UK report examines the risks of Brexit

3 May 2017

In a report examining the implications of the UK’s decision to leave the European Union (Brexit), the cross-party UK parliamentary Business, Energy and Industrial Strategy Committee recommends that the UK maintains access to the Internal Energy Market and retains membership of the Emissions Trading System until at least 2020.

The report, “Leaving the EU: negotiation priorities for energy and climate change policy” says the UK must remain committed to domestic climate change policies and not let Brexit undermine emissions reduction targets that are enshrined in national law.

Legal opinion is divided on the necessity for the UK to leave the European Atomic Energy Community (Euratom), the committee said.  "Withdrawal from Euratom is an unfortunate, and perhaps unforeseen, consequence of the prime minister's objective of ending the jurisdiction of the European Court of Justice in the UK." It added, "Ministers must end the uncertainty and resolve the matter by securing alternative arrangements as urgently as possible."

The committee, which examines the administration, expenditure and policy of the Department for Business, Energy and Industrial Strategy (BEIS), noted strong concerns within the industry that the new arrangements may take longer than two years to set up. It recommends the delayed departure of the UK from Euratom to give the industry more time to establish alternative arrangements.

"If this is not possible, the government should seek transitional arrangements, which may need to be longer than the three years proposed by the European parliament," it said. "Any interval between the UK leaving Euratom and entering into secure alternative arrangements would severely inhibit nuclear trade and research and threaten power supplies."

A similar message was included in a House of Lords Science and Technology Committee report, “Nuclear research and technology: Breaking the cycle of indecision” (see related story). The committee said the nuclear industry faces risks if the UK's membership of Euratom expires at the end of the two-year negotiating period without a replacement. It warned, "The UK risks losing its lead in fusion research as well as losing access to the markets and skills it needs to construct new nuclear power plants and existing power plants could be unable to acquire fuel."

The report says there is a "real urgency for the government to act on this". It calls for the government to establish a working group of industry and government representatives "to develop a plan to preserve the essential benefits of Euratom". The committee further noted: "The development of nuclear energy within the UK cannot be seen in isolation or as an end in itself. It must be seen as part of a wider energy policy which seeks to balance the competing demands of affordability, security of supply, decarbonisation and interoperability with other elements in the electricity generation mix."

Labour MP and committee chairman Iain Wright said: "The government has failed to consider the potentially severe ramifications of its Brexit objectives for the nuclear industry. Ministers must act as urgently as possible. The repercussions of failing to do so are huge. The continued operations of the UK nuclear industry are at risk."

He added: "The Prime Minister has made it politically unfeasible to remain in Euratom long term. The Government now has a responsibility to end the uncertainty hanging over the industry and ensure robust and stable arrangements to protect trade, boost research and development, and ensure safeguarding of the highest level.” He noted: "In the short term, the Government should seek to avoid disruption to the energy sector and domestic climate change agenda. Government needs to provide as much clarity and stability as possible to support investment and avoid damaging UK competitiveness and adversely affecting consumers."

Responding to the report Energy Secretary Greg Clark said: "The future of the nuclear industry in this country can only be protected by a Prime Minister who will actually stand up for Britain and nuclear power in Brexit negotiations."

Nuclear Industry Association (NIA) CEO Tom Greatrex said, "The BEIS Committee, and today's House of Lords Science and Technology Committee report, makes a number of sensible, pragmatic and realistic recommendations to prevent disruption, which the NIA welcomes." He added, "The government needs to take those on board and get on with serious discussion to ensure robust alternative arrangements are set up, in a realistic timeframe, to minimise disruption to the UK's nuclear industry both at home and in European markets."

Today, the NIA released a new position paper calling for the Government to work closely with industry in order to bring about replacement arrangements in a timely manner to avoid a cliff edge for the nuclear industry. The paper sets out the priorty areas for negotiations with the European Commission as the UK ceases to be a full member of the Euratom community.

Priorities include:

  • Agreeing a replacement Voluntary Offer Agreement with the IAEA for a new UK safeguards regime
  • Replacing Nuclear Cooperation Agreements with key nuclear markets, including the Euratom Community, the USA, Canada, Australia, Kazakhstan and South Korea.
  • Clafifying the validation of the UK's bilaterial Nuclear Cooperation Agreements with Japan and other states
  • Setting out a process for the movement of nuclear material, people, goods and services
  • Agreeing a new funding arrangement for the UK's involvement in Fusion 4 Energy and the wider EU nuclear R&D programme.

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