Leaving the EU: implications for the civil nuclear sector

This report examines the impact on the civil nuclear sector of the UK’s departure from the European Union. Our departure from the European Atomic Energy Community (Euratom) is an apparently necessary consequence of Brexit, but not an outcome advocated by anyone in the sector. At present, 21% of our power is provided by nuclear energy. The flow of nuclear goods and services cannot continue without a safeguards regime which is currently provided by Euratom. We welcome the Government’s commitment to ensure that there is no dilution of our nuclear safeguards from current Euratom standards, underpinned by the Nuclear Safeguards Bill, which is currently before the House. However, we conclude that it is highly doubtful that it will be possible for the UK to implement Euratom-equivalent safeguards by March 2019, and even the less stringent requirements of the International Atomic Energy Agency (IAEA) will be challenging to deliver. The only viable route to achieving the Government’s objectives is for Euratom to continue managing our safeguards regime. We therefore believe that the Government should seek to achieve in the negotiations as close as possible an association with Euratom, if we are required to leave. If it is unable to secure this outcome, it should ensure that transitional arrangements last long enough for our own Office for Nuclear Regulation to be able to take over. We believe that this would be consistent with the terms of the Phase 1 Negotiations Report, agreed between the UK and EU and published on 8 December 2017. In view of our doubts about developing our own capabilities, we call on the Government to indicate clearly, at an early opportunity, its plans for implementing contingency arrangements regarding safeguards and a commitment to keeping the House updated on progress. The Government must also ensure that the UK is able to continue trading with other countries through Euratom’s existing nuclear cooperation agreements until such time as new agreements can be established. In negotiations on withdrawal, the Government should seek to take account of the significant skills shortages at all levels that might otherwise affect the planned nuclear power station building programme, as well as ongoing civil nuclear activities. The UK hosts important nuclear research facilities, for example the Joint European Torus (JET) at Culham, and the Government should continue to fund and cooperate on this and other research projects run by Euratom. It is not possible to provide a meaningful financial estimate of the impact of leaving Euratom but all the evidence suggests that the impact on the UK civil nuclear sector will be considerable. The UK will lose influence and have to bear increased costs. There may be some opportunities for expanding trade outside the EU, but for the most part these are not affected by our membership of Euratom. There are no obvious advantages from regulatory divergence, nor is the industry or Government pursuing this objective. The Government should seek to agree its future relationship with Euratom as early as possible during the negotiations in order to minimise unnecessary expenditure and provide greater certainty to the sector.