gordon) (Con)

† Docherty, Leo (Aldershot) (Con)

† Donelan, Michelle (Chippenham) (Con)

† Foxcroft, Vicky (Lewisham, Deptford) (Lab)

† George, Ruth (High Peak) (Lab)

† Ghani, Ms Nusrat (Parliamentary Under-Secretary of State for Transport)

Green, Kate (Stretford and Urmston) (Lab)

† Heappey, James (Wells) (Con)

† Johnson, Dr Caroline (Sleaford and North Hykeham) (Con)

Kyle, Peter (Hove) (Lab)

† Lammy, Mr David (Tottenham) (Lab)

† Mc Nally, John (Falkirk) (SNP)

McGovern, Alison (Wirral South) (Lab)

† Tracey, Craig (North Warwickshire) (Con)

† Turner, Karl (Kingston upon Hull East) (Lab)

† Wragg, Mr William (Hazel Grove) (Con)

Dominic Stockbridge, Committee Clerk

† attended the Committee

Fourth Delegated Legislation Committee

Tuesday 15 January 2019

[Phil Wilson in the Chair]

Draft Merchant Shipping and Other Transport (Environmental Protection) (Amendment) (EU Exit) Regulations 2018

I beg to move,

That the Committee has considered the draft Merchant Shipping and Other Transport (Environmental Protection) (Amendment) (EU Exit) Regulations 2018.

It is a pleasure to serve under your chairmanship, Mr Wilson. The Department for Transport has conducted intensive work to prepare for the UK’s departure from the EU and ensure that our statute book continues to function. The Department is laying about 66 statutory instruments before the House before exit day, of which 42 have already been made. The draft regulations are one such instrument. They will make changes in three areas of transport and environment legislation: legislation on air pollution, controlling sulphur dioxide emissions from ships; legislation on substances used to prevent the fouling of ships’ hulls; and transport and works legislation in relation to environmental impact assessment. If they look familiar, it is probably because they were one of several draft statutory instruments published on 28 March 2018 to support the passage of the European Union (Withdrawal) Act 2018.

The amendments that the draft regulations will make are technical. There are no policy changes in them, nor is there any reduction in the environmental standards or obligations to which the UK is subject. They are made mainly under the 2018 Act, which retains directly applicable EU legislation in UK law and makes provision to correct deficiencies that arise from the UK’s leaving the European Union. To enable the legislation to continue to work as part of UK law, the draft regulations will, where necessary, change references to “the Member State” and “the Commission” to “the Secretary of State” and “the United Kingdom”. Changes to definitions and other wording in the legislation have been made to reflect the UK’s position outside the EU.

That is the essence of the draft regulations, but I know that hon. Members are keen to hear more, so I will provide a bit more information. Although the regulations are made mainly under the 2018 Act, some changes are made under section 2(2) of the European Communities Act 1972 to update references to an EU directive on sulphur emissions from ships in the Merchant Shipping (Prevention of Air Pollution from Ships) Regulations 2008. Since the 2008 regulations were made, Council directive 1999/32/EC has been repealed and replaced by EU directive 2016/802, so the draft regulations will replace references to the 1999 directive with references to the 2016 directive, which consolidates previous legislation on marine fuels. A further change, made under the 1972 Act, will correct an out-of-date reference to the European economic area agreement in the Transport and Works Act 1992.

I will say a little more about the three areas of legislation that the draft regulations will amend, because I know that hon. Members present are interested and the shadow Minister, the hon. Member for Kingston upon Hull East, has raised related issues. The first area is the control of sulphur emissions from ships, which is vital for meeting the Government’s policy of improving public health, reducing environmental damage from acid rain and protecting biodiversity. Powers to change references to international law have been transferred from the European Commission to the Secretary of State, which will enable us to keep up to date with changes to International Maritime Organisation rules on environmental protection. As colleagues will know, the IMO is the UN’s maritime body; as maritime Minister, I am very lucky that we host its headquarters here in London, just across the river.

Changes to the legislation on air pollution from ships will remove references to SafeSeaNet, a database operated by the European Maritime Safety Agency. The Maritime and Coastguard Agency will continue to receive information on compliance with IMO measures. The MCA is setting up a UK database to hold information on sulphur inspections and the taking of fuel oil samples. The draft regulations will ensure that recreational and pleasure craft will continue to benefit from certain exemptions in respect of diesel engines. The UK’s requirement to report to the European Commission, which will be redundant as it applies only to European member states, will be replaced with an obligation for the Secretary of State to publish an annual report on compliance with sulphur standards in marine fuels.

The second area of legislation that the regulations will change relates to the ban on the use of certain harmful chemical compounds, known as organotins, in ships’ anti- fouling systems. Anti-fouling paint and coatings, which inhibit the attachment of unwanted organisms to ships’ hulls, have an important role in improving ships’ fuel efficiency, which also improves the environment. However, the organotin compounds in some anti-fouling products, notably tributyltin—TBT—have been shown to be very damaging to marine life and have been banned under international and EU legislation. The UK is supporting work in the IMO to ban the use of a further compound used as a booster in anti-fouling paints. That will provide further protection to the marine environment. The regulations make no changes to EU restrictions on those substances; the changes made include replacing references to member states with references to the UK.

Finally, the regulations also introduce technical changes to the environmental impact assessment provisions of the Transport and Works Act and procedural rules. The changes will allow the UK to continue to take a co-ordinated and streamlined approach to producing an environmental impact assessment. For example, they will, as now, avoid the need for certain information to be collected twice. The Welsh Government have been consulted on the changes to the provisions and given their approval to the regulations.

The changes made by the regulations are needed. They will ensure that environmental laws on shipping and other transport continue to function after the UK’s withdrawal from the European Union. That will enable the UK to continue to comply with its international obligations as established by the International Maritime Organisation. The Government fully support the regulations, which I commend to the Committee.

It is always an absolute pleasure to see you in the Chair and to serve under your chairmanship, Mr Wilson. I hope to be relatively brief in my remarks, although I will ask the Minister one or two questions.

As the Minister mentioned, the regulations are part of the many aspects of EU law falling into UK law under the European Union (Withdrawal) Act. The instrument will ensure that the existing framework remains operable in the UK. We recognise that that is required as we leave the EU and are therefore supportive of it. I would like the Minister to address one or two points, although given their technical nature it would probably be better if she provided answers to my questions in writing.

In relation to the enforcement of sulphur dioxide emission limits on fuel from shipping, the new limit comes into force on 1 January 2020, adjusting the existing emission control zones covering the North sea and the channel. As I understand it, the Irish sea is not currently subject to those limits. I would be grateful if the Minister explained what impact, if any, the regulations will have on enforcement and compliance, especially on jobs and environmental standards in the Irish sea that are not currently covered by sulphur dioxide emissions.

Can the Minister confirm whether support for ferry companies to comply with sulphur dioxide emission limits after Brexit, as it was when initial sulphur dioxide limits came into force in 2015, will be affected by the regulations? Can she tell us where the Government are on the standardisation of sulphur dioxide abatement technology fitted on merchant ships? The regulations update the Merchant Shipping (Prevention of Air Pollution from Ships) Regulations 2008. Can she confirm that any further changes to the definition of the emission abatement method will not leave the UK behind?

The regulations remove the words

“on the basis of the reporting in the Union information system or in the annual report referred to in Article 7”.

They do not replace them with anything. Can the Minister explain on what basis the decision to sample fuel oil from ships will be made? Will it be based on the information of the MCA or that of some other body?

The instrument removes reference to SafeSeaNet, as the Minister has already outlined. We will no longer be a member of it when we leave the EU; however, the instrument does not make clear what we will replace it with. Will it be the MCA and, if so, will the MCA receive the extra resources needed to carry out those extra functions? I think the MCA would probably argue that it is already overstretched. I wonder whether there are any issues pertaining to that point.

I am grateful to the hon. Member for Kingston upon Hull East for his contribution to the debate, which shows that the Committee appreciates the importance of measures on environmental protection in relation to shipping and other forms of transport. The draft regulation will ensure the continuity of that legislation, as well as correct some minor but long-standing errors.

Some of the issues that the hon. Gentleman raised are quite technical, so I will indeed respond in writing, but I will address a couple of points now. He referred to SafeSeaNet, which provides information on ships in, or expected at, ports of member states. It is used for maritime safety, port and maritime security, marine environment protection and the efficiency of maritime traffic and maritime transport. The subject of access to databases has been raised regularly, so it is important to note that the THETIS database, which is linked to SafeSeaNet, shows which ships have priority for inspection and allows records of inspections. Via THETIS, reports are available to all port state control authorities in the EU and signatories to the Paris memorandum of understanding. The UK will continue to have access to THETIS, but not to additional EU modules for THETIS that are tied to EU legislation.

The hon. Gentleman also referred to the burden that could be placed on the MCA. As the Minister responsible, I work closely with the MCA team, who are very well aware of their extra roles and responsibilities and of their reputation for delivery. Above and beyond that, we have a responsibility as the host country for the IMO and as part of the delivery group for the 0.5% cap on sulphur by 2020. We foresee a serious leadership role there, too.

The Government recognise the significant harm that air pollution can cause to human health. When the hon. Gentleman raised the subject in a previous debate, we wrote to him about it; I would be pleased if he allowed me to respond in writing again. We have now published our clean air strategy, which includes further measures on ports and shipping. Shipping must play its part, and I was pleased that last year my Department established the Clean Maritime Council. One of the council’s first tasks was to develop a clean maritime plan by spring this year, setting out domestic policies to reduce greenhouse gas and pollutant emissions from shipping. Our clean air strategy makes further commitments, including the development of air quality strategies by ports. It will supplement the good progress made through international action, such as the North sea emission control area and the tougher global controls on sulphur emissions from 2020, which have led to major reductions in emissions.

The draft regulations will not restrict our ability to take necessary action; they will only make changes that are essential to ensuring that environmental legislation continues to function effectively in the UK from day one after exit. I hope that the Committee has found this morning’s sitting informative and that it will join me in supporting the draft regulations.

Question put and agreed to.

Committee rose.

Draft Nuclear Safeguards (EU Exit) Regulations 2018

The Committee consisted of the following Members:

Chair: Mr Virendra Sharma

† Braverman, Suella (Fareham) (Con)

† Brown, Alan (Kilmarnock and Loudoun) (SNP)

† Courts, Robert (Witney) (Con)

Creasy, Stella (Walthamstow) (Lab/Co-op)

† Davies, Glyn (Montgomeryshire) (Con)

† Harrington, Richard (Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy)

† Harris, Rebecca (Lord Commissioner of Her Majesty's Treasury)

† Harrison, Trudy (Copeland) (Con)

† Latham, Mrs Pauline (Mid Derbyshire) (Con)

† Lucas, Ian C. (Wrexham) (Lab)

† Mann, Scott (North Cornwall) (Con)

† Morris, Anne Marie (Newton Abbot) (Con)

Murray, Ian (Edinburgh South) (Lab)

† Smith, Nick (Blaenau Gwent) (Lab)

Twist, Liz (Blaydon) (Lab)

Western, Matt (Warwick and Leamington) (Lab)

† Whitehead, Dr Alan (Southampton, Test) (Lab)

Ben Sneddon, Committee Clerk

† attended the Committee

Fifth Delegated Legislation Committee

Tuesday 15 January 2019

[Mr Virendra Sharma in the Chair]

Draft Nuclear Safeguards (EU Exit) Regulations 2018

I beg to move,

That the Committee has considered the draft Nuclear Safeguards (EU Exit) Regulations 2018.

I repeat my sentiment of yesterday that it is a pleasure to serve under your chairmanship, Mr Sharma. It is even more of a pleasure because yesterday’s Committee was chaired with such brilliant style and dignity that my shadow, the hon. Member for Southampton, Test, was kept to record brevity. It will not help his reputation, but I thank him for his co-operation—and everybody else for theirs. I expect that today’s proceedings will be rather longer, but I will try to curtail my own contribution.

The regulations, which were laid before the House on 29 November last year, set out the legal framework of our new domestic civil nuclear safeguards regime after we withdraw from Euratom—the European Atomic Energy Community, for those unfamiliar with the body. The regulations are made under powers set out in the Nuclear Safeguards Act 2018, which amended the Energy Act 2013. They replace the current legal framework, which is provided principally by our membership of Euratom.

I emphasise that the two sets of regulations dealt with yesterday and today are essential to establishing our domestic regime whether we leave the EU with a deal or without one. They are linked to the Nuclear Safeguards (Fissionable Material and Relevant International Agreements) (EU Exit) Regulations 2018, which set out the definitions of fissionable material and relevant international agreements. I am sure that Members who were in yesterday’s Committee will remember them in full, and I will test them later to see whether they were listening—

—with the exception of the Opposition Whip. I remind everybody who has not wished the hon. Gentleman a happy birthday that it was his birthday yesterday. I think I have milked that one enough, but I will try to be nice to him in the hope that there will not be several votes this afternoon.

As I said, for the purpose of the regulations, the terms are defined under the 2013 Act, as amended. If it is acceptable to the Committee, I will not repeat what nuclear safeguards are. If anybody would like me to, I am very happy to go over that, but I went over it yesterday and at various points during the passage of the 2018 Act, pointing out that they are distinct from safety and security and are to do with non-proliferation.

The regulations are essential for two reasons. First, they will show the international community that we honour international legal nuclear safeguards, and that we are a responsible nuclear state. Secondly, the detail in the regulations and in yesterday’s will, we hope, retain public, industry and international trading partner confidence and enable the continuity of civil nuclear trade. We have to ensure that our civil nuclear ambitions continue and are not diminished when Euratom safeguards no longer apply to the UK.

The 2018 Act empowers the Office for Nuclear Regulation to be the regulator for safeguards. It did not do that before; the ONR regulated safety and security. The Act gives the Secretary of State powers to make regulations giving effect to our nuclear domestic regime when we leave Euratom. The regulations perform that function.

The regulations establish requirements on operators of qualifying nuclear facilities. They establish provisions for the ONR to be the new safeguards regulator when it takes over the roles and responsibilities currently with Euratom. Regulations 3 to 33, together with schedule 1, set out the requirements for operators, which include, for example, the record that an operator is required to keep, together with the forms that the operator must send to the ONR. Regulations 7 to 9 set out the requirements for an accountancy and control plan. Regulations 39 to 42 set out the provisions dealing with the ONR as safeguards regulator. Regulation 43 sets out the offences, with regulations 44 to 49 setting out the provisions dealing with notifications of the Secretary of State. Schedule 4 sets out the transitional provisions.

Our Department held an extensive consultation about the regulations; there were 28 responses, and we ourselves responded at the end of November last year. I thank those who contributed, because the comments on the regulations assisted our final policy deliberations. In response, we introduced a specific commencement date of 1 January 2021 for the accountancy and control plans, which gives operators further time to produce the plans, as they requested. We have introduced a new exemption for certain educational establishments holding very small quantities of qualifying nuclear material. We listened to comments on the transitional provisions in schedule 4 and further developed this to support operators and ensure a smooth move from Euratom to our safeguards regime. As part of the consultation we published an impact assessment for the regulations. A final fit-for-purpose nuclear safeguards impact assessment was published on 29 November 2018.

I am pleased to report that there has been good progress on many of the steps required to ensure delivery of a new domestic safeguards regime in the UK. We have signed our bilateral safeguards agreements—we discussed Japan extensively in yesterday’s Committee—and they were approved by Parliament on 19 December. The ONR is ready to take on the role and responsibility of the UK safeguards regime. It has been enhancing its capabilities. Several members of the Nuclear Safeguards Public Bill Committee expressed fear about that during the Bill’s passage. We heard evidence from Mina Golshan of the ONR explaining possible concerns that the posts would not be recruited and filled. We took those concerns on board, and I am pleased to say that the fears have not been realised. That is not because she was advising incorrectly; until a role is advertised and recruited it is almost impossible to tell what is going to happen.

From January 2019, the domestic regime commenced parallel running alongside Euratom, processing and checking reports received from industry through a system of safeguards managing and reporting. While it is running in parallel, we will have an opportunity to identify any adjustments necessary. We have time to do that before 29 March. On recruitment, which has been of interest to the House, the first phase of recruitment has been fulfilled, with 16 new safeguard officers in place—seven more than the minimum of nine that we felt were required to deliver the regime. Four nuclear material accountants have been appointed, giving a total of 20 in post.

These regulations, together with our international agreements, allow the ONR to deliver a safeguards regime that meets our international obligations from day one after exit. I believe the ONR’s capacity and expertise will build over time to be, by December 2020, equivalent in effectiveness and coverage to that currently provided by Euratom. That was our policy intent. It is the means by which the UK will exceed the commitments that we need to give the international community. The entire purpose of this is not to do the minimum required, but to do what we have done since all this started, showing leadership in the world. That is the regime we are aiming for.

I believe the draft regulations, together with the ones approved yesterday are vital to enable us to operate our domestic civil nuclear industry. They will deliver the Government’s commitments to establish a new regime by December 2020 that is equivalent in effectiveness and coverage to that currently provided by Euratom, and to meet international obligations from day one of exit. In certain respects the safeguards commitments set out in the new bilateral safeguards agreed between ourselves and the International Atomic Energy Agency will be exceeded. I very much look forward to hearing what hon. Members have to say.

It is a pleasure to serve under your chairmanship for the second day running, Mr Sharma. As the Minister says, clearly your presence instilled in me a modicum of brevity, which I hope I can continue this afternoon.

I knew I would get support for that.

This statutory instrument is really about two things: first, getting in place the regulations that will govern the process of nuclear safeguarding—inspections and all the other activities that go with it—and secondly, placing regulation into the hands of the Office for Nuclear Regulation. The draft regulations before us are pretty extensive and obviously it is not possible to go through them line by line—certainly it has not been possible for me, although it may have been possible for other Committee members.

I take it—it would be helpful if the Minister confirmed this—that according to the explanatory memorandum to the SI, some of the changes made are minor and consequential amendments to legislation, and the regulations as drafted a pretty exact parallel to what was the case under Euratom, and therefore enable that full range of inspection to take place to Euratom standards. Is that the Minister’s understanding?

The second part of the question before us is the position of the ONR in this matter. As I am sure hon. Members will know, the ONR has a large number of functions. The nuclear safeguards function is being added to the ONR’s overall set of responsibilities, where previously it was undertaken separately by inspectors appointed by, working for and embedded with Euratom. The inspectors who will undertake the work will now be within the purview of the ONR. As the Minister noted, questions were raised during the passage of the Nuclear Safeguards Bill about the recruitment of inspectors in the number required to carry out the function and how that would be done between the time of the Bill’s passing and now. The Minister made some comments both yesterday and today about the recruiting process undertaken by the ONR.

It is sort of good news that the recruiting process seems to have gone well. Certainly we raised some concerns during the passage of the Bill about how that would be done and whether it would be possible in the time available. The Minister said at the start of the Bill process that the aim of the inspection regime was to carry out an inspection regime as good as that under Euratom from the word go. Indeed, the impact assessment accompanying the SI states that 30 to 35 staff will be needed,

“to be able to deliver its functions”—

that is, the ONR’s functions—

“to a standard equivalent in effectiveness and coverage as that currently provided by Euratom”.

That is the gold standard as far as staffing is concerned. The Minister said both yesterday and today that additional inspectors had indeed been appointed and that the ONR’s recruitment target for the first phase has been met: 16 safeguards officers are in place, he said, which is seven more than the minimum of nine required to deliver the regime at the end of March. As I understand the position, we have inspectors in place to carry out inspection to an international standard, but not to the level previously set out in the regime overseen by Euratom.

The explanatory memorandum for today’s SI states:

“It is intended that these agreements”—

the international agreements mentioned yesterday and today—

“combined with these Regulations, will allow ONR to establish a new regime which will deliver international standards from day one of exit, building, over time, to be equivalent in effectiveness and coverage to that currently provided by Euratom, and which will exceed international standards.”

The reality is that as far as the ONR is concerned, our present level of recruitment of inspectors allows us to get by, but does not allow us to reach Euratom standards. Although that seems to be a satisfactory recruitment process in terms of getting to those international standards, it falls fairly well short of the aim of the ONR’s operation, as indicated at the time of the Bill.

It may be that since the SI deals with a potential abrupt and total EU exit on 29 March, being able to carry out inspections that meet an international standard on 1 April is all that is required, but I would be interested to hear from the Minister how quickly it is proposed that we can get up to those Euratom standards, perhaps during a transition period. That inspection regime was set out as the gold standard at the time of the Bill, and meeting its standards appears to still be the intention of the Government. I hope the Minister will be able to assure me on that point, and perhaps add a few points about the further recruiting process necessary to get us to that position.

The second issue I will raise is the cost of setting up the ONR to carry out its new functions. As Members who sat on the Nuclear Safeguards Public Bill Committee will recall, we were informed by—among other things—the explanatory notes to the Bill that the cost of setting up the ONR, its computer systems and so on was potentially up to £10 million. Now, we see in the explanatory memorandum for this piece of legislation that the cost of that task will be something like £28 million.

I wonder why there is that substantial variation between what we were told at the time of the Bill and what is before us today. Is it just that the estimates were wrong at the time of the Bill? Is it that additional costs have been added on to the setting up of the ONR? Is it perhaps that, given the situation we find ourselves in, we will technically still be within the Euratom orbit for 20 months should there be a transition period following Brexit? Presumably, those Euratom inspectors would continue their work for that period of time while the newly recruited inspectors work alongside them. Is it that additional cost that is creating those very inflated figures? On its face, it looks like the estimates that we were given at the time of the Bill were way out, and while the running costs appear to be about the same as was suggested at the time of the Bill, that figure looks very different. I ask the Minister to enlighten me about why there is such a difference, and whether he himself is happy with it, since I think that money will come out of Departmental funds. In any event, that substantial difference can be happily passed through as we move towards implementing this new regime.

Subject to the answers to those two questions, we do not intend to oppose the statutory instrument, because we think that it is very important that the regulations, and proper running of the system under the ONR, are fully in place as soon as possible. We therefore welcome the fact that the regulations are, as far as I can see, clearly in place and that we will be able to get up and running with an inspection regime from a very early stage.

I thank the shadow Minister for his two very interesting and significant points. First, on the matter of staffing and ONR recruitment, 30 to 35 staff was an estimate, including administrators, that the ONR made for the number of staff that it required. It now has a team of 20 in place—that is 16 and four—including inspectors and nuclear material accountants. The ONR is satisfied with progress to date. That is all I can say. That was the estimate in the first place, but it is very satisfied that what it has will provide the ability to deal with international standards, but not yet the gold standards to which the hon. Gentleman referred. At this stage, the ONR is satisfied and believes that it may require fewer people in total than it first thought. It is not because of a lack of recruitment or of suitable people. It knows the legal duty it has to fulfil; its legal brief is to get to Euratom standards as quickly as it can. I would not like it to be thought that this is a failure of recruitment or anything like that. However, we rely on the ONR, because it is the regulator.

I thank the Minister for that information. It may well be the case that there will be a period of parallel running during a transitional period. After all, the regulations are essentially designed to start us off in a no-deal Brexit. If there is another form of Brexit, there will be a transition period. Is the Minister’s intention to continue with the reporting arrangements that he set out for the House at the time of the passing of the Bill, to give a regular update on those sort of changes as the new regime gets under way?

Yes, it is our intention to do so, exactly as we have been doing up to now. I know that the hon. Gentleman, and I hope many people, will read such updates. They will certainly be provided, as we said.

The second point concerned the financial side—the increase in costs between the original estimates and the impact assessment produced today. The hon. Gentleman is correct. The transitional costs have increased since the ONR has had more information and we have had a better understanding of its activities. The difference in cost is based on what we estimate to be higher costs during an implementation period to get to Euratom standards. They reflect the fact that the ONR will be able to deliver an international standard safeguards regime from 1 April 2019, and that we will develop the regime to achieve Euratom equivalents by 2021. The hon. Gentleman is correct that that is an increase in cost. Best endeavours were used to do the estimate but, as it has become reality, the costs have come out higher.

Question put and agreed to.

Committee rose.