Brexit no deal a highly risky option
For the civil nuclear sector, the BEIS Committee found that "no deal" would be a highly risky option in the absence of transitional arrangements. Without nuclear cooperation agreements, and an international safeguards regime (currently delivered by Euratom), the UK will not be able to guarantee access to materials essential to the running the country's nuclear power stations which at present provide 21% of our power.
The Committee's report examines the role of nuclear safeguards in trade and research, the establishment of a new UK regime, the importance of nuclear co-operation agreements in trading nuclear materials, and the impact of exit on R&D and skills.
The Committee welcomes the pragmatic approach of Ministers to regulation and argues that the benefits of the Euratom regime should not be put at risk by sticking strictly to the red line on ECJ jurisdiction. The report aims to provide an objective evaluation of the potential costs and benefits of leaving the EU for the civil nuclear sector to inform public debate, in the absence of any similar assessments being published by the Government. The Committee has published this report in time for a debate on Euratom membership on the EU (Withdrawal) Bill.
Retain close association with Euratom
Rachel Reeves MP, Chair of the Business, Energy and Industrial Strategy (BEIS) Committee, said:
"Throughout our inquiry, no-one has advocated to us leaving Euratom. As a leading member of Euratom, the UK has driven standards and ensured our national interests are front and centre of the development of the industry in Europe.
But we now face the prospect of setting-up our own nuclear safeguarding regime in its place which falls short of Euratom standards. This requires us to set up our own bureaucracy, which comes at a cost of millions, with very real doubts that it will actually be ready in time.
The Government should, as a matter of urgency, be seeking to retain as close as possible an association with Euratom and secure its ongoing delivery of existing safeguards requirements in the UK. Any delay will increase investment in contingency arrangements which may ultimately not be required."
Maintaining regulatory standards
The report welcomes the Government's objective of maintaining regulatory standards at current levels, and the introduction of the Nuclear Safeguards Bill to allow the replacement of existing arrangements.
But, the Committee finds that it is highly doubtful that the UK could deliver safeguards to Euratom standards by the point of our departure in March 2019. The Committee calls for an extended transitional period for civil nuclear, or the continuation of Euratom support, to ensure standards are maintained and the risks to trade and transport of materials are reduced.
More clarity needed on future safeguards
Rachel Reeves MP, BEIS Committee Chair, said:
"Civil nuclear is a global activity and strictly regulated at an international level. There are no great economic or competitive advantages to be won in seeking to diverge from international standards.
The Phase 1 negotiations have only delivered agreement on broad principles on Euratom. The industry needs more clarity about our future safeguards regime and what regulatory equivalence will actually mean in practice.
We believe the Government must pursue as close as possible a relationship with Euratom, to retain our influence, serve our national interests, and ensure the valuable role which civil nuclear plays in our research base, in our economy and in our energy security, is not undermined."
The report recognises the important role which the UK plays in nuclear research, with facilities including the Joint European Torus (JET) at Culham. The report recommends the Government should continue to fund and cooperate on this and other research projects run by Euratom, and seeks reassurance from Government that the Austrian presidency of the European Council in the second half of 2018 will not affect the ongoing funding for JET.