Grand Committee
The Deputy Chairman of Committees (Baroness Harris of Richmond)
My Lords, if there is a Division in the Chamber while we are sitting, the Committee will adjourn as soon as the Division Bells are rung and resume after 10 minutes.
Energy Bill
Baroness Worthington
“( ) This section shall cease to have effect two years following enactment.”
Baroness Worthington
I think that we are all quite relieved to have reached our last day in Committee on the Energy Bill. I would like to thank everyone who has contributed to our debates, and I thank the Minister for her responses and for all her correspondence, which has been very useful.
Amendment 55ALA is designed to provide an opportunity to discuss an element of the Bill which has not had much attention so far, and that is the financial investment enabling investment contracts. Our amendment would provide a sunset clause to this aspect of the Bill such that it would no longer be part of the mix of policy two years following the legislation being given Royal Assent. We have tabled this as a probing amendment because we wanted to give the Minister an opportunity to provide some background information and clarity on the thinking behind the investment contracts element. When the draft Bill emerged, it was clear that quite a high degree of emphasis was being placed on a provision to enable the Secretary of State to enter into contracts for difference with investors ahead of all the detail of the Bill being worked through. The most significant difference is that this would be a contract between the Secretary of State and a party who wished to develop low-carbon electricity, not an enabling counterbody. The rationale was that such a counterbody would not be in existence, so it would be a direct contract with the Secretary of State.
It is fair to say that there has been considerable interest in these FID-enabling contracts. We were grateful to receive information from the department about the number of applications that have been submitted to date in relation to this element of the Bill, which now total 57. I note that that is just the number of applications that have come from renewable energy. The table we have been given does not indicate the level of interest that has been expressed by CCS or nuclear. Obviously the FID-enabling process is there for all technologies and yet the supporting literature and table show that while we have a lot of information about the renewables aspect, very little is supplied in relation to the other two major categories of low-carbon electricity. Can the Minister provide a bit of background information in relation to those nuclear and CCS projects which may have expressed an interest? Have there been any? If so, how many, and at what level of gigawatts? That information would be very useful and it is pertinent to the discussions around investment contracts.
It was my understanding that the FID-enabling contracts were necessary in order to prevent a hiatus in investment, but that is the least of the problems with regard to the renewables. Renewables have an existing support mechanism and we have already discussed in Committee the transitional arrangements that are in place for that. We have some concerns, but in general there is a transfer and crossover period for renewables that is clear. However, CCS and nuclear will be embarking on a completely new policy of support; I would have thought that those are the projects which need early sight of and access to the contracts, yet we are not being given much detail at all. That strikes me as odd. Perhaps the Minister can give the Committee an update on where we are in relation to being able to arrive at strike prices for those two technologies. It is important that the strike prices are subject to parliamentary scrutiny. We have been given an awful lot of information about renewables, but not about the other two technologies.
It will be increasingly important to treat these three diverse groups of technologies as similarly as we can, given that that is how we will be able to argue that our measures are subject to competition and to comparisons that will enable the least cost and the most sensible decisions. I am sure that that will be of great interest to state aid discussions. One of the main rationales for EMR intervention in the first place was that we were seeking to treat low-carbon electricity providers equally, yet still we seem to be proceeding in a fairly unequal way, with renewables being treated separately from CCS and nuclear. There is a great dearth of information on CCS and nuclear.
The state aid question is important, of course, for this section of the Bill. The rationale is that these investment contracts can be signed. I note with interest that the latest investment contract allocation update from the department says that they will not be signed until March 2014. Previous timetables implied that that would happen in autumn this year and that they would be subject still to state aid clearance. I struggle to see how this whole jigsaw will fit together. How will the investment contracts be able to be assessed for state aid if the remainder of the Bill is not yet worked through? Is it realistic to think that by March 2014 the Secretary of State will enter into contracts before the Bill has been approved or signed off in its detail?
As I have said, this is a probing amendment. It is specifically designed to try to elucidate more information in relation to these contracts. I note that it seems to have gone very quiet on the negotiating front with EDF. I saw today that in a 17-page press release, EDF found no space to mention Hinkley Point in the update on its results. I do not want to be overly pessimistic; however, if this is a really serious negotiation that is of material interest to its investors and people interested in its company, it seems odd that there was no mention of Hinkley Point. Perhaps I may end by asking that we have as much of an update as the Minister is allowed to give on that process of negotiation and when we might have more transparency around its terms. I beg to move.
The Parliamentary Under-Secretary of State, Department of Energy and Climate Change (Baroness Verma)
My Lords, I thank the noble Baroness, Lady Worthington, for these amendments, which seek to time limit the provisions on investment contracts. Amendment 55ALA would time limit the provisions in Schedule 2 to the Bill, which relate to investment contracts, to two years following enactment.
The investment contract provisions in the Bill are already time-limited. The Secretary of State can only enter into investment contracts on or before 31 December 2015. However, the remaining provisions set out in Schedule 2 cannot be time-limited, as they provide the Secretary of State with the necessary powers to administer and make payments under investment contracts in the unlikely event that the enduring EMR regime is substantially delayed or does not come into force at all. In the main, the powers mirror those in Chapter 2 of the Bill on contracts for difference.
If payments had to be made under an investment contract, it is likely that they would need to be made for considerably longer than two years, potentially for the duration of the contract. The effect of time-limiting the investment contract provisions through this amendment would be that developers would not have the confidence to take final investment decisions on much needed low-carbon generation projects that might otherwise be delayed or cancelled, as there would no longer be a means to make payments under the contracts. The amendment would therefore negate the purpose of these powers and risk creating the investment hiatus that they are intended to address.
Amendment 55ALC seeks to amend the powers relating to varied investment contracts. A varied investment contract will, in the opinion of the Secretary of State, materially increase the likely cost to consumers of electricity. To ensure transparency, the Bill requires that varied investment contracts are laid before Parliament together with a statement explaining why the variation is appropriate, having regard to the likely cost to consumers.
This amendment would require that varied investment contracts could be laid before Parliament only up to 31 December 2015. There would, therefore, be no possibility to make amendments pursuant to this provision after this date. While it is not the Government’s policy intention to reopen investment contracts for further negotiation once they are agreed, this clause provides for useful flexibility should it be necessary—for example to comply, as the noble Baroness rightly points out, with state aid rules.
Before I ask the noble Baroness to withdraw her amendment, I would like to respond to her question on the number of CCS and nuclear final investment decision applications. Apart from the renewable developers, we are in discussions on the potential investment contract for Hinkley Point C which, if agreed, will build a 3.2 gigawatt nuclear power plant. As the noble Baroness is aware, these hugely sensitive negotiations are ongoing and it would be imprudent of me to go further than that. I can say that, while it may have gone quiet out there, we are currently in very close discussions. A number of CCS developers have approached the department for FID arrangements.
The noble Baroness asked about the timetable changing from autumn 2013 to March 2014. That is because we are using the final strike prices and final contract terms instead of draft pricing and draft terms.
Baroness Worthington
It is helpful to know that there are a number of CCS projects, but a precise number would be even more so if that could be forthcoming in a letter. If the timing is moving in order to have final strike prices, when will we be able to have any commentary on the strike prices for nuclear and CCS? We have nothing. This has to be bounded within a range: there is not an infinite amount of money that can be spent and there has to be a lower limit. Why can we not at least have a range to understand and consider in relation to those two technologies?
Baroness Verma
I accept that the noble Baroness is keen to get the range. I am not in a position to offer that comfort to her at this point but I will take away her question and hope to illuminate the Committee with a fuller, written response. The negotiations on the agreed strike price are very sensitive and I therefore need to go back to the department to see what I can offer to further inform the Committee. Given my reassurances on writing to the noble Baroness on outstanding questions, I hope that she will withdraw her amendment.
Baroness Worthington
My Lords, I am grateful for that response and welcome the Minister’s offer to write with further details. I accept that negotiation is sensitive but at what point does the interest of negotiating with one company override the very real interest of the wider public, the entire sector and all the consumers who will be paying for the outcome of that negotiation? It is odd that, in everything else, the department has provided very welcome levels of detail and yet there is such a degree of silence in this area that it makes people unnecessarily suspicious. There should be no one negotiation that is so sensitive and so overridingly important that we are unable to have a discussion about it. That is skewing things unnecessarily. Let us try and get these technologies on an even keel, get through state aid and move forward. One negotiation should not require this degree of special treatment.
I look forward very much to the Minister’s letter and, on that basis, I am happy to withdraw the amendment.
Lord Whitty
Lord Whitty
My Lords, Amendment 55ALB is largely an attempt to get greater clarity than we got on, I think, the second day in Committee about the way in which the Bill as a whole applies to Northern Ireland. There is also the particular question of why Northern Ireland is referred to here in relation to investment contracts with the Northern Ireland generator, and whether that actually means generation in Northern Ireland into Great Britain. At the moment, the whole balance of interconnection is into Northern Ireland, with both the gas pipeline and the electricity line, and there is a separate issue between Northern Ireland and the Republic.
As I have said before, Northern Ireland has a very different energy market structure. It has a dominant supplier and a different systems operator, which is in part owned by interests in the Irish Republic. There is a wholesale electricity market that is jointly operated with the Irish Republic. The consumer regulator works on very different precepts than Ofgem, in that it is still, essentially, a price-regulation process. Finally, of course, consumers there face different problems and higher prices. I suppose I should declare a slight interest and an affinity in that I have done some work for the Consumer Council in Northern Ireland.
I have never quite understood how contracts for difference apply in Northern Ireland within that structure. I can see that capacity payments might apply, because the history relates to what they used to call availability contracts in Northern Ireland and the island of Ireland as a whole, which were quite expensive to consumers and business in Northern Ireland. However, I do not really see how investment contracts apply in Northern Ireland, particularly if they are ongoing—in reply to my noble friend just now, we are not in favour of putting an end date on the period in which investment contracts are issued. Rather than go into vast detail on this last day in Committee, I simply ask whether the Minister could contrive with her department, possibly in conjunction with DETI in Northern Ireland, to produce a paper that would indicate to us, before we reach Report, just how this operates in Northern Ireland. I am still bemused and suspect that those who have even less familiarity with the situation in Northern Ireland are even more bemused. There are references to Northern Ireland all the way through the Bill.
There is one other particular point in this amendment, which was raised, if I remember rightly, by the noble Earl, Lord Caithness, in an earlier debate. There are references to the department rather than to the Minister, whereas for the other devolved Administrations, there are references to the Minister. That sounded on the face of it to be a bit of a hangover from direct rule, and an explanation would be helpful on that front. Northern Ireland is distinct from Scotland and Wales in this regard because energy is a devolved matter in Northern Ireland. However, this provision appears, in one sense, to provide for the possibility—not necessarily the absolute certainty—of the schemes that we are devolving in vast detail for Great Britain being applied in Northern Ireland. If it only relates to the possibility of Northern Ireland supplying some electricity into the GB grid, that is a slightly different and probably unlikely matter. The Minister can probably answer this point fairly succinctly. If she is prepared to let me have a note over the summer that could be circulated to the other Members of the Committee, explaining how this applies to Northern Ireland—one which she has agreed with her Northern Ireland counterpart—I will say no more about it. I beg to move.
Baroness Verma
My Lords, I again thank the noble Lord, Lord Whitty, for his amendment, which would require investment contracts relating to electricity generation stations in Northern Ireland to be entered into jointly with the Minister for Enterprise, Trade and Investment. Instead, the Bill currently provides for a contract to be entered into with the consent of the Department for Enterprise, Trade and Investment. For the information of the Committee, I will lay out our position and then try to respond to the noble Lord’s questions.
The amendment would add the Minister for Enterprise, Trade and Investment as a party to the contract, but it would not confer the powers in Schedule 2 relating to administration and payments under the contract, which apply only to the Secretary of State. This would create serious practical difficulties in administering the contract.
It is not clear from the amendment as drafted what obligations or liabilities the Minister for Enterprise, Trade and Investment would have under the investment contract. Furthermore, there is no power currently in the Bill that would allow the Northern Irish Minister to transfer the investment contract to the CFD counterparty once that is established, as we envisage will happen for all investment contracts. It is difficult to see how this would work in a tripartite arrangement given the current powers.
The Secretary of State’s powers in Schedule 2 extend to Northern Ireland to ensure payments can be made to electricity generation stations in Northern Ireland. This position has been agreed with the Northern Ireland Executive, and the Northern Ireland Assembly passed a legislative consent Motion on 12 February to enable the UK Parliament to legislate to provide the Secretary of State with these functions.
I reassure the noble Lord that gaining the consent of the Department for Enterprise, Trade and Investment will include gaining the consent of its Minister. The Minister will therefore need to give consent to any investment contract relating to generation in Northern Ireland.
The noble Lord asked how CFDs would apply in Northern Ireland. UK and Northern Ireland Ministers agree that the preferred approach is a UK-wide one with an associated institutional framework. We are working closely with the Northern Ireland Executive to design the application of the FIT-CFD for the whole of the UK. UK Ministers will set FIT-CFD strike prices in Northern Ireland in conjunction with Northern Ireland Ministers and the cost of support will be socialised across the UK. However, Northern Ireland Ministers will maintain the right to set Northern Ireland-only strike prices for CFDs, if required.
I hope the noble Lord is reassured that we are giving an important role to the Department for Enterprise, Trade and Investment in relation to investment contracts in Northern Ireland. Given that reassurance, I hope that he will agree to withdraw his amendment. He asked me to write to him on a question he raised to which I do not have the answer at the moment. I will look at Hansard carefully to ensure that I have given him and the Committee a response to points raised earlier in the debate on his amendment.
Lord Whitty
My Lords, I thank the Minister for those comments and look forward to receiving a letter from her. However, what I am really looking for is something which explains how we envisage CFDs applying in the very different market in Northern Ireland in the same way as they apply in the market in Great Britain. I am sure that all the political niceties have been followed but I still do not see how the pattern is replicated within Northern Ireland. I can see that it can be replicated in terms of the possibility of Northern Ireland supplying energy to the GB grid, but that is a separate matter. Given all the complications of the very different Northern Ireland structure, including the all-Ireland complications, I still find it difficult to see how this measure applies. Therefore, something a bit more than a letter will probably be needed to convince the Northern Ireland authorities that they should go down this road. There must be something which sets out how the measure applies within Northern Ireland, even if it is a fairly technical background note which hardly anybody understands, or hardly anybody over here understands. Other documents of that nature have been floating around. It would be useful to have it in our hands before we return to this point.
On the question of the Minister for the Department of Energy and Climate Change, I understand what the Minister said and I will not press that point. It just looks slightly odd when we refer to Scottish and Welsh Ministers but to Northern Ireland departments. Again, that is a presentational matter, which perhaps the Minister will have another look at. It is not central to my question, which is: how do these three new forms of supply contract apply in a very different market? For example, is there to be a separate counterparty, or is it the same counterparty we are talking about? If it is the same counterparty organisation, how does that relate to Northern Ireland’s devolved responsibilities and to that of the Ministers there?
I think I have probably said enough to give somebody a couple of months for a few communications between Belfast and Whitehall to perhaps set this out in ways that I and other Members of the Committee will be able to understand. With that, I beg leave to withdraw the amendment.
Lord Whitty
Lord Whitty
My Lords, we are moving on to the transparency part of the provisions on investment contracts, but some of this reads across to other parts of the Bill. My amendment essentially would limit the exclusions in the information that the Minister will provide on the contracts and the transparency that they provide to Parliament. It would restrict it to trade secrets, which is provided for in Schedule 3(3)(b), and would delete two other exceptions on the grounds that they add nothing to the issue of trade secrets. Sub-paragraph (3)(c) refers to,
“information the disclosure of which, in the opinion of the Secretary of State at that time, would or would be likely to prejudice the commercial interests of any person”,
and sub-paragraph (3)(d) refers to,
“information the disclosure of which would, in the opinion of the Secretary of State at that time, constitute a breach of confidence actionable by any person”.
Quite apart from the subjectivity of that judgment by the Secretary of State, is not the information that we would rightly wish to exclude from any disclosure to Parliament or elsewhere all related to trade secrets? It is related to information held by the companies which are party to the agreements or other companies which are relevant to the agreement, which it would not be in the public interest to disclose and would not be in the interests of the signatories or contractors to the agreements to disclose.
I tried to find a definition of a “trade secret”. It apparently relates to anything which has not been disclosed to the public and which is of benefit to the holder of that secret. It is normally enforced by the confidentiality rules, which include commercial in confidence. In that case, surely sub-paragraph (3)(c), which deals with commercial in confidence, and sub-paragraph (3)(d), which deals with breaches of confidence that are actionable, fall under the paragraph dealing with trade secrets. If not, the suspicion has to be that the Secretary of State, by his or her subjective judgment, could exclude a whole range of other information that was pertinent to an understanding, by Parliament or by the public in general, of what are going to be pretty complex contracts. If we get a contract that is public and available to Parliament but heavily redacted because the Secretary of State thinks that in some direct or indirect way there might be a breach of commercial confidentiality of somebody who is not only not party to the agreement but not directly relevant to the agreement—or, indeed, any person—what does the Minister think, if I may boil it down to this, is covered by sub-paragraphs (3)(c) and (3)(d) which is not already covered by sub-paragraph (3)(b)? If other kinds of material are covered, we either need to be much tighter on the exclusions or spell out precisely what kinds of information could be legitimately redacted from any disclosure of the contracts.
These are hugely important contracts, matters of huge public concern which affect the future of our energy security, the cost to the consumer, the environmental impact and the cost to British industry and therefore British industry’s competitiveness. It is vital that as much as possible is disclosed about a contract without jeopardising the contract itself. That requires a relatively narrow delineation of what can be excluded: we must not have what looks like a fairly open door available to the Secretary of State to redact a whole lot more from the contract. I beg to move.
Baroness Verma
My Lords, I thank the noble Lord, Lord Whitty, for his amendment. The Government are fully committed to ensuring transparency of investment contracts. The existing provisions are clear that in order for a contract to become an investment contract it must be laid before Parliament and published in order to benefit from the powers in the Bill. In addition to the contract itself, the Bill requires that the Secretary of State makes a Statement to Parliament that he considers that the contract would encourage low-carbon generation; and that without the contract, there is a significant risk that the electricity generation would not be built or would be significantly delayed. The Statement must also summarise the regard that the Secretary of State has had to the impact on energy security, decarbonisation, affordability and the renewables directive targets.
For the Hinkley Point C investment contract, the Government have already committed to publishing a summary of the reports from external advisers and the value-for-money appraisal of any contract agreed. With these provisions, we are trying to achieve a delicate balancing act between making available as much information about the contract as possible, while at the same time allowing commercially sensitive information to be withheld from publication. It would not be appropriate to publish this information if it would risk significantly damaging the developer’s commercial interests. However, it is crucial that the developer can provide such information to enable us to be confident that the contract represents good value for money for the consumer.
I believe that the current wording of the Bill strikes this balance appropriately. The information that can be withheld from publication, as the noble Lord said, is information that is a trade secret, would prejudice a person’s commercial interests and would constitute a breach of confidence. The key commercial information—the strike price and the reference price—cannot be withheld from publication. While the Bill was being discussed in the other place, the Government identified two areas where we are able to further improve transparency of investment contracts.
First, we decided that alongside the investment contract that is laid before Parliament, the Government will also publish a description of the information that has been withheld, and the reason for doing so. Secondly, we removed the Secretary of State’s discretion to withhold information from the contract after it has been agreed but before it has been laid before Parliament. This means that any confidential information will have to be clearly identified as such during contract development, and there is no further discretion to withhold information once the contract is concluded. These commitments and legislative improvements ensure that there will be transparency in investment contracts, and that only the most sensitive information will be withheld from publication.
The noble Lord, Lord Whitty, asked why the Government resisted amendments to the Bill to restrict the definition of confidential information to information that is a trade secret. The Government’s intention is to publish as much information on investment contracts as possible. As I have already laid out, the extra things that we committed to after the Commons Report stage have now been put into the Bill. I hope that the noble Lord is reassured by the explanation that I have given and will withdraw the amendment.
Lord Whitty
My Lords, I am reassured only to a limited extent. I thank the Minister particularly for her reference to the fact that one has to identify what is going to be commercially confidential early in the process and that one cannot change that at a later stage. That was a reflection of a discussion in the Commons.
However, it still seems to me that sub-paragraphs (3)(c) and (3)(d) are expressed in extremely wide terms and I am still not clear what would constitute a problem not already covered by trade secrets, particularly under sub-paragraph (3)(c). Without being a total conspiracy theorist, one must recognise what lies behind the anxiety here. I shall have to choose my words carefully because, as the noble Baroness has said, we are in negotiations over one nuclear contract. However, people believe, particularly in relation to nuclear power, that historically things have been agreed by Governments over and above what has been disclosed publicly. Some of that is related to state security but some is related to regulation planning permission and other payments. In other words, there is a suspicion that in order to gain a commitment for a contract for difference it is conceivable that the strike price is not the only commitment that the Government make and that there may be other commitments. If that were to be a suspicion which the Government would find it difficult to counter, they could find themselves in a difficult public relations situation further down the line.
I hope that I am being overparanoid but, believe me, there are other people who are far more paranoid than me, not least in the media, and it will be important that Government are seen to be squeaky clean regarding these contracts.
Baroness Verma
My Lords, perhaps I may try to further reassure the noble Lord that the reason why certain parts of the information will be trade secrets is, for example, when allowing the future actions of a company, such as in relation to a potential financing structure. Basically, this relates to future financing—issues such as those are always commercially sensitive—rather than anything else.
Lord Whitty
I understand that, and it would be possible to express those provisions in slightly narrower terms than the exclusions in the Bill. I shall leave it there. It is a warning that this could be a danger for the Government and for those who want to see some contracts for difference signed, particularly in the nuclear industry. If there is any feeling that something has not been disclosed, future Governments may well suffer from it. I thank the Minister for the reassurances that she has given. Before the end of the process, the Government should make a few more but, for the moment, I beg leave to withdraw the amendment.
Lord Grantchester
“(5) An instrument containing regulations which make provision falling within paragraph 6, 7, 8, 9, 12 or 13 (whether or not also making any other provision) may not be made unless the instrument has been laid before, and approved by a resolution of, each House of Parliament.
(6) The first regulations under paragraph 10 or 11 may not be made unless the instrument has been laid before, and approved by a resolution of, each House of Parliament.”
Lord Grantchester
My Lords, Amendment 55ALE would implement the recommendations of your Lordships’ Delegated Powers Committee. Noble Lords will forgive the slight sense of déjà vu with which we return to this subject but, as the Delegated Powers Committee highlighted, the scale and nature of the extensive powers this Bill affords to the Secretary of State are vast. That these powers are subject to annulment only and could require no parliamentary approval seems completely inappropriate in the most part. This amendment also extends the provision for parliamentary approval to the CFD counterparty as well as enforcement provisions and the oversight of consultations. When commenting on this section of the Bill, the Delegated Powers Committee notes that much of the provision for investment contracts mirror those that will implement the CFDs in Schedule 2. Therefore its recommendation is the same.
Paragraph 14 of the sixth report states:
“We re-iterate in the context of Schedule 2 the view we expressed in the final two sentences of paragraph 4 above about the importance of draft regulations being made available to the House in sufficient time before it embarks on the report stage of the Bill”.
Paragraph 15 states:
“We also consider that any regulations made under Part 2 of Schedule 2 should require the affirmative procedure, with the exception of those which make provision falling within paragraph 10 or 11, which should require the affirmative procedure on first exercise”.
Without repeating remarks made in Committee previously, it is clear that this is not an appropriate way to legislate. We are now on the final day in Committee on this Bill, which has already been passed in another place, and we still lack most of the detail to enable us to understand how the new landscape will work in practice. Parliament is being asked to approve little more than a framework for legislation that should guide investment in the energy market for many decades to come. I sense that the Government are keen to heed the advice of the Committee, and therefore ask the Minister to ensure that draft regulations, in particular for Part 2, are published in good time for this House to analyse them ahead of Report when we return after the Recess. I beg to move.
Lord Roper
My Lords, I support the noble Lord, Lord Grantchester, on this amendment. I believe that we have a responsibility on behalf of the House to follow the report of our Delegated Powers Committee. Although I was in some ways disappointed, in other ways I was relieved when I saw in the Forthcoming Business published this morning that we will not be reaching Report stage in the first three weeks after the Recess. That will give the Government time to have these regulations published and for the House to examine them carefully. I was worried that we would get them just before we came back without a proper opportunity for discussion. I would be very grateful to have reassurance from the Minister that the regulations will be available in good time for Report.
Baroness Verma
My Lords, I thank the noble Lord, Lord Grantchester, for his amendment which would implement the recommendations of the Delegated Powers and Regulatory Reform Committee. It would require that all regulations made using the powers in Schedule 2 should be made using the affirmative procedure, apart from regulations made under paragraphs 10 and 11 on the provision of information and advice. These would need to be made using the affirmative procedure the first time such regulations are made.
I welcome the Committee’s scrutiny of the Energy Bill. As I have previously mentioned, the Government are carefully considering the recommendations of the Delegated Powers Committee’s reports and will respond in due course. I reassure the Committee that throughout the Summer Recess, Ministers and officials will be working very hard to try to provide as much information on the regulations as soon as we can. We intend to consult from October on the detailed implementation of the EMR, which will give noble Lords an opportunity to scrutinise the detail ahead of Report. Further details of our plans for secondary legislation can be found in the memorandum we recently sent to the Delegated Powers and Regulatory Reform Committee. I hope that with this reassurance that we will be working extremely hard to try to satisfy not only him but the Members of the Committee the noble Lord will withdraw his amendment.
Lord Grantchester
I thank the Minister for those comments and the noble Lord, Lord Roper, for telling the Committee that we may well get a chance to have a look at this in October so that we can take careful cognisance of the situation before we return on Report. I beg leave to withdraw the amendment.
Baroness Worthington
Baroness Worthington
We tabled Amendment 55ALF in order to consider in detail the provisions in Chapter 5 about conflicts of interest and contingency arrangements in relation to the creation of the counterparty and the role that National Grid will be given in the delivery of many of the features of the electricity market reform proposals.
The amendment would slightly change the current wording of the clause that allows for the Secretary of State to determine the kind of appropriate measures needed to ensure that there is no conflict of interest between National Grid’s commercial enterprises and the role that it has been given under the EMR. I am sure that our amendment is not perfectly worded—it is a probing amendment intended to clarify that this should not be a question of discretion. The current wording makes it clear that the Secretary of State has a certain degree of discretion in deciding whether it would be “necessary or desirable”. That seems slightly too broad. We have tried to encapsulate in our amendment the idea that sufficiency is the important aspect, not desirability, and that there should be absolutely no question but that action will be taken to eliminate conflicts of interest between National Grid’s commercial enterprises and activities and its EMR role.
Along with, I am sure, many other noble Lords, we received a briefing from National Grid on this issue. We obviously recognise and take note of the many measures that National Grid has already put in place to manage conflicts of interest in other parts of its business and its very strong undertaking to continue to operate in a way that has no conflicts of interest. We do not mean to question National Grid’s desires or motives and are sure that it does indeed seek to work in such a way that it has no conflicts of interest—our concern is with the legal basis for the interventions that the Secretary of State will undertake to ensure that.
It is worth considering that the Utilities Act 2000 and the Electricity Act 1989 built in certain provisions that prohibit National Grid from undertaking certain activities. For example, it is not allowed to disclose to a third party any information about individuals or businesses that it receives by virtue of their transmission licence activities. That seems to be the kind of quite tightly drawn provision that might need to be updated in the context of the EMR. Clearly, National Grid will receive information from third parties in relation to the functions that it will carry out under the EMR. It is the body that will be tasked by the Government with signing the investment contracts and the CFDs, which will give it access to information that it would not otherwise receive. I just question whether the provision created under the Utilities Act needs updating to ensure that it applies to not just the transition licence but the new role in the EMR.
It is an example of why we need to get this right and make sure that we have thought of every angle. We should not create a framework in which the Secretary of State can determine whether something is necessary or desirable. It is the word “desirable” that gives us slight cause for concern. We think the actual criteria should be that it is “sufficient” and would like to see explicit mention that there should be no conflict of interest between the system operators’ roles and the new roles they are being given under the EMR. I beg to move.
Baroness Verma
My Lords, I am grateful to the noble Baroness, Lady Worthington, for the amendment. I understand the concerns she has raised regarding the potential for conflicts of interest to arise between National Grid’s existing businesses and its new EMR role.
The Government want to use the best people for the job of delivering electricity market reform. The national system operator within National Grid is well placed to succeed in the task of delivering contracts for difference and the capacity market. The expertise it will bring to the role is the reason we gave that role to the system operator in the first place. For example, there are strong links between the capacity market and the existing range of balancing services that the system operator currently provides.
In addition, the system operator has the relevant technical expertise and the commercial and financial skills to ensure that the capacity market can be delivered in an efficient way—for example, through the modelling of future supply margins and the delivery of auctions. The system operator is also uniquely placed to understand the implications for the electricity system of different technology mixes brought on by contracts for difference, ensuring that we have the highest quality analysis on which to base our decisions on how we support low-carbon technologies.
The matter of conflicts of interest that arise between National Grid’s existing businesses and this new role was identified at an early stage. That is why we have worked closely with the regulator, Ofgem, over the past 18 months to assess thoroughly the potential conflicts that might arise and to consider how best to manage them. The process has involved extensive engagement with stakeholders, including a call for evidence and a public consultation.
In April we published the findings of that joint work with Ofgem, together with our analysis, which included an impact assessment. The work with Ofgem and independent analysts showed that the risk of conflicts being acted on is small, which is why we will be putting proportionate measures in place, using the powers proposed in this clause. That approach retains the valuable synergies with the system operator’s wider role, and gives confidence to those who need it: industry, investors and, I would hope, this House.
Neither the Government nor Ofgem assumes that this is the end of the process. While I am confident that the proposals we have made are up to the task, we will keep close watch over the situation so that industry can be certain that any conflicts, real or potential, can be managed appropriately. The exercise of these powers potentially has significant implications for National Grid’s business and it is not a decision that the Government would take lightly.
We must always keep in mind the factors that make the system operator the best organisation for the job, otherwise we risk losing the benefits of having the system operator perform the EMR delivery role. That is why the measures must and will be targeted and proportionate. We do not want to put in place a disproportionate response to the problem, which would lead to us sacrificing the synergies and all the benefits to consumers that flow from them.
The noble Baroness asked whether the provisions in the Utilities Act 2000 and the Electricity Act 1989 need to be updated in the light of EMR. We are proposing specific powers in this Bill that would enable us to put in place specific measures to protect sensitive information relating to EMR. We have worked with Ofgem to decide how to use those powers and set out the detail publicly. Therefore we do not consider that the changes that the noble Baroness proposes are in fact necessary. I hope that the detailed analysis that we have carried out with Ofgem and our public commitments on how we will tackle these conflicts of interest will mean that the noble Baroness feels content to withdraw the amendment.
Lord O'Neill of Clackmannan
Before the noble Baroness sits down, what is the competence of DECC and Ofgem in deciding what a conflict of interest would be? As I read it, the amendment has two parts. One relates to National Grid and the other to a responsibility on the department, which does not normally deal with competition issues as such. What expertise does the department have? In the event of there being a dispute which is not resolved to the satisfaction of both sides, is it possible for an offended party to appeal to any other competition regulatory authority?
Baroness Verma
The noble Lord raises a very important point. As he is aware, when we need to look at specialist areas we bring in experts to oversee DECC’s work. We have worked closely with Ofgem which, as an independent regulator, is well placed to have expertise within it. As I have said throughout, we are mindful of the need to keep an eye on this and we will keep it under review. If areas need improvement we must ensure we are able to move in and do that immediately. We are not just setting it in place and then leaving it. We recognise that specialisms may need to be involved and we will continue to look at the proposals set out in the Bill.
Lord O'Neill of Clackmannan
I am sorry, but I do not think the Minister has quite understood my point. In the event of one of the parties not being satisfied with the breadth of expertise brought to bear, the external experts and what have you, is there anywhere else they could go to appeal? I am not talking about some vexatious litigant but about a disgruntled utility that might feel there ought to be some form of review, outwith the department, with one of the competition authorities. Is there that option, in the event of a dispute about conflict of interest?
Baroness Verma
My Lords, rather than delay the Committee, it would be more prudent to write with a more detailed response. That might satisfy the noble Lord, Lord O’Neill.
Baroness Worthington
I thank the Minister for her response. The amendment was not seeking to add a disproportionate hurdle or to create a lengthy procedure or encumbrance that would prevent us benefiting from the expertise of National Grid. On the contrary, we were trying to give National Grid cover and protection by ensuring that we remove the discretion that is currently in the Bill. It comes down to another example of creating enabling powers that can be broadly interpreted. Obviously, we all trust that future Governments and Ministers will have the best interests of everyone at heart, but it is incumbent on us to make sure we write legislation in such a way that it enshrines that principle.
The purpose of the amendment was simply to question the reason for the degree of discretion and desirability factored into the clause. I would be grateful if the noble Baroness would reflect on that a bit more over the summer. The potential conflicts of interest are wide-ranging. I was grateful that the Minister mentioned the capacity mechanism, a measure which strikes at the heart of what National Grid does. The Committee already knows this, but we currently have two parallel solutions for capacity: the capacity mechanism as proposed in the Bill, which will not come into force until 2018-19, and in the interim period we have National Grid consulting on interim measures, apparently under its own licence initiatives and powers, to address what it considers to be a short-term concern about capacity markets. That already seems to be evidence that this is a highly complex and many-faceted Bill that creates unique circumstances within which the National Grid has to operate.
I am willing to withdraw the amendment, but I would like the Minister to consider the degree of discretion that the Secretary of State has. I beg leave to withdraw the amendment.
Baroness Verma
Lord Roper
“Domestic microhydro power
(1) Domestically based microhydro power shall be exempt from non-domestic rates.
(2) For the purposes of the section “domestically based microhydro power” is a single plant located within the curtelege of an owner or owner’s residential property with a plant capacity of up to and including 1250 kW.”
Lord Roper
My Lords, this amendment was originally tabled by the noble Lord, Lord Cameron, who very much regrets that he cannot be here today, and therefore I shall speak to it. He asked me first of all to make it clear that he is not personally involved in any microhydro scheme although in the west country where he comes from, and elsewhere in our countryside, a growing number of families and individuals are trying to make the best use of our many rivers, old mill leats and mill houses to create small amounts of renewable power both for themselves and their communities. Therefore, it seems odd that one part of government, DECC, should arrange a subsidy to encourage such investment through feed-in tariffs and ROCs, while another part of government, the Treasury, through the Valuation Office Agency, seeks to remove part of that subsidy.
The noble Lord, Lord Cameron, has set out nine reasons why microhydro should not be assessed for business rates and, with the Committee’s indulgence, I shall quickly go through them. Domestic hydro sites may be located on rivers that are able to provide much more power than the owners require for their own consumption. It is obviously in the interests of the nation that domestic owners be encouraged to generate as much power as their sites are able to provide and consume as little of their output as necessary, otherwise the potential benefit of their hydro plants’ contribution to the grid and the community as a whole is diminished.
Domestic owners do not want the complication of their residential property being designated as a business. There is already clear evidence of gaming around the capacity bands chosen for the feed-in tariff, and some owner-operators will perhaps downsize the scale of their investment to avoid non-domestic rates being levied, which, again, cannot be in the interest of the nation as a whole.
The Valuation Office Agency’s rating models have not been designed to accommodate domestic hydro plants, where there is no landlord, no tenant and no market rents to test the validity of the office’s assumptions. Indeed, its rating model and the DCLG legislation on non-domestic rates are insensitive to yearly variations in the weather. For example, the output from the run-of-river site may vary by more than 40% from one year to the next, depending on rainfall. There are no operating costs that an owner-occupier can cut to offset the consequential losses in revenue.
A site’s revenue will be reflected in the income of the owner and taxed accordingly, taking into account capital allowances for this very long-term investment. The approach of the Valuation Office Agency to calculating rateable value does not allow for the repayment of loans or the cost of borrowing and assumes that funding will be through equity, which, in the view of the noble Lord, Lord Cameron, is a ridiculous assumption for domestic microhydro. Non-domestic rates have been applied retrospectively, creating havoc and uncertainty for a number of domestic-scale financing plans. Indeed, according to evidence supplied by DECC, no allowance was made for non-domestic rates when the state subsidies were originally established.
A further example of the inflexibility of non-domestic rates means that when the subsidy ends, the drastic reduction in revenue—a reduction of 40% in the case of the renewables obligation and 75% for the feed-in tariff—will not be acknowledged or included in the calculations for rateable value until the five-yearly antecedent valuation date arrives. It will then be another two years before the adjusted rateable value comes into operation. Clearly, these two systems are incompatible. It is also worth pointing out that no other domestic renewables, for example photovoltaic solar panels, are charged business rates on the amount of power they export. This is a strange anomaly, and the noble Lord, Lord Cameron, was right to bring an amendment in these terms to the Committee. I look forward to hearing the response of my noble friend the Minister.
The Lord Bishop of Chester
My Lords, I very much support the amendment. This may well be the last time I speak in this Committee and I thank the Minister for the way in which she has conducted herself and for writing to me with answers to some previous questions that I raised.
In addition to the reasons which have been so clearly enunciated, I would like to inject into the discussion the issue of culture, because much of what we are about in energy policy in this country is working on a change of culture. It has become a fashionable word. The Second Reading of the Financial Services Bill was all about changing the culture of banking and financial services, and that is absolutely right. However, the same applies in the energy realm. The sort of installations that we are talking about are relatively small in themselves but speak more widely.
I will digress very slightly to a non-domestic instance. In Chester in the 1920s, the tram system was powered by a small hydroelectric plant on the River Dee. The University of Chester, where I am president of the council, is in the process of bringing that hydroelectric plant back into operation, partly to satisfy its obligations to HEFCE vis-à-vis its green credentials but also as a very reasonable project in itself. It will have a cultural impact in Chester quite beyond the actual electricity component of the project, and I think that the same will apply in the circumstances we are discussing.
There is something about hydroelectric power that goes with the grain of the countryside and nature rather better than windmills and some of the other things we are doing. We should do more to encourage local use of natural resources. If the projections about future rainfall are right, there will be even more rain flowing into our rivers to power these microhydro projects. Although I cannot comment on the precise terms of the amendment, it seems to me that the spirit of it is absolutely right at the present time.
Lord O'Neill of Clackmannan
I rise stimulated by the right reverend Prelate’s remarks, partly because when hydropower developments took place in Scotland, the nature of the opposition to them was very similar to the nature of the opposition to wind turbines today. Indeed, if you read any of the histories of hydropower in Scotland, you find the same arguments and the same kind of protagonists. Indeed, as I recall, one of the supporters of hydropower in the 1930s was expelled from the Perthshire hunt on the grounds that they were going to deface Pitlochry. Anybody who knows Scotland will know that Pitlochry is a great tourist attraction on the way up to Inverness and that the jewel in the crown of Pitlochry is the hydroelectric dam and the salmon leap there. If anyone were now to try to say that they wanted to close it down because it is spoiling the countryside, they would get rather a lot of fleas in their ears from the kind of people who say that they want to have hydropower but not wind power. That has to be taken into account.
Hydropower is one of the most attractive forms of generation. It is also interesting that subsidies for refurbishment have been made available to small-scale hydro, which may well be the case in Chester as well as in Deeside in Scotland. I had the opportunity of visiting one site some years ago because the kit had been refurbished in my constituency by the Weir Group of Alloa. The output had been increased from 70 megawatts of power to 81 megawatts, which was a considerable achievement. This is far smaller, but we can bring into play hydro opportunities that have perhaps fallen into disuse. It would be better if they could get the best possible deal because river flow—drought notwithstanding—tends to be pretty reliable. One would imagine that this, out of all the renewables, would be less prone to interruptibility and that therefore an amendment of this nature seeking to give a bit of extra assistance would be extremely helpful at this time. I support the amendment.
Lord Whitty
My Lords, the noble Lord, Lord Roper, and other speakers have made a very good case for looking at what the noble Lord says is an apparent contradiction, but I think is a clear contradiction, between the approach of the Valuation Office Agency and DECC to these things. We are talking about schemes that are very different from Pitlochry or whatever. We talking below 1.2 megawatts, but even at that level, I have some hesitation. If you were doing it for domestic purposes only, it is unlikely that you would get huge benefit in terms of your energy bill or your carbon footprint or that climate change would benefit any more than from putting a windmill on the side of your house in Notting Hill. It is not for domestic purposes. The way in which it is financed feeds into the grid and it therefore becomes a business. It is not entirely illogical for the business rates people in the Valuation Office Agency to take that into account, although the point made by the noble Lord, Lord Roper, about this being treated differently from other forms of renewable energy is an issue. I wish this amendment godspeed in terms of looking at the contradiction.
Baroness Verma
My Lords, I am extremely grateful to my noble friend Lord Roper for moving the amendment on behalf of the noble Lord, Lord Cameron. I hope that I can address the points made by my noble friend and other noble Lords and assure him that the practice adopted for the assessment of these projects for non-domestic rates is fair and consistent.
Non-domestic rates, otherwise known as business rates, are a tax on properties that are not domestic and capable of beneficial occupation. Most onshore renewable generating power stations, such as hydro or wind plants, are non-domestic properties and, therefore, liable for business rates. The amendment would give a tax break from business rates for hydro plants with a capacity of 1.25 megawatts or less, provided they were on the operator’s domestic premises. It would mean that two otherwise similar plants would be treated differently for tax purposes merely because one was located next to the owner’s house. I do not think that that would be a fair outcome for this sector.
The amendment raises some good questions about when plants at domestic properties should be assessed for business rates. I hope that on that point I can offer the noble Lord some assurances that the business rates system operates fairly. The rating list is maintained by the Valuation Office Agency, which is responsible for deciding when an installation should be assessed for business rates and for assessing its rateable value. In this regard, the Valuation Office Agency acts independently of Ministers, and we cannot therefore intervene in its decisions. However, we are aware that during 2010-11 the VOA undertook a review of hydro projects to ensure that all facilities that should be considered non-domestic were assessed for business rates. In some cases, these installations were located in the grounds of what would otherwise have been domestic premises. Where a hydro facility is considered to be domestic—for example all installations under 10 kilowatts—it is included in the council tax assessment of the house. Larger installations may also be considered domestic if the output of the plant is being used to provide power to the living accommodation. However, other projects where the output is being sold to the grid are assessed separately for business rates. This means that the smallest domestic hydro projects, which in the main are used only to provide power to the owner’s home, are not caught by the business rates system. Only those larger projects, where more power is exported and sold to the grid, are assessed for business rates.
In the evaluation of larger hydro projects, I can assure my noble friend that the Valuation Office Agency’s model has been adopted specifically to deal with the lack of direct rental evidence. Renewable energy plants, such as wind farms, hydro schemes, PV installations and anaerobic digesters, are assessed using a receipts and expenditure method of valuation. This is because the value of such properties is very closely related to their trading position and their ability to make profits. The costs of generating power at an electricity generator and the earnings from the sale of that power are tangible evidence of assumed rental value. The model is also based on a fair and maintainable forward projection of output averaged over a number of years, and the figures used are derived from actual outputs received from occupiers. Additionally, a ceiling level of output equivalent to a 40% load factor has been applied to the model, even though some schemes generate at well in excess of this level. The model also allows for borrowing costs and is consistent with the general application of receipts and expenditure valuations. I hope that the noble Lord agrees that this is a fair approach to drawing the line for this tax and that it ensures consistency across the sector.
I should also point out that more than 500,000 businesses in England benefit from the small business rate relief scheme, and about a third of a million of them pay no rates at all. We anticipate that many domestically based hydro schemes will benefit from the small business rate relief scheme, provided the owner does not operate any other non-domestic premises. We have also given authorities powers to provide their own discounts, which they can use to provide further support for hydro projects. Should they do so, central government would meet 50% of the costs. In addition, the Government’s feed-in tariff scheme supports the deployment of hydro, and as the noble Lord will recall from earlier in our proceedings, we are planning to extend the scheme to 10 megawatts for community projects.
I hope that I have assured my noble friend that the non-domestic rating system is built on a reasonable set of rules, which decide fairly which projects should be assessed for business rates, and that we have taken steps to cut bills for small businesses. In the light of that, I hope that he will withdraw his amendment.
Lord Roper
My Lords, I am grateful to all noble Lords who have taken part in this short debate. I was particularly interested by the intervention of the right reverend Prelate. The role of communities in developing microgeneration, although slightly different from the case of houses, is quite important, and we have seen a number of other useful examples of this. I believe that it is a way of making an important contribution to renewables that does not necessarily have too many disagreeable environmental impacts, in spite of what the noble Lord, Lord Whitty, said in his intervention. From the points that he made, I now understand that this is an area where some more unintended consequences may occur; the impact on anglers and others was something to which I had not previously given full consideration.
I am also grateful to my noble friend the Minister for her full and detailed response, in which she explained the context of the non-domestic rating of microhydro. The noble Lord, Lord Cameron, will want to read the Minister’s reply. Although I wish to withdraw the amendment at this stage, he may wish to return to the issue on Report. I beg leave to withdraw the amendment.
Lord Teverson
“Reduction of landfilling of organic waste
The Secretary of State must, as soon as reasonably practicable, set out a plan and timeframe for the reduction and eventual elimination of landfilling of organic waste in order to make it available for 100% renewable energy generation, and other appropriate uses consistent with the waste hierarchy as defined in the Waste (England and Wales) Regulations 2011.”
Lord Teverson
My Lords, I thank the noble Lord, Lord Judd, for supporting and putting his name to this amendment. Unfortunately, he is involved in the debate on Europe in the Chamber at the moment and cannot be here.
An obvious issue is sorting out and taking a much more robust approach to food waste. This arises within the context of a much broader issue. Worldwide, some 30% of all the food that is produced is lost between the field and the end consumer. In developed countries, it is mainly around wastage because we do not use our refrigerated produce quickly enough or we buy more than we need and throw it away. In non-developed countries, it is around the failure of the supply chain so that food is wasted, lost or defiled as it is distributed. We have one last chance to make up for what we have wasted at the end of the food chain by using it to produce energy and other materials. The amendment seeks to guide the United Kingdom more in that direction.
There is a double benefit here. First, renewable energy is produced and, secondly, the cost of landfill is substantially reduced. It has been estimated that landfill worth some half a billion pounds would be saved if we managed to treat all our food waste in this way. I shall come on to some of the practical experiences seen in parts of the UK and elsewhere in the world on food waste strategies, but let me go through the practicalities briefly. The amendment does not provide that this should happen immediately. It understands clearly that there is a timeframe and there must be a proper strategy which is worked through in a practical fashion during the following years. Having said that, we know that recycling works and that people are able and willing to sort their rubbish in different ways. In fact, food waste is already being segregated and taken away in a number of different areas.
In Wales, a food waste collection service is available to 88% of households. The technology is already in place and well proven, particularly in anaerobic digestion. A quite staggering estimate is that in Wales some £420-worth of food is wasted by each family every year, and I suspect that the figure is exactly the same for the rest of the UK. It represents food that has already been bought but is thrown away. It is much better to reduce such wastage first of all, but if that cannot be done, we need at least to use it later. In London, 23 out of 33 boroughs provide some sort of food waste collection. Fifteen boroughs are very adept at it and do well, but 10 still do not manage to undertake any food waste collection at all. It has also been estimated that if the whole of London managed to segregate and reuse its food waste, that would avoid some 900,000 tonnes of landfill which would save 400,000 tonnes of CO2 emissions and reduce landfill costs by £9 million. Again, that demonstrates the multifaceted benefits of doing this. This is strongly promoted elsewhere in Europe, particularly in Austria, Sweden, Germany and the Netherlands, as well as in a number of municipalities in north America.
Given all that, what is there to lose? It is slightly more difficult because we have to make sure that households can segregate their food waste more easily. A number of households, of which mine is one, are deeply into composting so that uncooked food waste is used in the garden. I have become a real convert to composting over the past couple of years. However, we would win in many ways. We would see a major reduction in the cost of landfill. There would be a substantial source of renewable energy. I think that some 3% of our greenhouse gas emissions are attributable to methane, which is one of the most powerful greenhouse gases. We could really get our anaerobic digestion industry going, we would have landfill reductions and methane reductions and at the end of the process we would have a fantastic compostable material that can be used in gardens and on agricultural land to make sure that every aspect of the technology is used. I beg to move.
Lord Grantchester
I thank the noble Lord, Lord Teverson, and my noble friend Lord Judd for bringing forward the subject of the use of organic waste and wider aspects of renewable generation. We welcome the opportunity to debate this, alongside amendments on other developing technologies. I understand that EU Sub-Committee D will be conducting an inquiry into food waste during the next Session.
A diverse mix of technologies and providers is crucial to a well functioning market, a point that was highlighted last week when this Committee debated access to the market for independent generators. Last week, we heard that while the rest of the economy showed meagre but welcome signs of growth, green growth in 2011-12 was 4.8%, thereby outstripping almost every other part of the economy. It bears saying again that investment in emerging technologies, such as biogas, that will provide the engine of growth in years to come is vital.
Sustainable development means that we must get a lot smarter about the management of our natural capital stock and flow, and this means smarter management of the entire life cycle of the resources we use. Recycling organic waste for renewable energy generation is no substitute for eliminating the volume of food waste produced in the first place, and I ask the Minister to update the Committee on what progress the Government have made in reducing this organic waste.
The amendment relates to reducing food waste from the retail supply chain. I shall extend this amendment’s probing to anaerobic digestion in the wider agricultural sector and sewage works in local authorities’ areas of activity. Where waste is unavoidable, anaerobic digestion can be a double win by reducing methane emissions caused by land-filling and, if used in CHP, generating renewable heat and energy. In addition, the digestate produced by anaerobic digestion can be used as a fertiliser.
In government, my party transformed our relationship with waste by quadrupling household recycling, introducing measures to divert waste from landfill and securing capital investment in these new technologies. We would not wish to see this work wasted—no pun intended—and urge the Government to build on this legacy.
In 2011, the Government published an Anaerobic Digestion Strategy and Action Plan for England. Can the Minister update the Committee on its progress? I shall raise a number of points in that regard. The Government say that they see AD CHP providing between 3 and 5 terawatt hours by 2020. Can the Minister update the Committee on the current level of deployment? The Government set themselves no specific targets for regional adoption of AD; however, they aim to remove unnecessary obstacles to its development. Given the Combined Heat and Power Association’s concerns about the ability of decentralised energy to access the market, are the Government confident that they have now removed these barriers to development of this important technology? Finally, what funding has been provided to date through the Waste and Resources Action Programme, WRAP, for the development of AD?
In Denmark, more than 80% of district heating is provided through CHP plant. Embedded, decentralised renewable generation of this kind requires a comprehensive strategic approach, and it is welcome that the amendment has brought this to our attention. The Committee looks forward to hearing from the Minister whether the Government will bring forward a plan to promote the sustainable development of this technology as part of our European commitment to recycle.
Baroness Verma
My Lords, I am grateful to my noble friend Lord Teverson for prompting a very important debate on setting targets for the landfilling of waste.
The amendment is designed to require the Secretary of State to set out a plan and timeframe, as soon as practicable, for reducing and eventually eliminating the landfilling of organic waste to make it available for renewable energy generation and other appropriate uses consistent with the waste hierarchy, as defined in the Waste (England and Wales) Regulations 2011.
We support the minimisation of organic waste going into landfill and are sympathetic to the aims of this amendment. To date, we have made considerable progress. We have reduced the amount of food waste produced and encouraged separate food waste collections that are suitable for anaerobic digestion and composting. We have already seen a substantial increase in the number of anaerobic digesters generating energy from food waste and expect many more to come on stream in the next few years.
As noble Lords will be aware, there are currently targets, set out in the EU landfill directive, for reducing the amount of biodegradable municipal waste entering landfill. Those require the UK to reduce the amount of biodegradable municipal waste entering landfill in 2020 to 35% of the levels that entered landfill in 1995; the UK is currently on course to meet that. An EU review of those targets is under way as part of a wider review of EU waste policy and legislation. I must stress that the outcome of the EU review will not be known until mid-2014, but there is a possibility that the European Commission will propose setting new targets. Therefore it would not be appropriate to commit ourselves to targets in addition to those set by the EU, particularly at this point in time when the outcome of the review of the EU targets is still unknown.
The Government have worked very successfully with industry to reduce supply chain food waste by nearly 10% over the past three years. Household food waste is down by even more: 13% since 2006. As noble Lords have pointed out, we want to focus in particular on waste prevention, rather than landfill targets or restrictions. As noted in the 2011 waste strategy, preventing food waste is the most effective approach in carbon-saving terms, compared to landfilling. Each tonne of food waste prevented means that 4.2 tonnes of carbon dioxide equivalent emissions are avoided. We believe that there are more efficient options than targets or restrictions in this area, with companies themselves knowing best where to make changes for maximum impact.
The voluntary approach has been shown to work and allows businesses to reduce waste and make themselves more efficient and competitive. We want to build on that work with businesses rather than impose targets or restrictions. As well as the continuation of the Courtauld agreement to reduce food and packaging waste in the retail and manufacturing sector, the Government have also recently launched a further voluntary agreement, which takes the same approach with the hospitality and food service sector.
We are also making progress in the collection and recycling of food waste, which is used to generate electricity by means of anaerobic digestion. Local authorities in the UK collected and recycled approximately 250,000 tonnes of separately collected food waste from households in 2011, which is a 54% increase on 2010. We expect that to be nearer 300,000 tonnes in 2013, which could provide electricity for 30,000 homes.
We can continue to support a growing anaerobic digestion industry without targets. Current evidence suggests that introducing further statutory targets would impact on businesses and local authorities in terms of compliance and monitoring, which would risk additional cost burdens on business.
I will respond briefly to a couple of points made by my noble friend Lord Teverson on the sector’s need for a plan that will avoid landfill from food waste. My noble friend will agree with me that the measures we are taking on anaerobic digestion are a success story. The Government have achieved their ambition of increasing the energy produced from anaerobic digestion of waste. The number of plants has increased from the 54 that existed when we published our strategy and action plan to 110. There are many other plants with planning permission in development.
We provide incentives for anaerobic digestion through the renewables obligation feed-in tariffs and the renewable heat incentive, which the noble Lord, Lord Grantchester, asked about. We have also provided a £10 million anaerobic digestion loan fund through the Green Investment Bank, whose fund managers have already invested in AD plants. The action plan has also delivered a driving innovation anaerobic digestion fund that is helping to challenge costs in the industry and a range of other measures, including reducing red tape for businesses in the sector. All these measures are helping the sector to grow and achieve its potential. Like my noble friend Lord Teverson, I am a keen supporter of composting, but I suspect he is probably much better at it than I am.
The noble Lord, Lord Grantchester, asked what the Government are doing to try to reduce the amount of food waste going to landfill. I referred to that in my speaking notes. We are working with business, and the voluntary approach has been successful. I hope that my noble friend finds my explanation reassuring and will withdraw his amendment.
Lord Teverson
My Lords, I thank the Minister for going through that. The momentum has been growing in this area, helped very much by the Government’s support measures. In the spirit of subsidiarity, I am not sure that the fact that European regulations might be coming along in the middle of next year should get in our way. I do not think that European directives stop member states having tougher environmental targets. That would be something. I would be strongly behind the Eurosceptics in resisting that. I am very pleased that the Minister mentioned the investment by the Green Investment Bank because a very large plant in Dagenham has been put forward for use by London boroughs. It is an excellent investment, and I do not think it would have happened without the Green Investment Bank. That is an example of how that has worked well.
I fundamentally believe that on certain occasions you use markets to a certain degree. When it comes to households rather than larger organisations, it is very difficult to make these processes commercial. I would never say that through legislation we should stop certain levels. This is not pollution, but it leads to pollution in terms of greater emissions. I understand there is momentum there. I shall think about this further. The momentum is good, so I beg leave to withdraw the amendment.
Lord Stephen
“Energy storage systems
The Secretary of State must—(a) set out a plan to support the development of storage systems for electricity that is generated from renewable sources,(b) put in place pilot schemes to store renewable energy and reduce the problem associated with intermittency of supply,(c) set targets in relation to the provision of renewable energy storage capacity, and(d) set out progress made on these issues in the form of a report, which must be laid before Parliament.”
Lord Stephen
My Lords, I refer to my entry in the register. Amendment 55D is tabled in my name and that of my noble friend Lord Teverson. When I was the Minister responsible for energy in Scotland and, in particular, for renewable energy, the Scottish Government set some very ambitious targets to increase renewable generation and decrease reliance on fossil fuels. I used to give speeches saying that 100% of Scotland’s electricity should come from renewables. I got challenged on this quite substantially from certain sources. One of the big challenges was intermittency. People said that it was okay if renewables were 10%, 15% or 20% of what we were generating, but if it went higher than that and into base load territory, it would be a disaster as renewables could not be relied upon and could not be a secure source for future energy supply. When you adopt that line of argument, what happens when fossil fuels become extremely expensive or substantially start to run out, I do not know, but there are plenty of people, some of whom we have seen in this Room over the past few weeks, who are quite prepared to put that to one side and hope for the best.
Viscount Hanworth
My Lords, as we have been reminded today and, indeed, in a previous session of the Committee, an installation providing an intermittent supply of electricity cannot be expected to stand on its own. It must be accompanied by an ancillary installation designed to supply power when the primary installation cannot provide enough. This can be either a storage system that can capture the power of the primary installation when it is in excess of the current demand, or it can be a means of importing power from a region where it happens to be in surplus or from another power plant that can be deployed rapidly to meet the deficit. The latter is currently the most common recourse and the ancillary plant is likely, nowadays, to be an open-cycle gas turbine installation.
In that case, given that the plant has a significant carbon footprint, it is liable to subvert the virtue of emissions-free renewable generation. For that reason, we ought seriously to consider other options. In fact, it has been asserted that the upper limit of the proportion of a nation’s electrical power that can reasonably be expected to be supplied by intermittent renewable sources is about 20%. This figure is well within the aspirations of the European Union energy directives. The EU aims to get 20% of its energy from renewable sources by 2020. Whereas renewables include wind, solar, hydroelectric and tidal power as well as geothermal energy and biomass, we imagine that the preponderance of the power will be from wind turbines.
Let us put aside the question of importing power from afar, which was discussed yesterday in Grand Committee, in order to concentrate on the matter of energy storage. There are two principal means of energy storage that appear to have the greatest potential for development. The first to be considered is a system of reservoirs and dams. At times of low power demand, water can be pumped up to the reservoirs. When demand peaks, it can be released and passed through turbine generators. Approximately 70% to 85% of the electrical energy used to pump the water into an elevated reservoir can be recovered, so this is an efficient affair in terms of energy conservation. The technique, so far at it has been pursued, has also proved to be a cost-effective means of storing large amounts of energy, but high capital costs are entailed in creating such facilities, and they depend on the existence of an appropriate geography.
The most visible leading example of pumped storage in the UK is the Ffestiniog reservoir and dam in north Wales. One of the largest facilities, which is also the least visible, is at Dinorwig, in north Wales, where a huge reservoir sits in a hidden cusp in the mountain. There is currently a peak capacity in pumped storage in the UK of around 2.8 gigawatts, which is about half the installed capacity for wind-powered generation. There is potential for an increase in capacity, albeit that the associated costs are uncertain. The Department of Energy and Climate Change conducted a hydropower resource assessment for England and Wales in 2010 but not, it seems, for Scotland, and there is much that needs clarifying.
It should be noted that, in the UK, the volatility of electricity demand is greater than in any other country. The reason for this lies in the electric kettles that satisfy the tea drinking urges of our citizens, which are closely linked to the evening schedules of our television programmes. Much of our pumped storage capacity is devoted to meeting the resulting spikes in electricity demand and the reaction of the system to the conditions of demand can be almost instantaneous.
Baroness Worthington
My Lords, I support the amendment tabled in the names of the noble Lords, Lord Stephen and Lord Teverson. It is an excellent amendment, and had I been administratively competent enough, I am sure we would have tried to add our name to it because it raises an important aspect of this energy trilemma that we are trying to solve. As the noble Lord, Lord Stephen, eloquently pointed out, it is sadly missing from the Bill. This amendment or a similar amendment would be an excellent addition to it and would help to make it clear that this will be a very important part of the energy system. The reason it belongs in this Bill is because it is a significant move towards supporting the greater use of variable sources of electricity. As has been pointed out by previous speakers, one clear way of addressing the issues and challenges that variability creates is through the use of storage.
It is often—I think wrongly—stated that electricity cannot be stored. That is incorrect. It can be and is stored in many ways. We have heard of some of them today. Dinorwig is an amazing example. It was a government-funded public work, and it has been operated very successfully by a number of private companies. It is a jewel in the crown of our grid and provides fantastic, very fast and very efficient back-up at times of need.
However, there are many other sources. Hydro pump storage is not just in North Wales. There is an awful lot of it in Scotland, where it is a very reliable and well integrated source of renewable energy that has become at one with the environment in which it is located. These are technologies that were built in the 1950s and are still serving us today. They are amazing examples of what renewable energy can achieve. With the renewed interest in storage, a plethora of new approaches is emerging. I read with interest that GE, the wind turbine manufacturer, has launched a turbine that it is calling the “Brilliant” turbine. It is 2.5 megawatts and has a chemical storage facility built in to smooth the curves when wind power is operating or not operating. Obviously, that is a statement from the manufacturers that they can see a commercial advantage to being able to provide storage to help deal with the variability of the energy supply.
The Leighton Buzzard project was mentioned by the noble Lord, Lord Stephen. This is a fascinating and great example of where Britain can really excel. It is fairly straightforward engineering excellence at its best. The challenge is to take electricity at times of high supply using a filtration system to separate out nitrogen and then to cool the nitrogen as a liquid. That is the storage mechanism. Once it is heated and released, it can power a turbine. The great thing about the Leighton Buzzard project is that it is located next to a source of low-grade waste heat, which would otherwise be wasted, and that is helping to improve the efficiency of the system. These are exactly the sort of projects you can rely on the engineers and innovators of Britain to deliver. I really hope that we will see much more of such projects and more support for them.
The chemical project has also been mentioned—but I might have got this the wrong way round. The liquid air project is in Slough, and the chemical project—the 6 megawatt chemical battery, also mentioned by the noble Lord, Lord Stephen—is the one in Leighton Buzzard, so I apologise for the confusion. Nevertheless, those are two examples.
There is also a wide amount of pre-existing distributed storage available on the grid in the form of Economy 7 and storage heating. This is another aspect of storage that has been slightly forgotten. When we had our initial push for nuclear power and found that we had an overabundance of power in the night, when there was not much use for it, a parallel process was introduced to encourage householders to fit storage heaters in order to absorb that excess electricity at times when it was cheap and use it to heat their homes. I do not see why that should be forgotten. I think it has an essential part and could now, with the advances we have made in smart metering and the information that will be available to consumers, provide another form of storage.
Lord Teverson
I will just point out that the noble Baroness is absolutely right about that. It is true that heating water by electricity can still be done. Storage heating has perhaps become less popular—most water heating is by gas—but there is still a substantial element of electrical water heating.
Baroness Worthington
I absolutely agree. If immersion heaters were now plugged into the grid and could be switched on at times of high supply, they would be a great source of storage on the network.
I do not want to take too much time, but I also mention one of my favourite discoveries of this year: the flywheels at Culham. A little-known fact of our grid is that the fusion research unit at Culham demands a huge burst of power in order to work, and it was deemed to be too great a demand to place on the grid. So, in the 1970s, flywheels were installed, which are still operating today, based on the flywheels that operate in Dinorwig. This is another example of fantastic engineering that solves a problem. I am dwelling on all these examples because I think they really show that, as our energy system transforms itself and as we embark on this road with, I hope, a very clear and unswerving purpose, we will solve many of the problems and obstacles that have been cited today as insuperable. Innovation in engineering is something we excel at and I expect that noble Lords will come forward with many more examples.
I turn to the amendment and the requirements to introduce a strategy and set a target. I am at times a little sceptical about the setting of targets, but I am very supportive of the idea of a strategy. Representatives from the industry have told me that they are very confused about how to interact with the Department of Energy and Climate Change. There is not a single point person in the department who really has an overview of this issue, and they have asked if we could raise that issue and ask that it be prioritised and given a home within the department. They tend to feel that they are being passed from side to side, with no-one taking overall responsibility for it. I think that is in part because the definition of “storage” is not quite clear, and this hits at a core issue. Dinorwig is classed as a generator and holds a generating licence, but if you have an Economy 7 storage facility in your home, you are not a generator. Lots of technologies may emerge that are somewhere in between because they are both absorbers and generators of power. They could offer very particular services to the system. Is there a need for a separate licence category for such operators? The Government need to think about this and perhaps come to a conclusion. In the course of writing a strategy, I am sure that this is one of the things that needs to be addressed.
This becomes particularly important in relation to the distribution network operators. We tabled amendments in earlier Committee sittings to tease out the fact that the DNOs are currently preparing the business strategies which they will implement over the next eight years. It is my strongly held belief that the capacity mechanism within this Bill, if it is done correctly, could have a dramatic effect on the introduction of electricity storage, and therefore should have a material impact on the DNO strategies. We have said before that it seems crazy to be signing off on DNO strategies before the detail of this Bill and the capacity mechanism within it is fully worked through.
The Electricity Storage Network, which is the relevant trade association, has pointed out that support for electricity storage is currently available. It is not quite clear from the briefing whether the grant is worth £30 million or £50 million, but it is clear that the Government are making available some tens of millions of pounds for grid-scale demonstrations of storage. That is very welcome indeed. However, the association makes a point which makes sense to me: if you spend that kind of money on the demonstration but you do not have a policy to secure the route to market, that is effectively wasted money. What the sector is really looking for is a clear signal that it will be able to participate in the capacity mechanism and that there will be a way in which it can compete against the other potential sources of capacity that will be brought forward. The problem is that we are dealing with what is essentially quite a new set of technologies which is facing all the challenges that you would associate with that. Potentially, these technologies could be commercially viable, but they are not yet. How can they compete in a capacity market that essentially seeks to be technology neutral and provide one price for all? This is a contradiction in the proposals being made by the Government that really needs to be thought through.
The Bill makes it clear that on the supply side, when it comes to supporting low-carbon electricity supplies, the Government have accepted that we need a tailored strategy for the different technologies. We have differentiated strike prices as well as different treatment for nuclear and renewables—and within the renewables category, there is an enormous difference in approach. The reason for that is that the Government recognise that in bringing forward the low-carbon economy, it is not just a question of the least cost initially because these technologies are at different stages of development. The Government have expressed a desire to bring forward a range of technologies and not simply to compare them all against levelised cost. It is more subtle than that. Those interests may include the ability to establish a supply chain, which might have a material bearing on how we support certain technologies. The Government have gone so far as to create a levy control framework which is split up into the different technologies and potentially into different sizes of technologies, and even into different locations. I say that because on the supply side it is clear that the Government accept that one size fits all will not work and that different policies need to be brought forward in order to help all the various technologies at their different stages of development.
The demand management and reduction side is thrown out of the window and we are told that all technologies must be able to compete on a level playing field. What I would argue is that that simply will not work for those technologies which are less far along the development curve. Those include electricity storage, which has huge potential and will be very important, but at the moment would find it extremely hard to compete against the existing coal-fired generators, with gas that has just been mothballed or, indeed, potentially with new CCGT, although I hope it would be able to compete with it. I would simply state that on the supply side, the Bill recognises the need for differentiated approaches, but when it comes to the demand side we take a completely different approach. I would like to hear from the Minister what the justification is for those very different approaches. I am sure that she will respond by saying “the least cost”, but if it is a question of the least cost, the argument should apply to both sides. There must be something different on demand to which we are applying a different logic, and I would like to hear what it is.
Lord O'Neill of Clackmannan
We have had an interesting debate that was kicked off by the noble Lord, Lord Stephen. Before telling us about the need for electricity storage, he told us that, as a Minister in the Scottish Government, he was in favour of moving towards 100% renewables. His speech had a certain revelatory note as though, when he was advocating 100% renewables, he had not really thought about storage. If you are dealing with renewables, you are of course dealing with interruptibles and you have to have something to fill the gap. Storage has always been one of those things. I find it a bit disturbing that the Scottish Government—of whom my party was a part at the time—signed up to what seems to be a somewhat ill-considered approach to renewables. However, it shows that when something with an element of newness and freshness comes along, it is thought that it must be good; and once its goodness is established, everything is possible. I get the message this afternoon that everything involving storage is good and therefore possible. I happen to be in favour of storage and in favour of a strategy, but if we are going to have a strategy, it means that there will be priorities. If there are priorities, it means that some of the projects now enjoying the cosy embrace of Members of this Committee on both sides may well be cast to the wind.
On the question of cost, the energy industry is saddled with bad investments from the bright ideas bank, but that is something which goes back through history. When the sector was publicly owned, the CEGB had probably the best scientific brains in the energy industry. They would go to civil servants and offer them, for example, nuclear energy—of which I am an enthusiast—saying that it would be too cheap to meter. We have got to be a lot cooler in our enthusiasm. It might well be that the advocates of a strategy find that the strategy turns round and punches them on the nose, knocking out some of their favourite little schemes.
I happen to be something of an enthusiast for the Leighton Buzzard project because it is of a reasonable size and it seems to be technically in order. I have a slight association through an interest in this area, which I have already declared. However, we have to be careful. I favour the concept of a strategy because it will instil a bit of discipline into what I think is the wishful thinking that has prevailed in so much of today’s discussion. I am not sure whether we are going to get very much more in the way of pump storage, as you need to have the terrain and the water. I remember talking years ago to people in the hydro industry in Scotland and they did not think there was really very much more that you could eke out of the Scottish landscape. That might have changed by now, but the point is that we are getting to the small and cuddly bits of technology.
We have all been hounded over the years and, indeed, over the last few months, by people coming and saying, “With a bit of money from the Government, we can change the world and make a fortune for ourselves”. I get a wee bit cynical. Perhaps it is because I have been in this game for far too long and have seen so many of these schemes founder. I want us to have a strategy and I think that we should have storage, but let us not lose our sense of proportion. At the end of the day, we will not be storing that much because it will be the surplus electricity. We will not be generating for storage purposes. It will be a case of storing the extra, the margin and the bonus. Let us keep a sense of proportion so that when a strategy is produced, we are ready for the fact that some folk may be disappointed because they did not get everything they wanted. We have heard already with regard to renewables the arguments beginning, “Ah, but” and, “It was not really intended like this” or “The nasty Chinese are now undercutting our prices. We must stop them coming in. We must impose taxes in this area because the Germans and the Spaniards have invested in photovoltaics and the like, which are not making the returns that once they did”.
If the Government take on board the spirit of this amendment, produce a strategy in due course, and give it a place within the newly reformed electricity market, let us make sure that that is done on the basis of serious priorities. We should not be pushed by every pressure group or commercial interest that comes along with some half-baked bright idea which, with a few million pounds more of public money, will resolve everything. Often we find that the UK comes to a scheme rather later than other countries, which have spent a lot of money on similar projects and then rejected them. There is a lot to be said for partnering with other countries and companies because they may have done far more research and experienced a lot more of the disappointments that normally arise from research in areas of this nature. We should give the spirit of the amendment a fair wind, but at the same time recognise that this has to be about priorities. We should not chase after every pot of gold at the end of every rainbow we see.
Baroness Verma
My Lords, I am grateful to my noble friend Lord Stephen and to all noble Lords who have contributed to this very helpful and useful debate on Amendment 55D. Subsections (a) and (b) of the proposed new clause support the development and piloting of storage systems for electrical energy. The Government agree that technologies that can be used to help balance the supply and demand of electricity, such as energy storage systems and demand-side response and interconnection, are increasingly likely to be required. This was the conclusion in DECC’s report, Electricity System: Assessment of Future Challenges, which was published in August 2012.
Energy storage systems can be used to store surplus electrical energy for use at times of high demand. They help to match the supply and demand of electricity efficiently and cost-effectively. Technology companies in the UK and elsewhere are actively developing energy storage systems which could help to address the problems associated with intermittency of supply. However, different energy storage technologies are currently at different stages of development and further innovation and development is needed to reduce the costs and thus make storage technologies applicable to wider deployment.
The department therefore identified energy storage systems as a priority area for funding under its Innovation Programme. We then consulted with storage technology developers and users, as well as other public sector innovation funders, before developing a plan to help support the development of storage systems. This led, in October 2012, to the department launching two innovation competitions to support research, development and demonstration of energy storage systems. As a result of these competitions, funding has already been awarded to 16 energy storage projects, and in the autumn DECC expects to announce details of up to four energy storage demonstration pilots, which it will be supporting during the current spending review period. The aim of these pilot projects is to demonstrate the scope for cost reduction of innovative energy storage technologies and to explore the opportunities for deployment of energy storage technologies to address a wide range of future UK electricity network balancing and other storage needs. I agree with the noble Lord, Lord O’Neill, that this should be part of fulfilling the capacity of needing more energy rather than it being a means to an end.
Under Ofgem’s Low Carbon Networks Fund, three pilot projects are already under way to incorporate storage into our electricity distribution networks. These projects have the potential to assist in balancing local demand to facilitate the timely and cost-effective connection of renewable energy. My noble friend Lord Stephen referred to the Leighton Buzzard six megawatt battery project, which is one of the three pilot storage projects being supported by Ofgem’s fund.
I turn to subsection (c) of the amendment, the proposal to set targets for the provision of renewable energy storage capacity. Energy storage systems are one way to address issues arising from intermittent supply and so to support the deployment of renewable generation. However, other mechanisms such as demand-side reduction, interconnectors and smarter networks can also be used to help to balance supply and demand. Different mechanisms are likely to be needed to meet different balancing applications depending on the characteristics they offer, such as power, duration of supply and response times. The commercial markets should be best placed to select the most cost-effective solution to address each balancing requirement.
Energy storage of all sizes will have the opportunity to compete alongside generation and demand-side response in the capacity market. This will provide a secure revenue stream, ensuring sufficient investment in the reliable capacity we need. Of course we recognise the importance of developing a more responsive demand side for the longer-term efficient functioning of the market. Given that certain technologies such as storage have different characteristics from generation, we are developing transitional arrangements to provide particular support to demand-side response and alternative capacity types, including smaller scale storage which is connected to the distribution rather than the transmission network.
As I have set out previously in our debates, the early stages of the capacity market will include “go early auctions” for specific technologies in 2015 and 2016, which are designed to help certain emerging industries to grow. We envisage that these auctions will include demand-side response, embedded generation below a size threshold and storage connected to the distribution network. The auctions will allow storage to take on limited obligations and benefit from regular guaranteed payments.
Finally, subsection (d) of the amendment would require the Government to set out progress made on these energy storage system issues in the form of a report which must be laid before Parliament. DECC is already planning to carry out post-project evaluation on the outcomes of the energy storage innovation schemes once the supported projects have been completed. In response to this request, I can commit that copies of this evaluation information and project reports will be deposited in the Libraries of both Houses.
I shall pick up on a couple of points that were raised during the debate. My noble friend asked how much funding DECC is putting into current projects. There is a list of things that we are doing and I have highlighted one or two of them. In spring 2013 we awarded £500,000 to a total of 12 organisations to carry out phase one feasibility studies into innovative and diverse energy storage ideas under the Energy Storage Technology Demonstration Competition. We will invite some of the innovators who have won funding under this competition to take part in the second demonstration phase of the competition, which is worth up to £17 million, to test designs on the ground. We also awarded £1.5 million to four organisations in the first round of the Energy Storage Component Research and Feasibility Study Scheme. We will also award grant funding of up to £1.5 million for winning projects in the second round of the scheme. There are a number of things that the department is already doing.
Lord Stephen
I thank my noble friend the Minister. I absolutely agree that there is a lot of very good work going on within the department and some of the other government or public sector organisations providing support in this area that she has referred to. I do not see that as in any way contradictory to the benefits of bringing in this sort of amendment. In being prepared to withdraw it today, I would ask the Government to consider the benefits of introducing an amendment of this kind at a later stage in the consideration of the Bill. This is such a centrally important issue that it merits introduction to the Bill, for the reasons that I have mentioned. I will not go over all those reasons again, but we need to say that it is important and include it in the Bill, in the same way as we think that decarbonisation is important—and a number of us want to include a target in the Bill for decarbonisation.
I was interested in the comment from the noble Baroness, Lady Worthington, that she is not particularly keen on targets, because I thought that the issue of targets was pretty central to the arguments coming from the Opposition Bench in relation to its criticism of the Bill. When I first came into government in Scotland in 1999—and the noble Lord, Lord O’Neill, referred to that—one issue that we had to deal with in coalition negotiations was the enormous number of targets that the Labour Party wanted to introduce into every aspect of government. At that time, there was a general view in Scotland and in my party that we could do with slimming down considerably the number of targets that the new Labour Party—bright-eyed and bushy-tailed in 1997—came surging forward with in its early days of government.
Baroness Worthington
I thank the noble Lord for giving way. I want to clarify that, as I said in my speech at Second Reading and as I have consistently said in Committee, I agree with the setting of outcomes in terms of what the Government want to achieve. However, I am nervous of the micromanagement of individual technologies through ever smaller targets. An editorial in the Financial Times this week asked why we could not have a process where the Government set the objectives and the market chose the least costly and most sensible solution. I have consistently said that is what we should be doing. This Bill is not taking that approach and I fear that another very specific technology target might be the straw that breaks the camel’s back.
Lord Teverson
I point out to the noble Baroness that my right honourable friend the Secretary of State for Energy and Climate Change is saying that we do not need a post-2020 renewables target for precisely that reason.
Baroness Worthington
I am sorry to raise this again as we are sparking up another debate here. There might well be concerns about a specific post-2020 renewables target but it is strange that the Secretary of State should not be more strongly advocating a decarbonisation target as this is necessary. We can carry on with this offline.
Lord Stephen
We have touched on a very interesting area but we can all agree that a strategy is a very good thing here. Even the noble Lord, Lord O’Neill, thought that a strategy was a good idea. Sometimes in government you have to be bold and ambitious in setting strategy and, sometimes, in setting targets. I take the point made by the noble Baroness about the importance of outcomes and not micromanaging. If the noble Lord, Lord O’Neill, had been given John F Kennedy’s speech about sending a man to the moon by the end of the decade, he would probably have set it to one side and declined to go for it. Sometimes we have to be ambitious and we are dealing with very important change that needs to be driven by government. None of the major changes we are seeing in energy infrastructure in the United Kingdom and many other developed nations would be happening without huge intervention and commitment from government.
In many aspects, the Energy Bill will deliver exactly the sort of change we are all hoping for but not in relation to storage where much more needs to be done. The noble Lord, Lord O’Neill, was exactly right that when these big targets for renewable energy were first set storage was seen as a vital issue if they were to be introduced. They can also be achieved through a mixed basket of renewable energies, not all of which are intermittent in the way that wind and solar energy are. Storage is not rocket science; it is not so uncharted. We are aware of the technologies right here and now: the issue is how to deploy them sensibly. It is not all about balancing the network: it is about focusing some energy storage on renewable energies. I was interested to hear about the proposal for an individual turbine having its own internal storage capability. When we are building, as we have done, the biggest wind farm in Europe, there should be consideration of some sort of energy storage alongside such a huge investment. We have a lot more to do and I am excited at the prospect. I am ambitious for all of this and genuinely believe that we can do it. With the right commitment, support and focus, we can make this happen. I beg leave to withdraw the amendment.
Baroness Worthington
“Voltage optimisation
Within 12 months of enactment, the Secretary of State shall publish a strategy to support the development and usage of commercial and domestic voltage optimisation.”
Baroness Worthington
My Lords, this amendment is dissimilar in many respects from the amendment we have just debated. I am not calling for a target, just to be consistent with voltage optimisation. It is a good opportunity for us to have a discussion about the role that voltage optimisation can play in helping to reduce our demand for electricity.
I first heard about voltage optimisation when I was working for Scottish and Southern Energy which was considering internally how it might go about meeting a theoretical demand to reduce the demand of its customers. I was advocating voltage optimisation as a policy that it should embrace and the company was mulling over how it might meet it if it were to happen. The things the company thought about off the top of its head to reduce consumers’ demand were the greater use of thermometers and controls in heating, which was very obvious, and voltage optimisation on the electricity side. I had never heard of it, but the engineers understood the system far better than I could. They knew about voltage optimisation and its potential for knocking down demand in a very certain way.
One of the problems with demand reduction is that it can have a rebound effect. Some energy efficiency measures increase efficiency but do not produce a net reduction in demand. The fridge is a classic example. You get a bigger fridge that may be A++-rated, but its overall demand is greater. Voltage optimisation gave very clear and concrete outcomes.
When I arrived in this House, I came across a group of companies that are building and installing voltage optimisation equipment. They have formed a trade association, which I am very pleased about.
I have tabled this amendment to reiterate some of the benefits of voltage optimisation and to highlight that at the moment it is slightly falling between the cracks and does not receive any support, despite the fact that it can and does reduce electricity bills, has a very short payback period for companies and households that fit it and has the added advantage of stabilising the voltage used in equipment and extending the lifetime of that equipment. If you consider that the voltage coming into a home can fluctuate quite widely, a voltage optimisation unit will hold the voltage at an optimised level so that everything in the house is using that controlled voltage, which can extend the lifetime of white goods and other equipment that works far better on a stable voltage. I should have explained voltage optimisation at the start, but I assume a very high level of understanding among eminent noble Lords here.
The UK can lay claim to being a world leader in this industry. Two of the companies that I have spoken to spun out of universities and have established a UK manufacturing base for this equipment. I am told that the industry is currently contributing around £60 million per annum to the UK economy. It only started in 2000, so it is obviously a sector that is quite young, but growing.
The reason for this amendment is the concern that this technology is currently excluded from existing support mechanisms. It does not qualify for support under the ECO or the Green Deal. It seems that the reason is that it has not been accepted as part of the SAP rating of energy efficiency assessment for homes. The industry says that it has been trying to resolve this for a number of months—in fact, for years—and is feeling very frustrated that the department has not done more to expedite the issue. It seems that there is a slightly negative perception of this technology at the BRE. The industry is doing all it can to address the BRE’s concerns, but is seeking a little more political support from the department to expedite this process and recognise the great benefits that VO can bring.
I shall leave it there because we have already had a lengthy debate on a particular type of technology and this is a similar plea for greater awareness and priority to be given to this solution. There cannot be many things that will so clearly bring down demand, which also have the benefit of reducing customers’ bills, very short payback periods and increasing the lifetime of appliances. It seems to me strange that this is not being supported more by government. I know that the Government use this technology—I think that it has been installed in both No. 10 and DECC’s buildings and in many other public buildings. If it is as good as they say it is—and I am persuaded that it is—we should support it; it is as simple as that.
Obviously, this is a probing amendment, but I look forward to hearing reassurance from the Minister that voltage optimisation is an industry which the Government wish to support, and that she will address the fact that currently it falls outside all the support mechanisms. I beg to move.
Lord Roper
My Lords, I made a brief reference to voltage optimisation earlier in the Grand Committee’s proceedings. I referred to the very useful lunch organised by the noble Baroness, Lady Worthington, where a number of us were able to learn from members of the trade association what was being done. In the rather steep learning curve on the topic of energy that I have experienced over the last 12 months, that was one of the high points, given that not only has the UK been a pioneer with this technology, but it is very effective, both at the level of the large consumer and, in other ways, at that of social housing.
I will make one suggestion to the Minister, if I may. We discussed earlier the situation laid down in Clause 37 of a pilot scheme or schemes for electricity demand reduction and the possibility of the Government setting up or examining pilot schemes to see what could be done. It seems to me that voltage optimisation is one of the areas that could come under what we have already considered in Clause 37. I would be interested to know whether the Minister feels that there is any chance of considering it within that framework.
Lord Deben
My Lords, I am sorry not to have been able to be here earlier. I declare an interest, given that in the past I have assisted firms of this kind to try to get a wider application of their equipment. There are certain drawbacks with this, but what I find so interesting is that it is a particularly British problem. It is simply because we have gone along with a voltage that is out of line with that of other people. Given that everybody manufactures to a voltage that is common elsewhere, we have something that is less than optimal. That is all. If the system is less than optimal we waste significant amounts of energy and our equipment works less sensibly and wears out more quickly.
I do not to repeat what the Committee is perfectly well aware of but simply to say that this is another example of how much can be done in very simple and small ways, which all add up. One of the things that worries me about governments of all kinds—this is not a comment about the present or the previous Government—is that small things that add up do not get the same attention as big things that very often do not add up at all. There seems to be a kind of desire to do things people will take note of, rather than understand how much there is which, if we add it up, makes a huge difference.
I do not want to go over it all, but I am sure that there has been a significant saving of energy simply because kettles now show you how much water has been put in, so that you know what you need for a cup of tea and do not put in too much. All those simple mechanisms actually make a difference. The trouble is that people tend to laugh at them, because in themselves each one does not matter. If we had voltage optimisation as a built-in feature of every new home, for example, and if it was automatically offered in every circumstance, we would save a significant amount of energy.
I therefore hope my noble friend will be able to say that her department will concentrate on the small things that add up but which will not get headlines in the Guardian. That is the fact. Let us see if we can do some of that because it would certainly make a big difference to meeting our energy demands.
Baroness Verma
My Lords, I am grateful to the noble Baroness, Lady Worthington, for the amendment. Over the past few months, a number of questions on voltage optimisation have been raised in this House and the other place. This is the result of having an industry that is passionate about its product and its estimates of potential savings. The Government, however, have to look at this objectively and consider the evidence of performance. I am not sure whether my noble friend Lord Deben was here during our previous debate but it demonstrated that the Government look at smaller projects. Perhaps my noble friend would look at Hansard to see how we are already supporting some smaller projects.
Voltage optimisation is a piece of electrical technology that could potentially reduce the energy consumption of household appliances and industrial machinery by lowering the supply voltage. Manufacturers of voltage optimisation devices have asked for recognition of this potential to save energy through its adoption in government-sponsored schemes, including the Green Deal, which the noble Baroness, Lady Worthington, mentioned. The Green Deal is an example of how a government strategy has been introduced that encourages householders and businesses to invest in technology, as long as it has a measurable and verifiable energy saving and can be recommended for a given building. These criteria are important to ensure that we realise real energy savings and ensure good value for money to consumers.
There is an established process for admitting new technology into the Green Deal, which entails the industry submitting its evidence to the Government’s contractor for entry to the standard assessment procedure, which is the tool for determining the energy efficiency of domestic buildings. In the case of voltage optimisation, this evidence has been reviewed by BRE, and its report has confirmed that there was a saving from the installation of voltage optimisation in some of the properties tested. In all these instances, however, part of this saving was found to result from a reduction in the level of service provided to householders—for example, by making lights dimmer. This cannot be counted as a real energy efficiency saving.
The report also highlighted further reductions in the estimated savings from voltage optimisation arising from the impact that EU directives are having on the energy efficiency of household appliances. The effect is that appliances are becoming more tolerant to, and efficient at, working within a range of supply voltages. A realistic projection of the likely take-up of modern appliances reveals that the potential saving from voltage optimisation will reduce each year, such that by 2020 the saving is likely to reduce to zero in a typical home and then become negative in later years. This is due to the voltage optimisation unit’s own power consumption.
In the commercial sector, it is more difficult to make generalisations about the efficacy of voltage optimisation due to the wide range of electrical plant that could be in use. However, this sector, too, is subject to improvements in the energy efficiency of electrical plant due to EU directives, which will reduce the savings from voltage optimisation. It is against this backdrop of evidence that the Government cannot commit to supporting voltage optimisation. There already exists a strategy within the Green Deal that allows industry to get its technology recognised and adopted, subject to it meeting key criteria. If the evidence for voltage optimisation were to change, then we could reconsider whether the market forces found within the Green Deal were sufficient to encourage its uptake.
I should also like to touch on the scale of savings that the noble Baroness believes will be made with voltage optimisation. We found that the indicative costs and savings were as follows: voltage optimisation units could cost around £300 plus the cost of installation but may save, on average, only £2 per annum. It has been suggested that by 2020 the units will use more energy than they save and will therefore have to be removed at further cost. This is evidence provided by the industry to the BRE, and the organisation Which? agrees with DECC about this. Given that, I hope that the noble Baroness is reassured that we are taking every possible opportunity to look at new entrants, and that on that basis she will withdraw her amendment.
Baroness Worthington
My Lords, I am grateful to the noble Baroness for those comments. What they serve to do is illustrate quite how closed the department is to this technology. If it was true that there was a saving of only £2 on an investment of £300, no one in their right mind would develop, manufacture and install it, and yet we have an industry that is doing so. Not only that, it is a British industry which is manufacturing in the UK.
I am grateful to the noble Lord, Lord Deben, for his intervention to say that small things which add up may not generate headlines, but actually they can generate headlines when it is a British-based industry creating British jobs and which can go on to export its technology around the world, leading to a positive balance of trade. Each individual bit of technology may not make the headlines, but the investment in UK skills, infrastructure and jobs should do so. Obviously the technical issues that have been quoted will, I am sure, be contested by the industry. All I am asking is that the department should not start out with a negative predisposition, it should look at the evidence in the round and listen to the industry.
Baroness Verma
My Lords, as I have said, if the initial criteria can be met, of course we will reconsider everything. The point is that the industry has to be able to provide benefits in the same way as those who are already involved in the Green Deal.
Baroness Worthington
I take the point, but what the industry is feeding back to me is that it is finding the process to be incredibly slow and time-consuming. People are pushing against an attitude of resistance which starts out by considering what they say to be false. However, that does not add up because some quite hard-nosed commercial operators such as Tesco have installed this equipment and are finding that it saves them money. If that is the case, some support should be offered. It is probably true that the quantum of savings and investment is better in larger-scale uses, but it cannot be true that this is an industry based on a fallacy. I refuse to believe that people would put their hard-earned money, hours and initiative into something which is of no benefit. I recognise that there is a procedure that needs to be gone through, but I hope that it can be opened up to scrutiny and perhaps a conclusion can be reached rather more swiftly than is the case at the moment.
The question of loss of service will be barely noticeable. People have said that voltage optimisation does not work because the lights are so dim that you cannot read a book. However, it is not on that scale at all. It is probably true that most households would not notice it. We probably enjoy a surfeit of lighting because we have all installed lots of halogen lighting in recent years. The loss of service is a contestable issue.
Energy efficiency and demand reduction comes with all sorts of potential loopholes and problems. I go back to what I said about fridges. The Government have been perfectly happy to hand out eco-credits, or whatever they were before they were called that, for the installation of appliances, but there is no requirement that those appliances should contribute to a net reduction in demand. They simply have to be efficient. As I have said, a larger and more efficient fridge, which is what the current trend is moving towards, uses more energy than a smaller, less efficient fridge. There is an inconsistency here. I know for a fact that when the light bulbs credits were available, we were handing out support to people who were simply putting those light bulbs into the cupboard under the sink. It is slightly unfair on the part of the Government to apply incredibly tight and overly restrictive criteria to a technology which I do believe is of benefit while not recognising that great leniencies have been shown towards other technologies in the past. I am not saying that we should go back to that but there is an inconsistency here.
I hope that this process will resolve itself and am sure that the industry will be keen to engage with the department to answer the concerns that have been reiterated here today. I am pleased to withdraw the amendment at this time.
Viscount Hanworth
“Nuclear Research and Development
( ) The Secretary of State must seek to foster Research and Development in nuclear technologies, including—
(a) advanced fission and alternative fuel cycles; and(b) profitable ways of employing Britain’s stock of plutonium in generating electricity.( ) The Secretary of State must report to Parliament annually on the progress made on these issues and any necessary changes to the legal remit of the NDA in furtherance of these aims.”
Viscount Hanworth
Throughout the Committee’s debates, one vital element has been barely mentioned—the future of Britain’s nuclear energy. Without the prospect of major investment in nuclear energy, the nation’s energy policy makes no sense and the Energy Bill is virtually meaningless. The lack of debate about Britain’s nuclear programme has been a reflection of its uncertainty. The Government are still in protracted negotiations with the French state-owned monopoly EDF—Électricité de France—which in reality represents, at present, the only means of achieving new investment in nuclear plant. For reasons of political ideology, allied to fiscal anxieties, the Government are loath to finance the investment. They are relying on EDF to raise the necessary funds from the financial markets, which are currently in a parlous state. The company, in turn, sees an opportunity to recoup some of its recent losses in projects elsewhere at the expense of the British taxpayer. It can look to the examples of foreign national rail companies, which are recouping their losses by adopting rail franchises in Britain. It hopes that it can follow suit.
With such a prospect in view, one might expect greater eagerness on the part of the company to strike a deal. In a previous debate on the subject of Britain’s nuclear programme, one of my colleagues voiced the opinion that our Government were in a strong negotiating position and that they should therefore stand their ground. That is a misjudgment. EDF has other prospects in view, in China in particular, and the scale of those Chinese projects will far exceed anything that is on offer in Britain. Moreover, the company’s expenditure in Britain to date in connection with the prospective Hinkley C nuclear power station is no guarantee of their commitment.
According to an economist’s nostrum, bygones should be bygones, while according to an alternative version of the dictum, one should not throw good money after bad. The Government are therefore advised to have a properly conceived and well publicised plan—a plan B, as it is usually described—to meet the eventuality of a breakdown in the negotiations. There is a strong suspicion that the Government have a plan B, albeit a covert one, given that an influential faction within the Government appears to believe that Britain’s impending energy deficit can be overcome by a dash for gas that would rely on supplies of gas that could be magicked out of the ground beneath our feet.
We have been feeling the effects of the Government’s schizophrenic attitude throughout the debate in Committee on the Energy Bill. The schizophrenia is not unique to Britain but has been severely affecting Germany’s energy policy, which accounts for the fact that the German energy companies that originally intended to bid for nuclear contracts here have withdrawn, The nuclear schizophrenia has also made some inroads into the policies of the French Government.
In this country, we are already seeing strong opposition to the prospect of fracturing the ground in order to extract gas. The short-tem expedient of relying on natural gas to power our generating stations would be in utter contradiction to the avowed intention of decarbonising our energy supplies.
A further reason for the Government’s reliance on foreign utilities to realise their nuclear ambitions is the attenuated state of our nuclear industry. A recent report by the Science and Technology Committee of the House of Lords bore witness to this state of affairs. It recommended that drastic action should be taken to revive the industry and foster its research and development. The consequence of the report was flurry of activity that gave rise to a cluster of government reports centred on the so-called Beddington report that reviewed the civil nuclear research and development landscape in the UK.
Some of us have recently witnessed a resurgence in the optimism of the proponents of Britain’s nuclear industry. There is a strengthening feeling that the time is right for a nuclear renaissance. There are outstanding technical opportunities to be grasped for a generation of nuclear reactors that will succeed the reactors currently being built around the world.
Current reactors are conventional uranium reactors, mainly of the pressurised water variety, which follow the designs of the majority of the original civil reactors, albeit that nowadays they have greatly enhanced safety. There is, however, strengthening conviction that the succeeding reactors should take a new route that proceeds from a design that was realised in prototype form almost at the inception of the civil nuclear age. This is the thorium-based molten salt reactor. It has the signal advantage of using abundant fertile thorium fuel in place of fissile uranium fuel. In contrast to a uranium reactor, a thorium reactor will generate very little of the problematic wastes that afflict conventional reactors. It is also endowed with passive safety, which is to say that a malfunction leading to overheating the reactor would lead to its automatic shutdown. The reason why such a design was not adopted at the beginning of the nuclear age is that the reactor has one signal disadvantage which today is one of its major advantages —it fails to produce weapons-grade plutonium.
Now is not the occasion to describe the technology in detail. However, some Members of this House are very well apprised of the details. They constitute the All-Party Parliamentary Group on Thorium Energy, which is closely allied to the Weinberg Foundation. The foundation has a mission to expound the virtues of thorium technologies as well as to support nuclear technology and nuclear power in general. Those who are interested or curious should visit the websites of the APPG and of the Weinberg Foundation, which contain a wealth of information and are readily accessible.
There are other reactor designs we should also be considering, including fast breeder reactors. Notwithstanding some negative anti-nuclear propaganda that was aimed at them, fast breeders are eminently practical devices. The PRISM fast breeder reactor of the GE Hitachi company has been proposed to our Nuclear Decommissioning Authority as a way of profitably burning our stock of 120 tonnes of plutonium that resides at Sellafield. The authority has been given the task of recommending the best way to dispose of the stockpile, which was once regarded as a menace. Now it is being seen as a valuable nuclear resource which could power efficient and cost-effective ways of meeting our electricity demand.
Originally, it was proposed to bury the plutonium waste. Then it was thought that it could usefully be converted into a mixed oxide fuel for burning in conventional reactors. The emphasis appears to have shifted in favour of either the PRISM fast breeder as a means of burning the plutonium or the alternative Canadian CANDU reactor, which might be described as a slow breeder. It is because of this shift of emphasis, which implies a widening of the discretion of the NDA, that I believe that its original terms of reference, which were set out in the Energy Act 2004, need to be modified.
In 1954, the American physicist, Lewis Strauss, predicted that atomic energy would eventually make electricity “too cheap to meter”. That is the correct attribution of the quotation. He may have had in mind fast breeder reactors, which effectively create their own fuel, or he may have been thinking of power generation by hydrogen fusion. Either way, his vision, or something close to it, is still in prospect. We might therefore ask why, after the rapid progress at the start, the goal is still so distant. There are several answers to this question. One of them points to the nuclear phobia associated with nuclear weaponry, which has been exacerbated by nuclear accidents. However, the nuclear accident at Fukushima, which has created a major impediment, has little bearing on the question of the safety of a new generation of reactors.
There is also, in this country at least, the effects of a failure of the technological courage that once characterised the nation which we urgently need to recover. The effect of the demise of the scientific Civil Service has been experienced throughout the course of our deliberations in this Committee. The bright young people of DECC do not have the resources or the skills to deal competently with the complex matters that we have been considering. They have had to rely extensively on outside consultants. I hope that this will change in the near future. That is no criticism of them; it is a criticism of the circumstances in which they find themselves. I hope, too, that the injunction in my amendment that the Secretary of State should report to Parliament on an annual basis to give an account of his activities in relation to nuclear technology will provide some stimulus and will compel his to grapple with these issues.
I conclude by mentioning an article in the Engineer of 5 October 1956, the eve of the opening of the Calder Hall power station, Britain’s first nuclear power station. The article recounts that it took three and a half years from conception of the project to its realisation. This is the time that will have been spent in negotiations with EDF regarding the proposed Hinkley Point C reactor. The contrast with the snail’s pace at which we proceed nowadays is astonishing. The glory days of the Atomic Energy Research Establishment at Harwell and of the establishment at Sellafield—or Windscale, or whatever you care to call the place—are long since gone, but there is still an opportunity to recover some of the spirit of those times. I beg to move.
Baroness Worthington
My Lords, I will briefly speak to this amendment. I declare an interest as a patron—unremunerated—of the Weinberg Foundation. I also helped to establish the all-party parliamentary group to which my noble friend Lord Hanworth referred. I will not wax lyrical about the benefits of thorium and closed-cycle breeder reactors because I think we are all getting a little tired now as we are very near the end, but I understand the sentiment behind this amendment. I am particularly interested in the latter part of it, which requires the Government to report on,
“any necessary changes to the legal remit of the NDA”.
The reason why I am interested in that is that we have an opportunity here, in considering what we do with our plutonium stocks, to mark a new era in nuclear fission. That shift from seeing the plutonium as a liability that is just costing us money—which it is at the moment, to be honest—to seeing it as an asset that can be exploited to generate low-carbon electricity is, I think, just upon us. Soon it will be there, but we are not quite there yet.
My fear is that there is, quite understandably, a high degree of conservatism—with a small C—in the industry. There is a tendency to stick with what you know and not to do anything risky or to look beyond your immediate priority. The NDA does an amazing job of managing the process of decommissioning our existing nuclear sites, and I just hope that, when it considers what to do next with the plutonium stocks, it will consider in the round and will not be encumbered by a preponderance of doing only what it knows best and sticking to what it has seen previously. If it does that, I fear that once again we will be building a very expensive MOX fabrication plant, for which there will be probably no known customers by the time it is built. Certainly, the PWRs that are being built by AREVA and EDF will not wish to take it. It is much better for them to use newly fabricated fuel while it is available. That will be the “do nothing”, “stick to the plan”, “keep going as we are” strategy.
I am delighted that, in addition to those, new ways of approaching this problem have now been put forward by different industry representatives. My noble friend Lord Hanworth mentioned the PRISM reactor, GE Hitachi’s breeder reactor and the CANDU reactor from Canada. There has been quite a lot in the media about the PRISM reactor, but much less about the CANDU reactor, which is potentially an excellent solution. CANDU reactors are very flexible, are a tried and tested technology developed over many years by the Canadians, and have a very big investment arm behind them. It is a very viable project. There you get the advantage of building not just a fuel disposition solution but a reactor to provide clean energy. Given the precarious—or perhaps protracted—negotiations with EDF over Hinkley, it is very clear that we need to have a plan B. If we just switch our frame of reference to consider the plutonium stocks as an asset and then exploit them to maximise the production of electricity and minimise the production of waste, it will point us to a novel solution that would open up great benefits to the UK. I hope that the department, in the advice that it gives to the NDA, will consider this in the round and consider whether we need, perhaps, to rethink the remit of the NDA.
Lord O'Neill of Clackmannan
I welcome the amendment and the noble Viscount, Lord Hanworth, is to be congratulated on giving us an opportunity to debate this matter. In many respects, if in the nuclear industry we had been able to get things started at Hinkley right away, we probably would have been committed to different reactors from the ones that are now coming along as opportunities. There is therefore some virtue in a degree of delay in the process. However, both PRISM and CANDU have to go through the generic design assessment process, which could take up to 30 months although, in fairness to the regulators, they have suggested that they will try to accelerate that by using foreign experience and so on.
We are talking here about a nuclear programme of construction that will continue for probably 30 years. As someone once said in the context of school dances, “You rarely went home with the person you danced with first”. In this context, we may well find emerging technologies that provide us with opportunities. At the moment we have to be realistic about the fast breeder element in the technologies that have been spoken of this afternoon—they are somewhat limited. When I was chairing the Nuclear Industries Association, I had the opportunity to attend a conference in Paris that was meant to be a shop window for the French nuclear industry. I think that the French were a bit miffed when Japanese and South Korean companies came forward and spoke very confidently about their capacity to realise fast breeders in what will now probably be 15 years’ time. We did not go down the road of fusion today, which every schoolboy knows will be available in 35 years’ time; 35 years ago, they said it was going to be available in 35 years’ time. We therefore have to be a wee bit cautious about fast breeders, but we could be talking in terms of getting one in the United Kingdom perhaps 20 years from now, when we will probably still be building—
Viscount Hanworth
Perhaps I may interject. The truth of the matter is that we have already had a fast breeder in the UK that worked fairly well, in spite of rather diminished support. There were two fast breeders in France. There was Phénix and Superphénix. Phénix was very successful. There were some doubts about Superphénix, which had some engineering difficulties. However, its primary difficulty was, of course, political. I will reassert what I said previously, which is that fast breeders constitute an eminently practical technology. They are not 15 years away, but are as far away as it would take to ratify and certify them.
Lord O'Neill of Clackmannan
This is a classic example: if it was that good, why are we not using it?
Lord O'Neill of Clackmannan
It is no longer for political reasons. Proliferation arguments have been set aside for a long time. The Koreans would not be knocking their socks off to try and do this if there was a technology they thought was good enough lying there untouched.
We have to be realistic. There is no question that I am an enthusiast for nuclear power but I also live on planet Earth. This planet is governed by rules of economics which the noble Viscount probably knows more about than I do. These technologies are, to a large extent, not proven in a commercial context for the generation of electricity. There are arguments about whether or not you should be using plutonium and how it can be dealt with. These are understandable but they are yesterday’s arguments. Today’s concern is producing reactors which can do the job at a reasonable price, efficiently and safely. At the moment, these criteria have not been met. If they had, the Japanese and Koreans would have the full-blown fast breeder on the table.
We know that there have been these things. There is a case for thorium but, as I understand it, the reactor in India produces 40 megawatts of power at the moment and it has quite a way to go. Some years ago I was fortunate to host a conference when a group of Indian technologists came over and described their work. It was fascinating but it was still small scale: I could compare it to carbon capture and storage. An enthusiast will tell me that somewhere in the world there is carbon capture and storage on a big scale but nobody has yet been able to find a way of developing it in an economically efficient manner.
Within 10 to 15 years we will probably have this kind of thing. Is Britain in a position to either contribute to this process or properly benefit from it? This is where the Science and Technology Committee report was highly critical of Government for not taking this seriously enough, over a number of years; this was not a coalition-specific charge. The previous Government, when they woke up to the requirement to embrace nuclear, understandably did a number of commendable things in terms of training and widening the opportunities for nuclear to be part of university engineering qualifications. Something like 13 university courses across the UK offer that, which is an achievement which is down to both Governments’ active encouragement. However, we still have a long way to go. We have a national laboratory at Sellafield which is not getting the funding it merits. This was the view of the Science and Technology Committee. Professor MacKay, the scientific adviser to DECC, who was before the committee last week but we have yet to get Michael Fallon, the Minister responsible, who will come before us after the recess.
Without getting too specific or hung up on particular technologies within the nuclear framework, it is essential that if we are going to take advantage of the new technologies as they come through we have got to have trained, capable people to do that. At the moment, I am not certain that the Government are giving it the highest priority and that is what this debate should be about. We could go through the specifics of Select Committee reports but that is not productive. If we are going to have this technology it is not a once-and-for-all thing. It is not like combined cycle gas plants which just need a little tweaking here and there. There are possibilities for bigger changes but, in order to invest in the right and most appropriate one, we must have a skilled labour force and institutions and research establishments capable of dealing with that. As someone hinted, we need to have an open-mindedness in the industry which, at times, it does not have—because they are very much companies wedded to particular technologies, as EDF is. It is just unfortunate in some respects that the company that is first to the starting line is the one that in the European context uses the least reliable technology in terms of construction, and probably the most expensive to run. If we get a strike price, as we will eventually, it will have to be set in such a way that it does not provide the more efficient and perhaps cheaper technologies with a chequebook to make fabulous amounts of money out of. I realise that that is the predicament that the Government have, but we must not just keep saying, “We don’t have a UK capability—we’re dependent on foreign countries”. The technical changes that will come through in the medium term will be such that it would be a tragedy if we repeated the failure of the 1980s, the 1990s and the noughties in terms of getting the proper people and technical capabilities.
We do make reactors in the United Kingdom; we make them for our nuclear submarines, and they are made by Rolls Royce. If a proper programme was developed, one would imagine that Rolls Royce would be interested in getting into the new generation of nuclear technologies. There are companies within the United Kingdom that have the capability to take advantage of this, but they need encouragement from government more than anybody else.
Baroness Worthington
On the question of what the UK can contribute, the noble Lord is absolutely right that Rolls Royce is already involved here in reactor design and manufacture. That company is sponsoring a student in the Dalton Research Institute in Manchester, looking at a small modular reactor based on a thorium fuel cycle; it is looking at different reactor designs, including molten salts. So it is here. One example of how a small amount of money can have a big effect is the $10 million grant given by the Department of Energy in America to a number of universities, plus the Oak Ridge National Laboratory, to look at molten salt-cooled pebble-bed reactors. That funding programme enabled them to leverage into the Chinese nuclear reactor research programme, such that the Chinese changed direction and are now collaborating in work on a molten salt-cooled pebble-bed reactor using thorium. I use that as an illustration that you do not have to build everything yourself and spend hundreds of millions; you can have a highly leveraged impact if you are smart about your R&D choices and build on your existing strengths.
One great thing about the all-party parliamentary group has been exposure to an increasing number of scientists in the UK who are working on thorium and molten salts—and in combination. It is true that Sellafield and the National Nuclear Laboratory, by being commercial, have to go out and seek funding from the existing incumbents in the market. Therefore, they do not have the luxury of being able to horizon scan or think slightly more outside the box, because they are continually looking for funding. If more funding were provided by government and we had a genuine R&D for nuclear fusion strategy, the NNL would be an absolute asset in this search for the most sustainable forms of nuclear power. They are the ones working with Thor Energy, fabricating solid fuel thorium rods today that are being tested in the Halden reactor. So there is plenty to be very proud of and to build on in the UK.
Baroness Verma
My Lords, Amendment 55F from the noble Viscount, Lord Hanworth, provides me with an opportunity to outline what the Government are already doing to better co-ordinate and develop research and development in nuclear technology.
The Government welcomed the Science and Technology Committee’s excellent 2011 report on Nuclear Research and Development Capabilities in the UK, and in responding to it we committed to undertake a programme of work designed in the simplest terms to assess where the UK was in terms of nuclear R&D, where we and the industry believe the sector could be by 2050, and how to get there. The work under this programme completed around the beginning of this year and went on to form the basis for the development of the nuclear industrial strategy. The strategy was published alongside the outputs from our R&D work in March.
This package of work highlights how essential research and development will remain in ensuring that nuclear power can play its role in the current and future energy mix while allowing us to continue to deal safely and securely with the legacy of our nuclear past. The strategy was clear that the co-ordination and development of nuclear R&D needs to be taken forward in collaboration between industry, academia and public bodies. In doing so, we aim to maximise the use of public and private resources and provide a level of harmonisation between industry’s commercial aspirations and maintaining energy options for the UK’s future growth. As such, we believe that it is unnecessary and even counterproductive to put a legislative requirement on the Government part of this larger collaboration when we have already committed to moving forward together. We recognise that while R&D on advanced fission technologies and alternative fuel cycles is important, it is just part of the wider whole that includes essential work on decommissioning and long-term waste management.
On the management of the UK’s plutonium stockpile, all the options being considered involve the spending of public money, and a key driver will be ensuring best value for taxpayers. Following a public consultation on long-term plutonium management, the Government have concluded that for nuclear security reasons the preferred policy for managing the vast majority of UK civil separated plutonium is reuse, and that plutonium should be converted to mixed oxide fuel for use in civil nuclear reactors. The Government’s expectation is that at current uranium prices the value of the fuel generated will be significantly less than the cost of its manufacture; in other words, for the foreseeable future, the manufacture of MOX is primarily a route for consuming plutonium stocks rather than a commercial operation in its own right. However, the Government remain open to any alternative proposals that offer better value to the taxpayer, and the Nuclear Decommissioning Authority continues to work on an assessment of both the CANDU and PRISM technologies, the use of either of which would involve the use of advanced reactors and new fuel forms.
I turn now to the reporting requirement to Parliament that is set out in the amendment. The nuclear industrial strategy sets out our intention to create a co-ordination structure across the UK nuclear R&D landscape, including the formation of the Nuclear Innovation and Research Advisory Board with its own expert secretariat. We envisage that this body will be in place by the end of the year. Part of its remit will be to provide publicly available progress reports about the strategy and the pathways in the road map, and comment on any divergence from these. This will provide an independent report that will be available to Ministers, the public and Parliament, which will be wider ranging and more detailed than what is proposed in the amendment.
I shall touch on a couple of points raised by the noble Baroness, Lady Worthington, on the remit of the Nuclear Decommissioning Authority. We believe that it plays an essential role in ensuring that the historic civil nuclear legacy sites are decommissioned safely, securely, cost-effectively and in ways that protect the environment. As we set out in the Government response to the committee’s report, we would have serious concerns about changing the authority’s remit or reallocating essential resources from it because we do not want to dilute its ability to focus on this critical mission. It is also worth noting that over the past five years, the NDA estate has itself contributed more than £544 million to R&D activities, with an annual spend of between 3% and 5% of its overall budget.
The noble Lord, Lord O’Neill, and the noble Viscount, Lord Hanworth, both asked why we are not using fast breeder reactors in the UK, and I think that the noble Viscount said that we had already done so. Dounreay used fast breeder reactors, but we found them to be commercially not viable. It was generating less than 50% at the time and was also a prototype, so there was some reasoning behind that decision.
I hope that I am able to reassure the noble Viscount, Lord Hanworth, that the Government are taking the issue of nuclear research and development very seriously and are working in partnership with experts from a variety of sectors. On that basis, I hope that the noble Viscount will withdraw his amendment.
Baroness Worthington
Before the Minister sits down, I have a question about one key phrase that was used. The noble Baroness talked about value for taxpayers. However, I was trying to communicate that the Bill will introduce considerable extra costs for consumers. What I am trying to get at is that taxpayers and consumers are one and the same—we are all taxpayers and all consumers of electricity. If you focus purely on the disposition of plutonium as something completely separate that the public purse has to fund, and argue that we just spend money on what costs the least, you are missing the bigger picture. As a citizen, I am both a consumer and a taxpayer, and will be paying for nuclear projects as a consumer. I would like to see a coherent strategy that says, “Here is a solution that gives two outcomes. We get rid of plutonium and we have low-cost electricity, which saves consumers money”. I just want to test that.
Baroness Verma
Absolutely—as I alluded to earlier, we are looking at proposals from both CANDU and PRISM. We have not put them to one side but are looking at them seriously. In the bigger context, it has to be about value for money as well as doing all the things that the noble Baroness and I would want to see.
Viscount Hanworth
I am distressed by the inertia, the lack of vision and the dilatoriness of the Government and particularly of those agencies of government that have to deal with our technological future. I feel sure that we will come back to these questions time and again and will do so until we get some satisfaction. That may be a long time coming but in the mean time I will, of course, withdraw my amendment.
Lord Whitty
“(c) the establishment and operation of an Expert Advisory Panel to advise on the exercise by the Secretary of State of powers relating to CFDs, Investment Contracts or Capacity payments made under Part 2 of this Act.”
Lord Whitty
My Lords, we really are at the end now. I shall try to be brief but make no apology about turning to a subject that affects the deliverability and credibility of the entire Bill. When we had a discussion on the establishment of an expert committee, the Minister referred me to the clause to which this amendment applies. Clause 139(2)(c) provides for resources to be raised for the employment of advice. I have no objection to that, but ad hoc advice, as we said the other day, is not sufficient for delivering such a complex project. We are now horribly aware of that, having been through nine days in Committee. Apart from a few serious experts in DECC and possibly Ofgem, a few very sharp lawyers sitting in the big six and other interested parties that may be on the other side of these deals, we probably know as much as is likely to be known at this stage about the nature and process of the contracts, the difference in the process of investment contracts and to a lesser extent, given that a lot still is fairly obscure, about capacity mechanisms.
The public know nothing, the potential participants know nothing and consumers know nothing. DECC, the counterparty and Ofgem will face a complex process. They will have to deal with extraordinarily complicated and novel arrangements that do not reproduce anything extant anywhere in the rest of the world when it comes to electricity supply. They will be dealing with companies who are very sophisticated, who employ the very best advice and who, necessarily and rightly, are looking for a deal which will profit them as well as helping the long-term future of our energy security.
Delivering what is in the Bill, even though it is not that thick a Bill, will be an extremely complex process. Parliament and the public would expect departments and others representing the Government and the public in this process to have very solid advice. Some of that can be dealt with on an ad hoc basis, contract by contract and aspect by aspect. However, as was made clear in a previous debate, you need an institutionalised body which is clearly publicly known and respected, consisting of people with deep experience of the legal, financial, technological and economic issues which it is tackling. Above all, you need consistency. You need corporate memory and a body to oversee the individual officials and Ministers who, whether we like it or not, are not there for ever. They are often there only for a few months or years and cannot take full responsibility for negotiating these contracts.
The expert panel is an advisory panel, but it is an important strengthening of the whole process. I do not expect the Minister to change her mind today, but unless the Government recognise that they need something like this—they may want to call it something else—the deliverability of this whole process, on which so much depends, will look extremely shaky. I therefore hope that the Government will at least take on board that they ought to look at this concept again. I beg to move.
Lord Deben
My Lords, I very much oppose the amendment, which seems unnecessary. A great deal of advice is available and it is not necessary to have yet another committee. A committee has been proposed with a different role, which seems to me to have a much more sensible and wider view. That was in an earlier amendment—which has been withdrawn but which I have no doubt will come back—proposed by the former chairman of Shell UK, the noble Lord, Lord Oxburgh. That seems to be a much better proposal than this one. It is not necessary to shove this in at this point. The Secretary of State will have at his behest a whole range of people on whose advice he can rely. This gives him permission to do that, and although I am all in favour of giving him that permission, I do not want him to have yet another committee. I think that this is the wrong way to do it and I very much hope that my noble friend will resist the amendment. I rather suspect that she will, and it is always a pleasure to end such an afternoon, now almost evening, by entirely supporting my noble friend.
Baroness Verma
I am extremely grateful to my noble friend. I thank the noble Lord, Lord Whitty, for his amendment, which would set up an expert panel to advise the Secretary of State on the exercise of his powers relating to CFDs, investment contracts and capacity payments. I reassure the noble Lord that we are working hard to ensure that the process through which final contracts for difference and strike prices are set is transparent, robust and informed by a full range of expert input. The consultation on the draft delivery plan, as well as workshops and events with stakeholders, will allow industry, consumer groups and all other stakeholders to scrutinise the figures, and the evidence used to develop them, and provide us with feedback to inform the final plan.
Prior to the consultation, the draft strike prices were also informed by two pieces of independent advice: the analysis provided by National Grid, which helped the Secretary of State understand the potential impacts that different strike prices could have on the Government’s objectives and, of course, the independent scrutiny of that analysis by the panel of technical experts. Both these reports were published alongside the draft EMR delivery plan and copies have been deposited in the Libraries of both Houses. The panel of technical experts in particular, which consists of experts in relevant areas such as economics and generation costs, was appointed through an open competition. It is impartial and independent of any particular viewpoints. I do not therefore think that we need to create another expert advisory panel. We have used existing powers to appoint the current interim panel of technical experts and, following Royal Assent, we intend to establish an ad hoc advisory group. Clause 139(2)(c) provides the spending authorisation to support this work.
Lord Whitty
My Lords, I think that we are near the end and, clearly, I am going to withdraw the amendment. However, I am both disappointed and unreassured. I say to the Minister and the noble Lord, Lord Deben, that the body proposed in the amendment has a very different and more precise role than the one proposed by the noble Lord, Lord Oxburgh, which we can argue for in a different context.
The Minister is effectively saying, “We have all these technical experts; we’ve got an ad hoc panel; we are going to have another body involving industry and consumers; and we are going to have another ad hoc technological panel, once the legislation is passed”. It is obviously reassuring to some extent that the department is getting all this advice, but why not make it clear that we have a body of real expertise to oversee this gigantic exercise of changing the whole way in which we deliver our energy—a body that is to some extent institutionalised and recognised by Parliament? I think future Ministers will regret not having that body to support them. I hope I am wrong, but I think it would give Ministers sharpness of advice in the process and protection after it. I regret to say that I think the Minister’s successors may well regret her dismissal of this amendment today. With that, and with a happy summer to everybody and my thanks to the Minister and her department for all the help she has given us, I beg leave to withdraw what I think is the final amendment to be debated.
Baroness Verma
“( ) Part 1 (decarbonisation);”
“( ) Section (Fuel poverty) extends to England and Wales only.”
Baroness Verma
“( ) section (Feed-in tariffs: increase in maximum capacity of plant) (feed-in tariffs: increase in maximum capacity of plant);”
“( ) section (Fuel poverty) (fuel poverty);”
The Deputy Chairman of Committees (Lord Skelmersdale)
My Lords, this concludes the Committee’s proceedings on the Bill, but before I let noble Lords go, I, on behalf of all Deputy Chairmen who have served this Committee over a very long period—and noble Lords feel it more than I do—wish noble Lords a very happy Recess.
Baroness Verma
My Lords, I shall take just one or two more minutes of the Committee’s time to put on record my thanks to all chairs of the Committee’s proceedings. I also thank those who have worked behind the scenes: the clerks, Hansard, the doorkeepers and, of course, my very efficient officials from DECC, the Ministry of Defence, the Department for Communities and Local Government and the Department for Environment, Food and Rural Affairs who have been here to support the Government throughout our debates. I also thank all noble Lords who have participated in the Committee for the way in which we have conducted proceedings. We have had a good and thorough debate and have scrutinised the Bill in full. I particularly welcomed the spirit of collaboration that has been adopted with the aim of improving the Bill. We have been in broad agreement on the main objectives, and noble Lords have made some helpful suggestions for further improvement which the Government will consider very carefully. I wish all noble Lords a very happy Recess, and I reassure them that I will be working with officials during the Summer Recess to try to get all the information they require to them before Report stage.
The Deputy Chairman of Committees
That definitely concludes proceedings on the Bill.
House of Lords
Agriculture: Common Agricultural Policy
(10 years, 9 months ago)
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Lord Greaves
To ask Her Majesty’s Government what progress is being made on greening the common agricultural policy.
The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Lord De Mauley)
My Lords, agreement on common agricultural policy reform was reached in June at both the Agriculture Council and in the European Parliament. As part of the deal, from 2015, 30% of Pillar 1 farm subsidies will be dependent upon a series of greening practices being carried out on farms. We shall be working in the coming months to devise a greening policy for England. At the same time, we are making plans for the new rural development programme from 2015. I should declare an interest as a beneficiary under the current CAP.
Lord Greaves
My Lords, the progress made on the CAP is welcome, though not as radical as some people will allege. The increased requirements for environmental compliance by farmers who are getting the single payments are particularly welcome. The proposals for transferring more money from Pillar 1 to rural development, including environmental works, are also welcome. Will the Minister assure us that the Government will remain firm on these objectives and not give in to the short-sighted campaign by some people, including the NFU, to try to block these valuable changes?
Lord De Mauley
My Lords, we have a legal obligation to implement what is known as greening from 2015. No decisions have yet been taken on implementation. We will consult stakeholders, including farmers’ representatives and NGOs. We need to achieve genuine environmental outcomes from greening, without impacting unnecessarily on farmers’ business activities.
Lord Plumb
My Lords, I declare an interest as a farmer. First, to satisfy 28 nations with a policy that is acceptable to all, when we see such a diverse structure of farming there, is a recipe for an uncommon market rather than a common market. Secondly, does my noble friend the Minister not agree that the emphasis at this time should be on the growth of food and the food security part of that, rather than just on greening? The whole emphasis seems to have turned to greening, switching from one pillar to the other. How do the new greening rules overlap with the existing agri-environmental scheme commitments, and what changes will those produce, as against the existing commitments faced, when the greening comes into effect?
Lord De Mauley
My Lords, there are a couple of questions in there from my noble friend. Our priorities for CAP reform have always been to help EU agriculture become more competitive and market-oriented while improving the capacity to deliver better environmental outcomes. It is unclear precisely what the greening requirements will look like since the detailed rules have yet to be drawn up. However, we are working to ensure that all these elements are complementary and coherent so that we have a smooth transition to the new programme in 2015.
Lord Curry of Kirkharle
My Lords, could I pursue with the Minister the issue of the existing environmental schemes referred to by the noble Lord, Lord Plumb? Many farmers have signed contractual agreements for the entry-level scheme, and I can claim some responsibility for that scheme, having recommended it. They are under an obligation under those contracts. Will these be jeopardised by the new greening arrangements? There is a lot of concern and some confusion among the farming community on this issue.
Lord De Mauley
My Lords, the noble Lord makes a very good point. If I have understood him correctly, no, it is very much our intention that they should not be adversely prejudiced.
Lord Forsyth of Drumlean
My Lords, notwithstanding the progress being made on greening, what progress is being made on pruning the CAP?
Lord De Mauley
Well, my Lords, that is indeed a question. In the context of the reduced CAP budget, the UK’s key aims for the CAP reform negotiations were to increase the resilience, market orientation and international competitiveness of EU agriculture; to improve the CAP’s capacity to deliver environmental outcomes; and to simplify the CAP for farmers and authorities. We want an efficient and responsive agricultural sector in the EU and globally, and we want the future CAP to achieve this.
Lord Grantchester
My Lords, I declare my interests in the countryside. Does the Minister’s department recognise that success in greening policies relies very heavily on good will and implementation from farmers? Is the cart before the horse in this instance? Will the Minister outline what the Government want to achieve from greening measures, rather than transferring funds into Pillar 2 from Pillar 1 simply because they can?
Lord De Mauley
I understand the noble Lord’s question, and others have asked that. The Government’s view is that environmental outcomes can be more targeted and more effective if they are delivered through Pillar 2. There will be a new set of environmental measures within Pillar 2 but we will honour the obligation in Pillar 1 to achieve the greening that is set down.
Lord Tomlinson
Does the Minister accept that when we look at the European Union budget, it really does not reflect priorities? We have an agricultural budget that exceeds that of research and development and indeed that of employment measures. While I agree with the noble Lord, Lord Plumb, on the need to maximise food production, we ought perhaps to take some lessons from the Cairns Group and put them into effect in Europe.
Lord De Mauley
I cannot find very much to disagree with in what the noble Lord says. We worked very hard in the direction in which he is moving. The cut to the CAP budget was €55 billion, which is roughly equal to the annual level of spending on the CAP budget and better than a real freeze.
Baroness Scott of Needham Market
My Lords, given the very different patterns of agriculture across the 28 member states, to what extent is there flexibility within the new arrangements for member states to implement the greening measures in a way that suits British farmers and builds on some of the very real progress that they have already made?
Lord De Mauley
My Lords, my noble friend makes an important point. We have fought hard to achieve an element of flexibility in the greening requirements. Perhaps we have not got as far as we would have liked but we are negotiating with nearly 30 other states and, of course, the Parliament.
Lord Cormack
My Lords, can we inject some intelligibility into the language with which these things are described? It really is the most awful gobbledegook. How can people outside be expected to understand about caps, pillars, greening and all this nonsense?
Bees
(10 years, 9 months ago)
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Lord Hoyle
To ask Her Majesty’s Government when they will implement the European Commission decision to restrict the use of neonicotinoid pesticides to protect bees.
The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Lord De Mauley)
My Lords, the European Commission implementing regulation requires the new restrictions to be in place by 1 December 2013. We will introduce the restrictions from that date.
Lord Hoyle
Will all these chemicals be monitored? Will the Minister also condemn those commercial interests which are introducing foreign bees with parasites that are damaging our own species?
Lord De Mauley
On the latter point, the noble Lord is right that parasites—particularly the varroa mite, but there are a number of others—are something that we really must watch out for. He asked whether the full range of neonicotinoids is subject to the restrictions. He is right to ask that. There are a couple that are not. I am not sure I can pronounce them but I will try: acetamiprid and thiacloprid—
Lord De Mauley
I am grateful. These are not covered by the restrictions as they are of relatively low acute toxicity to bees. The restrictions apply to the remaining three neonicotinoids—which I hope noble Lords will permit me not to pronounce—and are intended to remove those uses that might cause bees to be exposed to the compounds. Therefore, uses permitted include spray applications made to crops after they have flowered.
The Earl of Selborne
I declare an interest as food grower; my living therefore depends on pollination. Does the Minister accept that, while it is very important to protect bees, it is equally important to protect all insect pollinators? Therefore we have to make sure that their habitat is conserved, which is a much wider issue than just protecting honey bees.
Lord De Mauley
My Lords, yes. We have had this discussion in your Lordships’ House before. I was pleased to announce recently that we are developing a national pollinator strategy precisely because of the concerns my noble friend raised.
Baroness Howe of Idlicote
My Lords, may I recommend, as an alternative to pesticides, the method used by the winner of this year’s St Andrews Prize? Around the crop growing areas, the trees were equipped with beehives because the elephants, which were doing the major damage in that area, were terrified of bees. This not only produced safe areas for crops but meant that there was honey money as well.
Lord De Mauley
I am really very grateful to the noble Baroness. Farmers have not been complaining to me recently about the numbers of elephants but I shall keep my ears open.
Lord Knight of Weymouth
My Lords, reports this weekend that bees and other pollinators have bred well this year are most welcome. More concerning are reports that the lead government scientist on the effect of neonicotinoids on bees is joining Syngenta, one of the leading manufacturers of the insecticide. She previously worked on a Syngenta-funded project on bees and pesticides for Fera. Given the widespread concerns among the public about bee health, what assurances can the Minister give us that this closeness between policymakers and commercial interests benefits taxpayers more than shareholders?
Lord De Mauley
My Lords, of course, all public servants go through the proper procedures before they take up a role outside government after they leave government.
Lord Jones of Cheltenham
Noble Lords may have seen a recent programme on ITV about bees, in which the Food Minister David Heath and Matt Shardlow of Buglife gave their views on neonicotinoids. Mr Heath said that there are other chemicals that are even more damaging to bees. Is my noble friend able to tell us what those other chemicals are and what action the Government are taking to ensure that they are not used? While ensuring that our Government implement the suspension of neonicotinoids as soon as possible, will the noble Lord encourage Ministers and officials in his department and scientists who advise them on this issue to take time to watch “Horizon” on BBC2 at 9 pm this Friday, when the presenter Bill Turnbull, himself an experienced beekeeper, investigates “What’s Killing Our Bees?”?
Lord De Mauley
My Lords, as regards my noble friend’s second question, I am very grateful to him for resolving the thorny problem of how I should spend my Friday evening. As regards his first question, I am not absolutely sure of the chemicals to which my honourable friend referred. However, in the absence of neonicotinoids, we expect farmers to use the available products, such as pyrethroids and organophosphates, for their particular pest problems. Without something effective, the consequence for farmers could be a reduction in crop yields, potentially substantial in scope. Despite not being as effective as neonics, these other products are legal and have passed the safety tests set in legislation.
Lord Curry of Kirkharle
My Lords, the scientific evidence supporting this is sketchy at best. It appears that some useful work has been done in Australia. Are the Government researching the work that has been done in Australia to help us better understand the impact of these chemicals?
Lord De Mauley
My Lords, we certainly are aware of the work that has been done in Australia. In fact, my right honourable friend the Secretary of State went there recently and is certainly aware of it. We used that in making our case prior to the vote. That did not seem to work, so we are now working towards doing our own trials to fill out those evidence gaps.
The Countess of Mar
My Lords, there is some evidence that bees can tolerate neonicotinoids. However, when combined with glyphosate, which is in the ubiquitous Roundup, their immune systems become affected. That is one of the reasons why they cannot withstand the varroa bug. Can the Minister say how much research is being done on combinations of pesticides and the way they affect bees, particularly their immune systems?
Lord De Mauley
The noble Baroness makes a point which has concerned a number of people. Considerable work has been done, which shows that chemicals with different toxic actions normally act independently. Chemicals with the same toxic action normally act additively. There is only limited evidence for combination effects in excess of those for individual chemicals.
Regulation of Investigatory Powers Act 2000: External Communications
(10 years, 9 months ago)
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Lord Strasburger
To ask Her Majesty’s Government what guidelines Secretaries of State adopt in deciding whether electronic communications sent from the United Kingdom to a United Kingdom addressee but routed outside the United Kingdom fall within the definition of “external communications” in Section 20 of the Regulation of Investigatory Powers Act 2000.
The Senior Minister of State, Department for Communities and Local Government & Foreign and Commonwealth Office (Baroness Warsi)
My Lords, I am sure that your Lordships’ House will understand why I cannot go into detail on operational matters. The Regulation of Investigatory Powers Act 2000 sets out that authorisations for all interceptions of communications, internal or external, must consider necessity and proportionality. My right honourable friend the Foreign Secretary has stated that privacy is at the forefront of the minds of Secretaries of State. Great care is taken to balance individual privacy with duty to the UK’s national security. The Interception of Communications Commissioner provides thorough and independent oversight of all of these considerations.
Lord Strasburger
I thank my noble friend the Minister for her reply. We now know that GCHQ is routinely hoovering up and storing prodigious quantities of the internet communications of millions of innocent people, turning us all from citizens into suspects. As far as I am aware, Parliament has not sanctioned this industrial-scale seizure of our private data by the state. Can the Minister please tell the House whether this blanket snooping on all of us is authorised by a Minister, and if so, which Minister sanctioned it, and under which section of which Act of Parliament?
Baroness Warsi
I do not accept the noble Lord’s question, or indeed the points he made in it. I can assure the House that we take the interception of communications incredibly seriously. For these actions to go ahead we need a warrant from one of the most senior members of the Government as well as detailed legal advice to support it. That decision will be reviewed by independent commissioners and implemented by agencies, which are bound by legal and ethical frameworks, alongside parliamentary scrutiny through the Intelligence and Security Committee. This provides one of the strongest systems of checks and balances and democratic accountability for secret intelligence agencies and their work anywhere in the world.
Lord Reid of Cardowan
My Lords, I think the House recognises that electronic communications have grown exponentially and are now global and transnational, not merely international. In order to have some perspective and context to this Question, can the Minister give us a rough indication of how many terrorist plots have been foiled and how many British lives have been saved through the legal supervision of those electronic communications?
Baroness Warsi
The noble Lord makes an important point which is, of course, based on his many years of experience in dealing with this very real threat. I cannot give precise numbers here at the Dispatch Box. However, I can say that secret intelligence work is vital to our country. It detects threats that our country is facing, ranging from nuclear proliferation to cyberattacks, it prevents serious and organised crime, it prevents and disrupts complex terrorist plots and it supports the work of our Armed Forces. These are all things that protect our country and its citizens.
Baroness Gardner of Parkes
My Lords, perhaps I may raise the more basic point of nuisance calls. In the past, I have asked why we cannot prevent them here and I have been told that if they are international calls we can do nothing to control them. It is only the calls started locally that can be controlled. Is it still the situation that all the phone calls we get advising us to do a million things cannot be dealt with because we have no control at all?
Baroness Warsi
I am not sure that I can answer my noble friend’s question. I do not have details of that in the brief. However, I can confirm that it is a question that my mother asks regularly so I probably should get the answer to it.
Lord Campbell-Savours
My Lords, does not the use of the terms “blanket” and “hoovering up” by the noble Lord, Lord Strasburger, indicate a complete absence of knowledge about what GCHQ is actually doing?
Baroness Warsi
I am not sure that I would go that far, but of course I take the noble Lord’s point that the function of GCHQ is an incredibly important and vital aspect of our national security.
Lord Pannick
The Joint Committee on the draft Communications Bill made a number of recommendations for improving and updating the law in this area. Do the Government have any intention of implementing those proposals?
Baroness Warsi
The noble Lord will be aware that the matter has now passed through two parliamentary committees and it is the Government’s intention to bring the matter back to Parliament. However, at this stage, final proposals have not been drawn up.
Lord Elystan-Morgan
The Minister mentioned that ministerial licences had been specifically granted for such interceptions. Can she kindly tell the House roughly how many licences have been issued over a convenient period—whether it be the past 12 months or the past 24 months?
Baroness Warsi
I believe that that would be an operational matter. I think that noble Lords would agree that I take my responsibilities to this House incredibly seriously and that I am usually incredibly frank and detailed in my answers. However, I hope that noble Lords will bear with me when I say that that is an operational matter and that I can comment only so far on these matters.
Energy: Fracking
Lord Harries of Pentregarth
To ask Her Majesty’s Government, in the light of the blockade of the Cuadrilla Resources drilling site in Balcombe, West Sussex, what assessment they have made of the feasibility of pursuing fracking in the United Kingdom in the face of public resistance.
The Parliamentary Under-Secretary of State, Department of Energy and Climate Change (Baroness Verma)
My Lords, the Government understand that there will be a range of public opinions and that communities need to be properly engaged and informed on the implications of pursuing the exploration of unconventional gas resources. We welcome the industry’s commitment to early engagement. The Government have set up the Office of Unconventional Gas and Oil and have made it a priority to help people understand the facts about shale gas. The UK has a strong regulatory system that provides a comprehensive and fit-for-purpose regime for exploratory activities.
Lord Harries of Pentregarth
I thank the Minister for her Answer. However, does she agree that the fears of the villagers of Balcombe are very understandable—not only the thought of a very significant environmental footprint, as we have had in the United States, but, more fundamentally, the fear of water pollution? I know that the latest study of the Royal Society and the Royal Academy of Engineering says that fracking takes place hundreds of metres below the aquifer, but does she not agree that the science is still in a fairly early stage? Would it not be better to wait until next year’s report of the United States Environmental Protection Agency before authorising any more fracking projects?
Baroness Verma
My Lords, I take the noble and right reverend Lord’s points very seriously. However, the Health and Safety Executive scrutinises well design and monitors progress to ensure that the operator manages risk effectively throughout the life cycle of the well. The well design is also reviewed by independent examiners. The Health and Safety Executive assesses all well notifications before construction and monitors well operations based on weekly reports to well specialists. Release of substances into ground water is regulated also by the Environment Agency. We have a very strong regulatory framework in this country and we should leave it to the regulators to ensure that all that needs to be done is done thoroughly.
Lord Teverson
Does the Minister agree that the greater environmental threat at the moment from energy is the resurgence of coal being used for electricity generation? Coal has now overtaken gas and accounts for 40% of total generating capacity, with most of it coming from Russia. Will the Minister confirm that it is the Government’s intention that unabated coal generation should cease within the near term?
Baroness Verma
My Lords, my noble friend makes some very important points. He will be aware that the Government are doing exactly that through the measures that we have in our EMR package to make generation from low-carbon resources more attractive than generation from coal. All existing coal plants will be required to meet the requirements of the industrial emissions directive, which aims to reduce emissions of harmful oxides of sulphur and nitrogen, and in particular we will make sure that we work towards coming off coal in the long run.
Baroness Worthington
My Lords, the RSPB yesterday highlighted the fact that updated planning guidance now recommends that decisions relating to wind farms must take into account protecting local amenity but does not require the same for fracking. Will the Minister explain the reason for this discrepancy? Also, given that the lobbying firm of the Prime Minister’s adviser, Lynton Crosby, has links to the fracking company, is this the latest example of putting the interests of big business ahead of the concerns of the general public?
Baroness Verma
My Lords, the noble Baroness will be fully aware that community engagement is the prime source from where we will get opinions for and against fracking and wind farms. On both issues the Government are working very hard and very closely with operators, developers and communities.
Lord Howell of Guildford
My Lords, does the Minister accept that it could be a mistake to discuss fracking in terms of the whole of the United Kingdom in one go? Obviously, in beautiful rural areas there are worries not just about drilling and fracking, which I think are exaggerated, but about trucks, deliveries, roads and disturbance, which are quite justified. However, there are large, uninhabited and desolate areas, certainly in parts of the north-east, where there is plenty of room for fracking, well away from anybody’s residence, and where it could be conducted without any threat to the rural environment. Does the Minister agree that a distinction should be made between one area and another rather than lumping them together, and that if we can push ahead with this kind of gas production, it will take us fast away from coal burning, which is increasing at the moment because of the delays in authorising gas production that the noble Lord, Lord Teverson, talked about a moment ago?
Baroness Verma
My Lords, my noble friend raised a number of very important points. As noble Lords are aware, we are in the early stages of exploration at the moment. There will be areas of the landscape that will not be suitable for fracking, as my noble friend rightly pointed out. However, we are in the early stages, and as the Government are determined to ensure that we are dependent not on coal but on gas and low-carbon energy sources, my noble friend made some very important points.
Baroness Farrington of Ribbleton
My Lords, I declare an interest as a resident of Lancashire who is aware of the enormous beauty of the Trough of Bowland. Will the Minister join me in condemning the alleged remarks of protesters in the south of England that all the fracking could be done in the north? Will she join me in insisting that the beauty of Lancashire is as important as—not more important than—the beauty surrounding, for example, Guildford?
Baroness Verma
My Lords, again I accept the noble Baroness makes some very important points. I am sure that my noble friend did not say that Lancashire was not as beautiful. All parts of this great country are beautiful.
Lord Kilclooney
My Lords, a large area in County Fermanagh has been identified as suitable for fracking. Of course, its successful development would mean a lot to the economy of Northern Ireland, and County Fermanagh in particular. Can the noble Baroness confirm that the recent tax incentives for those carrying out fracking will apply to Scotland, Wales and Northern Ireland as well as to England?
Baroness Verma
My Lords, I believe that these are devolved matters but, in case I am wrong, I will write to the noble Lord and make available the information in the Library.
Lord Greaves
My Lords, when I get up every morning and look out the window I look across the valley at the beauty of Pendle Hill and reflect that Pendle Hill consists largely of Bowland shale. So not all Bowland shale is in remote, desolate and uninhabited places—in fact most of it is not. Does the Minister agree that what we really need is a properly organised commercial exploitation of shale gas in one place to see exactly how it works under the regulatory system that we have in this country? That might set everybody’s mind at rest, or it might not.
Baroness Verma
My Lords, I think that I made it clear in my opening remarks that we have an effective planning system that will ensure that we properly explore the feasibility of shale gas and other unconventional gas and oil in this country. DCLG has the lead on this but I will take the noble Lord’s views to the department.
Lord Brooke of Sutton Mandeville
My Lords, does my noble friend think that it would be prudent during her summer reading to make some study of the early days of coal mining?
Baroness Verma
My Lords, I will add it to the many tasks that I already have for my summer reading.
Inheritance and Trustees' Powers Bill [HL]
BBC (Trustee Election and Licence) Bill [HL]
Standing Orders (Public Business)
(10 years, 9 months ago)
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Lord Hill of Oareford
That the standing orders relating to public business be amended as follows:
Electronic Deposit of Documents
(10 years, 9 months ago)
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Lord Hill of Oareford
That, in respect of any bill relating to High Speed 2 that is introduced into the House of Commons in Session 2013-14 and subsequently brought up from the House of Commons and to which the Standing Orders relating to private business are found by the Examiners of Petitions for Private Bills to apply, it shall be sufficient compliance with:
(a) any requirement under those Standing Orders for a document to be deposited or delivered at, or sent to, an office of a government department, body or person if it is deposited or delivered at, sent to or otherwise made accessible at that office in electronic form;
(b) any requirement under those Standing Orders for a document to be deposited with an officer if it is deposited with or delivered, sent or otherwise made accessible to that officer in electronic form;
(c) any requirement under those Standing Orders for a document to be made available for inspection at a prescribed office, or to permit a document to be inspected, if it is made available for inspection at that office, or is permitted to be inspected, in electronic form;
(d) the requirement under Standing Order 27(7) or 36(3) relating to private business to permit a person to make copies of a document or extracts from it, if there is provided to that person, on request and within a reasonable time, copies of so much of it as the person may reasonably require and such copies may, if the person so agrees, be provided in electronic form;
(e) the requirement under Standing Order 27(7) relating to private business for a memorial to be made on every document deposited under that Standing Order, if the memorial is made on a separate document;
(f) any requirement under Standing Order 4A(1), 27A(5) or 83A(8) to make a document available for sale at prescribed offices, if it is made available for sale at an office in London.
That this order shall not affect any requirement under those Standing Orders to deposit any document at, or deliver any document to, the office of the Clerk of the Parliaments.
That any reference in those Standing Orders to a document which is deposited, lodged, delivered or sent under those Standing Orders includes a reference to a document which is so deposited, delivered or sent in electronic form.
That any reference to a document in this order includes a reference to any bill, plan, section, book of reference, ordnance map, environmental or other statement or estimate.
Standing Orders (Private Business)
The Chairman of Committees
That the standing orders relating to private business be amended as follows:
After Standing Order 83 insert the following new Standing Order:
Protection of Freedoms Act 2012 (Code of Practice for Surveillance Camera Systems and Specification of Relevant Authorities) Order 2013
Baroness Anelay of St Johns
My Lords, unless any noble Lord objects, I beg to move that the Motions in the name of my noble friend Lord Taylor of Holbeach be postponed until after the Motion later today in the name of my noble friend Lord Boswell of Aynho. I make the suggestion with the agreement of the usual channels because we anticipate that there will be a debate on the first Motion which may take some time. It would be preferable, therefore, not to delay all the other business before the House today.
If the House agrees to this Motion—I note that the noble Baroness, Lady Smith of Basildon, signifies her consent from a sedentary position, for which I am grateful—these two approval Motions for the statutory instruments, which were considered in Grand Committee earlier this month, will be considered again, and I hope approved, as our last business later today.
Working Time (Amendment) Regulations 2013
(10 years, 9 months ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord De Mauley
That the draft regulations laid before the House on 20 June be approved.
Relevant document: 6th Report from the Joint Committee on Statutory Instruments, considered in Grand Committee on 22 July.
Local Elections (Ordinary Day of Elections in 2014) Order 2013
Lord Ahmad of Wimbledon
That the draft order laid before the House on 26 June be approved.
Relevant document: 7th Report from the Joint Committee on Statutory Instruments, considered in Grand Committee on 24 July.
Occupational and Personal Pension Schemes (Automatic Enrolment) (Amendment) Regulations 2013
(10 years, 9 months ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Baroness Stowell of Beeston
That the draft regulations laid before the House on 26 June be approved.
Relevant document: 7th Report from the Joint Committee on Statutory Instruments, considered in Grand Committee on 24 July.
Financial Services (Banking Reform) Bill
(10 years, 9 months ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord Newby
That it be an instruction to the Committee of the Whole House to which the Financial Services (Banking Reform) Bill has been committed that they consider the bill in the following order:
Clauses 1 to 7, Schedule 1, Clauses 8 to 16, Schedule 2, Clauses 17 to 21.
Intellectual Property Bill [HL]
Baroness Anelay of St Johns
My Lords, this is a procedural Motion that is commonly put and it falls to the Chief Whip to do so. I have it in command from Her Majesty the Queen to acquaint the House that Her Majesty, having been informed of the purport of the Intellectual Property Bill, has consented to place her prerogative, so far as it is affected by the Bill, at the disposal of Parliament for the purposes of the Bill.
Clause 13 : Offence of unauthorised copying etc. of design in course of business
Amendment 1
(a) ”
The Parliamentary Under-Secretary of State, Department for Business, Innovation and Skills (Viscount Younger of Leckie)
My Lords, on Report we had further detailed debates about the introduction of criminal sanctions for the deliberate copying of a registered design. Noble Lords raised various issues intended to refine and improve the way the sanction operates. The noble Lord, Lord Stevenson, while opposing the principle of the criminal sanction, nevertheless sought to ensure that certain activities clearly fell outside the sanction. He said:
“However, should the proposal be approved, we think that the Bill should also contain a defence for any person who reasonably believed that they were not infringing”.—[Official Report, 23/7/13; col. 1181.]
To that end, both he and the noble Lord, Lord Young of Norwood Green, proposed an amendment on Report which sought to address this issue.
Over the past few weeks, my officials and I have had a number of detailed discussions with stakeholders, including members of the International Chamber of Commerce, the IP Federation and the Chartered Institute of Patent Attorneys about the scope and operation of the proposed criminal sanction. I have listened very carefully to their concerns and to the concerns voiced by Members of this House. I am pleased to bring forward this amendment, which the Government believe goes to the heart of the concerns raised.
As noble Lords will be aware, it has always been the Government’s clear aim that the offence should be directed to blatant and intentional copying of a design that belongs to another. In this regard, the Government remain concerned to ensure that the offence is properly focused on wrongful business behaviour and so minimises any potential chilling effect on businesses which operate legitimately.
It is important that those who have acted diligently and decently, doing their best not to infringe the rights of others, should not have cause to cease innovating lawfully, simply for fear of falling foul of the offence. Consequently this amendment introduces to the existing defence of non-infringement a further defence of reasonable belief that the design in question was not infringed. This defence is dependent on facts within the defendant's own knowledge: his state of mind, the reasons why he held the belief in question and materials he can furnish to support that belief. It will help to ensure that the courts are able to reach a just and fair outcome in such cases.
Lord Stevenson of Balmacara
My Lords, the arguments for and against criminal sanctions for designs have been extensively aired over our discussions on this Bill. Proponents feel that current civil enforcement is expensive for small innovators and that current civil sanctions are not dissuasive to large infringers. Opponents are concerned that unexamined IP rights are a dangerous basis for taking criminal sanctions and that there is a risk of stifling competition in useful products.
We understand the Government’s aim in this Bill. As the Minister said, we were anxious to see if we could move towards a common position. However, we are still concerned about whether it is appropriate and proportionate, whether it would really deter those pirates and counterfeiters whose behaviour the public would consider criminal and whether it may turn out to have a stifling effect on innovation and competition.
One concern, which we have expressed previously, is that the proposed provision could turn into a tool to be used by unscrupulous companies to the detriment of UK designers. It is reasonably inexpensive to register a design, especially as there is no effective examination involved. An unscrupulous company could apply to register designs it copied from a UK designer, then threaten that designer with criminal sanctions for producing his or her own designs. The prospect of defending a criminal action might be enough to make the designer give in. What sort of fairness does that speak to?
As the Minister says, the Government’s intention is that blatant, deliberate copying of designs for commercial gain, safe in the knowledge that many of the victims will be unlikely to have the resources to respond, is an act worthy of punishment, and they believe that the UK needs a coherent approach to the protection of intellectual property rights. On the other hand, the measure is opposed by the IP Federation, the Intellectual Property Bar Association, the City of London Law Society, the Chartered Institute of Patent Attorneys and a number of IP lawyers and specialists. I put it to the Minister that it may not turn out to be a brilliant career move for the IP Minister to cross swords, as he has done, with Sir James Dyson and, indeed, the Ministry of Defence on this point.
As Roger Burt, president of the Chartered Institute of Patent Attorneys, says,
“the Intellectual Property Bill could result in people being charged with criminal offences and locked up for up to 10 years, just for producing a design that looks ‘substantially’ like an existing design”.
We tried to find a compromise position with the Government on this point. We wanted the Government to raise the bar for criminality so that criminal penalties could be considered only in cases, using the words used by the Minister, of “blatant, deliberate copying of designs, for commercial gain”, but we failed. However, we are glad that the Minister listened to one part of our argument, which is that the legislation as drafted might open a Pandora’s box of unintended consequences, potentially discouraging the very kind of legitimate, competitive risk-taking that policy makers have been keen to encourage as a driver of growth.
We therefore welcome the government amendments tabled today, which propose a defence for anyone who reasonably or in good faith believes that their actions were non-infringing. We will continue to oppose the introduction of criminal sanctions for registered design infringement as a matter of principle. However, we are pleased that there will now at least be a defence for any person who reasonably believes that they are not infringing. The objective test of reasonableness should cover situations such as where someone has taken legal advice on the issue, or where an opinion of non-infringement is secured from the IPO opinion service.
They should also extend more broadly to cover competent self-analysis and explanation by a defendant as to why he or she believed that an informed user would perceive the product as creating a different overall impression to the registered design. This is an important amendment and we are happy to support it.
Lord Clement-Jones
My Lords, as the Minister knows, I have always been a supporter Clause 13. I know that many small designers will be delighted to see it contained in the Bill and I hope that it survives its passage through the Commons.
Although I did not feel that the clause needed a huge amount of amendment or that it will be the blunt instrument that some people have predicted, if the addition of the amendment makes it more acceptable, it must be welcomed. I welcome the fine tuning that the Minister has carried out.
In welcoming the amendment, and given the restrictions on speeches at Third Reading, I want to thank the Minister for the accessible and receptive approach that he has taken throughout the Bill. I hope that as the Bill goes through the Commons the further discussions that he has promised on lookalikes—and, in particular, on the comparative advertising issues which may be applicable to lookalikes—and on the kind of penalties that might be appropriate to digital copyright infringement will bear fruit.
Lord Howarth of Newport
My Lords, I echo the noble Lord, Lord Clement-Jones, to the extent that he has welcomed the Minister’s constructive response to some of the issues raised by my noble friends on the Front Bench and myself in Committee and on Report on the matter of the criminal offence. More broadly, perhaps I may I express my appreciation of the Minister’s scrupulousness and fair mindedness in the way he has responded to a range of issues raised by noble Lords throughout the various proceedings on the Bill. I thank him for that.
Viscount Younger of Leckie
My Lords, I am grateful for the contributions to this short debate on the government amendment of the noble Lords, Lord Stevenson and Lord Howarth, and my noble friend Lord Clement-Jones. I should say to the noble Lord, Lord Stevenson, that I have long since realised that as intellectual property Minister I cannot please everyone all of the time. I am certainly aware of the opposition from certain quarters, including CIPA, to the criminal sanction aspect of the Bill.
I would like to take this opportunity to thank, in particular, the noble Lords, Lord Stevenson of Balmacara and Lord Young of Norwood Green, who have put their names to the amendment, for their collegiate and constructive approach. I also extend my thanks to those Members on all sides of the House who have taken part in the debates on the Bill. I am grateful for the detailed consideration that they have included in this process, both inside and outside the Chamber. The House has engaged in its role of proper scrutiny, improvement and revision and the Bill which is being sent to the other place is greatly improved. I would also like to put on record my thanks to my Bill team and other officials for their expertise and support throughout this process.
The amendment clarifies the scope of the criminal offence further and provides greater security and confidence to the UK’s designers. I commend it to the House.
(b) reasonably believed that the person did not do so”
European Union (Approvals) Bill [HL]
Lord Gardiner of Kimble
My Lords, the sole purpose of the Bill is to enable Ministers to support two draft decisions of the Council of the European Union. The European Union Act 2011 provides that Ministers may not support certain decisions in the European Council unless they are approved by an Act of Parliament. Neither decision can be adopted by the Council of the European Union without the unanimous support of all member states.
The Bill provides Parliament with the right, given to it by the European Union Act 2011, to consider the proposed use of the Article 352 treaty basis. This article is used in those cases where further action is necessary to achieve one of the objectives set out in the treaties, but where there are no specific provisions to give the EU institutions a specific power to take that action.
The two measures for which approval is sought are proposed Council regulations brought forward under Article 352 of the treaty on the functioning of the European Union. The first draft decision establishes a legal obligation on the European institutions to deposit their paper historical records at the European University Institute in Florence. Previously, European institutions have voluntarily deposited their archives at the European University Institute, and the proposed move to an obligation seeks to provide long-term certainty that the archives will be preserved in accordance with recognised international standards at a single accessible location.
A 1983 Council regulation already obliges the European institutions to preserve and provide access to their historical papers once those records are 30 years old, when they would no longer be in business use. The European Council, Parliament, Commission, Court of Auditors, Economic and Social Committee and Investment Bank currently meet that obligation by depositing their paper archives within the EUI on a contractual basis. The proposed legal obligation reflects these existing arrangements, and will not change the point in time at which the public can access historical records, or the place at which they can be accessed.
Making this practice a legal obligation will help to ensure transparency and scrutiny of the European institutions’ work, and fits alongside the Government’s drive for greater transparency. A measure which allows for greater accountability around EU decision-making is one that the UK should surely welcome.
As the EU moves towards digital record-keeping, the measure also provides that the European institutions should, where possible, make their records available to the public in digital form. In addition, the EUI is to be given permanent access to each institution’s digital archives to fulfil its obligation to make historical records accessible to the public from a single location once they are 30 years old.
The Court of Justice of the European Union and the European Central Bank will be exempt from the obligations under the proposed regulation, but will be able to deposit their records on a voluntary basis. I would like to explain why this is the case. For the Court of Justice, this is because of the volume of records, most of which are case files often containing sensitive personal data, which need to be quickly accessed to support the court’s functions. For the European Central Bank, the exemption is due to the bank’s organisational autonomy and because its historical records are subject to a separate 2004 regulation.
This measure will be financed by contributions from the depositing European institutions from their existing budgets, and will have no financial impact on the UK. The Italian Government have made suitable premises permanently and freely available to the European University Institute to ensure that the deposited archives of the European institutions are preserved and protected in accordance with recognised international standards.
The Justice, Institutions and Consumer Protection Sub-Committee of your Lordships’ European Union Committee had the opportunity to consider this measure. Your Lordships sought clarification on the reasoning for allowing the Court of Justice of the European Union and the European Central Bank to deposit their records voluntarily, and on the digital provisions of the proposals, both of which I have just outlined. The committee cleared the measure from scrutiny after the Government provided satisfactory clarification on these points.
The Council has published the final agreed text of this measure and it has received consent from the European Parliament. It is therefore ready for adoption, subject to UK agreement.
The second draft decision provides for the establishment of the Europe for Citizens programme for the period January 2014 to December 2020. This builds on an existing programme of the same name covering 2007-13, but will adopt a simpler and more effective approach. The programme is concerned with improving the way citizens can participate in and contribute to EU matters: first, by strengthening remembrance and common values; and, secondly, by encouraging broader engagement and debate.
Commemoration and participation are the core elements of the programme. Around 20% of the overall budget will provide funding to commemorate both world wars and the victims of totalitarian regimes. It also seeks to raise awareness of the fundamental aim of the European Union to promote peace, values and the well-being of its citizens.
The second and more substantial pillar of the programme, which will receive around 60% of the overall budget, is designed to encourage democratic and civic participation of citizens at European Union level by developing their understanding of the policy-making process in the Brussels institutions and promoting opportunities to empower communities and encourage social action, including volunteering.
At a time when we hear so much about the democratic deficit of the European institutions, and the perception that they are remote from the people they were set up to serve, these are worthwhile and important objectives. Europe for Citizens is a funding programme that will support a range of organisations with a general European interest, with a view to stimulating citizens’ interactions on EU matters, together with organisations that promote debate and activities concerning European values and history.
Like its predecessor, the programme will be implemented through grants based on open calls for proposals and through service contracts based on calls for tender. It will provide for the analysis and dissemination of the results of its activities, supported by regular external and independent evaluation. An interim evaluation report on the implementation of the programme will be drawn up by the European Commission no later than the end of 2017, and a final evaluation report no later than 2023.
The programme has no new impact on UK domestic policy, and these types of activity have been supported for some time. It reflects the Government’s aim of localising action to encourage communities at grass-roots level. The continuation of the Europe for Citizens programme will ensure that a source of funding at European level will continue to be available to UK civil society organisations, and I would certainly encourage them to submit project proposals so that they may benefit from it.
Looking to the future, I am especially pleased that my officials have obtained confirmation from the European Commission that funding from the Europe for Citizens programme will be eligible to support projects commemorating the centenary of the outbreak of World War I in 2014, with numerous events in both France and the UK being planned for this important anniversary. We anticipate the final version of the text to be adopted in the autumn, once the Commission has confirmed the final budget. It will then be submitted to the European Parliament for consent and subsequently be ready for adoption, pending UK agreement.
The Justice, Institutions and Consumer Protection Sub-Committee of your Lordships’ European Union Committee had the opportunity to consider this measure. The committee considered the measure to play a useful role, and noted its relatively small budget. Following clarification by the Government of the need for a parliamentary debate prior to consent, it subsequently cleared the measure from scrutiny.
It is important that the Europe for Citizens programme is agreed in time for projects to be funded from the time it starts. Our aim is for the Bill to receive Royal Assent before the end of 2013. This would enable the Council regulation to be approved in advance of the period during which it would be active. The Bill extends to the whole of the United Kingdom, and its subject matter does not give rise to any devolution issues. There will be no financial effects or any impact on public service manpower as a result of the Bill. The provisions contained within it do not require an impact assessment. For Europe for Citizens, the EU Commission had originally proposed a budget of €229 million, representing an increase of around 7% on the budget for the existing programme of €215 million. Following the negotiations on the multi-annual financial framework earlier in the spring, it is hoped that that figure will be significantly reduced. This would be a realistic response to the constrained financial conditions which we all have to take into account, but not so severe as to jeopardise the integrity of the programme as a whole.
I confirm that I do not consider that any of the Bill’s provisions engage European Convention Rights and so no issues arise as to the compatibility of the Bill with these rights. It is also the intention for the Bill to come into force on the day of Royal Assent. For the reasons that I have outlined, I commend this Bill to your Lordships. I beg to move.
Baroness Falkner of Margravine
My Lords, I am grateful to the noble Lord, Lord Gardiner of Kimble, for so comprehensively introducing what is, ultimately, a very small measure. I do not intend to detain the House very long; I know that the next debate, on the work of the European Union Committee, will engage your Lordships much more than this Bill will.
We welcome both clauses, particularly on the depositing of historical archives. It will be very useful for researchers to be able to access information from one source—the European University Institute in Florence. The noble Lord, Lord Gardiner, will be aware of how important transparency is to the EU’s citizens and commercial enterprises. He will also be aware of the debate that the board of the European Central Bank has been having on the lack of transparency of that bank’s minutes on interest-setting decisions. Given how relevant this is to London as a financial centre, although we are not directly engaged with the European Central Bank, will Her Majesty’s Government enthusiastically support those of its members who are seeking greater transparency? This is the only major central bank that does not publish its minutes at the moment.
We broadly welcome Clause 1(2)(b) on the Europe for Citizens programme, which, as the noble Lord, Lord Gardiner, pointed out, seeks to enhance understanding and to take action to build capacity for civil participation. Among the programme’s priorities, the noble Lord, Lord Gardiner, mentioned remembrance and European citizenship, which are profoundly important as we lead up to the centenary of the start of the First World War. He also mentioned democratic engagement and civic participation.
That is the area on which I would like to press Her Majesty’s Government. I declare an interest as the parent of a 16 year-old. Having seen the national curriculum’s GCSE programme and the entire content of the secondary school education programme, there is very little mention of the European Union. There is certainly greater emphasis in history, religious studies and so forth on historical events that have affected the European Union as we see it today, but the actual processes, procedures, decision-making, structure and organisation of European Union institutions are not touched on in any depth of knowledge at all. There are no courses at A-level that prepare candidates for European Union decision-making studies or employment in the EU. While this lies in the purview of national Governments, this Government have been profoundly aware for many years of the lack of United Kingdom participation in the EU Civil Service and the institutions of the EU, and the extremely low numbers of civil servants that find themselves working at EU level. Will my noble friend tell us how we expect to boost our influence within EU institutions when we do not prepare our young people in any meaningful sense to be able to understand what the European Union is about in terms of day-to-day life?
I have another point on democratic engagement and civic participation. As I was reading the programme’s lofty ideals, all of which I completely agree with, I looked at the terminology and the methods by which it is intended to appeal to civil society. It becomes evident that a group of bureaucrats of a certain age has dreamt up the programme, because it has no relevance to the way in which social media work and young people think, or to the communication means by which they engage with each other, irrespective of the remit of institutions. I shall give an example from page 6 of the programme. The Minister mentioned “Remembrance and European citizenship” and “Democratic engagement and civic participation”; he did not mention the third highlighted point, which is “Valorisation”. With the indulgence of the House, I shall explain what this means. It is described as,
“a horizontal dimension of the programme … It will focus on the analysis, dissemination, communication and valorisation of the project results from the above-mentioned strands”.
I was so impressed by this attempt at defining “valorisation” that I looked it up in the Oxford English Dictionary, where it is defined as
“to give or ascribe value or validity to … by artificial means”.
That is profoundly important. All these programmes are top-down rather than bottom-up. They are guided rather than being spontaneous in any sense; anyone who has worked with civil society will know that bottom-up approaches are far more important. They do not speak to citizens in terms that enthuse them about the value of the European Union. While one commends the programme for what it is, if we in the United Kingdom are to challenge the anti-European bias in our media and public discourse, we will have to do better than this.
Lord Renton of Mount Harry
My Lords, I listened with great interest to what my noble friend Lord Gardiner had to say in taking us through the Bill. I am particularly interested in it because I played some part in the previous Bill on this subject so it is good to be talking about it again.
I have no objection to the first part of the European Union (Approvals) Bill—if it is appropriate to deposit papers and historical records at the European University Institute in Florence, so be it—but I find the second and major part rather difficult. I am surprised by the draft decision in relation to the Europe for Citizens programme.
I have managed to get hold of the Council of the European Union’s document on the programme, which came out on 4 July. Pages 9 and 10 talk about its specific objectives being to,
“raise awareness of remembrance, common history and values and the Union’s aim that is to promote peace, its values and the well-being of its peoples by stimulating debate, reflection and development of networks”,
and then to,
“encourage democratic and civic participation of citizens at Union level”.
It continues:
“In order to achieve its objectives, the programme shall finance inter alia the following types of actions … Mutual learning and cooperation activities such as … Citizens’ meetings, town-twinning, networks of twinned towns … remembrance projects with a … European dimension”.
I do not see how all that fits in with the present programmes and ideas of some of the most serious people in the Conservative Party. Here we are: we are just removing ourselves from the justice provisions of the European Union. It is ironic, for example, that we are planning a referendum on whether we stay in the EU and at the same time taking hold of this Bill with plentiful support. These situations may not seem not to contradict one another, but I think that they do. For that reason I should like to hear more from my noble friend on this subject. It is not a problem for me personally. I have always been in favour of our active membership of the European Union and convinced that it is only through that active membership that Britain will grow. I should like to think that the Bill goes some way towards supporting that view, but it comes at a slightly odd time.
Lord Liddle
My Lords, on these Benches we support the principle that the Bill should come before this House and we support its detailed content. I hope that it will not detain the House for very long in its further stages. We support the principle, because we believe that it is right that Parliament should approve this type of decision, and we support that aspect of the EU Act 2011.
As regards the specific content of this approvals Bill, we support the clarification of the need for the EU to keep a proper archive. As the noble Lord said, this is important for transparency. We also support the Europe for Citizens programme. I should like to ask a couple questions on the first matter and make some comments on the second, particularly in the light of the remarks of the noble Lord, Lord Renton.
On the matter of the archive, I do not expect the Minister to be able to answer these questions today, but it would be interesting if he could write to me. I wonder whether that archive will contain the material of real substance that will enable historians to analyse how decisions were taken in the European Union. In my experience, you do not get much of that flavour from the official documents or from the official conclusions of ministerial meetings. A historian would need access to things such as the notes that the secretary of the Commission meeting took about who said what, the correspondence between commissioners and the records of the chef de cabinet meetings. In this way it could be seen how decisions were prepared. Access would also be needed to the verbatim reports that are made of the European Council meetings, rather than simply the conclusions. I would throw in the proceedings of COREPER. Although it is not an official European institution, it played a crucial role over the years.
Will those documents be part of the archive? This is an important point. We have seen in the 60-year development of the European Union that we are moving step by step from a world of secretive diplomacy, where suspicious nation states came together to take the first bold steps towards union, to a much more open democracy. Analysing that process will be very important for the future.
It is on that theme that we support the Europe for Citizens programme. It is right that, as Europeans, we should commemorate things such as the 100th anniversary of the First World War. It is, of course, one of the main reasons why the idea of Europe is still so vital. I always remember reading Mitterrand’s final speech to the European Parliament. My French is appalling, but he reminded everyone that:
“Le nationalisme, c’est la guerre”.
That is one of the fundamentals of Europe. Therefore, we should be commemorating those events.
Even in the United Kingdom, there is a sense that we need to have a cross-border, cross-national debate about the future of the European Union and that we need to engage citizens in it. We, together in the European Union, are part of what political scientists call a community of fate. In other words, what happens in all those countries really matters to us; and what happens in the European Union really matters to us. A classic example is that the British economy has not avoided the consequences of the euro crisis simply because we are outside the euro.
The present Government are coming to terms with the need for debate. The noble Lord, Lord Renton, mentioned the justice opt-outs. More interesting is the decision to opt back in to most of the most important parts of the JHA agenda. That is because the Ministers dealing with this point recognise that we are part of a community of fate—we have to take these decisions together. We can see the same in the single market, where the Government are increasingly emphasising the importance of the single market to our economy.
I do not want to be too sociological about it, but there is a European demos in the making, and the euro crisis has brought it to the fore. We should be looking at this as an opportunity to promote debate between citizens about how they see Europe and the future of the Union.
If the Prime Minister’s plans go ahead—of course, I do not think that he will win the next general election, but were he to do so—and there is a renegotiation in 2016 and a referendum in 2017, I hope that that will be played out against a background of much commemoration of Winston Churchill’s great speeches calling for Europe to unite.
Lord Gardiner of Kimble
My Lords, I am most grateful for all the contributions that have been made. We have had a short but most interesting debate—indeed, a prelude to further consideration of the European adventure. These two EU measures, both of which provide for more citizen engagement in the EU, are of great benefit.
First, we discussed a measure to secure the long-term future of the EU institutions’ archives which takes account of the advances in record-keeping in an increasingly digital age. I was of course intrigued by the point of the noble Lord, Lord Liddle, about the substance of archives. For someone such as me, who is interested in history but extremely amateur, the point of the history book is when it hits on something that goes beyond the ordinary notes and into the most intriguing parts. Although I cannot answer the noble Lord precisely, I very much hope that he is right that this will be an archive that historians will find of great value, not just for the agenda and minutes of the meetings but for the discussions and how they came to the decisions that they made. I will consider that and obviously come back to the noble Lord if I have anything of greater value to add, but I am with him on that.
The measure also reflects the flexibility required in introducing digital archiving and accordingly avoids prescribing technical solutions, which would not allow for rapidly evolving technologies. Approving this measure would contribute to ensuring the transparency and scrutiny of the EU. I was particularly taken by the point that my noble friend Lady Falkner of Margravine made about transparency because the Government definitely support the general principle of transparency, both domestically and within the European Union. I wish that I was able to comment more fully or specifically on the minutes of the European Central Bank but I very much hope that it will continue to make as much of its archive available as possible because that, again, plays into what the noble Lord, Lord Liddle, was saying about the importance of archives.
This also reflects our own Government’s priority in using digital platforms as a means of facilitating contact between citizens and public institutions. Again, my noble friend Lady Falkner of Margravine mentioned the engagement of young people and I endorse very much the concern that she raised. However, we need to remember that there are young people coming forward who need to know more. One of the great advances with digital platforms is that I very much hope that they will be a medium that young people will find more user-friendly. It is this digital technology which provides the means for bringing people of all generations more closely together, an aspect of today’s world that is very much to be welcomed. I saw this for myself in a recent visit to the outstanding National Archives at Kew, which certainly opened my eyes to the scope and opportunities that these advances provide.
Perhaps I may turn to the Europe for Citizens programme, which should be seen in the same context. I hesitated at what my noble friend Lord Renton of Mount Harry said about the contradiction because this programme will run from next year to 2020 for all of Europe, and I see this as a positive. Whatever decisions the British electorate may or may not make about the position of this country in Europe, I believe that from 2014 to 2020 there is a great citizens’ programme across all the nation states, which is of value to this country and to the citizens of all the countries. I do not see it as a contradiction in that way. This is a positive, whatever happens.
It is particularly poignant at this moment to commemorate those in the two world wars and their lives, and many of your Lordships have been much involved in that. There are certainly many communities up and down the land involved in town twinning. I know that they come from all generations and all countries. Again, this is a very positive part of where taxpayers’ money is going. It is going, through the European institutions, towards this being a rewarding exercise.
This is a real opportunity for civil society organisations. To pick up on something that my noble friend Lady Falkner of Margravine said, we encourage a much more positive engagement at institutional and local level for citizens of all ages. I particularly go back to young people who have ideals. Having many ideals about the common values that are shared is an important part of the European adventure, so I very much hope that this programme will be seen as an opportunity. I very much agree with the point that the noble Lord, Lord Liddle, made about the opportunities. I also hope that this Bill will not take too much time because, in the end, this is a measure that we need to get through to enable the important work to begin for 2014.
If there are any points that I have not answered, I will come back to noble Lords but I believe that these two measures will definitely benefit citizens across the European Union. I commend the Bill to your Lordships and ask your Lordships to give it a Second Reading.
European Union Committee: 2012-13 (EUC Report)
(10 years, 9 months ago)
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Lord Boswell of Aynho
That this House takes note of the Report of the European Union Committee on its work in 2012–13 (1st Report, HL Paper 15).
Lord Boswell of Aynho
My Lords, this Motion invites the House to take note of the report of your Lordships’ European Union Committee, which I have the privilege of chairing, on that committee’s work in the 2012-13 Session. I am pleased that this round-up of our committee’s important work has been given valuable time on the Floor of the House as its work has been recognised, not least by Sir Jon Cunliffe, the present UK permanent representative to the EU, as,
“enormously influential in Brussels and on Government thinking”.
I recognise that many in the Chamber today are very familiar with our work, but we are anxious to encourage a wider understanding of it among all Members of the House. For the benefit of those who are perhaps less au fait with it, I shall summarise the Committee’s role. It scrutinises EU policies and proposed EU laws, seeking to influence their development; holds Her Majesty’s Government to account for their actions in, and connected to, the EU; and represents the House in its dealings with the EU institutions, and other member states and their national parliaments. Much of this work is carried out by the six EU sub-committees, and we will be hearing from a representative of each sub-committee during the course of this afternoon’s debate.
I will mention a few highlights from this past Session, but before doing so I wish to pay tribute to the sub-committees’ hard work and meticulous efforts. A rigorous approach to detail is what this House is well known for and we apply that principle to the scrutiny of EU affairs. We seek at all times, and I hope that normally we succeed, to act in a non-party-political way to advise the House neutrally on EU matters. Given the current rather fetid political climate, it is essential that we continue in that vein, and I have no doubt that we will continue to rise to that challenge. I am deeply and genuinely grateful to each of the chairmen, the members of all the committees and, by no means least, the expert staff team that supports them so ably.
My committee and its sub-committees have undertaken an extraordinary level of work this year. We have scrutinised over 270 EU documents and proposals, sent 653 letters to Ministers examining the Government’s position and putting forward the committee’s own views, heard from over 210 witnesses in person, considered around 270 pieces of written evidence and published 16 reports—all this at a time when, in accordance with the House’s wishes, we have reconfigured our sub-committee system.
I shall now mention a few of the most significant pieces of work we have done during the Session. The Select Committee itself regularly conducts one-off hearings with the Minister for Europe regarding the outcomes of European Council meetings. During the 2012-13 Session there were three such hearings, covering topics as diverse as the G20 growth and jobs action programme, the situation in Mali and the EU’s neighbourhood policy. In addition, we followed up our inquiry into the multiannual financial framework and conducted and completed a new inquiry into the future of European Union enlargement. That report emphasised the importance of enlargement to securing stability and economic prosperity for the European Union itself and its neighbourhood. It analysed the way in which the enlargement process was conducted by the Commission and the Council, and made recommendations about how to make the process more transparent and better understood by European citizens.
I turn to the sub-committees. The Economic and Financial Affairs Sub-Committee has carried out a range of important work but I want to highlight two aspects. First, it has conducted regular evidence sessions following up on the euro area crisis report of 2012, which highlighted concerns about the future of the euro area, raised further questions about the desirability and efficacy of eurobonds and set out how the democratic legitimacy of solutions to the crisis could be ensured. Secondly, the sub-committee undertook a significant piece of work considering the consequences for the United Kingdom of proposals for a European banking union, as well as, of course, other work.
The Sub-Committee on Internal Market, Infrastructure and Employment undertook a timely inquiry into a proposal to set Europe-wide gender quotas for company boards. The committee urged the Commission to bring forward a system for monitoring the numbers of women in senior positions, but warned against quotas as they failed to address the root causes of inequality. It further questioned the Commission’s assertion that national measures to improve gender balance on boards were not working and, following a debate in the House, a reasoned opinion was issued raising concerns about subsidiarity.
The External Affairs Sub-Committee continued to operate at considerable pace, dealing with a wide range of proposals on foreign affairs, development, defence and international trade. During the Session it conducted an inquiry into the EU’s External Action Service, the EEAS, which concluded that the service had been successful in a number of areas, such as developing a comprehensive approach to countries and regions like the Horn of Africa and the Sahel, and in calming the relations between Serbia and Kosovo. However, the committee also highlighted challenges for the EEAS.
The Sub-Committee on Agriculture, Fisheries, Environment and Energy undertook a noteworthy inquiry considering whether the EU’s energy policy met, and would continue to meet, Europe’s basic requirements for energy. The committee expressed some alarm at the uncertainty, complacency and inertia surrounding the need to secure an affordable supply of low-carbon energy, and highlighted concerns about where the necessary investment in energy infrastructure could be found. This report, like several others that I have mentioned, received considerable press interest, but the unreported, perhaps seemingly unexciting yet essential and detailed work of our committees is also vital to ensure that the Government are properly held to account and that Parliament is well informed about EU matters.
The Justice, Institutions and Consumer Protection Sub-Committee completed a high-profile inquiry into fraud against the EU budget. The inquiry report highlighted that the European Union’s antifraud system had a number of weaknesses and that the Commission’s estimates of the cost of fraud to the EU budget in its annual reports were significant underestimates. That sub-committee also undertook an important piece of work in an innovative partnership with the Home Affairs, Health and Education Sub-Committee regarding the block opt-out decision under Protocol 36, which has been the subject of great debate recently in the House. The report of this inquiry has been recognised as a dispassionate, sound analytical tool to aid the Government and Parliament in forming views on the desirability of the opt-out.
Separately, the Home Affairs, Health and Education Sub-Committee examined the operation of the Commission’s global approach to migration and mobility, GAMM, and the implications of the UK’s partial participation in the European Union’s asylum and immigration policies. The committee concluded that the control of immigration from third countries was rightly the responsibility of individual member states, but that a co-ordinated approach by the European Union and its member states was imperative. The committee called for the GAMM to take a more focused approach in future and for the Commission to have a more prominent role internationally, particularly in forums such as the Global Forum on Migration and Development.
Noble Lords will no doubt wish to focus on the work of each sub-committee in greater detail but I want to record again my thanks to the sub-committee chairmen and members, and in particular to thank the noble Lords, Lord Teverson, Lord Carter of Coles and Lord Bowness, the outgoing chairmen of sub-committees C, D and E respectively, and welcome the new chairmen of those committees—the noble Lord, Lord Tugendhat, and the noble Baronesses, Lady Scott of Needham Market and Lady Corston.
The work of our committee and its sub-committees depends on the necessary information being provided in a timely manner by the Government, in accordance with its obligations. Although several departments produce excellent Explanatory Memoranda well within agreed deadlines, I regret that Her Majesty’s Treasury has repeatedly fallen short of the expected level of openness and helpfulness to Parliament—a matter which I am, once again, pursuing with Ministers. In addition, we are disappointed to have observed a gradual decline in the quality of the Explanatory Memorandums being produced by a range of departments. To quote one of my own straplines, an Explanatory Memorandum is not much use if it does not explain itself. We do all we can to support departments, and so we should, and yet we can only carry out our role effectively if given the right tools. I have no wish to be pompous but I do need to be firm about it. Despite the current pressures on civil service departments, the necessary resources must be given to these tasks as European Union matters affect the people, business and other organisations of this country in many different ways. In any case, as a matter of principle, government departments should meet the obligations into which they have entered.
Our committees continue to make significant contributions to interparliamentary conferences and work. I am most grateful for the work of COSAC—the Conference of Parliamentary Committees for Union Affairs of Parliaments of the European Union. It is not the easiest acronym and not always the easiest organisation but it is one which I think is beginning to feel its feet. COSAC meets twice a year in plenary form and is a crucial, if little known, formal mechanism for interparliamentary co-operation.
Furthermore, we continue to benefit enormously from good links with the chairs of the EU scrutiny committees in the other place and the devolved Administrations, not least through our twice-yearly EC-UK meetings. There are also regular tripartite meetings bringing together members of our committee, the European Scrutiny Committee in the other place, and United Kingdom Members of the European Parliament. We met twice during the 2012-13 Session. These meetings raise important issues and allow for an exchange of views and understanding of each other’s work that might otherwise be lacking. Finally, our excellent EU liaison officer and the National Parliament Office provide a valuable link to Brussels and help to build effective relationships with other national parliaments and parliamentarians.
To conclude, what does the current Session hold? As usual, we will be engaging with a wide range of issues in inquiries—including, at Select Committee level, the role of national Parliaments in the European Union, and, among the sub-committees, youth unemployment, genuine economic and monetary union, the Transatlantic Trade and Investment Partnership, and the continuing discussion about the block opt-out—while maintaining our routine scrutiny function.
At a time of ongoing discussions about the European Union and the United Kingdom’s future relationship with it, it is even more important than ever that the House retains its ability to understand, impartially examine, challenge and influence the European policies of Her Majesty’s Government, and the development of European Union policy and law across the whole union. The family of EU committees, which I have the honour to head, is an important mechanism for that, and I commend this report of its work in the Session 2012-13 to the House. I beg to move.
Baroness Corston
My Lords, I am very grateful for the opportunity to speak in this debate and to follow the noble Lord, Lord Boswell of Aynho, who chairs the main European Union Select Committee of your Lordships’ House with the utmost diligence and courtesy. I want also to place on record that for the majority of the 2012-13 Session Sub-Committee E—the committee on justice, institutions and consumer protection—was chaired by the noble Lord, Lord Bowness. He certainly handed on to me a very well-oiled machine.
It reminds me somewhat of an exchange with the then clerk of the Joint Committee on Human Rights, when I was its founding chair more than 12 years ago. He told me that he had previously been clerk of the Defence Committee, which he described as like Inspector Morse’s Jaguar. It was a classic, needed a little light touch on the tiller and the accelerator, had regular servicing and caused very little trouble, whereas, he said, the Joint Committee on Human Rights was a kit car with the instructions in Hungarian. The committee handed on by the noble Lord, Lord Bowness, was much more like Inspector Morse’s Jaguar and I am very grateful for that.
In the previous Session there was more than enough work for Sub-Committee E. In addition to very substantial scrutiny work, the sub-committee carried out one full inquiry, a joint inquiry together with Sub-Committee F, and a follow-up inquiry. I shall briefly describe each. We conducted an inquiry on combating fraud against the European Union’s finances. It was launched in July 2012. It was timed, in part, to coincide with the publication by the Commission of its proposed directive designed to protect the EU’s financial interests via the criminal law. Evidence was taken from a range of parties, including academics, the United Kingdom police, government agencies, the relevant European Union Commissioner and, after some reluctance, the Exchequer Secretary, Mr David Gauke. I will say at this point how surprised we were that the Government refused permission for us to take evidence from Her Majesty’s Revenue and Customs and it took quite a lot of prodding for the Minister to appear before us at all. In addition, members of the committee travelled to Brussels to take evidence from, among others, MEPs, Eurojust, and OLAF, the European Union’s anti-fraud body. In total, the sub-committee held 13 evidence sessions with more than 30 individual witnesses.
Our subsequent report identified a number of weaknesses in the EU’s current anti-fraud system, including a lack of enthusiasm among the member states in taking their responsibilities to combat EU fraud seriously, weaknesses in the ability of OLAF to fulfil its remit to protect the EU’s financial interests, and a considerable mismatch between the known levels of fraud perpetrated against the EU’s finances. The Commission’s figure of €404 million for 2011 and the committee’s own estimate in the region of €5 billion are at variance to say the least. In their response to the report the Government stated that,
“no amount of fraud should or will be tolerated”.
While they recognise that in some areas the EU’s anti-fraud system needs improvement, overall, however, the Government believe that the system is “on the right track”.
In the course of the inquiry, we were unable to ascertain whether any government department or agency in the UK takes overall responsibility for fraud against the EU’s finances. No one was able to tell us with any confidence how much known EU fraud is perpetrated from within these shores, despite the fact that the individual member states are required to tell the relevant EU authorities when they uncover these offences. In our report, we called for a single government department or agency to take responsibility for fraud against the EU’s finances. However, the Government rejected this recommendation on the grounds that any move designed to place responsibility for the matter on to what they called a “single UK department or agency” would create duplication and slow the process down.
On the sub-committee’s estimate that the level of fraud against the EU’s finances is more likely to be €5 billion as opposed to the €404 million that the Commission estimates, the Government say merely that they are “concerned” by this figure, but that it,
“is not a figure that is recognised”.
They do not say who it is not recognised by, and the response may be somewhat perfunctory.
Finally, in relation to the upcoming proposals for the creation of a European public prosecutor’s office—the EPPO—the Government state that the creation of another EU body is not the answer to the problem of EU fraud. The Government recognise that the current system is “not perfect” but suggest that it works and continues to improve, and that, as far as the UK is concerned, the anti-EU fraud position is “strong”. The Government have stated that the best way of ensuring that the decision to prosecute remains a national matter is not to participate in any EPPO. They also point out that the treaty envisages a system whereby the EPPO will be empowered to,
“investigate, prosecute and bring to judgement”,
those responsible for committing EU fraud, which is a role that conflicts with the UK system where the investigation and prosecution functions are kept entirely separate. The proposals to create the EPPO were published last week and the sub-committee intends to launch an inquiry into these proposals in the autumn.
I now turn to the workload of the Court of Justice of the European Union. The sub-committee carried out a follow-up inquiry into this matter in the later part of the Session. We sent a call for evidence to all those who provided evidence during the original inquiry and also took oral evidence from the Minister for Europe. In our report, we expressed concern that the number of cases pending before the Court of Justice continues to rise year on year and we called for the right balance to be struck between the length of time it takes for the court to dispense with a case and the quality of its judgments in order to preserve its credibility. We also found that although the latest statistics from the general court indicate a reduction in the number of pending cases, the number of new cases has more than doubled between 2000 and 2010. Those cases are of great interest, principally to business in this country. We therefore reiterated that there is still a very strong case for increasing the number of judges in the general court and urged member states without delay to find a system for appointing additional judges to safeguard the stability of the court and the quality of the judiciary.
In their response, the Government agree with most of the report’s conclusions. They appear to have shifted their position a little in that they are being more positive about appointing additional judges to the general court as a means to deal with the court’s backlog of cases. Also, the Government now appear to favour a merit-based selection process to appoint additional judges to the general court instead of a rotating system of appointment. The sub-committee hopes that progress will be made soon on resolving the general court’s excessive workload and it will follow developments in this area with interest.
I now turn to the 2014 opt-out decision on Protocol 36 to the Lisbon treaty. I do not intend to go into any of the detail on this inquiry. I will leave that to the noble Lord, Lord Hannay of Chiswick, when he addresses the House. Suffice it to say that on 9 July this year the Home Secretary made a Statement that provided more information about the Government’s approach to the opt-out decision. At the same time, the Government published Command Paper 8671—not the easiest of documents to digest—which sets out a list of 35 measures that the UK will seek to rejoin if the opt-out is exercised and includes Explanatory Memoranda that cover the 130 measures falling within the scope of the opt-out decision. The first debate was held in the House on 23 July and a vote took place on the opt-out decision. The House supported the Government’s decision to opt-out and endorsed the list of 35 measures they would seek to rejoin. A second vote on the final package of measures will take place in due course, following the conclusion of the negotiations with the Commission and the Council.
Sub-Committees E and F have agreed to reopen their inquiry and report to the House on the 35 measures that the Government wish to rejoin. The call for evidence for the reopening of the inquiry was published on 18 July and the deadline for submitting evidence is 11 September. Oral evidence will be taken from Ministers on 9 October. The sub-committee is looking forward to continuing working on this issue, together with the Home Affairs Sub-Committee.
As to the reform of Eurojust, last week the Commission published proposals for a regulation on the European Union Agency for Criminal Justice Co-operation—known as Eurojust. The UK opt-in applies to these proposals and the sub-committee will consider them in September.
I turn to our enhanced scrutiny work. At the beginning of the previous Session, the sub-committee took over responsibility for consumer protection and culture from the now defunct Sub-Committee G. In this regard, we scrutinised the European Consumer Agenda and proposals for a common sales law. The sub-committee held an informal briefing with the consumer rights campaigning organisation Which? in October and heard oral evidence from Jo Swinson MP, Minister for Employment Relations, Consumer and Postal Affairs, on the alternative dispute resolution for consumer disputes. More recently, the sub-committee held a private briefing from Ofcom on the Commission’s Green Paper Preparing for a Fully Converged Audiovisual World: Growth, Creation and Values. The sub-committee may continue work in this area in the autumn.
The sub-committee is also conducting enhanced scrutiny on the Commission’s package of proposals on trade mark reform. To this end, the sub-committee has sought comments from the Institute of Trade Mark Attorneys on the proposals, and further activities may continue in the autumn. The sub-committee has been interested for some time in the work of the Fundamental Rights Agency and the possible overlap with the work undertaken by the Council of Europe. Accordingly, the sub-committee will invite the Fundamental Rights Agency to give evidence on its role and the work it carries out. That is expected to take place in late October.
Finally, those noble Lords who were involved in the European Union Select Committee acknowledge that this committee represents and does some of the most important work done in your Lordships’ House. To scrutinise all European Union legislation is an extraordinarily important function. I am proud that this House does it so well and I am grateful for the opportunity to take part.
Baroness Scott of Needham Market
My Lords, I will speak on the work of Sub-Committee D which, for the uninitiated, deals with agriculture, fisheries, environment and energy. I have had the honour to chair it since the start of this Session in May, but all credit for the past year’s work must go, of course, to my predecessor, the noble Lord, Lord Carter of Coles. I extend my thanks to him and to his committee during that session; he has set a remarkably high bar. I also note that since May, without the benefit of quotas, we now have 50% female and 50% male chairs of the EU sub-committees.
The obvious feature of the past Session for Sub-Committee D was the addition of energy policy to the remit following the reduction in the number of sub-committees. While this was a substantial new policy area, it was very well aligned with the committee’s existing responsibility for climate change policies. As one might expect, the sub-committee approached its new remit with great enthusiasm and, as we have heard, chose to focus on EU energy policy for its principal inquiry during the previous Session.
The energy report was debated only yesterday in Grand Committee, so I will not dwell on content. However, I am pleased that many noble Lords made reference to our report during the debate in Committee on the Energy Bill. It is pleasing that an EU committee report has served the House in its wider context of scrutinising UK legislation—which helps to emphasise the obvious point, that UK legislation cannot be scrutinised in isolation from EU legislation, and vice versa.
Our energy report received widespread press coverage in the UK and beyond and has been referred to by the members of the parliaments of many other member states. Our report was primarily timed to feed into discussions at EU level on its future energy and climate change policy framework. It is pleasing that the report was published in good time to do that. I know that the Commission has been drawing on some of the material and phrases from our report in its consideration of future policy options. Our phrase “the energy trilemma”, to describe the balance between affordability, sustainability and security of supply, is now coming into common parlance.
Beyond the inquiry, the sub-committee’s scrutiny focused on major reforms to the common agricultural policy and the common fisheries policies. Both have demonstrated the long-term added value of the work that we do in this House on EU scrutiny. In the case of fisheries reform, for example, the thrust of the new package very much reflected the sub-committee’s 2008 report. In the case of agricultural reform, the new rural development policy reflects several of the recommendations that the sub-committee made in its Innovation in EU Agriculture report some years ago. While EU decision-making is slow, and it is difficult sometimes to show immediate policy impact, I think that we can demonstrate the long-term beneficial effects of examining policy areas at an early stage of their development.
Not content to just leave these issues as they lie, the sub-committee is undertaking short pieces of work on how these reforms will be implemented. In fisheries, we have recently held evidence sessions to examine issues relating to the new ban on discards of over-quota fish. In agriculture, we will hold several sessions with stakeholders in the autumn to have a look at implementation issues and concerns on CAP reform.
Turning to the sub-committee’s plans for the new Session, we are about to launch a new inquiry into food waste prevention, examining how EU policies can assist rather than hinder attempts to prevent food wastage, and how local, national and EU initiatives can be harnessed most effectively. This will build on previous work that we have done on agricultural innovation and fisheries discards. We hope that this will feed into work being done by the European Commission on food waste and on waste policy more generally. In particular, it is our aim to produce a piece of work that will be helpful to the incoming European Parliament and the Commission next year; it is an attempt to build a “coalition of the willing” with other member state parliaments.
The noble Lord, Lord Carter, and I have been very fortunate to have an enthusiastic and knowledgeable committee backed by a skilled and dedicated secretariat. They absorbed the new area of energy policy with great enthusiasm. However, I flag up my strong belief that any further attempts to reduce EU scrutiny committees should be resisted. From my experience on Sub-Committee B previously and now Sub-Committee D, I do not believe that either could take on a new major policy area without the quality of the work suffering in some way.
The Minister for Europe and the Foreign Secretary have recently flagged up the importance of national parliament scrutiny of EU legislation, and they are right to do that. However, if we are to do such work, it needs to be properly resourced and supported, not just in this House. Frankly, I am dismayed at how much time my small team of three has to spend chasing up government departments which do not provide information on time and within deadlines, or which produce explanatory memoranda that are neither explanatory nor particularly helpful. Above all, we must be very cautious not to see the important issue of national parliament scrutiny of the EU obscuring the need for effective scrutiny of government action within the EU. That is a very important part of the scrutiny role of this House and it is one that we must hold on to.
Lord Hannay of Chiswick
My Lords, this is a very good and very necessary time for the House to debate the work of its EU Select Committee during the previous Session. Whatever view one takes of the future role of the EU, and of the UK’s role within it, it is surely a debate worth having ahead of what is likely to become an exceptionally intense period of debate about the UK’s continued membership of that Union.
Moreover, it is a time when the role of national parliaments in shaping and influencing EU legislation is coming into sharper focus than ever before. As the noble Lord, Lord Boswell, mentioned in his contribution to this debate, the Select Committee is on the verge of undertaking an inquiry into the role of national parliaments. I suggest that we need to subject our own performance to the very closest scrutiny. I welcome particularly the contribution of our distinguished and effective chair during the period in question, the noble Lord, Lord Boswell, who moved this debate. He has made a major contribution over the period since he took up the chairmanship and I am convinced that he will continue to do so.
This debate also marks the end of the first Session after the reduction in the number of EU sub-committees, to which several previous speakers have referred. The number of sub-committees, which conduct the majority of the Select Committee’s business, was reduced from seven to six. This allowed the House to create new committee activities in other policy areas. While I, like many others, was rather unhappy with that decision, we have nevertheless done our best to make it work. The abolition of Sub-Committee G resulted in the reallocation of its remit among the remaining sub-committees, my own included, expanding their respective workloads accordingly. Despite that, the six sub-committees have taken on and discharged their new roles effectively, as is being highlighted in the contributions to this debate. However, I join the noble Baroness, Lady Scott, in saying that I think that it would be a gross error if any attempt were made to reduce further the number of sub-committees. The elastic is being stretched pretty tight and the burden on our extremely able staff has become greater in the past year. It would be frankly irresponsible to increase it further.
I will focus first on the work of the Sub-Committee on Home Affairs, Health and Education, which I have the honour to chair, and to pay tribute to its members both past and present, some of whom are here today, for their hard work and effective contributions. During the period in question, the sub-committee produced two major thematic reports, one on the EU’s global approach to migration and mobility, normally known as the GAMM, of which more later, and one on the UK’s 2014 justice and home affairs block opt-out decision, which, as the noble Baroness, Lady Corston, indicated, I will say a bit about.
This report was produced jointly with the Sub-Committee on Justice, Institutions and Consumer Protection, first under the able chairmanship of the noble Lord, Lord Bowness, and now under the chairmanship of the noble Baroness, Lady Corston. Incidentally, joint work by two sub-committees of the sort that we did—every single one of our meetings and all our evidence sessions were held jointly—is an extremely unusual occurrence and is not without its logistical difficulties. I believe that its success in this instance is a testament to the flexibility and adaptability of the system and, above all, to the willingness of the members of the two sub-committees to work together as a single team. I must mention that the report that we adopted, which I think was quite influential and will continue to be so, was adopted by unanimity—by people from all three main parties and from none. This was certainly something of an achievement. That joint report appeared in April of this year. We recently reopened the inquiry following the Home Secretary’s Statement of 9 July. A supplementary report to the House will be produced by the end of October, as the Government have proposed.
A third thematic report, on the EU’s next five-year justice and home affairs programme—likely to be known as the Rome programme as it is likely to be adopted under the Italian presidency in the second half of 2014—was announced by the committee yesterday. However, as this deals with matters falling within the present Session, I will make no further reference to it in this debate.
With respect to the report The EU’s Global Approach to Migration and Mobility—the GAMM—when the sub-committee conducted its inquiry into this matter, it was conscious that debates about migration, like migration itself, are not new. However, recently the tone has sharpened and there is a risk that a rational and measured discussion of complex issues will be drowned out by cries of populist outrage, riding on the back of stress caused by the recession.
Our report sought to avoid falling into that trap. The committee’s view was that, given the current and prospective demographic challenges facing Europe, member states, in particular those with skills shortages, will need to be flexible in the operation of legal migration from third countries in order to secure the economic growth and competitiveness that they desperately need. At the same time, we also recognise, rightly in my view, that member states retain the primary decision-making responsibilities in this area, including determining the number of third-country migrants they choose to admit to their territory. We did not suggest that there should be any change to that, and nor did any of our interlocutors, including the Commission and the European Parliament.
The report also focused on a specifically UK policy choice: the Government’s inclusion of international students in their current policy objective of reducing net migration to the UK by 2015 to the tens of thousands per year. My committee was one of five Select Committees of the Lords and Commons, the chairs of which wrote to the Prime Minister last January to argue that it made no sense at all to include genuine international students within the public policy scope of the Government’s immigration policy, and that by so doing the Government were risking serious damage to what is, after all, one of the UK’s most valuable, successful and vibrant invisible exports. I have not yet heard a single convincing argument in support of that policy, and I ask the Minister to address this matter when he winds up the debate.
I agree that yesterday’s announcement of an international education strategy by the Minister for Science and the Business Secretary was a step in the right direction. However, a good deal more than warm words will be needed if the higher education sector’s contribution to our involvement in the global race is not to be undermined by the Government’s immigration policy. I noted that the Secretary of State for Business, in an interview at the weekend, said what I believe: namely, that regarding students as immigrants is absurd.
I return to the important matter of the block opt-out. I will not revisit the complex arguments for and against it, nor delve into the byzantine complexity of the issue’s component parts, which the House had ample opportunity to debate as recently as 23 July, and will no doubt return to again before the end of the Session. Instead, I will focus on the process. On parliamentary engagement and handling, the Government’s approach to the opt-out decision has thus far been notable in a number of respects—but, alas, for all wrong reasons. Since the Home Secretary made her initial statement to Parliament about the matter last October, the committee has been persistently denied official information to aid its scrutiny of this important matter. Deadlines have continually slipped, and attempts to elucidate a coherent government position and rationale have proved elusive.
As noble Lords will be aware, the situation finally improved only on 9 July, when the Home Secretary made a further Statement about the Government’s intentions in this area. However, any feeling of welcome was again undermined by the extraordinarily short period allowed to this House before we were asked to debate and vote on exercising the opt-out. I admit that we were allowed a bit longer than the House of Commons, but not much. That was compounded by the Government’s decision to respond to the committee’s April report more than a month late, and only hours before the debate that took place on 23 July. I hope that the Minister will give an assurance of more punctilious behaviour in the future handling of this matter. I ask him to undertake in particular to keep the House regularly informed of the progress of negotiations with the Commission and the other member states once they formally begin in early November.
In addition to these two major inquiries, my sub-committee also conducted enhanced scrutiny of the Commission’s proposal for a revised tobacco products directive. This involved taking oral evidence from pro and anti-smoking organisations and from Public Health Minister Anna Soubry MP, as well as receiving a large volume of written evidence. While public debate in the UK has focused on the contentious matter of plain packaging, I remind the House that provision for this does not feature in the proposed directive. It will be left as a matter for individual member states to decide.
The output of the process of enhanced scrutiny was a detailed and well received letter to the Minister, outlining the sub-committee’s position on the proposal, which was broadly supportive. This work has been followed up in the current Session with another round of enhanced scrutiny of the Commission’s related proposal for an EU cigarette-smuggling strategy, on which oral evidence has been heard from officials at the EU’s anti-fraud agency, OLAF, and at Her Majesty’s Revenue & Customs. I will say, in advance of our taking that further, that what the noble Baroness, Lady Corston, said about her sub-committee’s inquiry into OLAF showed again how difficult it is to co-ordinate all parts of the British Government that have an input into this area. I am sure that we will address that when we write to Ministers after the recess.
In conclusion, I turn briefly to a matter that falls outside the purview of my sub-committee, and which relates to the Government’s balance of competences review—a matter dear to the heart of the Minister who will reply to this debate. While the EU Committee as a whole, and its sub-committees, have not engaged directly with this review, my sub-committee has made recommendations relevant to the review in both its recent reports: the one on the GAMM and the one on the block opt-out. It expects these to be taken into account by the review’s current second semester, which will include a report on free movement, which was covered in our GAMM report, and in the forthcoming third semester, which will include a report on policing and criminal justice. I hope that those will both be taken on board, and I hope that the Minister will give an assurance that that will be done.
On free movement, the committee’s GAMM report, which I discussed earlier, concluded that the free movement of persons is fundamental to the structure of the EU and is an integral part of the single market, with revision of its terms in the treaty being neither desirable nor feasible. The logic of producing the review’s report on police and criminal justice matters after the Government had made their decision to opt out of a number of existing pre-Lisbon policing and criminal justice measures totally eludes me. After all, both the block opt-out decision and the decision to seek to rejoin 35 measures are precisely designed to determine the balance of competences in this area—so why on earth did we not conduct the review before attempting to take the decision?
Baroness O'Cathain
My Lords, I am grateful that the occasion of this debate on the European Union Committee’s 2012-13 report gives me two opportunities. The first opportunity is to pay tribute to the work of the European Union Committee chairman, the noble Lord, Lord Boswell, for the important work of scrutiny of EU legislation. The fact that so much of our legislation is directed from the European Union—from Brussels—or amended in response to the deliberations of the European Parliament makes it essential that we keep a watching eye on all that goes on.
The European Union Committee does a great job, mainly behind the scenes, in ensuring that all EU proposals, directives, regulations, information—usually called “superinformation documents”—and the rest are scrutinised. The noble Lord, Lord Boswell, has a very tough responsibility, but he is ably supported by the clerk, Jake Vaughan, by legal advisers and by staff, who prevent anything slipping through the net—or the “sift”, as it is commonly called. The House owes them all a great debt of gratitude.
As the noble Lord, Lord Boswell, described, the scrutiny process is carried out by six sub-committees. Today’s debate therefore also gives me the opportunity to enlighten Members of the House about what goes on behind the scenes in one of those six sub-committees. I act as chairman of EU Sub-Committee B, whose remit is the internal market, infrastructure and employment. I am pleased to have the opportunity of sharing with the House the highlights of the 2012-13 Session.
Before doing so, I must thank all current and past members of the sub-committee who have worked so hard, week after week—and we do meet weekly—and all of whom have contributed greatly to our work in this Session. Due to them we have accomplished much, enjoyed our Monday afternoons, and developed a great atmosphere of mutual respect. That may seem too good to be true but believe me that it is so. Attendance is excellent and even yesterday there were minor regrets—I have to say minor—that we were not meeting again for many weeks. I think we all feel that we need this break and are looking forward to buckets, spades, sandcastles and paddling as well as a well earned break from the wave after wave of directives, regulations, and other documents which pile up each week awaiting scrutiny.
We were sad to say au revoir to the noble Baroness, Lady Buscombe, the noble Lord, Lord Elton, and the noble Baroness, Lady Scott, who is now chairman of Sub-Committee D. I thank them all. We gladly welcomed the noble Lords, Lord Cotter and Lord Freeman. The noble Lord, Lord Freeman, previously chaired Sub-Committee B but has never said, “In my time we did x, y, and z”, although I am sure that he has been tempted to do so. We also gladly welcomed the noble Baroness, Lady Hooper, who came to us from Sub-Committee A. As an aside, the newcomers—bringing specific, most valuable experience and expertise—seem to have moved seamlessly into our work patterns and schedule.
Of course, without our clerk, policy analyst and committee assistant we could not have coped. All three were new to us but, yet again, the powers that be managed to appoint exactly the right persons for each of these critical roles. I can safely say that without each of them our work output would be well below that which we have achieved and they are universally brilliant in guiding us, working indefatigably, anticipating our needs, filling in the gaps of our knowledge on the workings of the EU, and ever ready to go that extra mile. They do all that plus they are so nice and, at times, funny. Yes, we are a happy, productive, determined team and I feel deeply honoured to be their chairman.
During the year we completed two new inquiries and published the subsequent reports. The first inquiry was on women on boards, and we published our report on 9 November last year. This subject has been debated several times in this House and, indeed, it seldom seems to be off the business and other pages in the press. We regard it as unfinished business as we are now told that the final decision will not be taken until November this year. This is quite strange because there was a delay in coming clean about what the directive was going to be in November of last year, so it indicates that there is quite a lot of disagreement both in the Commission and in the Parliament. Behind the limelight, however, we continue to encourage other member states to take our line—namely, no quotas—while suggesting that the Commission bring forward an EU-wide system for monitoring progress.
What did we learn from this inquiry? We certainly developed better engagement with other parliaments, greater use of video conferencing, establishing links with the Commission, all of which were most satisfactory. Time spent in deepening understanding and making and keeping alive contacts is time well spent and—with the greater use of modern technological developments—does not necessarily entail expensive time-wasting travel. Similarly we have initiated and maintained mutually respected links with officials in Whitehall in the various departments who are responsible for the sectors of our very wide remit. Our dealings with departmental heads and the coal face have led to much greater understanding and are a terrific help in adding to the ultimate value of our scrutiny role. The subject of Explanatory Memoranda has come up already in this debate and this has been a deeply discussed issue. Certainly one or two departments are already beginning to produce documents that we can understand, so they are Explanatory Memoranda.
The second inquiry was on the effectiveness of EU research and innovation proposals, and we published our report on 30 April. We highlighted the fact that the EU’s competitiveness has been, and is, increasingly threatened by the emphasis placed, and work undertaken, in emerging economies. We focused on the ability of the EU to compete and retain its reputation and leadership in this sector. It was a short inquiry but we received a great deal of interesting evidence from a very wide range of witnesses including those from the SME sector—the sector on which are pinned the hopes of so many of us for growth and job creation. This is ongoing. The Government response has been received and we hope to receive the response from the Commission before we debate the report in the autumn.
What did we learn from this inquiry? It was very challenging for the committee. It dealt with an important and broad subject in a relatively short time—three and a half months between the call for evidence and publication of the report. I have to say that it was a steep learning curve for those of us who feel scientifically challenged. However, we had strong help from certain members of our committee who are leading lights in this area. This is a great example of the very wide breadth of expertise which is available in this House.
I now turn to other work. The committee believes that it is most important to revisit our previous work. For example, we had a meeting with the incumbent Minister of Transport to address the lack of government engagement in our previous report on the Channel Tunnel—another item that is back in the news. We also had informal, information-gathering talks with Deutsche Bahn and Eurotunnel. Revisiting work is scheduled for the Women on Boards report as it continues through the EU legislative process. We are still inclined to participate in the debate, following the developments since the publication of our report.
During the Session the committee made history, publishing two subsidiarity reports under the reasoned opinion mechanism introduced in 2009 by the Lisbon treaty. Incidentally, in the four years since 2009 only four such reports have been published by the UK. We had two of them in the space of about three months— on aid for the most deprived and gender balance on boards. The issue of subsidiarity has provoked much discussion and debate in the committee, and in the House, about the meaning of this difficult concept. One example is the Oral Question on subsidiarity asked by the noble Lord, Lord Kakkar, on 5 March 2013.
What about current and future work? We plan enhanced scrutiny on EU migrants. The Minister, Mark Harper MP, gave us valuable evidence a week ago. Our next big inquiry will be on youth unemployment. We shall launch a call for evidence in September, and we had a scoping meeting yesterday to discuss the shape of the inquiry and the potential witnesses.
To conclude, I am sure that we are no exception to the other sub-committees in that we take our work very seriously. We are committed to ensuring that the quality of our work is beyond reproach. We are dedicated to providing the best scrutiny to assist our Government to play a leading, constructive role in the EU and to work for the best outcomes, not only for the over 500 million inhabitants of the 28 member states but, particularly, for the citizens of the UK within the EU. Last but by no means least, we will continue to maintain the high reputation of the House of Lords EU Committee in EU circles and elsewhere.
Lord Harrison
My Lords, I, too, pay tribute to the noble Lord, Lord Boswell of Aynho, for his excellent stewardship of the Select Committee, and for his encouragement for us to think outside the box sometimes, in ensuring that our work is mirrored in the work of the House as a whole. I say to both our Front Benches—I give an example of the Tyrie commission on banking that was recently published—that we are going to see the advent of the Liikanen proposals that will come before us from the European Union, and are not always sure that things done on the European scene in the single market are matched in the way that they should be by the work in this House. I hope that we in the Select Committee can promote that process even more urgently.
Some of the important elements of the Economic and Financial Affairs Sub-Committee of the European Union Committee that I chair include the European banking union, on which we published a major report in December 2012, led by the President of the European Council, Herman Van Rompuy in his four presidents’ report, backed up by the European Commission’s blueprint.
Suggestions were for a proposed three-pillared approach; that is, a single supervisory framework, a single resolution mechanism which was recently published, and a single deposit insurance mechanism. However, the last of those three was quickly dropped under German pressure and progress on the second, as I have said, has been recently published. As such, the proposals initially were set out only in relation to the first pillar, the single supervisory framework. The committee’s report reflected on those proposals as well as on the further steps towards banking union that were required. We undertook a very deep inquiry which included evidence from the President of the Council, Herman Van Rompuy; the Commissioner for Internal Market and Services, Michel Barnier; the vice-president of the European Central Bank, Vitor Constâncio; and the chairman of the European Banking Authority, Andrea Enria. I should also say that when we were in Brussels we took advice on the European Banking Union from Sir John Cunliffe. He, of course, has now been nominated as the new Deputy Governor of the Bank of England.
The committee found that a European banking union was urgently required to restore credibility to the euro area banking system and to break the vicious circle between banks and sovereigns. Although the UK has stated that it would not participate, the consequences for this country could be enormous. The committee warned of the significant risk that the UK could be marginalised as banking union participants moved towards ever-closer integration. This, in turn, threatened to fracture the single market as the authority of EU’s 27 bodies, such as the European Banking Authority, came under threat. The committee warned that the Government’s assurances about the impact on the City may prove to be misplaced. It called for the Government to ensure that London’s pre-eminence as a financial market was not imperilled and that the integrity of the single market was retained. UK isolation in such debates would be disastrous.
The committee also expressed regret that the three-pillared approach was so quickly undermined under political pressure. However, it welcomed the single supervisory mechanism proposals as a significant first step. It agreed that the ECB should take on supervisory responsibility over euro area banks but warned that the concentration of so much power in one institution meant that powerful safeguards needed to be put in place, and that there should be no conflict between the European Central Bank’s supervisory and separate monetary policy tasks. Indeed, the ECB should be accountable to the European Parliament and to national Parliaments in the exercise of its supervisory powers, and there should be equality in the decision-making process within the ECB between the euro area and the non-euro area participants and the role of the European Banking Authority in representing the 27 member states must not be undermined. It now represents the 28 member states.
The committee has not rested on its laurels since publication of the report. It has engaged in several rounds of correspondence with the Financial Secretary to the Treasury as a deal on the single supervisory mechanism emerged, which, in spite of some of our concerns about the bail-in deal, is in itself an undoubted achievement. We have given particular consideration to changes to the voting arrangements in the EBA and the so-called non-discrimination clause, which the Minister argued would be a significant achievement and safeguards against any restriction of the UK’s role as a financial centre of the single market. However, we were concerned that such safeguards were not as watertight as thought. There will be a review of voting arrangements if and when there are four or fewer non-participating member states. As recent developments with Latvia remind us, all but two member states are under a legal obligation to join the single currency.
We examined banking union in the context of the Commission’s broader proposals to strengthen fiscal, economic and political union in our new inquiry into genuine economic and monetary union and its implications for the United Kingdom. One notable recent development is the publication of the Commission’s proposal for the second pillar of banking union, the single resolution mechanism. We will continue taking evidence on these important subjects. We have meetings lined up with the Commission’s Vice-President, Olli Rehn, who recently said that that vicious circle between the banks and sovereigns was to be diluted rather than broken. We shall quiz him on that. In Frankfurt, we shall meet Dr Constâncio who we have interviewed previously on these important issues.
The committee published an important report on markets in financial instruments regulations and directives, MiFID II: Getting it Right for the City and the EU Financial Services Industry. We highlighted the threat to the City of London by trying to block off third countries coming into the single market of 28 members; the dangers of the pre-trade transparency that was originally there which threatened to undermine proper competition within these trading instruments; and the algorithmic or high-frequency trading, an issue to which we will have to return under a different title.
We also highlighted the financial transaction tax. At the end of the 2011-12 Session, we published our report, Towards a Financial Transaction Tax?. The committee’s report was highly critical of the Commission’s proposal for an FTT. We argued that it would not fulfil any of the Commission’s five stated objectives and that there was a significant risk that financial institutions would relocate to avoid the tax. The UK had made clear that it would not participate. Yet we warned that an FTT would nevertheless have a significant effect on the United Kingdom, not least because of the obligation placed on UK authorities to collect the tax under EU mutual assistance agreements or under the provisions of joint and several liability.
Follow-up work to that report has consumed much of the committee’s attention during the 2012-13 Session and at the start of the current Session. We criticised the Government and the City for what seemed to us to be an entirely complacent attitude, assuming that such a flawed proposal could never survive, but this seriously underestimated the political will behind the proposal in Brussels. While the Commission’s original proposal was ditched in late 2012, 11 member states, led by Germany and France, announced their intention to implement the FTT under the enhanced co-operation procedure, whereby a smaller number of member states may pursue a proposal, so long as the rights of non-participating member states are not infringed. When the new proposals were published, they included a new provision, the so-called “issuance principle”, whereby financial institutions located outside the European Union would also be obliged to pay the financial transaction tax if they traded securities originally issued within the EU; for example, a trade in Volkswagen shares between London and New York would be caught. This raised concerns about the potential extraterritoriality of the tax and added to the committee’s concerns about the potential deleterious effect on the United Kingdom.
In light of this, we undertook a follow-up piece of work early this year when we urged the Government to consider a legal challenge against the proposal. This finally did the trick and awoke the Treasury from its slumber. Sure enough, the United Kingdom has since launched a legal challenge. Indeed, the Minister has acknowledged,
“that the grounds on which the Government has challenged the authorising decision are all points on which your Committee has previously flagged concerns”.
It is also becoming clear that participating member states are growing increasingly nervous about the impact of the financial transaction tax. Informed observers have predicted that, given the political capital invested in the project, an FTT will survive in some form, but that it will be significantly watered down, possibly to mirror UK stamp duty. We wait to see and, of course, the committee will continue to keep a close eye on developments.
Finally, the euro area crisis: amid these complex legislative proposals the committee has also sought to remain informed on the political and economic context in which the eurozone and the European Union as a whole operates. During the 2012-13 Session we continued with our twice-yearly updates on the eurozone crisis. In January and February 2013, we held a seminar on the effects of the austerity agenda on the EU, which was attended by academics, campaigners, think tanks and a number of EU member state ambassadors.
At that time, EU leaders were suggesting that the worst of the crisis was over. In that context, we warned that the biggest enemy in the worst of the crisis was to suggest that the worst of the crisis was over. Complacency is a danger that we must guard against, especially as it can affect the United Kingdom and the integrity of the single market. Your Lordships will be pleased to hear that the committee has not let up on its examination of these issues. Even this morning I have hot-footed it straight from a meeting of Sub-Committee A, where we agreed our latest letter on the crisis, in which we set out our views that the EU tendency to muddle through the crisis may not be enough.
I conclude with this: as others have expressed, we, too, have been disappointed by our relationship with the Treasury and, in particular, the Financial Secretary to the Treasury, Mr Greg Clark. We have been disappointed both by the tardiness of receiving explanatory memoranda and the lack of quality that we should expect from the Government. When he was before us last week, we were so angry with these failures that I threatened from the chair the meeting’s conclusion that we would bind up all his explanatory memoranda in a leather-bound document to be presented to him when he left so he could take them away on his summer holidays and read some of the poor quality explanatory memoranda that we received from Government. Whether he is keen to have that happen, I do not know.
Finally, perhaps I may say that it is a joy to have chaired the committee. I am particularly pleased that Stuart Stoner and Rose Crabtree have been working so hard—as all the members of the sub-committees have expressed. We really are blessed with the very best of help from the young men and women who attend to us.
Lord Bowness
My Lords, I too thank the noble Lord, Lord Boswell of Aynho, for so comprehensively introducing this report and for his leadership of the Select Committee during this past session. I am delighted, too, that this is the second year running that we are debating the committee’s annual report. I am pleased that it is not purely historic on this occasion, but includes a chapter setting out the future work that the committee and sub-committees will undertake.
I hope that this practice will continue, that the debate on this report will become a major occasion in your Lordships’ House for debating European Union matters and that Ministers will want to contribute. Indeed, I hope that the usual channels might find another time, when the minds of Members are on other things, rather than the fact that this is the last day—and almost the last hours—of the Session before the Summer Recess.
I do not wish to repeat what has already been said, so perhaps noble Lords will forgive me if I make some personal observations on this report and pose some questions. I particularly want to underline the importance of our participation in the inter-parliamentary meetings, and of building relationships with members of the European Parliament and the Commission. This gives us an opportunity to make our views known and find out what other people are thinking: not just members of the European Parliament from the United Kingdom, but those within the Parliament who occupy important positions in the particular committees. It gives us an opportunity to do that and it is particularly important in the codecision process.
I am also grateful to the noble Baroness, Lady Corston, for her review of the work of Sub-Committee C and her kind comments to me. I wish the noble Baroness, my successor as chairman of the sub-committee, well for the coming Session and thank those members who served with me in the past, as well as the staff for their considerable assistance. The noble Baroness referred to the three reports that were carried out in the past Session. I will make one or two brief comments on each. On the follow-up report on the workload of the Court of Justice, I am delighted that the Government have now been persuaded of our view that additional judges are needed in the general court.
We know that it has stalled because agreement cannot be reached on how to determine which countries have more than one judge; but I hope that the Minister will assure us that the Government are keeping this very much at the top of the agenda. Equally, I hope that if cash—money, lest I be misunderstood—seeks to intrude on this matter, a Written Statement made to the House on 2 July by my noble friend Lady Warsi will be borne in mind. While the amount that the UK contributes to the budget of the Court of Justice of the European Union is not clear, on the basis that we meet some 11.5% of the cost of the European Union, our share of the court’s budget would be £32 million. According to that statement, we put £25 million into a variety of other international justice organisations, including the International Criminal Court and the International Criminal Tribunal for the Former Yugoslavia, and made voluntary contributions to a lot of other international tribunals. Given the importance of the Court of Justice, I feel that this puts its relative cost into perspective.
The other inquiry dealt with preventing fraud against EU finances. As the noble Baroness, Lady Corston, said, we were particularly disappointed with the apparent lack of engagement by both the Government and Her Majesty’s Revenue and Customs. I particularly regret the rejection of the suggestion that one department, or one office within Government, should be responsible for our efforts against fraud on European finances. More contentiously and on a personal note, I regret the outright rejection of a European prosecutor’s office even before any proposal had been made. That seemed to me somewhat ill judged. It now looks as though this may form part of the revised Eurojust proposal; and although separate from the proposal for a European prosecutor’s office, to which the noble Baroness, Lady Corston, referred, there are likely to be close links. I ask the Minister: will this lead to the Government not opting in to the new Eurojust proposal? Eurojust has been identified by the Government as being very important, as shown by their desire to reapply to rejoin in the present format. How workable will rejoining in the present format be if we do not join in the revised Eurojust?
The other important inquiry that was carried out has already been mentioned. I refer to the joint inquiry carried out by the home affairs sub-committee under the chairmanship of the noble Lord, Lord Hannay. I do not propose to rerun last week’s debate. Suffice it to say that it was the failure of the Government, I am sorry to say, to consult on timing and the form of the Motion as promised which led to the difficulties—which, I am glad to say, were solved by my noble friends Lord McNally and Lord Taylor of Holbeach and their revised Motion. However, the status of that Motion and what difference a Motion in your Lordships’ House and one passed in the other place makes to the mandate and the decision-making process is far from clear.
The Explanatory Memorandum which formed the Command Paper is also far from clear. It must be an outstanding candidate for an award for being the least helpful and most confusing Explanatory Memorandum ever produced. However, having said that, the Motion that came before the House did not solve the problem for those of us who wished to express a deeply held belief that it is a mistake to opt-out but wanted to make it quite clear that, if we did, we should rejoin at least the 35 measures that were listed. It was a dilemma I could resolve only by not voting.
With this in mind, the European Union Select Committee was quite correct in not becoming directly involved with the Government’s competence exercise. Let the committee comment when the deeds have been done by government or in the course of an inquiry when relevant. The interests of government and Parliament are not always the same even if the same words are frequently used. For Governments, parliamentary co-operation tends to be the support of the Executive by Parliament on a whipped vote. That is not the tradition of the evidence-based, considered reports on which we in this House act.
I also note, from an exchange at Questions yesterday, that my noble friend Lady Warsi, in her Answer to a Question by the noble Lord, Lord Barnett, said that,
“the Prime Minister regularly discusses a range of EU issues with his counterparts, including changes needed to make the EU more competitive, flexible and democratically accountable. These discussions include the substance of reforms and the means to achieve them, which range from legislation to treaty changes”.—[Official Report, 29/1/13; col. 1533.]
This must inevitably raise the question of how these discussions are taking place before we have seen the publication and the results of the competence review. On what basis are these discussions taking place? I do not expect the Minister to tell us but it is a question that inevitably forms in our minds.
I appeal to the Minister to confirm that, as it is the stated desire of my noble friend the Prime Minister for us to remain a member of the European Union, there will be a major drive on the part of Ministers to emphasise the benefits and desirability of remaining a member, and that this message will be made just as clear as the message that the public are to be given a chance to decide whether or not to stay in the European Union.
Lord Davies of Stamford
My Lords, I declare my membership of Sub-Committee A, which handles economic and financial issues in the European Union. I have been on that sub-committee for only two months and can take no credit whatever for the fine reports that my noble friend Lord Harrison has outlined. I pay tribute to him as a very effective chairman of that committee. The reports have received a good response—not just here but on the continent—and have been acknowledged by the Government as having contained early warnings, which unfortunately in many cases they decided not to take. Like others, I pay tribute to the leadership of the noble Lord, Lord Boswell. In the two months that I have been a part of the system, as it were, I have seen that he provides extremely vigorous and effective leadership to this very important structure.
It is a pleasure to follow the noble Lord, Lord Bowness. In the debate we had last week on justice and home affairs, I paid tribute to the distinguished report that he, jointly with the committee of the noble Lord, Lord Hannay, produced on the subject and which was the background to that debate. That is where I want to start because we had the most extraordinary debate last week from which it was absolutely clear that the Government had been faced with 135, or thereabouts, potential home affairs and justice measures. They looked at them all very carefully and found that not one of them was against the national interest. Some were otiose and some were obsolete, but none of them was harmful. The Government selected the 35 measures which were clearly the most valuable to us, some of which were absolutely vital to the conduct of justice in this country. They decided that we could not avoid being a part of these measures without serious damage to the country and so they decided to opt back into them.
However, they opted out of the remainder when it was not logical to do so. There was no harm in the remainder, which added up to a positive element for the national interest on the Government’s own assessment. During the debate last week I read out several quotations from the Government’s own documents on the subject. There is no doubt that the whole of the 135 measures contains greater value than simply the 35, and yet the Government decided not to opt back into about 100 of them. There was no logical reason behind that decision. What is more, it has set at risk our getting back into the 35 measures because there are always doubts about these complicated procedures and the Government are incurring additional, unnecessary administrative and other costs through this complicated procedure—not to mention the costs in terms of good will. We are exasperating our partners by this extraordinary and utterly irrational conduct.
We all know that the reason for it is that the Government had to find a sop to give to their Eurosceptics. The Tory Party is desperately worried about people voting UKIP and wants to draw back into its fold the UKIP voters. We all know what the reasons are—they are pretty squalid party politics—and they have made it impossible for the Government to come to what any rational human being would have seen as the right functional decision to take in this case.
A situation in this country where the Government cannot take rational decisions on a European subject is a very serious matter. The question arises as to what we do and to whom we look for some kind of dispassionate and thorough cost-benefit analysis of measures that come forward in an EU context so that we can be reasonably confident that we are doing the right job for the British public in the decisions that we take. There is no better or other obvious mechanism than the committee structure we have in this place. We all know that the House of Commons does not engage in a systematic way in these deep and thorough reports on European legislative proposals. We have this extremely valuable instrument, which is made even more valuable and vital by the circumstances I have just described.
There are other irrationalities. The noble Lord, Lord Bowness, has just referred to the decision to opt out of the European prosecutor’s office proposal even before it was made. That is clearly a party political decision. Was it in the interests of the country? I have no idea. I have not looked at the matter in detail or read the report of the sub-committee but, nevertheless, it is quite clear that the Government did not make a rational decision on this matter. Someone ought to tell the British public about the pluses and minuses for the country as a whole of doing that.
There are other important issues pending. My noble friend Lord Harrison referred to the issue of the European banking union. The Government decided that we should not be part of the European banking union. Is that the right decision? I do not know. I was not on the committee when it reported on that subject. It is clearly a moving feast. It was only a week or two ago that the Commission produced its second directive on the resolution and recovery aspect. It has already produced a directive on the European supervisory mechanism and we hope that it will produce the third element before too long, which is a directive on retail deposit insurance in the European banking union.
This is not a proposal which is entirely clear or concrete, but we shall have to take a decision on it. It is important that we take the right decision. I have no confidence in the ability of the Government to take a dispassionate decision on this matter, any more than on any of the other issues that I have just talked about. It is important that we look at that.
We have already had some evidence that there will be increasing costs to our not being part of the banking union. It will be increasingly difficult to protect our interests. We have had witnesses in my time on the committee over the past two months who have said, in the context of other things, that over the medium or long term it is probably inconsistent with our being the largest financial centre in the European Union for us not to be a part of the banking union. All these things have to be taken very seriously.
Another big issue that it is quite impossible to expect the Government to take a rational view on is the issue of Schengen. At first sight, there must be great advantages to this country joining Schengen—the convenience and amenity for us all in being able to travel without a passport through more than 28 countries, as some non EU members have joined Schengen. The benefit would be particularly great for two very different categories of our citizens: the very poor and some probably rather rich. With regard to the very poor, there are a lot of people in this country who have never travelled abroad. Some get to retirement age and they have still never travelled abroad and have never had a passport. They hope to visit Paris, Italy or see the Alps before the end of their lives and they are going to have only a few hundred pounds at most to finance that trip. Therefore, the cost of a passport is quite a significant factor and deterrent, and we should think about people like that.
At the other end of the income spectrum, there are the international businessmen. These people are incredibly important when it comes to taking business decisions on location—where do you place your corporate headquarters in the EU? There are international businessmen who travel quite a lot and travel outside the EU to places where they need visas. Their passports often have to be with embassies or consulates for the issuing of visas. If they suddenly want to make a trip to Brussels or Frankfurt, they cannot do it. We are one of the very few countries that provide second passports for businessmen who ask for them for that sort of reason. Therefore, that is a significant issue, although perhaps not a vital issue, in terms of business decisions on location and it is something that we all feel strongly about.
There are other arguments about Schengen. One argument for joining would be that it would involve a lot of savings and would relieve the pressure on the border agency. We know the pressures it has been under and the real problems it has been having. The Government say they are interested in making administrative savings. There would certainly be administrative savings there.
The big argument on Schengen is that we are losing hundreds of thousands at least but probably millions of tourists a year. For people from the Far East, China and elsewhere who come to Europe, mostly on organised trips, it is simply not worth the money or the time for the travel agency to apply for a second visa. They apply for a Schengen visa and they offer people a European tour which takes them to Paris, Amsterdam, down the Rhine, and then to Florence, Rome, Madrid and Seville, and they do not come to the United Kingdom at all. They do not come because they have to get an extra visa at extra cost. It is quite clear that we are now talking in terms of hundreds of thousands, but it might be millions, of lost visitors to this country every year as a result of that.
Why do we not join Schengen? On the other side of the argument, some people would say “Good God, you couldn’t possibly do such a thing. You’d have millions of people pouring across the Thracian border into Greece who a day or two later would appear in London, Birmingham and Bradford as illegal immigrants here”. We have to think about that. Is it true that the French, Germans and the Dutch have a much worse problem controlling illegal immigration than we do? Is it true that sophisticated countries such as Switzerland and Norway, which are not members of the EU, have actually chosen to join Schengen when it is so hopeless at actually filtering people through the common external frontier? We need at least to ask that sort of question.
Some people will say “It’s a principle that you must always control your frontiers. You have only your own citizens controlling the frontier”. That cannot be an absolute principle because we have officials in the Republic of Ireland taking decisions about who should come into the United Kingdom. It is certainly not an absolute principle. Some will say that it is all to do with sovereignty. People get very excited about sovereignty. Before 1914 you could go to Victoria station and buy yourself a ticket to Paris, Berlin, Rome or Madrid and go without a passport. It was not until you got to the Russian frontier, the frontier of the Russian empire, that you had to produce a passport. Whatever the nations of Europe were suffering from before 1914, I do not think that it was an insufficiency of sovereignty.
All of these arguments need to be probed. Who is going to look at them? Not the Government. If you suggested joining Schengen the Eurosceptics would go berserk. They would go barmy and get hysterical. The Eurosceptic press—the Murdoch press and the Rothermere press—would get completely hysterical as well. There is no chance of a cool, calm, measured and calculated cost-benefit analysis being done by the Government on a subject like that. It is all the more important that we have instruments of the kind we do in the form of committees in this House which are able to give the country some of that element of analysis of these issues.
Lord Howell of Guildford
My Lords, I join others in warmly congratulating my noble friend Lord Boswell, and indeed his fellow chairs of the committees and all the committee members on their work. I pay tribute to it because it is immensely detailed and clear. I am not myself a member of the EU Committee system, so I hope that that is acceptable. A decade ago I was chairman of Sub-Committee C so I hope that makes me accepted as part of the old alumni of the EU Committee system.
I will concentrate on a section of the committee’s report on its forward look, on the way in which it is affected by and looks at future policy and scrutiny work—matters already referred to by my noble friend Lord Bowness. I do so against a background of widespread debate and shifting perceptions throughout the European Union itself concerning its procedures and aims. That, of course, is over and above the equally significant changes in the whole pattern and character of international relations, generally in a world that is now almost totally connected, with governmental and non-governmental networks increasingly melding together in a completely novel way. It is important, is it not, that your Lordships should remain well ahead of the game, as indeed we are in so many other fields? One has to realistically say that, whatever else is going to happen in the coming year, the forward-look things will not be as usual; things will be very different all the time.
I draw evidence for this view of change from the clear and increasing resistance to integration and ever-closer union as guiding EU principles which we have seen from the Netherlands Government, from Italy, and from the obvious German resistance; from the all round and outright resistance to more centralisation of power in attempts to repair the euro; and from a clear call for a return to what has been called deliberative intergovernmentalism. I also refer to a remarkable paper issued by the organisation Policy Network, which is a body of impeccable pro-EU credentials chaired by the noble Lord, Lord Liddle, who is sitting there on the Opposition Front Bench. This paper, Coordination in place of integration? Economic governance in a non-federal EU, is by Professor Renaud Thillaye, a senior researcher of Policy Network. Its message is simple: we have reached the end of member-state tolerance for one-size-fits-all measures and demands for more central power. Instead, the professor advocates the kind of sensible dialogue which leads much more to practical open-method co-ordination, and therefore to a substantial alteration in the size and nature of the flow of Commission-inspired EU proposals, directives and all the rest with which the committee has to struggle so nobly. However, it is undoubtedly, in its own words, “somewhat burdensome”.
Professor Thillaye points to the deep deficiencies in the present EU model and its outcomes, such as stagnation in research spending, the waste of skills, increased poverty in southern European countries and the appalling levels of unemployment. He refers to,
“the sense of a ‘diminished democracy’”,
and cites the EU scholars who claim that,
“the EU Single Market and the EMU restrict greatly ‘the capacity of member states to realise self-defined socio-political goals’”.
Instead, he wants to see an “enriched dialogue” between member states—and, of course, Parliaments—and concludes that:
“The EU should avoid imposing specific measures from above”.
My own conclusion from all this for the work of our own committee is that, in addition to being concerned with two specific principles, as the report we are debating today outlines, it should add a third principle, governing both its scrutiny work and its policy work in the future.
The two principles mentioned in the report, which are familiar to us, of course, are subsidiarity—whether something is to be done at the right level; and proportionality—whether it can be done less onerously. I would like to see a third principle added to the committee’s future work; namely, flexibility—whether something is better done through co-ordination than through centrally conceived law-making regulations and proposals.
Is it not perfectly clear that in this digital age of instant hyperconnectivity on every issue, the advantages of well focused co-ordination on specific issues, rather than centrally imposed instruments handled by cumbersome hierarchies, are greatly increased and can speed up decision-making instead of delaying it? It is obvious that the committee’s valiantly performed task in holding the Government to account is not at all helped by the endless, enormous stream of Commission proposals, all requiring Explanatory Memoranda from the Government, the quality of which—as we have heard in this debate and as the report confirms—is getting weaker and not stronger, I am afraid.
Of course, if we are looking at ways of halting or checking some of the less desirable elements of instruments and proposals, there is the yellow-card procedure. However, I think that most people—on all sides, without bias—have agreed that this is an utterly feeble instrument. The requirement of nine member states to make it work is ridiculously high. My right honourable friend the Secretary of State for Foreign and Commonwealth Affairs is right to urge that we move to a tougher reformed red card procedure, although that would have to be on the basis of far fewer national Parliaments objecting to make it realistic. Of course, that is precisely what some of us argued for in this very House at the time of the Lisbon treaty but it was rejected outright by the Labour Party and indeed—dare I say it?—by the Liberal Democrats.
Generally, if more ad hoc and e-enabled co-ordination is now to replace EU imposition and integrationist zealotry, a much better dialogue about competences, how things should be done, by whom and in what way is also required between member-state Parliaments and the Commission itself. Sadly, there, too, the Select Committee report speaks of “short and unspecific” responses from the Commission, often coming months late. This just will not do. This is not a state of affairs that those concerned with the welfare of this country or of Europe should accept. The whole balance is wrong and it is leading to increasingly bad results for the peoples of Europe.
I hope that in this House we will be able to debate in the autumn, as soon as we come back, some reports from the Cabinet Office and the Foreign and Commonwealth Office on the balance of competences, to which my noble friend Lord Bowness has referred. I am not sure how much we will learn from them about the burning need for change—although the need is there. Frankly, to judge by the first batch, which has already appeared, we are not going to learn much. They seem disappointingly shallow.
It is clear that the people drafting these documents—at least, the foreign policy paper that I have read carefully—have not understood that in the age of global connectivity, tasks and powers have changed, patterns and methods of trade and exchange have changed and the ways in which states relate to each other and negotiate have changed. Except for one brief mention, to which I direct your Lordships’ attention, on page 92 of the foreign policy review, there is no sign of awareness that digital networks change everything and that new alliances and networks must urgently be built if we are to prosper and protect our interests in this country, both as good members of the European Union and in relation to our growing interests in the outside world.
Above all, in the EU context, the old categories of so-called competences have now all been called into question and need unbundling and re-sorting. They were put together in another age. When it comes to actually getting things done, co-ordination between member states looks increasingly preferable to packaged- up EU competences and the capricious judgments of the politicised European Court of Justice. The balance of competences review sees an increasing blur between domestic and foreign policy but does not recognise an equally increasing blur between governmental and non-governmental agencies.
For example, if I may take an excellent report that came from EU Sub-Committee C of this House, there is the structure and role of the European External Action Service. I say excellent; I am not sure that I quite agree with the report’s conclusions on this venture because diplomacy through collective structures was never a great success and the issue now in the digital age is whether it is even necessary. Collective European aims in overseas theatres can now increasingly be achieved by swift co-ordination and alliance for specific tasks rather than by permanent and expensive new bureaucratic structures. The authors of this balance of competences review miss the point about the genius of the digital age: that instant and ad hoc co-ordination can be far more flexible, quicker, more efficient and better tailored to the particular mission in hand than heavy and complicated new treaty-empowered hierarchies of the kind set out in numbing and labyrinthine detail—if anyone wants to follow them—on pages 19 and 23 of the foreign policy review.
The age of vast, cumbersome, all-embracing and permanent treaties cascading measures from the central bureaucracies, with which our noble committees have had to struggle, is well and truly over—rather like the age of the vast, vulnerable battleships of the past. The age of more agile and practical co-ordination between states, focused on well defined common purposes, far more democratically accountable and closer to the people, is now upon us. Nowadays, Governments can come together and co-ordinate actions at the click of a button and then return to the pursuit of their national and local priorities and needs. This is the true path to democracy in Europe and to bringing Europe closer to its peoples. Communities no longer need to be built on massive central power. That was the doctrine of the previous century.
I hope that our committee, with all its excellent work and so well led by my noble friend Lord Boswell, will be able to recognise these changes and follow some of these guidelines in its future work. As I said, your Lordships must be ahead of the game in a totally transformed set of international conditions. If we are not, who will be?
Lord Maclennan of Rogart
My Lords, I have had the privilege of serving on four sub-committees of the European Union Select Committee. I have listened with great interest to the current chairmen of six of the EU committees describing the work of the current Session, which is of course what this debate is primarily about, but it would be a mistake to follow their lead in going over the detailed business that these committees have engaged in.
However, I would like to say at the beginning how very much I have appreciated the leadership of the chairman of the Select Committee, the noble Lord, Lord Boswell of Aynho, and pay tribute to his fresh thinking about how these committees should work. I also feel it is appropriate to express strong gratitude to the staff who have serviced these committees. They are not large in number and they have to work extraordinarily hard to produce the advice and drafts on which we focus.
The European Union Select Committee is one of the most important functions of the House of Lords. It currently engages, I believe, 74 Members of this House. The noble Lord, Lord Boswell, indicated that Sir John Cunliffe stated how much influence we have brought to bear on Brussels and Governments. I disagree very strongly with the previous speaker, my noble friend Lord Howell, in his summation of the way in which the Union ought to operate by way of co-ordination, rather than the open legislative process and the open parliamentary process that we have. I cannot see how what he has recommended is in the least conformable with democratic thinking in a modern conglomeration of 28 nations. How could the detail be co-ordinated effectively so that the disagreements are properly vented and properly answered and consensus is arrived at? It is not a matter of modern technology; it is a matter of openness that we have to embrace if this Union of ours is to enjoy the support that it deserves having kept this continent at peace for an unprecedented length of time.
I did not mean to divert down that route, but I wanted to indicate my belief that the work of these committees is invaluable in ventilating issues that need to be raised with the Government, the European Commission, the European Parliament and the Council. There is not much doubt that the work of these committees has made a significant impact. It is unusual for a clash of mighty opposites to occur, such as we had over the opt-out from justice and home affairs. None the less, it ventilated the arguments and enabled many members of the public, who were certainly not as well informed as they might have been, to grasp some of the issues and it got significant coverage in the national press.
I would like to open a thought that is not entirely about the influence that we can have on government, but rather the influence that we might have with the public. It seems to me that because we are doing studies of great depth and importance, and we are engaging with witnesses who are knowledgeable, engaged and interested, we produce significantly sophisticated reports. However, despite getting our message out to many newspapers and some broadcasts—the report talks about 35 million opportunities for people to understand what is being said in dialogue—I none the less think that we might, within our terms of reference, contemplate how we could gain more public understanding of the work that we do and get the public almost to help to promote some of our studies.
We are, of course, engaged largely in scrutiny of decision-making in the process of its being decided, but the third term of reference set out in Appendix 1 to the annual report is:
“To represent the House as appropriate in interparliamentary co-operation within the European Union”.
That is a very broad mandate and we have certainly used it to engage through COSAC and other bilateral meetings with Governments and parliaments of other countries. But it seems to me that that is not enough. We have only two full meetings of COSAC in the course of the year. We do not have as many meetings as we might have with other parliamentary bodies or with our own European parliamentarians—we have three meetings a year in the House of Commons. However, that does not seem to me sufficiently to embrace the public. I should like to speculate and suggest that we might communicate with the public to find out which issues give rise to the greatest concern. A body such as YouGov, chaired by Peter Kellner, the spouse of the noble Baroness, Lady Ashton, might be able to identify and prioritise the public’s real concerns and consequently we could engage in a debate. We could have a special meeting open to stakeholders who are particularly exercised by what they understand to be the problem with Europe or the way the Union is moving. We could then include these thoughts in our scrutiny and researches, however unfocused they may be, and we could answer them directly and possibly engage in a continuing dialogue.
The way in which we put out our invitations is very reasonable, but it is nearly always sparked off by a proposal from government or from the European Union. My view is that, if we are to exemplify the effectiveness of our work comprehensibly, we must endeavour to engage more directly with the public.
Lord Tugendhat
My Lords, I speak as another new member of the Select Committee and as the new chairman of Sub-Committee C on External Affairs. I cannot believe my good fortune. I find both roles absolutely fascinating and it gives me great pleasure to join other noble Lords in paying tribute to the chairmanship of the noble Lord, Lord Boswell, and to my predecessor as chairman of the sub-committee, the noble Lord, Lord Teverson. I share, too, the good opinion expressed by a number of noble Lords of the clerks who served the committee. They are few in number and do an outstanding job.
I shall not go into the subjects dealt with by my two noble friends Lord Maclennan and Lord Howell but shall stick much more, as others have done, to reporting on the work of the sub-committee, most of which was done during the period when the noble Lord, Lord Teverson, was chairman. I am not sure that my voice will hold out to the end, so I shall be brief.
The committee followed up on its earlier inquiry into Operation Atalanta, the CSDP anti-piracy mission in May and June of 2012. The committee has noted the successes of the mission and welcomed the EU’s comprehensive approach to the region. The committee recommended that the EU’s anti-piracy mission should be accompanied by an equal focus on the political process and on supporting security sector reform in Somalia. As part of its interest in Atalanta, the committee visited the operational headquarters in Northwood and noted that the new system for tracking ships in the sea was now in place. The report was debated in Grand Committee in 2013. Since then, the committee has kept a watching brief on the issue.
The noble Lord, Lord Boswell, has already referred to the report on the European External Action Service, so I need say little about that. It was designed to feed into the two-year review undertaken by the high representative and has received a comprehensive response from the Government.
The main conclusions of the report were that the post of the high representative is overloaded, and the committee laid out some of the recommendations that we heard from witnesses to ease this situation. We believe that the EEAS delegations can play a more important and engaged role in forming and delivering EU foreign policy. The committee noted that many smaller member states wanted the delegations to take on consular activities and it recommended that this be an area that the review should consider. However, the Government have put forward some quite substantial objections to that proposition.
The committee noted, too, that while the EU special representatives play an important role in EU foreign policy, their remuneration rate looks at first glance—and maybe there is more to come—rather high. The report was debated in Grand Committee in June 2013.
Since I have been chairman, we have had a short inquiry into the EU’s development assistance for drinking-water supply and basic sanitation in sub-Saharan Africa, which goes under the acronym of WASH. This work is based on a critical report from the European Court of Auditors on which the sub-committee had corresponded with the Government and which it wished to pursue further. Our report has been published in the form of a letter to the Commission with a covering note to the Government. It was based on extensive evidence taken from a number of NGOs over a short period. We also spoke to the Commission and the Court of Auditors, and I must say that what we learnt was extremely disappointing. The whole WASH programme casts doubt on the much larger aid programmes, and I hope that the Commission will provide a satisfactory response to the report that we have sent it. We are also sending the report to the relevant committees in the European Parliament, because it is important that it, too, should be seized of this issue.
Our next big inquiry will be into the Transatlantic Trade and Investment Partnership. The call for evidence on that has gone out and the formal evidence sessions will begin in the autumn. I hope, too, that we will have a seminar and take the views of a wide range of interested parties.
Our scrutiny work has also continued at a high level in relation to the Middle East and in particular to Syria, where we have expressed concerns about the security of arms and been worried by the recent decision taken at the Foreign Affairs Council. The sub-committee has received an informal briefing on the extension of the mandates of the EU’s regional and thematic special representatives, which came under scrutiny on 27 June. We have expressed our concern that the process of renewing the budgets and mandates of the EUSRs is too rushed to allow proper parliamentary scrutiny. On the role itself, the committee has expressed concern that the mandates of the EUSRs are not always clearly defined and that EUSRs can sometimes duplicate the work of other international actors on the ground. In particular, we put the mandate of the EUSR for Sudan and South Sudan under scrutiny, as it was not clear to us that the political situation and the conditions on the ground justified ending an enhanced EU role to the region.
We have raised an exhaustive list of scrutiny issues with the Government, covering such subjects as child labour; the EU Voluntary Humanitarian Aid Corps; the EU Border Assistance Mission for the Rafah Crossing Point; the EU integrated rule of law mission for Iraq; women in the Afghan national police force; the role of the EU at the Food and Agriculture Organization; EU sanctions in Syria, Somalia and Myanmar and EU’s defence instruments; and a protocol amending the agreement on government procurement.
The committee has also undertaken enhanced scrutiny on EULEX Kosovo, the EU’s rule of law mission in Kosovo and there, too, on the basis of a critical European Court of Auditors report. The committee heard evidence from the Minister for Europe, David Lidington, as well as from the Court of Auditors. In addition to all this, there have been a great number of informal briefings from ambassadors in the countries to which they were accredited, and the committee will continue with that aspect of its work in September.
It has therefore been a very busy programme. I cannot claim credit for very much of it. I pay tribute to the noble Lord, Lord Teverson, and to the previous members of the committee. I very much look forward to carrying the committee’s work forward during the next 12 months.
Lord Judd
My Lords, it is good to follow the noble Lord, Lord Tugendhat. He brings to his chairmanship of Sub-Committee C a lifetime in politics and of experience in international affairs, and from across the Floor I have always found him particularly well informed and enlightened. He also brings his considerable experience as a Commissioner of the European Union. He referred to his good fortune; I think that the committee is certainly fortunate to have him in the chair. While I mention the noble Lord, Lord Tugendhat, I want to join others in paying tribute to the chairmanship of all our committees, and of course to the noble Lord, Lord Boswell, for his supreme chairmanship, to which he brings not only an ability that is desperately needed but a commitment which is very challenging. I think that we all deeply appreciate that. I want in personal terms to put on record my appreciation as a member of Sub-Committee F of the outstanding leadership and chairmanship that we consistently have in the noble Lord, Lord Hannay. I have known him for many years. He, too, brings vast experience of the world and international affairs, which again illustrates just how well served Parliament is by their leadership in committees and by the experience that that leadership brings.
In thanking the noble Lord, Lord Hannay, I would like to say how much I have appreciated the joint work between Sub-Committees F and E the chairmanship of the noble Lord, Lord Bowness. He provides again to the House a real example of integrity and political courage. He speaks for what he believes, and does so not only with passion and emotion, but always on the basis of sound analysis and detailed knowledge. I think that the House should be grateful. I wish my long-standing friend the noble Baroness, Lady Corston, well in her chairmanship. She will have a tough challenge following the noble Lord, Lord Bowness, but I know that she will more than live up to it. I have had the good fortune of serving under her on the Joint Committee on Human Rights and know what a very effective chairman she too can be. I am sure that we all wish her well.
There is another group of people whom we ought to bear in mind and thank in our deliberations. These are the witnesses who provide so much valuable evidence to the committees as the basis for their work. We would not be able to produce our reports unless many people had a put great deal of time into preparing submissions and appearing before the committees, and sharing their insights, experiences and thoughts.
This brings me to something about which the noble Lord, Lord Maclennan, was talking. There is one gigantic challenge with the European Union and our approach to it. To the majority of people in the country, certainly a wide cross-section, the European Union is a remote and closed world. It speaks with great deliberation and experience to itself. It is very well informed about the work with which it deals, but to some extent it has lost contact with those who are dependent upon it and have to respond to its initiatives. That underlies a lot of the public anxiety about it and needs to be challenged. It is something to which in our work we could all make an important contribution.
When we are assembling lists of witnesses it is important not to fall into the trap of taking evidence just from those who are already informed about the European Community. We must develop the ability to seek out people who are coping with the consequences of European Union policy, or who have a great deal to say about the challenges to which the European Union should be responding, and to hear their views as well. These are people in the front line of the work with which we deal. When we were doing our report on migration in Sub-Committee F, I was struck by some of the witnesses from this front line, dealing with the issues of migration in our society. As we develop our work we should take this very seriously.
As I understand it, one of the issues with which the Government are concerned in our future relationships with the European Union is that it should be opened up and become more flexible and closer to people. It should be more accountable to the nation and people as a whole. That is a laudable objective. If it is to be fulfilled it is incumbent on the Government to live by example and not just theory. Even after a week, what happened last week was nothing short of a parliamentary disgrace. Here were two committees that had done tremendously detailed work on the implications of opting out and taken evidence from a wide cross-section of witnesses, who had put a great deal of effort and time into what they had to say to the committees. These two committees had listened to those in the front line of work in the context of justice, security and the rest. But what happened? Just hours before the debate on the same day, the Government’s response appeared. How is that opening up the matters of the European Union to the public as a whole? How is that enabling Parliament to do its job as it should? We should all have had time to consider in depth the Government’s response and prepare ourselves for a sensible debate in that context.
We should not hesitate in calling for the Government to do far better on this in the future. At the moment they are not serving the cause of enlightening our country at all by behaving in this way. It is not a totally isolated indication. We must understand what lies behind it and one of the difficulties is that we all know that there is a huge debate going on within the ranks of the coalition. It is not simply between the two formal parties that form the coalition, but even within the ranks of the Conservative Party. I have friends in the Conservative Party with whom it would be very difficult to get a thin sheet of paper regarding their views and mine on Europe. But there are others in the Conservative Party who are very different, committed to a xenophobic, insular and narrow view of where Britain’s future lies, and that is certainly not within the sphere of the European Union, nor even on too many occasions, I fear to say, of international co-operation as a whole.
That will always be a complication when the Government are getting their case together, but it in no way excuses what happened last week. I have been disturbed at the way in which we are repeatedly entertained to what, if it was not so grimly serious, is a charade of on the one hand senior government voices whipping up the sceptics and the critics of the concept of the European Union, and on the other those who are trying to keep the whole show on the rails. I suspect that that includes the Prime Minister.
One of the contentious issues in which emotion has obscured reality is the repatriation of criminals who have completed their sentences and are not British subjects. There is too much evidence that some in the senior ranks of government, who should know better, have been whipping up a view that this is somehow the fault of the European Union or of the European court. If that were case, it would be a very serious matter. Let us establish how great the problem is. In that context, I put down a Question on 3 June, asking on how many occasions in 2012 the Government were prevented from deporting criminals, who were not United Kingdom citizens, following the completion of their sentences by rulings of the United Kingdom courts citing Article 8 of the European Convention on Human Rights.
I drew the House’s attention to this last week. I have had approaches from Ministers, who have protested how sorry they are that I have not had a reply and that I must of course have one. I hope he will forgive me, as he is not in the House, but because this is so serious I must say that last night I sent an e-mail to the noble Lord, Lord McNally. I pointed out that today was the last day before the recess. A week had gone by and I had still had no reply.
I was very touched that the noble Lord sits so assiduously by his iPad, because within minutes, I had a reply in which he said that he was shocked that I had not had a reply. I would like to think that that is just innocent incompetence, the machine just not getting a reply together, but I cannot help being concerned lest that reveals something much deeper: that the Home Office is in no hurry to answer the question because the facts might not conveniently fit with the rhetoric and the playing to the gallery, to put it bluntly, which has gone on.
As we consider the future of the European Union, these matters are very grave indeed. We must have a Government displaying to us openly, fairly and straightforwardly the matters central to the issue. That, of course, starts with the Select Committees. I come back to the issue of how totally unsatisfactory—that is putting it in mild language—how totally wrong and insulting it was to produce a report only hours before the debate took place.
I want to say what a great privilege I find it to serve on Select Committees and how much I appreciate all those who make that work possible and so effective. A real tribute must go to the clerks and their support staff, who do a fantastic job for us all. I hope that they will get a decent break this summer, although I fear that in the case of Sub-Committees E and F, that will not be as simple as it sounds because we are going to meet during the recess. That shows the commitment to those issues by a large number of people. Again, I give real thanks to the noble Lord, Lord Boswell, for his terrific leadership in this operation.
Lord Kerr of Kinlochard
My Lords, I started to take the reports of the Select Committee seriously 22 years ago. I discovered that I had to. I then lived in Brussels, and it was the habit of the then President of the Commission, Jacques Delors, to read House of Lords reports on Sunday afternoons. When he discovered something that he did not understand or did not like, it was his habit to telephone the permanent representative. I discovered that these conversations went slightly better if I had read the reports beforehand.
I was therefore delighted when I came here to have a spell on the Select Committee and on three sub-committees, and I now sit on Sub-Committee A under the polymathic chairmanship of the noble Lord, Lord Harrison, whose habit it is to greet witnesses from far and wide in their native tongue, to the consternation of his colleagues and, sometimes, the witnesses. He is an admirable chairman, as he has again displayed today in his speech.
The standard of the big reports from the Select Committee, which attracted a lot of admiration in Brussels 20 years ago, is undiminished. It is still very high. I think particularly of Bowness-Hannay on the Protocol 36 opt-out. Sub-Committee A’s MiFID II report was good, and I think that its report on the financial transaction tax hit on a point which, at that time, the Government had failed to or did not wish to recognise: that the obnoxious tax would cost us because we would have to collect it even if we did not ourselves go along with it.
The big reports are very good indeed. However, compared to 20 years ago, I think that the standard of everyday scrutiny of the legislative workload has diminished. It is not as good as it used to be. I think that the principal reason for that—the Minister may disagree with me but he will have heard the feeling of the House from the noble Lords, Lord Boswell, Lord Hannay, Lord Bowness, and Lord Judd—is that the Government do not take the process as seriously as they used to. That is my impression too.
The noble Lord, Lord Boswell, spoke of the perpetual lateness and inadequacy of Explanatory Memoranda. Aficionados will have followed with interest the increasingly irate correspondence in the previous Session between him and the Financial Secretary to the Treasury over the 2012, 2013 and 2014 Budgets, various measures of financial services and banking legislation and the infamous financial transaction tax. The common theme to all those letters was delays, missed deadlines, superficial analysis and unanswered questions. I know that the Treasury suffers from staff cuts and a high turnover—I read the figure of 20% a year turnover in the press the other day. I cannot believe that, but perhaps the Minister will enlighten us. If it is true, it is extremely alarming. The Permanent Secretary to the Treasury came to answer a friendly call from Sub-Committee A and assured us that performance will improve. I hope it will; we wait to see.
There is a particular reason why delayed Explanatory Memoranda are not just discourteous and in breach of the rules but actually dangerous. I attach some importance to the subsidiarity mechanism. There is a deadline of eight weeks for the use of the yellow card. This morning, in Sub-Committee A, we looked at a proposal which, to my amateur eye, seemed to raise a question of subsidiarity. Whether or not I was right is completely academic, because the proposal was dated very early in June, but it came to the committee this morning, so there is no way in which, if I were right and the committee and the chairman agreed with me, we could use the yellow card, purely because of delays that occurred in London. The Government need to take seriously the rules which are clearly set out in Cabinet Office guidance to the whole of Whitehall, and which used to be enforced quite fiercely by Permanent Secretaries—I can give a personal assurance that that used to be the case.
Of course, there are also objective reasons why the scrutiny process has got more difficult, why we have to run harder to stay still. We have to catch up with co-decision. The Council is now only the co-equal legislator with the European Parliament. I am not convinced that we in this Parliament or the Government are yet doing enough to try to influence the European Parliament in the European Union interest and the UK interest. The problem is exacerbated by the Conservative Party having left the EPP. It is quite difficult even for distinguished senior Conservative Members of the European Parliament to have as much influence as their predecessors. I pay tribute to Malcolm Harbour, who is a sterling exception to what I just said: he proves that what I am saying is not true in all cases. I pay tribute to Sharon Bowles, but I think that the West Lothian question—let us call it the Westphalian question—will impose itself on the next European Parliament in relation to the chairmanship of committees. Sharon Bowles has put in a sterling performance as chairman of one of the key committees of the European Parliament. She has done extraordinarily well but she has hung on to her job by the skin of her teeth because, for a large number of members of her own grouping in Strasbourg, it is difficult to see why, when the United Kingdom has stood aside from fiscal union, banking union and bailouts—from the core business of the Parliament on economic matters—a UK MEP can be the chairman of its key economic committee. I hope that she survives, as she does a great deal of good in the European interest and the UK interest, but I am not sure that she can.
The European Parliament has also drifted away from national Parliaments a bit. On the multiannual financial framework, I did not see much recognition in the European Parliament, with its insistence that the totals were too low, of the need for painful belt-tightening being felt in member state Parliaments. On the financial transactions tax, I was shocked by some of the arguments advanced in the European Parliament, where the greatest enthusiasm came from those who thought that the financial sector needed to be punished for its crimes in the financial crisis and that throwing grit in the wheels of the capital markets was a good idea, per se. I did not see many arguing that having a great international financial centre inside the EU is a huge EU asset and that the City of London needs to be listened to, and that the FTT therefore needs to be rejected. Those who want to make such arguments in the Parliament could be assisted in making them by people like us, so I have three very modest proposals.
First, is there perhaps a case for inviting key United Kingdom Members of the European Parliament to participate in certain subject-specific Select Committee meetings, not as witnesses but as country members sitting on our side of the table and talking with us about how best to affect the EU outcome? Secondly, should our chairmen regularly meet the chairs of the European Parliament committees and, thirdly, could we even consider—a daring suggestion—a joint committee of members of the Select Committee of this House with UK Members of the European Parliament? It could perhaps have fluctuating membership, depending on the issue of the day. I am not saying that these meetings should be the kind which happens for form’s sake, with very long agendas, or on a regular basis. I see them as ad hoc, and called to deal with a particular big issue, such as the seven-year financial framework this spring, or the financial transactions tax. If, as I hear, the Select Committee is to consider the role of national Parliaments, I hope that it might consider looking into these suggestions.
I have one other suggestion, which I also put to the noble Lord, Lord Boswell, with a certain degree of trepidation. We have to acknowledge that the performance of our own committee could be improved. We do very well but I think we could do better. The Commission sends to this House, electronically and instantly, every legislative proposal that it puts forward at the moment when it is sent to the Council. They are here before they are read by Sir Jon Cunliffe in Brussels. What do we do with them? We actually do very little because since we joined the European Union, it has been our practice to wait. In those days, we would have waited for the carrier pigeon to arrive with the paper from Brussels. We wait until the Government send us along a copy, telling us what they think of it. Why do we wait for the Government? We could be self-starters and form our own view by considering the most contentious proposals—the ones where, say, subsidiarity confers real importance on deadlines and efficiency.
There would be resource consequences from such a change. It would have costs for this House. But if we cannot get the Government to perform as they used to, it seems to me that we will have no choice but to kick the process off ourselves if we are to retain the standards of scrutiny that we used to have and, I hope, improve them—and we should be improving them.
The Prime Minister was quite right when he said on 23 January:
“It is national parliaments, which are, and will remain, the true source of real democratic legitimacy and accountability in the EU”.
I agree and I think that most Brussels insiders—even some Members of the European Parliament—would agree, although some are clearly a bit puzzled that six months on, he still has not produced any specifics as to what he means and what his improved national parliamentary accountability would look like or how it would work. The Prime Minister talked about it as if it were a matter for treaty change. I really cannot see that at all. We could look again at Articles 10 and 12 of the treaty, which could be expanded, but they are deliberately unspecific—correctly, I think. It would be wrong in principle that an EU treaty should purport to lay down how member state Parliaments should control the business of the European Union. This is entirely a matter for us.
Our system, which used to be almost as good as the Danish system but now is definitely not, being some way behind, is still better than the system in some other countries. However, before we preach too loudly, “Physician, heal thyself”, the answer to the problem which the Prime Minister rightly describes is at least partly in our own hands. If we were to improve it, by catching up with co-decision and technology, we would improve democratic accountability in this country and be better placed to encourage others to follow our example.
Lord Hodgson of Astley Abbotts
My Lords, it is a great privilege to follow the noble Lord, Lord Kerr of Kinlochard. A lifetime at the diplomatic coalface has given him analysis and perspective that I cannot hope to match, and I listened with great interest to his suggestions.
I am just an ordinary member, now of Sub-Committee E and previously of Sub-Committee F. This has given me the opportunity to study in detail four very different chairmen: my noble friends Lord Jopling and Lord Bowness, the noble Baroness, Lady Corston, and, previously, the noble Lord, Lord Hannay. Each has been extremely effective and has been able to corral their potentially recalcitrant flocks with humour and good sense. It has been a pleasure to serve under them all. The other group to whom I add my thanks are the clerks, who do such terrific preparatory work and manage to turn the meanderings of the committees into a coherent whole. In my view, the country and the House owe a great debt of gratitude to both these groups.
As a member of Sub-Committee E, I served on the joint Select Committee considering the opt-out decision but I am not proposing to cover that issue now. The House has debated it at length and I agree with the noble Lords, Lord Judd and Lord Hannay, that the delivery of the Government’s response was unacceptably late. However, we have had a good chew of that and candidly, if I am honest, I am suffering a bit from opt-out or opt-in fatigue, at least for the time being. We will no doubt return to that issue in the autumn.
Instead, I will focus first on another of Sub-Committee E’s reports: that on The Fight against Fraud on the EU’s Finances. The evidence that the sub-committee received indicated that the official figure of fraud—which, as we have been told, was £404 million—was a woeful underestimate and that the real figure could be as much as 12 times higher: around £5 billion.
We also received evidence that OLAF, the European agency charged with fighting fraud, did not always receive the full-hearted national co-operation that it deserved. In these circumstances, the Government’s participation in our inquiry, or perhaps I should say their non-participation, is disappointing. Further, the Government’s response to the sub-committee’s report, received only recently, did not seek to rebut the sub-committee’s suggestion that EU fraud could be as high as £5 billion, merely recording, as the noble Baroness, Lady Corston, said, that it was not a figure that they recognised. This smacks of a good deal of complacency. Fraud is theft—theft from the taxpayer, whose interests every Government in the EU ought to be protecting. Moreover, fraud, if not investigated and prosecuted with vigour, has an unhappy habit of spreading. I hope for a more vigorous approach by the Government on this topic in future.
Lord Davies of Stamford
I am grateful to the noble Lord for giving way. Does he agree that, given the importance of fraud—I think that the whole House will be with him on everything that he said on that—it might have been a good idea if the Government had decided to join in with the initiative of setting up a European prosecutor’s office with a specific remit of pursuing fraud cases in the EU?
Lord Hodgson of Astley Abbotts
As always, the noble Lord, Lord Davies, has a seductive tone to his voice, but of course that is a completely different issue. We are trying to ensure that OLAF, which is the European fraud investigative committee, operates effectively. That is what we need to concentrate on first rather than, as my noble friend Lord Howell has said, superimposing yet another body that will be out of touch with the reality on the ground.
I shall focus the rest of my remarks on Chapter 10, the future look. I have written to the noble Lord, Lord Boswell, to give him some advance warning of what I wish to raise and what I would like the EU Committee to look at in future: the implications for this country of the continued free movement of labour within the EU—one of the pillars, as the noble Lord, Lord Hannay, firmly pointed out, on which the whole EU structure rests. However, I fear that the UK, uniquely, is already facing some strains from this free movement, strains that I fear will almost certainly become more severe and increase over the next 10 to 20 years.
A couple of figures may help to illustrate the point. England, not the United Kingdom, has now overtaken the Netherlands as Europe’s most densely populated country, with some 400 people per square kilometre. By comparison, France has 125 people per square kilometre, which is one-third or one-quarter as densely populated, and Germany has 260 per square kilometre—about two-thirds as populated. That is today, but over the next 15 years to 2027, if you believe the mid-projection by the Office for National Statistics, the UK’s population—here I am talking about the UK, not England—will increase by 7 million people, from 63 million today to 70 million then. What does this mean in comparable statistics? Last year, the UK’s population grew by just short of 1,100 people per day—a small village every week; a parliamentary constituency every three months or so. By contrast, Italy’s, France’s and Germany’s populations are falling, and on present projections the UK will overtake Germany to become the most populous country in Europe by the early 2030s.
Should we worry about this? Before answering that question, one needs to make it clear that race, colour and creed play no part in the debate. Indeed the social strains, if social strains there be, are likely to be felt most harshly in the minority communities. So should we worry? Physically, we can certainly fit the people in. Bangladesh has 1,400 people per square kilometre compared to England’s 400. However, it will be up to wiser minds than mine as to whether we wish to reproduce Bangladeshi living conditions in the UK.
Concerns revolve around two specific issues. First, there is the impact on our environment—the pressure on the green belt around our cities, the impact on our countryside, especially in the south-east, and so forth. These are important to me but are not the critical issues. For me, the critical issue is the potential crowding out of our native-born population—please note that I say, and I mean, “native-born”; that is not another word for white but, rather, means anyone and everyone who was born here—and the consequences of that crowding-out on our social structure. If the default option for British industry and commerce is to call for more immigration as opposed to upskilling our own population, we run the risk of creating a sullen, disconnected, unemployed and in due course no doubt unemployable underclass—an underclass that, in the minority communities, may well find extremist activities attractive. That is not good for us as a country or as taxpayers.
I shall give the House a practical example. I have a house on the Shropshire/Herefordshire border. As I speak here today, there are about 4,000 people from eastern Europe picking fruit. They are here legally, they behave well, they work hard and at the end of the season all, or at least most, of them will go home. However, there are unemployed locals in Herefordshire and south Shropshire. Talk to the fruit farmers and they will tell you that the locals will not work hard enough, are not reliable and turn up once and do not come again. Talk to the locals and they will tell you that they cannot get the farmers to recruit them because they prefer to recruit in bulk from eastern Europe in the hundreds. Where does the truth lie? I have no idea, but there is an issue here that at some point we have to address.
An argument often advanced for increasing immigration is the need to provide additional people to look after, and compensate for, our ageing population. This has extremely superficial attractions but it ignores the inexorable laws of ageing and compound interest. Today’s increased number of young people leads inevitably to tomorrow’s increased number of old people, who will in turn require still further increases of young people to compensate. Indeed, it has been calculated that if we wish to keep the same number of workers to pensioners as at present—it is about 3.5 to 1—we will already need an extra 27 million more workers by 2050: a 40% increase in our population.
To conclude, while free movement of labour within the EU is only part of the challenge, it is an important part and one which an EU committee will be uniquely well placed to address because it can do so in the non-partisan, equable, evidence-based way at which it excels and which this subject, above all, demands. I take a fairly hard-nosed approach to this country’s relationship with the EU but I do not doubt that at root it has been of great benefit to the United Kingdom. The 900,000 or so graves in France and Belgium are mute witnesses to that fact. However, outside the M25 in particular, the apparently inexorable rise in our population is causing concern. We need to reassure any concerned people that Parliament is aware of those concerns and prepared to investigate them fully, no matter how sensitive they may be.
Martin Wolf, the FT economics commentator, wrote:
“Society cannot function without a majority willing to play by the rules, without individuals demonstrating on a minute-by-minute basis their trustworthiness, reliability, courtesy and self-reliance”.
We need to ensure that we do not stretch these qualities to breaking point.
Lord Liddle
My Lords, I join the chorus of thanks to the noble Lord, Lord Boswell, and to the formidable array of committee chairs and retired chairs who have spoken. I thank them for their hard work, and for the rigour and objectivity of that work, which makes a tremendous contribution to the European debate in Britain.
I want to make three points in a brief speech. First, this work is essential and therefore I agree with the noble Lord, Lord Hannay, and the noble Baroness, Lady Scott, that there should be no further cutbacks to it in this House. Secondly, it can work properly only if all parts of the Government take it seriously. I have a lot of sympathy with the strictures on the Treasury that I have heard from various quarters in this debate. When I worked in 10 Downing Street the Treasury would not even tell No. 10 what was going on. That was not so much because of the personalities at the top but rather because of an institutional arrogance: they believe they are guardians of the state unaccountable to anyone else. This attitude has to change.
If I may make an aside, I am somewhat alarmed by the fact that at present the two key posts in the management of European business—in the European Secretariat and at UKRep in Brussels—are held by people from the Treasury. I congratulate Sir Jon Cunliffe, who is a very able man, on his appointment as Deputy Governor of the Bank of England but I hope this Treasury grip will not be maintained.
The third point is about the future work of the committee. Here I rather agree with the noble Lord, Lord Howell—and not just because of the very nice compliment that he paid my think tank—that the committee could take a more ambitious view of its role beyond scrutiny. We have to recognise that a big debate has been started about Britain’s future in the European Union and the committee can make a very valuable contribution to it, particularly in two areas where it is extremely well, if not uniquely well, qualified. One is the question of competences and the whole debate about subsidiarity and proportionality. The second is the debate about the need for an enhanced role for national parliaments.
A good starting point would be the Government’s balance of competences review. My fears about this have been somewhat allayed by the tone of the first reports, as they show an objectivity of approach. There has certainly been a bit of Lib Dem influence there, which is possibly more effective in this area than on many coalition policies. I also think there is a sense in parts of the Conservative Party that it is simply not going to follow the kind of bar-room prejudices of Nigel Farage in setting its future European agenda—at least, I hope so. I detect—I would like to know what the Minister says about this—that the Government are shifting from what started off as a Conservative manifesto commitment to the repatriation of powers to a sensible debate about the need for multilateral reform of the way the European Union exercises its competences. If that is the case, it would be quite an important shift, which on this side of the House we would very strongly support. The committee could help that debate along, particularly if it carried out a detailed examination of how there can be better enforcement of subsidiarity and proportionality and what role national Parliaments can play.
I am sure that the noble Lord, Lord Kerr, is right to say that the work of the committee could be even better. Certainly, the role of national parliaments in the system could be strengthened without treaty change. We have to look, at a much earlier stage in the policy-making process than at present, at how national parliaments hold Ministers to account. We should seek to beef up the role of COSAC—the body that brings together the parliaments in Brussels—so that the yellow card procedure is used more effectively. Of course, there are all sorts of other ways in which the role of national parliaments could be strengthened through future treaty change, but I suspect that that is some way away.
Therefore, the Select Committee does excellent work, but it could do even more if it made a contribution to this crucial debate about reform of the European Union, and in that way helped us to remain effective members.
Lord Wallace of Saltaire
My Lords, I am conscious that I now stand between noble Lords and what the noble Baroness, Lady O’Cathain, called their buckets and spades, although in my case it is my punnet and hoe. I failed to pick rather too many of our raspberries and a large quantity of our blackcurrants last weekend, so I look forward to getting back as soon as possible to provide my wife with them to process.
I declare an interest as a former member of the House of Lords EU Committee and a former chair of one of one of its sub-committees. I had thought that perhaps when I step down from government, it would be very pleasant to sit on the committee again. However, what I have heard today suggests that it is all extremely hard work, which is the last thing my wife would want me to do when I have finished working absurdly hard in government. We appreciate how much extremely valuable work the Lords EU Committee and its sub-committees do. The Government certainly have no intention to reduce the number of sub-committees. I remind Members that the number of sub-committees and the allocation of committee resources in this House is a matter for this House and its authorities, not for the Government.
The committee will have seen the Government’s written response to this report and the Minister for Europe welcomed it.
Lord Davies of Stamford
On the very important point of the allocation of resources to permit the committees to do their work, we have, of course, recently been subject to reductions in our travel budget. That is bizarre, because the work requires us to keep in close touch with our continental partners and in particular with the institutions in Brussels. Do the Government have a view on the matter of the resources that should be allocated or the reduction in resources that is being imposed on the committees here?
Lord Wallace of Saltaire
My Lords, I am simply not briefed on that. However, I can assure the noble Lord that as a Minister I travel with Ryanair and easyJet to various places around the outer fringes of the European Union. We also do our best to economise where we can. I remind the noble Lord that this is the leanest Government that Britain has had for many years because we have cut the government car pool very substantially—we have to walk everywhere.
This is a very timely debate. I recall our previous debate on the annual report, which took place rather later than this one, and in the Moses Room, although we are now here in the Chamber. I also recall it because the noble Baroness, Lady O’Cathain, criticised me very sharply on that occasion for not having read every single report that the committee had produced in the previous year. I can assure her that I have read at least the summary of every report that the committee has produced this year.
There are, of course, many examples of the way in which the committee has fed into the Brussels process and the work of other Governments, as well into the debate within Britain. We are concerned at the criticisms that the committee has made of the untimely provision of Explanatory Memoranda, and in particular of the role of the Treasury. We very much take on board what the noble Lord, Lord Kerr, said about the importance of timeliness in terms of subsidiarity. I will take all the points back, and we will discuss them in the Cabinet Office, the Foreign Office and various parliamentary branches of the relevant departments, to make sure that they are fully taken on board. I am an enthusiast for the development of the use of the yellow card mechanism. We have to make sure that we are given all the resources we can manage so that we will be able to use that to its best ability.
I have been heavily involved in the balance of competences review for six months, about which various comments have been made. Perhaps I may stress that those reports were not intended to have policy recommendations at the end. They were intended very much to feed into a better informed debate in the United Kingdom. I hope that the first six reports have done so. I look forward—although perhaps not entirely—to three more rounds of very careful assimilation of a large amount of evidence presented into another collection of reports.
I say to the noble Lord, Lord Hannay, that the balance of competences exercise is very much in parallel to other aspects of what is going on in government. We have welcomed his committee’s report on the justice and home affairs opt-out. The balance of competences exercise is proceeding in parallel with a whole range of other negotiations and the order of reports was drawn up some time ago, with other dimensions in mind.
We are attempting, both within the balance of competences exercise and in the work of this and other committees, to provide space for a reasoned debate within the European Union about our interaction with the European Union. We all recognise that over the next nine to 12 months that debate may be constricted in some ways as we move towards the next European elections. We are also conscious, particularly so over the past week, that the press is not always favourable to a reasoned debate. The Leveson report remarked that in press coverage of the European Union—as with press comment on women, minorities and Muslims—its attitude is that it is quite acceptable to invent stories without any source whatever.
I was very struck to see this story in the Mail the other day:
“Revealed: The shadowy lobbyists waging war to keep Britain in Europe”,
I read it with great interest, only to discover that it was actually talking about British Influence, which is an entirely public body. I think that the Mail had lifted this story from a Eurosceptic blog, which said that British Influence was a deeply dangerous organisation funded by the secretive Bilderberg Group. Oddly enough, the Mail did not include that bit.
I was also quite worried by the article by Peter Oborne in the Telegraph last week, saying that:
“The 1975 referendum was a fair poll in the same sense that the elections due to be held in Zimbabwe next Wednesday will be fair … The sense has lingered that we were hustled, against our will, by an anti-democratic elite, into an organisation whose true aims and nature were hidden from us until too late”.
The BBC, of course, was playing a role in the deceitful agenda.
On Saturday, the Telegraph’s Brussels correspondent, Bruno Waterfield, told us that,
“the European Union is planning to ‘own and operate’ spy drones, surveillance satellites and aircraft”,
under the control of the noble Baroness, Lady Ashton, in,
“a major move towards creating an independent EU military body with its own equipment and operations”.
I was therefore very pleased to receive this morning an invitation from King’s College London to a debate in October on how to ensure that we have impartial reporting on the European Union, at which Bruno Waterfield will be one of the speakers.
I say this partly to demonstrate that getting reasoned debate based on evidence about Britain’s involvement in the European Union is not easy and that this committee plays an immensely valuable role in helping to widen that debate. I hope that noble Lords have read the balance of competences review papers so far and I hope that they feel that they have drawn in evidence-based policy with which perhaps to counter the emotion-based policy, the prejudice-based policy and the conspiracy-oriented allegations which so often cloud out rational debate in Britain. All parties must contribute to this effort.
I say to the noble Lord, Lord Judd, that I very much look forward to hearing a speech from the Labour leadership comparable to the speech made by the Prime Minister in January. The leader of my party, the Deputy Prime Minister, will make a major speech on the European Union in October. I very much hope that we will hear a constructive Labour contribution to an EU reform agenda that keeps Britain in the European Union. This is what the Prime Minister was talking about, and I confirm to the noble Lord, Lord Liddle, that that is what the coalition Government are pursuing, rather than unilateral repatriation intended to lead to an exit, which is what the Telegraph, the Mail and a number of others on the fringes of conventional politics very much want us to pursue.
I turn to various issues that were raised in the debate. The sub-committee on foreign affairs produced a very valuable report on common security and defence policy. I have noted that on scrutiny we have shifted very often from major reports to follow-on reports and continued scrutiny. As we approach the December European Council, which will have European defence very much on its agenda, I trust that the sub-committee will continue to monitor the way in which the British Government and others approach this. As everyone knows, there is a tension between those who are interested in institution building and others who are interested in practical conflict prevention and conflict resolution under that dossier.
Similarly, on banking union, it would be immensely valuable if the sub-committee responsible for that continues to monitor the ongoing debate. Having read its report and various other—mainly German—documents, I think that I understand the various different definitions of banking union that are floating around. However, because there are so many different definitions of banking union—with maximum, minimum et cetera—clearly we need to contribute to the debate. As the noble Lord, Lord Harrison, and others rightly said, we need to think also about where in the debate the interests of Britain and of Britain’s financial centres are at stake.
On the workload of the European Court of Justice, I take on board what has been said. We have now moved on the question of—
Lord Wallace of Saltaire
Advocates-General. The question of more judges is now about to come up.
On the question of students and migration, I will write to the noble Lord, Lord Hannay. However, I will say now that the government line is that students who stay here for three to four years are not necessarily temporary visitors. That is one reason why the question of what role they play in the statistics is important. As the father of a student who went to the United States seven years ago and who I hope will come back to the United Kingdom one day, I am very conscious of the tensions.
Lord Hannay of Chiswick
I would like to save the Minister from sending an unnecessary letter in the Recess. This is not about statistics. I have said it an awful lot of times. Others, including the noble Lord, Lord MacGregor, in the debate that he initiated, also said it. It is about government policy and the impact of that policy on immigration and on our higher education sector. That was what the senior member of his party who is a member of the Cabinet referred to. I ask him to send me a letter not about statistics but about how the Government will give effect to the international education strategy that was put out by David Willetts yesterday and which, I am afraid, is not totally consistent with the Government’s immigration policy.
Lord Wallace of Saltaire
My Lords, I guarantee that I will look at the strategy of the Minister for higher education and will consult further.
The noble Lord, Lord Bowness, asked about a Eurojust opt-in. The Government are now consulting on the new Eurojust proposal, which was published on 17 July as part of a package, alongside a proposal for a European public prosecutor’s office. We have been clear that the UK will not participate in the establishment of a European public prosecutor’s office, so we are now considering how to respond to that.
One thing that I hope the committee will focus on in the coming year is the area of European data protection. This applies to domestic legislation in Britain—we may have a data-sharing Bill in the next Session—and applies also at European level. When it comes to negotiation with the United States, data protection and data-sharing are becoming—as we all know and see from the German elections—a highly sensitive area in which the expertise and expert contribution of the Lords European Union Committee could be extremely valuable. A number of noble Lords have talked about democratic accountability—
Lord Hannay of Chiswick
My Lords, I am sorry to interrupt again, but I have to tell the noble Lord that the Select Committee did, in fact, recommend that the Government opt in to the data protection directive currently under negotiation in Brussels. Mirabile dictum, the Government did opt in.
Lord Wallace of Saltaire
My Lords, the final shape of the data protection directive is by no means clear. We are a very long way from a final text. I merely wish to insist that it needs to be kept very well under review.
I move on to democratic accountability. The role of national parliaments and closer co-operation among national parliaments, of the sort that the noble Lord, Lord Kerr, and others talked about, is very much a direction in which we should be moving. The yellow card mechanism is developing. I do not agree with the noble Lord, Lord Howell, that it is not a workable mechanism. Closer co-operation between national parliaments; better use of the Brussels office, which we have and share with others; rapid provision of Explanatory Memorandums; and, as the noble Lord, Lord Kerr, also said, closer co-operation with British Members of the European Parliament should help us demonstrate to our publics that we are actively engaged in scrutinising the necessary involvement of the United Kingdom in a whole range of regulations at the European level, but also to make sure that we are feeding into the Brussels bubble the active concerns about subsidiarity that we and many other publics have.
This has been a very wide debate, and I simply want to end by pointing out that Her Majesty’s Government are committed to staying within a reformed European Union. We are working with others to promote that agenda. I was very pleased yesterday to read from the Foreign Office a number of telegrams about the positive reaction of other member Governments to the first balance of competences papers. We are already talking to a number of other Governments about how we might share an agenda for reform. That, I hope, has the support of all members of party and non-party groups in this House. I very much look forward to the further valuable contributions that the European Union Committee of this House will continue to make. I will do my utmost within government to ensure that members of the Government—even the Treasury—co-operate as fully and as promptly as possible with the continuing of the committee.
Lord Boswell of Aynho
My Lords, given my position as the concluding speaker in the debate, I very much hope that it will not be a matter of the theme, “Apres moi le deluge”. We are all about to go on our holidays and I do not intend to prolong the agony. However, I would like to say first how much I appreciate the contribution of all those who have participated in the debate and the Minister’s response. I am particularly grateful to those who have expressed very generous—even if unmerited—remarks to me personally. Before the cynics get at it, perhaps I should say, by no prior arrangement, that I would like in turn to express my gratitude to all the sub-committee chairs and former members of our committee—including the Minister, as he reminded us—who have participated in this debate. It has shown the depth of expertise that the House can deploy and, in what I hope will be a golden summer of England cricket, that we can bat all the way down the order with great success.
If I were to select a single word to encapsulate the nature of our discussion, and probably the way in which our committees work, it would be workmanlike—but not, I hope, pedestrian. We do a proper job of work. We do it seriously but we try to have regard to the wider context as we do it. In a way, that has been brought out by the debate, because we have shown a constant tension between concern about procedural issues and substantive issues. Perhaps I may select in particular the remarks of the noble Lord, Lord Judd, who felt strongly about both. I think we all understand that there is a European people out there, not all of whom are very happy with the course of events and who feel tensions about how the system is not necessarily expressing their views as it should.
There is also concern as to whether we are having the right dialogue with Her Majesty’s Government and the right degree of compliance with the scrutiny reserves and the other obligations that they have undertaken. I remind the House that it is entirely for the Government to meet their obligations. We will do our best to help and we do not wish to be unreasonable. It really is not sufficiently good enough, on their behalf, to say, “Well, we did our best”, when clearly in certain cases that has not happened. We will not go away from that issue, nor should we do so.
However, I would reflect that there is a danger—we see this even in some of the material that we get, for example, from the European Parliament commenting on our involvement in European affairs—that because we have a documents-heavy and scrutiny-intense activity, there is a feeling that somehow that is all that we do. Of course it is not the case that everything is done formally by the process of scrutiny, holding things under scrutiny or even grumbling about the conduct of Her Majesty’s Government. There is a much more numinous process of policy formulation and discussion.
Perhaps I may come to points of substance. First, there is a certain regret in my heart that no explicitly Eurosceptic contribution has been made today. As I have said on previous occasions, any discussion of European policy matters is not a binary one where everyone immediately agrees or disagrees to the suggestion you have made after your detailed inquiry. It is very much more a process of evolving. One of our important roles, which I think has been touched on, involves our ability to go further back in the decision-making process and to respond as the Commission has a bright idea or wishes to develop themes, and not simply to wait until the last minute when we can say, “We are not happy with this as it’s turned out”, “It raises a subsidiarity issue”, or whatever.
Another point raised—for which we are indebted to the noble Lord, Lord Howell of Guildford, as we are for others—is that it is now a very complex process. As for his comments on the contribution of the electronic dialogue, although I can e-mail my colleagues in COSAC, for example, which is the sort of thing we should be doing more than we do, that might not be the answer to every situation. We do not simply have a central authoritarian system to which we have to respond rather late in the day, we also need to be involved in a much more networked policy formulation and discussion.
In that context, yes, of course we want our dialogue, and yes, we are not complacent about having got it perfectly right—I say in response to the comments of the noble Lord, Lord Kerr of Kinlochard—just because Jacques Delors, the European Commission or the current Commissioners have our reports on their shelves. We can always do better. I am sensitive also to the point made by the noble Lord, Lord Hodgson of Astley Abbotts, about migration issues. Indeed, I hope that the House will not land everything with even the remotest relevance to Europe on our shores. However, we do have a dialogue. Two of our sub-committees have looked at some of the issues and we have corresponded about them. We are open to doing more in this respect just as we are open to doing more on procedural issues.
I hope that I can assure your Lordships’ House that we do our best to do an objective job. We do not have closed minds about how it should work. We do some things that do not always appear even in the tomes of annual reports. In the context of our national parliamentary inquiry, I have written well over 100 letters to various people, including national parliaments and ambassadors in London and otherwise, to alert them to what we are doing and to invite them actively to participate. We will take any part in the dialogue that they are prepared to have with us.
In conclusion, I should like to express my gratitude for the way in which our report has been received and to emphasise that, whatever we do in the future, we will be guarded by the lodestars of quality and objectivity. We will make no compromises about that.
Protection of Freedoms Act 2012 (Code of Practice for Surveillance Camera Systems and Specification of Relevant Authorities) Order 2013
(10 years, 9 months ago)
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Baroness Stowell of Beeston
That the draft orders laid before the House on 10 June be approved.
Relevant documents: 4th Report from the Joint Committee on Statutory Instruments, 6th Report from the Secondary Legislation Scrutiny Committee, considered in Grand Committee on 17 July.
Baroness Stowell of Beeston
My Lords, I beg to move the Motion standing in the name of my noble friend on the Order Paper. Although this Motion was debated extensively in Grand Committee on 7 July, the noble Baroness, Lady Basildon, has given notice that she wishes to debate this order again today, so it may be helpful if I briefly remind the House of the order’s intention.
This is a code which will for the first time place a regulatory framework around the deployment and use of CCTVs. It will also for the first time ensure that the public have a say in the deployment of these cameras. Through the 12 guiding principles encapsulated in the code, what we are putting in place will ensure that the rights of the public are balanced against the need for CCTV cameras.
This is not about increasing or decreasing the number of CCTV cameras in use. It is about ensuring that the police, local authorities and other designated authorities consider deploying CCTV cameras only where they have identified a pressing need; that the public are consulted in those considerations; and that the purpose of the use of CCTVs is set out clearly for the public. The purpose of CCTVs is to assist in the prevention, detection and conviction of crime, and the purpose of the code is also to drive greater consistency and quality of the images taken from those cameras to ensure that their use by the police is more efficient and effective in cutting crime. I beg to move.
Baroness Smith of Basildon
My Lords, I am grateful to the noble Baroness for her explanation. I should point out that I am only “Lady Basildon” on Twitter; it is usually Smith, but I am pleased to have the Minister as a follower on Twitter. There are two orders before us today, but she has rightly addressed the one that I raised concerns about. We raised and discussed the other one, about the national security determinations relating to DNA and biometric information, in Committee.
The Minister is quite right that the order which I am speaking about, the Protection of Freedoms Act 2012 (Code of Practice for Surveillance Camera Systems and Specification of Relevant Authorities) Order 2013, was debated in Committee. I am sorry—I say this with regret and not as a criticism—that the noble Lord, Lord Taylor of Holbeach, is not here today; not because we are not pleased to see the noble Baroness, but because we discussed this in Committee. I said to him on 7 July that if I remained dissatisfied with the answers to our queries and concerns, then we would look to debate it on the Floor of the House. The noble Lord helpfully wrote to me, seeking to address those concerns, but some remain, which is why we are debating this again today,
As pleased as we are to see the noble Baroness, we therefore regret that the noble Lord is not able to be here today. However, no doubt the noble Baroness will have read the debate, will have seen the letter that the noble Lord, Lord Taylor of Holbeach, sent me, and will be aware of the concerns that I raised. She sought to air them today, but I regret that in her short comments she was unable to do so. I do not want to repeat the Committee debate—that would be unwelcome at this time on the last day of term—but I will summarise the concerns and explain why we remain concerned. I hope that the noble Baroness will be able to give further information and might seek to address some of the points that have been raised and not fully answered.
The Secondary Legislation Scrutiny Committee made the point that the Government needed to justify how the benefits offset additional bureaucracy, and the wider application of the code. Those two issues stand together. There is significant increased bureaucracy and cost for local authorities and the police, as I outlined previously. This is addressed in the impact assessment. In Committee and in his letter to me, the noble Lord addressed this. He said in his letter that the Local Government Association agreed that it was difficult to assess the costs involved. He then added that it was around £1.6 million each and every year, although given the information on the impact assessment, this is a conservative estimate and could be much higher. The impact assessment suggests that is the best estimate and that it could be as high as £3 million each and every year, and that the best estimate for the one-off transition costs is over £14 million and could be as high as £29 million.
In his letter the noble Lord also stated that the best estimate values had been shared between 350 local authorities and 46 police authorities. However, as both the letter of the noble Lord, Lord Taylor, and the impact assessment make clear, the impact assessment assumes that,
“many of the local authorities and police forces … are already operating broadly within its”—
that is, the code’s—
“guiding principles where they relate to existing obligations. Thus the additional burdens and bureaucracy are likely to fall where systems and the accountability for decision-making need to be strengthened to protect the public”.
That implies to me that the conservative estimate of £1.6 million annually and the additional £14 million transition costs are not being shared across all local authorities and police forces because when the costs in the impact assessment were estimated it was done on the basis that many—I think it was 25% to 50%—would not incur any additional costs.
A further difficulty which was raised in Committee but has not been addressed is that this order applies only to the public and not the private sector. The Explanatory Memorandum quotes the policy background and refers to the advantages of CCTV. It also refers to the disadvantages, including,
“the extent to which private lives are exposed to ever greater scrutiny by other individuals, organisations or the State, leading in some instances to a potential exposure to criminality, or more generally, to an erosion of personal privacy”.
The order is therefore being promoted as a protection of civil liberties against the power of individuals, organisations and the state. However, it does not apply to individuals, organisations and the state; it applies only to the state and public institutions. So if these guidelines are so essential to protect civil liberties, why does the policy giving effect to the Government’s principles outlined so boldly in the Explanatory Memorandum only apply to the public sector? Can the noble Baroness tell me what percentage of CCTV cameras the order covers? I know that previously the Minister said that this was because they were in a public place, but so are shopping centres; shop and office cameras look onto the street. Do the same principles apply to those CCTV cameras as to the ones that police and local authorities use? If I am to believe what I see on “Law and Order UK” and other detective programmes on TV, the police often ask for access to the information on these private CCTV cameras to collate evidence of criminal activities. So, in many cases, the use of those cameras and the people they film are identical.
The Government have made much of leaner, slimmer government and fewer regulations—they want to cut quangos—and yet here we have not only a new commissioner but significant additional regulations for local government and the police. I understood that the Government policy was that for each new regulation that was brought in, two would be jettisoned as the overall burden, as the Government call it, of regulation was reduced. I think that is a poor way to make policy. There are serious issues around regulation; it is not a numbers game. In his comments to the Committee, the Minister said that, in terms of bureaucracy and regulations, the rule of “one in and two out” does not apply to the public sector, only to business. That is a new one on me. I had not realised that the Government’s commitment to reducing bureaucracy, as they call it, was qualified. Given that this involves taxpayers’ and council taxpayers’ money, can the Minister tell me why the Government exclude the public sector in this regard?
A second point I have raised before and on which I am still not clear—perhaps the noble Baroness can help me—is that when I raised the issue of compliance with the principles the Minister’s response was that the legislation to establish the new Surveillance Camera Commissioner limited the commissioner’s role to encouraging compliance and that the legislation provided no enforcement powers even though it was the Government’s legislation. At an annual cost of £250,000, the Government are therefore setting up a commissioner to encourage local authorities and the police to comply with the new regulations, which will not apply to the private sector. However, although there is a statutory duty, there is no way that this commissioner, at a cost of £250,000—a quarter of a million—can enforce the regulations.
When I raised this in Grand Committee, the Minister sought to give me some assurances, but his answers gave me more cause for concern. To my question about enforcement he responded:
“Local authorities and the police will be under a duty to have regard to the code when exercising their functions…When a local authority or police force fails to do so, it will be vulnerable to judicial review for a breach of that statutory duty. The possibility of being subject to such a legal challenge will incentivise local authorities and the police to adhere to that statutory duty”.—[Official Report, 17/7/13; col. GC293.]
There are 12 guiding principles within the code, seven of which are considered not to have any cost. Each one of those places an additional bureaucratic obligation on the police and local authority. Therefore, non-compliance with any of those 12 criteria or principles opens up the possibility of a judicial review, and judicial reviews do not come cheap. This statutory instrument allows for any public sector CCTV installation to be subject to a judicial review. I am not sure if the noble Baroness is aware of this, but local authorities are understandably becoming more risk-averse whenever there is a possibility of legal action or judicial review because they fear the costs. Experience tells us that the threat of a judicial review can lead local authorities to avoid decisions that can lead to a JR, even when they are likely to win, just because of the huge costs that are involved.
The Government themselves recognise this problem. They say they want to reduce the number of judicial reviews. The Justice Secretary, Chris Grayling, claimed that:
“The system is becoming mired in large numbers of applications, many of which are weak or ill-founded, and they are taking up large amounts of judicial time, costing the court system money and can be hugely frustrating for the bodies involved in them”.
The Government’s policy is to reduce the number of judicial reviews, but the Home Office policy is to give 12 grounds on which any CCTV application can be challenged by judicial review. I am really not comfortable with the threat of a JR being the only effective means of enforcement. I fear that the policy may well have the opposite effect to that which the Government intend by reducing the number of CCTV cameras, as councils seek to avoid risk.
We come back to the basic question that was asked in Committee, and I am still not clear on the answer: is this necessary? The impact assessment states that many of these bodies—local authorities and police—are already employing and using those guiding principles. The point was made by the noble Earl, Lord Erroll, who is in his place today, when he said in Committee that,
“many of the issues that do matter in this are covered by the Data Protection Act, for instance accurate databases and things like that. So they are already covered elsewhere. Will having an extra commissioner really make a difference?”.—[Official Report, 17/7/13; col. GC286.]
The noble Lord’s letter to me also refers to the Information Commissioner’s role in CCTV. There is a lack of clarity here. The judicial review only refers to the 12 principles; if there is a role for the Information Commissioner and for judicial review, which could be from either the camera commissioner or a member of the public, could there be a case where there are two actions against the local authority or the police, one via judicial review and one via the Information Commissioner?
I am certainly not against oversight. We support oversight, but I come back to the first point I made, and the point made by ourselves and the noble Earl, Lord Erroll, in Committee, and by the Secondary Legislation Scrutiny Committee: do the benefits justify the costs, or are there other ways in which this can be achieved?
I urge the noble Baroness to take this back and please think again. I am sure that we all want to avoid unnecessary burdens and unintended consequences, but I fear that this order could achieve both.
Baroness Stowell of Beeston
My Lords, I am grateful to the noble Baroness, Lady Smith of Basildon. My apologies for using her Twitter moniker in the Chamber; I will avoid doing that again.
During the passage of the Protection of Freedoms Act, Parliament debated and agreed the function of the commissioner and the scope and nature of the CCTV code of practice in so far as it applies only to the police, local authorities and other designated bodies. As we made clear then, the Government believe that the CCTV code will ensure that CCTV is deployed and used transparently, proportionately, and effectively. We want the police and local authorities to use CCTV to help cut crime. During our consultation, we received widespread support for it: 80% of respondents supported it. The Information Commissioner was also positive in his response, as was ACPO.
It might be worth me reading out a brief quote from ACPO’s response to the consultation on this code. ACPO said that the code,
“will help to bring in a consistent approach to dealing with the use of surveillance cameras. The use of twelve guiding principles sets out the Code in a straightforward way, which can be easily understood and implemented. The focus on transparency, access to and the security of images, as well as operational, technical and competency standards, making systems available to the police and the encouragement of the use of surveillance cameras as a forensic process, are all important facets of the proposed Code”.
The Government believe that it is an important step in ensuring the right balance between the rights of the public and the pressing need to fight crime.
The noble Baroness asked why the code covers only public authorities such as the police and local authorities, and some other enforcement agencies that are listed in the order. The list of relevant authorities is set out in the Protection of Freedoms Act, which was debated and approved by Parliament. Therefore, Parliament agreed that the project should begin on a limited basis, effectively covering local authorities and the police. The fact that it is limited in this way does not arise out of this order or the code of practice, but was in the original Act that was passed by Parliament. The code will be mandatory for only a relatively small proportion of CCTV cameras but we believe that it is right and proportionate for others to be encouraged to adopt the code because it is in their interests rather than to be obliged to at this stage.
The noble Baroness asked what proportion of CCTV cameras will be covered by the code. Although it will be small to start with, because it will be limited to the police and local authorities, the Government believe that all cameras operating in the public space owned by public bodies should be used openly, transparently and effectively, in line with the code. The Surveillance Camera Commissioner will review the implementation of the code, including its take-up by private bodies, and report to the Home Secretary and Parliament in 2015. Indeed, we expect the police and local authorities to be able to demonstrate the benefits of the code and to help raise awareness of it among those who would voluntarily adopt it.
The noble Baroness asked about costs. The Government believe that the costs of implementing the code are minimal. As she said, the costs cited in the impact assessment are estimated at £1.6 million per year across 350 local authorities; in other words, about £20,000 per year per local authority and £23,000 per year per police force. These costs are minimal in comparison to the budgets of these bodies. They are also average costs and will vary depending on the size and nature of the locality. The noble Baroness asked about how costs might vary from force to force and authority to authority. I do not have those details at this time but, as the impact assessment makes clear, we have based the costs per authority and per force on an average that has been acknowledged by the LGA.
We think that these modest costs are worth while in terms of the expected benefits that they will bring of better quality images to help investigate crime and bring criminals to justice, and greater public confidence. It might be worth me referring to a recent incident to do with the use of automatic number plate recognition in Royston in order to illustrate the benefits of the code and how the relationship between the Information Commissioner and the new Surveillance Camera Commissioner might work. Earlier this month, the Information Commissioner issued an enforcement notice against Hertfordshire Constabulary and its use of automatic number plate recognition. The ICO has ordered the force to review its use of ANPR cameras around Royston. It says that it has created a ring of steel that means no one can drive their car in or out without a record being kept. Although this predates this code, the Surveillance Camera Code of Practice will provide guidance for the police and others and enable the public to hold them directly to account for the proportionality and effectiveness of ANPR and CCTV. We understand that in this example Hertfordshire Constabulary will be working closely with the ICO to ensure that any future deployment of ANPR in and around Royston is proportionate in meeting a clearly stated and justified purpose.
Baroness Smith of Basildon
The Minister has raised a very interesting point, but I think she clarified herself when she said what is happening in a relationship between the Information Commissioner and the police. That is happening now, before this order comes into force, so is the order necessary?
Baroness Stowell of Beeston
Yes, the order is necessary. The reason I used that example to illustrate the point is that the Information Commissioner retains all his enforcement responsibilities regarding the Data Protection Act, both in respect of ANPR and CCTV. The point I was going to make is that the relationship between the Surveillance Camera Commissioner and the Information Commissioner has been set out in a memorandum of understanding. If there were any issue around enforcement in the use of data protection, which was the example that I gave from Royston, then enforcement would remain the responsibility of the ICO.
The purpose of this code is to go further than enforcement. It is about ensuring that CCTV cameras, which make an important contribution to helping to cut crime, are used in the most effective way. It is about ensuring that the public can have confidence in the way in which cameras are deployed and can see that, in times of reduced budgets and competing priorities, each police force uses this very expensive equipment in the most effective way that it can.
The noble Baroness raised points about enforcement and judicial review. In terms of enforcement, the Information Commissioner retains his responsibility. The code itself is self-regulating. We did not want to bring in this code and introduce additional burdens unnecessarily on local authorities or on police forces. We wanted the code to ensure good practice and that the best use possible was made of CCTV. The Surveillance Camera Commissioner will be required to provide an annual report to the Home Office and that will be laid before Parliament. He will be able, through his transparent way of monitoring performance, to report to the public on how this equipment is being used.
Judicial review will operate in the same way as in any other context. A judicial review can be brought only by an individual who is directly affected by the public authority’s actions or decisions in relation to CCTV or by an interest group representing such individuals. The Protection of Freedoms Act makes no reference to the commissioner initiating legal challenges against public authorities and therefore this will not form part of the commissioner’s function or role.
As I said at the beginning, the purpose of this code is to strike the right balance between protecting the public and upholding civil liberties. We believe that it will help to ensure that the purpose of CCTV is clear to the public and that it will help to deliver the results that they have every right to expect.
Protection of Freedoms Act 2012 (Guidance on the Making or Renewing of National Security Determinations) Order 2013
(10 years, 9 months ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Baroness Stowell of Beeston
That the draft order laid before the House on 10 June be approved.
Relevant document: 6th Report from the Joint Committee on Statutory Instruments, considered in Grand Committee on 17 July.