Grand Committee
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Children and Families Bill
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The Deputy Chairman of Committees (Baroness Harris of Richmond) (LD)
My Lords, if there is a Division in the Chamber while we are sitting, this Committee will adjourn as soon as the Division Bells are rung and will resume after 10 minutes.
Clause 36: Assessment of education, health and care needs
Amendment 128A
Lord Patel
Lord Patel (CB)
My Lords, it is a pleasure to kick off today’s procedure rather than waiting all day and your turn not coming. It gives me an opportunity to begin and I will try not to be long. Perhaps I may put my amendment in the context of the debate that we have had. First, many times in Committee we have heard that this Bill is all about improving education for all children. I am encouraged by and I thank the noble Lord, Lord Nash, and the Government, for their amendment related to the education of children with cancers and other long-term diseases.
I also thank him for his response to the amendment in the names of my noble friend Lord Kennedy and myself about children with cancers, their education and alternative provision. Putting that into context with this amendment makes this amendment crucial to complete the circle. I say that because my amendment provides a simple insertion to Clause 36. It would ensure that “providers of alternative provision”, including hospital schools and medical pupil referral units, would be able to request an education, health and care—the so-called EHC—needs assessment for pupils who need it. It is necessary because the Bill states that the request for,
“an EHC needs assessment for a child or young person may be made to the authority by the child’s parent, the young person or a person acting on behalf of a school or post-16 institution”.
I believe that what is lacking is that the providers of alternative provision should also be able to request an assessment.
Research carried out by charities such as CLIC Sargent has found that many parents did not think that their child’s educational needs were adequately assessed after their child’s initial diagnosis of their condition, including cancer. That adversely affected the education of the child. Alternative providers are well placed to request and feed into the needs assessment, as they have better knowledge of the child’s needs and have been involved in the child’s education over a period of time. Importantly, the limitations that, for example, the child with cancer still undergoing treatment might have can last several years.
Although some children with cancer go through treatment with minor disruption to their education, some find that they are disadvantaged for years as a result of aggressive and debilitating treatment and have huge gaps in their education. Their needs are very different. Some would be able to return to school with minimal extra provision, while others may require significant additional support. In some cases, that may be during their whole school career to enable them to catch up with their peers and to achieve their potential.
Often, awareness on the part of the school is key, which is not surprising considering that such children and young people are few in number. About 3,500 new cases of child cancers are diagnosed every year and a similar number of other children have other long-term diseases. Because of the variety of conditions, each school will not have the necessary experience. The issue is further exacerbated by the fact the child’s needs will often not be immediately apparent, but learning can still be affected in the longer term as a result of chronic fatigue, attention and concentration difficulties and even psychological and emotional problems. These issues can all directly impact on a child’s ability to learn.
There are, therefore, other benefits in involving hospital school staff and other professionals such as clinical nurse specialists in the process, as they are much more likely to have specialist knowledge about the impact of the child’s cancer and the support required. The amendment has the support of the National Association of Hospital and Home Teaching, a professional association for teachers and staff in the UK who work with children and young people whose medical needs prevent them from attending school.
The Minister has been very considerate in the amendments we debated before, but this amendment is the one missing notch that will help the education of children not just with cancers but with other long-term diseases. It would recognise the important role of alternative providers of education, working in a co-operative way with schools, parents and local authorities. Furthermore, including them in the EHC planning of these children values them as teachers. I hope the noble Lord, Lord Nash, will be sympathetic to the amendment. I am not seeking for this to be in the Bill—although I do not see why not—but I would be content if the guidance could be strengthened. I beg to move.
Baroness Jones of Whitchurch (Lab)
My Lords, I wish to speak to Amendments 129, 131, 133, 136, 139, 140, 141 and 142 standing in my name. These amendments focus on the mechanics of the process for determining education, health and care needs, the rights of appeal and the support for families which need to be factored in during the assessment process.
First, Amendment 131 specifies that, when making a decision as to whether special educational provision should be made for a child or young person, the local authority should have,
“regard to the competencies and needs of the child or young person’s parents and immediate family”.
This whole-family approach is an essential feature of the Bill. It should place the child’s or young person’s family at the heart of the assessment process. This is important in informing the provision to be specified in an EHC plan and would provide a much more rounded and personalised programme of support. This is consistent with our approach to previous parts of the Bill which sought to involve families more in the process. I know, from discussions we have had about young carers, that the Minister is sympathetic to this approach.
It is important that family life and home life are considered as part of a support package. Families are key to the well-being of children and young people with special educational needs and disabilities and to ensuring that they have every help to achieve their potential. The draft code of practice is very light on the scope to include families in assessments. The emphasis is on parental involvement in discussions and decisions, which is fine, but we are making a different point: families do not just need to be consulted; their own needs for help and support also need to be assessed. This whole-family approach is a fundamental principle which should thread through the clauses and be spelled out in the Bill. I hope noble Lords will support this amendment.
Amendments 129, 140, 141 and 142 deal with timescales in decision-making. Clause 36 specifies that parents, young people or educational establishments can request an EHC assessment. Our amendments would add a six-week time limit for responding to such requests. We feel that this is a reasonable timeframe, given that such requests would not be made unless there was a view that a child’s education was suffering in some way, so early intervention and action for the sake of the child are obviously important at that point.
We are aware that this requirement is included in the draft code of practice, but we feel that these rights are so fundamental that they should be spelt out clearly in the Bill. We feel that clear timescales would give added reassurance to parents and children alike, and would ensure that local authorities had clear and responsive processes in place to comply with the Act from its commencement, which would make these timescales a reality.
Amendments 133 and 136 deal with the right of appeal. As it stands, Clause 36(5) states that where a decision is taken by a local authority that no special education provision will be made, the local authority must notify the child’s parent or the young person of the reasons for that decision. So far so good, but our amendment would go one step further and ensure that parents are informed of their right to take the decision to appeal as a matter of course. This matter is covered in the code of practice, but we feel that it is better placed as an absolute right in the Bill.
We would go one stage further and argue that all appeal rights should be brought together as one single seamless set of rights spelt out in the Bill. We have separate amendments in a later group that address that point. We believe that a robust appeals process will ultimately be a guarantor of quality and will help to make the EHC system a success. I hope noble Lords will listen carefully to the points that I have made and will feel able to support the amendments.
Lord Lingfield (Con)
My Lords, I, too, have amendments in this group, to which I will speak briefly. In a similar way to the amendment of the noble Baroness, Lady Jones, to which she has just spoken, my first amendment, which is to Clause 36(5), seeks to place in the Bill a specified time limit for a local authority to act. In this case, it is to notify a parent or young person that the authority has determined that special education provision is not necessary.
Although the Bill does provide in Clause 36(11)(c) the regulations to be made concerning the giving of notice, for reasons of transparency it is important that this should be placed here in primary legislation. It is important to realise that the suggested time limit of 15 days reflects the current practice under existing legislation. Such transparency of time limits is important for parents and ought to be in the Bill, in order that they are informed promptly if a local authority determines that special education provision is not necessary, so that parents can, without delay, decide on any processes of appeal that they may wish to follow.
My second amendment, to Clause 36(11), strengthens the wording from “the regulations may make” to “regulations shall make”, so that we can be absolutely clear that regulations will be produced to this end.
The Parliamentary Under-Secretary of State for Schools (Lord Nash) (Con)
My Lords, I speak to this group of amendments on assessment tabled by the noble Baronesses, Lady Hughes and Lady Jones, the noble Lord, Lord Patel, and my noble friend Lord Lingfield. Before I do so, I should say that my noble friend Lady Northover has had a bereavement and my noble friend Lord Attlee will be standing in for her at very short notice on a couple of the groups this afternoon.
The overarching theme of this group is clarity and timeliness in communications. Getting this right is absolutely vital in creating a system where children, families and young people feel that they are being treated fairly. I thank noble Lords for the opportunity to discuss this matter.
On Amendment 128A, tabled by the noble Lord, Lord Patel, it is a key part of the reforms that anybody working with a child or young person who thinks that they may need an EHC plan can refer them to the local authority. This includes providers of alternative provision, so that a child or young person’s needs can be met. I reassure the noble Lord that Clause 23 will enable providers of alternative provision, and anyone else working with children and young people, to make a referral. The local authority must then determine whether an EHC assessment is necessary, as it would following a request under Clause 36.
Baroness Jones of Whitchurch
I am very grateful to the Minister for accepting one of our amendments. That is progress. However, I want to press the Minister on Amendment 131. I think I heard the Minister saying that, yes, of course the needs of families would be considered, but only if it was a social care issue. He referred to another piece of legislation. I have two points about that.
First, I would have thought that it made sense to bring everything into this one piece of legislation, rather than to refer people to other outstanding legislation that might apply, and I thought this was what we were aiming to do. Furthermore, I question whether saying that the needs of the family should be considered only when it is a social care issue is the right way to go about this. I thought that the idea of the Bill was to look at education, health and social care in the round, and I would have thought that the families’ needs and capabilities should be looked at in all three aspects of that, to reflect the way that they are going to impinge on the facilities provided for the child. I query whether this should be limited to social care.
Lord Patel
My Lords, I thank the noble Lord for his comments on my amendment. I did not think that the earlier provisions he referred to made it clear that alternative providers of education could initiate an EHC plan, but if his reassurances confirm that, then I am content. I will, however, read exactly what he said and look at the clauses again. I felt the earlier clauses did not clarify that, which is why I tabled the amendment.
Lord Touhig)
Lord Touhig (Lab)
My Lords, Amendment 137 is tabled in my name and those of my noble friends Lady Hughes of Stretford and Lady Jones of Whitchurch, and the noble Lord, Lord Low of Dalston. I shall speak also to Amendments 145, 165, 173 and 175 in this group. Amendments 137, 145, 165 and 173 seek to amend various clauses, including Clause 36, “Assessment of education, health and care needs”; Clause 37, “Education, health and care plans”; Clause 44, “Reviews and Re-assessments”; and Clause 45, “Ceasing to maintain an EHC plan”. All these clauses refer to a local authority “having regard” to a young person’s age when making a determination. Examples include the review of a plan or the decision to cease to support a plan. Similar amendments to these were tabled in the other place seeking to replace the reference to age with a reference to having regard to “educational outcomes”, but these amendments go further and would simply remove the references to age altogether. This is something that I am sure colleagues in the Committee know that the sector is much exercised about. These amendments seek to ensure that children or young people with education, health and care plans are supported to achieve qualifications similar to other children and young people regardless of their age, so long as they are under 25.
The provisions as currently outlined are restrictive and there is a lot more that should be taken into account by local authorities when deciding whether a young person needs a plan or remains in need of one. Many young people have specific circumstances such as spending periods of time not in education or training, the reasons already discussed in relation to previous amendments, or they may lag behind because of their specific learning difficulties. It is therefore essential that decisions should be based primarily on educational outcomes rather than a young person’s age.
These are probing amendments, and removing the reference to age is not an argument for support to go on indefinitely. Indeed, I think that the age of 25 is a sensible and proper target, but it is also wrong that age should be the overriding factor that is considered by local authorities, as the clauses currently suggest. The Minister in the other place agreed that age should not be the only factor considered when determinations are made, but he did say that the Government,
“want the clause to prompt local authorities, once a young person is aged over 18 … to take a thorough look at whether outcomes have been achieved and the young person has made a successful transition to adulthood”,
and went on to say that:
“The relevant regulation in the draft plan assessment regulations sets out that, when undertaking reviews, local authorities must consider the child or young person’s progress towards achieving the outcomes specified in the EHC plan”.—[Official Report, Commons, Children and Families Public Bill Committee, 16/4/13; col. 562.]
However, Clause 45(3) already requires a local authority,
“to have regard to whether the educational outcomes specified in the plan have been achieved”,
when it is considering whether to cease maintaining a plan. I therefore argue that the emphasis currently placed on age in the legislation is a complicating factor, causing entirely unnecessary ambiguity and potentially undermining the attainment of young people.
For 20 years I served as a councillor in a local authority and I know that colleagues on all sides of the Committee have also served at different times. I can tell the Minister that, from that experience and knowledge, the legislation as drafted will allow cash-strapped councils to drive a coach and horses through it—and they will certainly do so. It is a local council’s great escape and this will rival the film “The Great Escape” if we are not careful. Surely we do not want that to happen. I fear that the emphasis on age will work against what we are seeking to do in the Bill as a whole.
I turn to Amendment 175 tabled in the name of my noble friends Lady Hughes of Stretford and Lady Jones of Whitchurch. Clause 46 states that:
“A local authority may continue to maintain an EHC plan for a young person until the end of the academic year during which the young person attains the age of 25”.
As with previous clauses and amendments that we have already discussed, there is a concern that too much emphasis is again being placed on age as opposed to the educational outcomes of a young person. There is serious concern that such references to age could lead to local authorities cutting support part way through apprenticeships or other training courses. As I have stated previously, while support cannot continue indefinitely and 25 is a good cut-off point, we have to be careful about using age as a determining factor.
I welcome the fact that apprenticeships are now included in the Bill, and we are all grateful to the Government for listening to the representations made by noble Lords on all sides. However, age or the academic year should not be the only factor. The overwhelming factor should be the educational outcome for the young person. I am pleased that the Government, following an undertaking given by the Minister in the other place, have looked at this and have included the objectives of this amendment in the regulations. I thank the Government for listening because it leads to good and sensible dialogue and we then make better law than would otherwise be the case. In those circumstances, I beg to move.
The Deputy Chairman of Committees
My Lords, if Amendment 137 is agreed, I cannot call Amendment 138 by reason of pre-emption.
Baroness Sharp of Guildford (LD)
My Lords, I shall speak to Amendments 138, 146, 166, 174, 205AA and 205AB, which are all in my name and in this group.
Amendments 138, 146, 166 and 174 pick up the issue spoken about by the noble Lord, Lord Touhig; namely, they are about age and the wording that one sees in, for example, Clause 36(10). Rather than eliminating Clause 36(10), we seek to replace,
“have regard to his or her age”,
with,
“ensure that he or she will have sufficient time and support in education to make a successful transition to adulthood”.
There is in fact a slight mistake in the Marshalled List, which reads “transfer” rather than “transition”. The amendments have the support of the Association of Colleges, Ambitious about Autism and the Association of National Specialist Colleges, Natspec.
The view of those organisations, and my view, is that the Bill genuinely wants to ensure that young people with special educational needs have all the opportunities that they need to get the best out of education. The publicity around it has made much of the nought-to-25 system that is being introduced. It has also made much of the need for personalisation, which the amendments reflect. The aim of the amendments is therefore to ensure that the individual needs of the young person are recognised through the planning process, and that decisions about continuing their learning are made on the basis of need rather than an artificial link to their age.
One of the points mentioned by the noble Lord, Lord Touhig, is that there has been something of a tendency to think that, because the ages 18 and 25 are mentioned, these are the appropriate points rather than anywhere between those two ages. We are concerned that parents will feel that they have to battle to get a place beyond 18 in order that their son or daughter may stay until they are 25, setting up perhaps inappropriate expectations that they will continue through to 25 when it might be more appropriate for them to move into looking after themselves at an earlier age.
There are many reasons why a young person with special educational needs might need to be in education beyond the age of 18. Their learning difficulty may mean that they take longer to learn, practise and consolidate their skills. They may need additional time to become more autonomous learners, moving away from a situation where support is very hands-on to support that promotes their independence. They may need to learn how to use technology that can support this autonomy. Young people with special educational needs often mature later than their peers, and it is not until they move into a more adult environment that they really make a step towards more effective learning and taking on greater responsibility.
They may acquire the information and understanding to make informed choices about their future only once they have moved beyond school. Take, for example, the case of Chris, who has Asperger’s syndrome and major communication issues. He switched to college at the age of 16. In supported learning at college, Chris gained the confidence and skills required to progress into mainstream education. He has completed the bronze Duke of Edinburgh award, which he started when he first joined the college. He also started, in supported learning, on a next steps course for two years, progressed to a level 1 foundation course in IT, has steadily worked his way through level 2 and level 3 and is now completing his UCAS statement, with the aim of going to university next September.
Time spent to ensure that young people are well prepared to move into adult life pays dividends for them, their families and, ultimately, for the public purse. The National Audit Office report, Oversight of Special Education for Young People Aged 16-25, which was published in November 2011, stated:
“Equipping a young person with the skills to live in semi-independent rather than fully supported housing could, in addition to quality-of-life improvements, reduce these lifetime support costs by around £1 million. Supporting one person with a learning disability into employment could, in addition to improving their independence and self-esteem, reduce lifetime costs to the public purse by around £170,000 and increase the person’s income by between 55 and 95 per cent. If properly focused and effective, therefore, investment in special education should provide long-term returns”.
I cite the example of Shaun. Shaun first studied on an ACE course, which is a transition programme, at college. He had very low self-confidence and complained about being bullied. Although matters were resolved, Shaun requested a move to another college. Shaun started off very quietly at the new college, but gradually built up his confidence and became more sociable and responsible through the year. After completing his year on the ACE course, he was confident enough to join a mainstream course. He then completed an entry award in motor vehicles, went straight into full-time employment in motor vehicles and is now self-supporting.
This set of amendments ensures that local authorities and others taking, or helping to take, decisions on behalf of those young people will focus on outcomes that support the transition to adulthood—the point made by the noble Lord, Lord Touhig. There is much evidence to show that a successful outcome is linked to an effective learning programme geared to the needs of the young person, not artificially linked to age. I believe that that is the basic intention behind the Bill and, in that respect, this set of amendments is wholly in line with it. I very much hope that the Minister will be sympathetic to them.
Amendments 205AA and 205AB relate to Clause 66, which enables the Secretary of State to collect and publish information on children and young people with special educational needs who are under the age of 19. The amendments would extend that provision to the age of 25. Once again, it is a question of recognising that many young people with special educational needs need help and support through to 25. If the Government are genuine in their intention to create a comprehensive nought-to-25 system, it must include arrangements to monitor the outcomes for 19 to 25 year-olds. Indeed, the success or otherwise of the Government’s policies in this area will ultimately be accurately and appropriately measured only in the education, employment and independent living achieved by young people in that age group.
Officials have suggested that the reluctance to include 19 to 25 year-olds is driven by a desire not to increase administrative burdens on colleges, which is a particular policy concern of the Department for Business, Innovation and Skills. However, the Association of Colleges, which has asked me to table the amendments, has stated its willingness for the age range to be extended. It is not clear that the extension would necessitate any new data collection, as it asks only that colleges report on existing data collected under the individualised learning record.
Baroness Cumberlege (Con)
My Lords, I have three amendments in this group. As this is the first time that I have taken part in Committee, although I took part on Second Reading, I have been told that I should declare my interests, which are in the Lords register. In particular, this afternoon, I should like to declare my non-pecuniary interest as the chairman of the trustees of the Chailey Heritage Foundation. The foundation is a non-maintained special independent school with a registered children’s home. It works in partnership with a clinical facility, run by the NHS on the same site, and it has just launched a transition service for 19 to 25 year-olds. Some of these young people will continue from Chailey and others will come from a much wider area. This is the group to which my amendment refers.
Seeing is worth a thousand words, so I am particularly grateful to my noble friend who, during the very precious Recess, came to meet the children, young people and staff at the foundation. His visit had a profound effect on those he met, and I think it is fair to say—I hope the Minister will agree—that the occasion was of mutual benefit. My noble friend met some very severely disabled young people. I was interested in the examples given by the noble Baroness, Lady Sharp. The young people at Chailey are not of that sort at all: they are much more severely disabled. However, they do well at school, within the limits of their disabilities; some have 15 or more medications a day and none of them can walk or power their wheelchair unaided. Our ambition for these young people is that, having had a very worthwhile, stimulating education, which Ofsted says is outstanding—something that we are very pleased about—they should then benefit from this education.
They have some understanding but very limited, or no, speech and have learnt to communicate through different means, often using sophisticated modern technology. They have acquired some knowledge of how to operate in society. We believe that they should participate in their own lives and not be consigned to a wasted life in a nursing or residential home. Despite their very complex needs, we have plans for four of our young people to move into assisted living and we are seeking some sort of employment for them, although we realise that it will be very limited. The noble Baroness, Lady Sharp, mentioned the National Audit Office review. I agree that saving money in the long term depends on the initial education of these young people. Semi-independent, rather than fully supported, housing can save considerable money in the long term.
I am grateful to the noble Lords, Lord Patel and Lord Low, and noble Baronesses, Lady Jones and Lady Hughes, for supporting Amendments 170, 171 and 173. I was hoping to see the name of the noble Lord, Lord Nash, on these amendments when we looked at today’s Marshalled List, but that may come in time. The amendments are very similar to others on the Marshalled List this afternoon. We all wish to see education, health and care plans continue, where appropriate, to the age of 25. I was encouraged by the follow-up letter, written by my noble friend after Second Reading, in which he recognised that some people with special educational needs require more time to complete their education beyond the age of 18: as we all know, they generally learn more slowly than other young people. Having been a Minister, I appreciate the Government’s concern about legislating.
We understand that there could be an expectation that every young person with SEN would have an entitlement to education up to the age of 25, regardless of whether they were ready to make or had already made a successful transition into adult life. Those of us who have brought up children, or worked with children and young people, know that our task is not complete by 19. The years between 19 and 25 are also very formative; it is a time of experimentation, finding limits and testing boundaries. We do not expect a 19 year-old to settle down into adult life or decide where they are going to live for the rest of their life. Young adults with complex needs are different, in that they require very intensive support. They have to make this transition and develop a sense of themselves as adults and what it means to be an adult. Creating the right environment to achieve an understanding of adult life is an important part of supporting development, and we believe that it is “educational” for those with complex needs.
Lord Northbourne (CB)
My Lords, I support Amendment 146, tabled by the noble Baroness, Lady Sharp of Guildford. For many years, I had the privilege to be a member of the governing body of the Caldecott Community, where we looked after very damaged children. Reintegration into adult life was always the problem. The noble Baroness is absolutely right that the potential to make a successful transfer into adulthood must be the ultimate criterion. It is obviously true that educational achievement and, indeed, age may be factors in the judgment, but what about the ability to succeed? It is important that that context should be established, because institutions must have as their objective not necessarily educational attainment but enabling their pupils to develop to a point where they can live independently.
Baroness Howe of Idlicote (CB)
My Lords, I also say what an absolutely splendid debate we have had so far, particularly the input from the noble Baroness, Lady Sharp, with which I agree entirely. Also, the noble Baroness, Lady Cumberlege, has given quite a new dimension to our thinking.
I have tabled a small and modest amendment in the group, Amendment 172. It is based on the fact that Clause 45 allows a local authority to cease an education, health and care plan if the outcomes set within it have been achieved. The amendment would require a local authority to continue the plan if ongoing support were needed to maintain those outcomes, so it is pretty similar to others. In effect, my amendment seeks to prevent the Bill from giving local authorities a green light to end plans prematurely, when children may still need specialist support. That issue greatly concerns the National Deaf Children’s Society, RNIB and Sense.
We must recognise that sensory impairment in itself is not a learning disability. There is no reason why most children with a sensory impairment cannot achieve as well as other children, providing that they receive the right support. What concerns me is that, without this amendment, the Bill seems to allow local authorities to remove that support just as a child is starting to make progress. It would also seemingly allow local authorities to remove that support, even if ongoing support is needed to maintain and consolidate the progress that the child has already made.
Parents have told the National Deaf Children’s Society of their frustration that their child often had to fall behind before they could get the support they needed. One parent told the NDCS that:
“Although our son made extremely good progress in his first year in his new school, this seemed to be a trigger to reduce the levels of assistance from all other departments. His speech and language therapy stopped, everything stopped. It was as if he no longer needed it and he just dropped, his development went completely backwards”.
It is that kind of scenario that the amendment is intended to prevent. Although it echoes much of what has been said already, I hope that the Minister, when he replies, can give the assurance needed for all those children.
Baroness Howarth of Breckland (CB)
My Lords, I shall briefly support the noble Baronesses, Lady Cumberlege and Lady Sharp, and the noble Lord, Lord Touhig. I will not repeat the excellent arguments they made. I have already declared the interest which takes me into this: that I am president of Livability. We have two colleges, Nash College and Hinwick Hall College, where we have young people with very profound needs indeed, and where the education, health and care plan will really make a difference if it is seen in the round. I know that we are going to come to that on another set of amendments, so I just flag that up.
I wanted to ask the Minister very directly if he would tell us why the age issue was in the legislation at all at that level. I have worked for many years in local authorities; I have been a chief officer and linked to local authorities in other ways, and I know that when you are short of money you scour through legislation to find exactly where you can draw the line. That is a proper thing for local authorities to do. I am a vice-president of the Local Government Association and I understand that there may well have been representations in relation to the funding for this Bill. However, that is a pity because there is so much that is excellent.
I shall refer by way of example to Clause 44 on “Reviews and Re-assessments”, where all the things we are asking for in terms of parental involvement and that of young people themselves, and making sure that the authority takes that forward appropriately, are in place. Even so, there is still a strange phrase in the middle on having regard to age. We are all worried about the long-term plans in the three areas that we hope, through other amendments, to try to bring together. I know that the Government are keen to amalgamate some of this thinking and they have done well for young carers; we have heard about what good work is going to be done in that area. I am keen to understand from the Minister what the thinking is behind the phrase.
Lord Low of Dalston (CB)
My Lords, I have added my name to Amendments 137, 145, 165 and 173, but I do not propose to speak to them in any detail because we have been on this debate for a good long time. We have heard a number of full and eloquent speeches and I do not wish to go over what noble Lords have said. However, I should like to add a couple of points.
The Government are presumably worried that parents and young people will assume that they have an automatic right to an education, health and care plan up to the age of 25, but that is not something that the Government need to be too worried about. Most young people will not want to stay in education until they are 25. As the noble Lord, Lord Touhig, said, these amendments do not seek a blank cheque for continuing education for all young people to the age of 25 regardless of the type and purpose of the course they are pursuing; rather, they envisage local authorities supporting young people to achieve their agreed education, health and care plan outcomes, allowing them to progress to a job, develop their independent living skills, make an economic contribution to their community and avoid swelling the ranks of those who are not in education, employment or training.
I do not think that age needs to be mentioned at all, as the noble Baroness, Lady Howarth, just said. Most young people will achieve their education, health and care plan outcomes well before the age of 25, as they do now. Young people must have the opportunity to continue their educational programmes to achieve their agreed outcomes in age-appropriate settings in order to make the transition to adulthood, including work and independent living. These amendments will ensure that the existing protections for 16 to 25 year-olds are not lost.
In that connection, Ministers have stated that no one should be worse off as a result of the Bill. Currently, the learning difficulty assessment statutory guidance requires local authorities to maintain learning difficulty assessment and support to allow the young person to achieve their potential in employment and independent living up to the age of 25. That is in part a recognition of the fact that some disabled people may take longer to reach their potential.
The Bill should therefore not derogate from what is provided for in the current learning difficulty assessment guidance. As the noble Baroness, Lady Cumberlege, told us, independent specialist providers support many students who need a longer period to complete their studies or training. Many such providers also have significant numbers of students who become disabled for the first time as they approach adulthood, which obviously delays their educational progress. Decisions about whether to maintain a young person’s education, health and care plan beyond the age of 19 should be based solely on the young person’s progress in relation to their planned outcomes. Their age up to 25 is not the most significant factor. Focusing disproportionately on age will divert attention from supporting the young person to achieve the agreed outcomes in their education, health and care plan, which should be the prime consideration throughout.
Baroness Wilkins (Lab)
My Lords, I support Amendment 172 tabled by the noble Baroness, Lady Howe. I will not extend much further this excellent debate. It is very important that the Bill and the accompanying guidance is clear on the need to maintain specialist support when this is needed. It should not simply be cut when a child starts to do well. On this point, it seems that there is an inherent tension in the draft code of practice that needs to be resolved. I would be grateful if the Minister would look into this.
On the one hand, the definition of special educational needs includes children or young people who have a disability which prevents or hinders them from making use of the educational facilities of a kind generally provided for others of the same age. There are some groups of children, such as those who are deaf, to which this particularly applies. The implication is that these children have a special educational need by virtue of the fact that they are in need of specialist support to enable them to access those same educational facilities. However, there are times in the code of practice, from the tone of what is being said, when the reader can be forgiven for thinking that only children who are not making progress should be regarded as having a special educational need. For example, on page 75, it is suggested that SEN specialists should be involved when it becomes apparent that the child is making little or no progress. Many believe that this reflects a tension between the special educational needs framework of supporting children who fall behind and the disability equality framework of taking proactive steps to support disabled children.
Will the Minister look again at this to make sure that it is crystal clear that no local authority should cut support for a child because they are making good progress when it is only because they are receiving that support that they are able to make that good progress? I would also welcome his clarification for the record that children who need specialist support, such as deaf children, should be regarded as having a special educational need regardless of whether they are falling behind or making good progress.
Lord Nash
My Lords, I am grateful to all who have spoken in this important debate. I know that we all share the same concern to ensure that young people who need educational provision up to the age of 25 will receive it. I hope that I can offer some reassurance and will be delighted to discuss the matter further with my noble friends Lady Cumberlege and Lady Sharp, the noble Baronesses, Lady Howe and Lady Howarth, and others if that is not the case. I will first respond to those amendments regarding the genuine worry that the various clauses which require local authorities to “have regard” to a young person’s age when they are over 18 will give local authorities the ability to refuse to assess a young person or to cease their plan based solely on age.
From the outset, I would like to state categorically that this concern is unfounded. Local authorities cannot make decisions based on a young person’s age alone. The legislation requires local authorities to maintain EHC plans while it is necessary for special educational provision to be made for the young person in accordance with a plan. The draft code of practice makes this completely clear, stating in Chapter 7 that local authorities must not make decisions based only on the fact that a young person has turned 18.
Let me be clearer still: our vision is for a system that is ambitious for children and young people with special educational needs. There is no hidden agenda to cut costs or to reduce the number of families we want to help. Instead, we want a system that raises the aspirations not only of children, young people and their parents, but of those professionals working with them, and that has high expectations about what children and young people with SEN can achieve. Our ambition is that with the right support and opportunities, many more of these young people will have completed their education and made a successful transition to adulthood at the age of 18, along with their peers. Our vision is that where young people need longer to complete or consolidate their learning, they are able to remain in education and continue to receive co-ordinated help and support through their EHC plan—until the age of 25 if necessary.
What we must not do is create an expectation in law that all young people with SEN will simply stay in formal education until age 25. Creating an automatic right for all young people with EHC plans to remain in education for that long would dilute the focus on outcomes that we want throughout the new system and particularly from year 9 onwards. Local authorities could delay proper consideration of outcomes until after age 18, by which time it is likely to be too late, and many young people will simply drop out of the system at that point, as happens now. Worse, it could create a cliff-edge at age 25, when support would have to end for all those with EHC plans regardless of whether outcomes had been met. Surely the focus must instead be on supporting them to achieve outcomes and make a successful transition to adulthood, wherever possible, along with their peers. We need to end the presumption of failure attached to special educational needs and make sure that local authorities are doing all that they can to help many more children and young people with SEN achieve positive outcomes by age 18.
Turning to the point made by my noble friend Lady Cumberlege about the word “must”, we think that adding it to Clause 45 would serve to create an expectation that all young people with EHC plans should remain in education until after 25. On the question of why we refer to 18, and not 19, a young person aged over 18 has the legal meaning of a person who is aged 19 to 25, and it is our intention for the clause to apply to 19 to 25 year-olds. I hope that that provides some clarification.
The noble Baroness, Lady Howarth, asked why we use the phrase “have regard to age” at all. Following pre-legislative scrutiny, the Education Select Committee stated that there was confusion about whether the Bill created an entitlement for young people with EHC plans to remain in education until 25. It recommended that we make that clear in the Bill. Including the phrase “have regard to age” is our best solution to address that recommendation. It simply requires local authorities to take a young person’s age into account as part of a range of things that they must consider when making decisions. All other suggestions that we have had err on the side of creating a presumption that young people should remain in education until 25 unless certain conditions are met.
Young people with SEN over the age of 18 must be supported to remain in formal education where this will enable them to complete or consolidate their learning, achieve outcomes and make a successful transition to adulthood. Local authorities must, in consultation with young people, consider whether that has already been achieved by the time compulsory participation ends at age 18 or whether the young person needs, and indeed wants, further support through an EHC plan. We have made it clear in the draft assessment and plan regulations and code of practice that the EHC plan process should prepare and support young people for adulthood, facilitating a successful handover to new opportunities and support in the adult world. That transition planning must start from year 9 of a child’s schooling and continue until they have left formal education and made a successful transition to adulthood. This includes enabling young people to access learning opportunities, such as those offered by the Chailey Heritage Foundation, which prepare young people to live more independently. Such opportunities are a vital part of what is needed and I am grateful to my noble friend Lady Cumberlege for enabling me to see at first hand, in an extremely impressive and moving visit to Chailey, what a difference such approaches can make to the lives of those with complex needs.
Not only do our reforms protect the current position for those aged 19 to 25, they go further by creating a legislative requirement for local authorities to focus on outcomes and prepare young people for adulthood. In addition, where young people disagree with decisions made by local authorities, they now have—for the first time—the right to appeal to the tribunal.
It is right that once these educational outcomes have been achieved, local authorities should no longer be required to maintain EHC plans. Young people with ongoing health and social care needs will continue to receive those from the relevant services; that will not stop simply because they no longer have an EHC plan. Young people who have made a successful transition to adulthood and are now in employment, higher education, adult learning and so on will continue to receive support in those settings to enable them to maintain and build on the outcomes achieved while in formal education. For example, Access to Work is available for those in employment, Disabled Students’ Allowances for those in higher education and so on.
Baroness Sharp of Guildford
My Lords, I am not totally happy with what the Minister has said. The funny phrase,
“must have regard to age”,
is used in quite a number of clauses. He seems to be saying, “We do not want to look at age, we want to look at a successful transition into adulthood”. I do not understand why the Minister prefers his wording to actually saying that we want a successful transition to adulthood. The Minister has made the point that it is not a question of going through to 25, it is a question of when, between the age of 18 and their 25th birthday, it is appropriate for them to move into independence. I therefore do not understand why he is rejecting an alternative form of wording.
On Amendments 205AA and 205AB, I need to go back and have a look at this more carefully. My understanding is that at the moment it is not proposed to collect the data, so I was interested to hear the Minister say that they will be collecting data. I thought that they were making a distinction between schools and colleges and that they were not proposing to collect the data from colleges.
Finally, in relation to the code of practice mentioned by the noble Baroness, Lady Wilkins, my understanding is that it is not very helpful. If the Minister could have another look at it, I would be grateful. I thank him for his reply and hope perhaps that he can reassure me that he might look again at the wording.
Baroness Cumberlege
My Lords, I echo what the noble Baroness, Lady Sharp, has just said. Try as I might, I am afraid that I am not totally reassured, but I am extremely grateful that the Minister has agreed to meet with those of us who have these concerns. I am sure my noble friend will appreciate that there is a very strong coalition across the Committee—I do not mean in government terms, but across the parties—and that he gets the feeling that we need to go a bit further on this. I look forward to meeting him in due course.
Lord Touhig
My Lords, the Secretary of State, Mr Gove, said in a speech at what may have been his party conference:
“I’m really lucky to have as the Minister for Children and Families Edward Timpson. In the last year, Edward has transformed the education of children with special needs in order to ensure that all young children living with a disability at last have the support they need all the way up to the age of 25”.
I repeat: all the way up to the age of 25. In the debate in the other place the Minister said, as I said in my opening remarks, that age should not be the only factor considered when determinations are made. In response to this debate the Minister has said that our concerns on the age question are unfounded. If he can assuage our concerns and take out the reference to age altogether, we will all be happy bunnies. It is as simple as that.
The noble Baroness, Lady Sharp, said rightly that age was an artificial link. So far as my Amendments 137, 145, 165 and 173, as well as colleagues’ amendments are concerned, it is important to bear in mind that the Bill says that local authorities should “have regard to” a young person’s age when making a determination, for example, to review or cease a plan. I do not know how this is going to turn out, but we may well come back to it. Recently I spoke to someone I have known for years. He worked with me when I was a councillor and he was a local government official. We discussed this and he said, “Give me half an hour and I will give you three papers in which you as a councillor will be able to say, ‘We do not have to continue this support because of the age question’”. The noble Baroness, Lady Howarth of Breckland, made the important point that councils do not want to do anything bad or wrong in terms of this Bill or what they want for young children with disabilities or learning difficulties, but because of financial difficulties and other reasons they will look at the legislation to see if there is a way to avoid doing a particular thing.
I think we share an ambition to try to resolve this. The Minister cannot fail to have been impressed by the quality of the comments and the expertise of this Committee, and I am sure that every Member will happily volunteer to join his Bill team. We will find the time in our busy lives to help him redraft some of these amendments so that he will not have this problem. I do not think that it is going to go away. We will come back to it on Report. In the mean time, I beg to leave to withdraw the amendment.
Lord Low of Dalston
“RegisterMaintaining a register of sight impaired and severely sight impaired children and young people
A local authority in England must establish and maintain a register of sight impaired and severely sight impaired children and young people who are ordinarily resident in its area.”
Lord Low of Dalston
My Lords, the amendment would introduce a new clause after Clause 36, requiring local authorities in England to establish and maintain a register of sight-impaired and severely sight-impaired children and young people ordinarily resident in their area. Perhaps I should declare my interest, which is in the register, as a vice-president of the Royal National Institute of Blind People.
Local authorities have been required to maintain registers of blind and partially sighted people since the introduction of the National Assistance Act 1948. That obligation applied to both adults and children. Following a recommendation in the Law Commission’s report on adult social care in 2011, the Care Bill currently going through Parliament lays a duty on local authorities in Clause 73 to establish and maintain registers of sight-impaired and severely sight-impaired adults ordinarily resident in the area. However, under this Bill, no such obligation exists in relation to sight-impaired and severely sight-impaired children.
The registers, which have been maintained for some 65 years now, play a critical role in enabling local authorities to assess population level need for specialist visual impairment services and support. Evidence indicates that young children and parents greatly benefit from receiving integrated support from an early stage, following identification of a child’s sight condition. Early referral, aided by a robust system of registration, is fundamental to achieving that.
Registers serve three main purposes. First, they provide a local resource to support the local authority and partner agencies with the strategic planning of services. Secondly, they indicate a person’s eligibility for certain benefits. As a matter of fact, under universal credit, children who are registered blind will be entitled to receive the severe disability addition in recognition of the household’s need for greater support. Thirdly, in the case of children and young people, the process of being registered with the local authority assists with early referral to specialist services and support, including help from voluntary groups. The requirement to maintain a register for adults assists local authorities in planning services and meeting individuals’ needs. If the same duty is not placed on local authorities with regard to children, it seems inevitable that the service planning and arrangements to meet the needs of a specific group of children and young people will be less effective.
Existing legal provisions on the maintenance of a register of disabled children are inadequate. The Children Act 1989 states that local authorities “shall open and maintain” registers for “disabled children”, but those general registers are scarcely used and do not meet sensory services requirements. The certification and registration process in relation to those with a visual handicap is unique in its potential to bring health and social care together. The situation for children is even more complicated, because social care and education both need to be involved. For example, early access to mobility training arranged through social care has a profound impact on blind and partially sighted children’s development and ability to benefit from education.
The greatest fear is that, without a statutory basis, registers of visually impaired children could fall into disuse.
On 7 September last year, in response to a Parliamentary Question from Stephen Gilbert MP, the Minister in another place said that:
“A local authority is required to keep a register of disabled children within its area and this will include children who are sight impaired and severely sight impaired”,—[Official Report, Commons, 13/9/12; col. 384W.]
but there, as your Lordships will appreciate, he was referring to the general registers. These registers for all disabled children are scarcely used and many practitioners regard them as obsolete.
Earl Attlee (Con)
My Lords, I am grateful to the noble Lord, Lord Low, for moving Amendment 142A.
The new clause seeks to replicate Clause 76 in the Care Bill, which would establish registers for visually impaired adults. The RNIB has, understandably, raised concerns that such measures for those under 18 are missing from this Bill. I agree with the noble Lord about the critical role of the register in planning services. However, local authorities are already under a duty to maintain a register of disabled children and young people under Section 17 of the Children Act 1989: the noble Lord, Lord Low, referred to the 1948 Act. This register includes blind children and young people; changes proposed through the Care Bill will not remove this duty. The RNIB, and the noble Lord, report that local authorities sometimes neglect their duty to maintain such registers. However, the same risk and difficulty would apply with the proposed new clause. It provides no greater statutory guarantee than that already provided by the Children Act.
We want to ensure that local authorities are effectively meeting the needs of blind or partially sighted children. There are a number of requirements in the Bill that should achieve this. Clause 22 requires local authorities to identify,
“children and young people in its area who have or may have special educational needs”.
Clause 26 requires local authorities to make joint commissioning arrangements that include consideration of the education, health and care provision reasonably required by local children and young people with SEN. Clause 27 requires them to review the special education and care provision that is available locally.
Together, these provide a clear framework that requires local authorities to plan for and meet the needs of children with SEN, including blind or visually impaired children and young people. Following discussion of this issue in another place, the Minister for Children and Families committed to give further consideration to these issues. Officials from the Department for Education met with the RNIB to agree a way forward. As a result, page 36 of the draft SEN code of practice highlights the importance of using the registers to plan services. The code states:
“Local authorities are required under schedule 2 of the Children Act 1989 to maintain a register of disabled children in their area. These registers are particularly helpful for providing data on low-incidence needs that can be difficult to predict from national data sets.”
The noble Lord, Lord Low, referred to low-incidence needs.
I hope this removes any doubt or misinformation that registers of disabled children are somehow no longer required. I hope that the duties in the Bill, along with the additional guidance added to the SEN code of practice, provide sufficient reassurance that we expect, and require, local authorities to identify and meet the needs of children and young people with a visual impairment. I therefore hope that the noble Lord, Lord Low, will feel able to withdraw his amendment in due course.
Lord Low of Dalston
I am grateful to the noble Earl for his response, which I shall want to read with care. At first blush, it does not really persuade me that the case I made when I moved my amendment has been answered. The noble Earl referred to the Care Bill and its provisions but those apply only to adults, not to children. He also referred to the general registers of disabled children which are maintained under the Children Act. However, as I have indicated, these do not seem to work very well and are certainly not visual-impairment specific. They do not, in any way, reproduce the visual-impairment specific registers which we have been used to using ever since the National Assistance Act. There has been long-standing provision for visual impairment registers and I cannot understand the reason for removing it from statutory provision.
The Minister referred to the code of practice and I will certainly want to look at that. Indeed, I will look carefully at the full text of what the Minister has said. However, at first blush, it does not seem to me that a reference to the Care Bill, the general registers maintained under the Children Act or the code of practice really amounts to the same sort of provision as visually impaired people and their organisations have been used to enjoying since the registers were introduced under the National Assistance Act. I do not really understand the reason for removing that provision.
All sorts of discussions have taken place between the RNIB and officials. I have not been involved in them and I would be very grateful if the Minister would agree to meet me to talk this through before Report in the hope that we can get a resolution of this matter. That would avoid the necessity to bring back further amendments which might be of a divisive nature on Report.
Earl Attlee
My Lords, I, or my noble friend Lady Northover, would be delighted to have any meeting as suggested by the noble Lord.
Lord Low of Dalston
I am very grateful to the Minister for that. I have experience of his courtesy and willingness to spend time discussing matters of mutual concern. I should be very glad to take him up on that offer. As I say, I hope that in that way we will be able to reach a resolution that will avoid me having to bring the matter back on Report. For now, I beg leave to withdraw the amendment.
Lord Low of Dalston
“( ) any social care provision which the local authority considers to be necessary in order to meet the needs of the disabled person under section 2 of the Chronically Sick and Disabled Persons Act 1970.”
Lord Low of Dalston
My Lords, Amendment 143 concerns the type of social care provision that should be included in education, health and care plans. Under Clause 36(2), the assessment process for an education, health and care plan should include,
“an assessment of the … social care needs of a child or young person”.
That assessment applies to social care provision from either children’s or adult services, depending on the age of the child or young person with an education, health and care plan. There is no disagreement with the Government in principle. Everyone agrees that an education, health and care assessment should include an assessment of a child’s or young person’s social care needs.
The disagreement concerns which social care needs should be assessed and then included in education, health and care plans. As drafted, the Bill states that following the assessment of social care needs a child’s or a young person’s education, health and care plan—EHC plan—must include the social care provision,
“reasonably required by the learning difficulties and disabilities which result in him or her having special educational needs”.
That is set out in Clause 37(2)(d).
The problem I apprehend with the language in Clause 37(2)(d) is that it is language that cannot be found in any existing children’s or adult social care legislation. I cannot understand why we would want to create a whole new terminology in this Bill when we already have clear definitions in social care law. Amendment 143 is an attempt to address that disparity between existing social care law and the Children and Families Bill. The way in which the Bill is drafted appears to add a new definition of social care on top of the existing duties in social care legislation. That can only cause confusion and uncertainty for council officers and the children, young people and their families who use their services.
Baroness Gardner of Parkes (Con)
My Lords, I support the noble Lord, Lord Low, on this amendment. I have not taken part in this Bill so far because I do not consider myself to be an expert on education and know little about it, but my concern is that, with the timing of the Care Bill being taken in the main Chamber along with this Bill in here, the whole thing might fall between two stools. In responding to the last amendment, my noble friend Lord Attlee said that there might be some duplication. I should say that I would rather see duplication than a hole. It is terribly important that this is taken into consideration. Even for those most in need of special educational support, there seems to come a time when education comes to an end. However, care needs continue in terms of the social behaviour of the person as much as anything else, and that can be quite a worry if someone falls into bad company. It is important that their social condition as much as their mental and physical condition is watched.
The noble Lord, Lord Low, has made the extremely valuable point that this goes right across these different services. For years, I have been involved in health issues, and there is always an argument about whether health or social care should deal with certain problems. Every time, each sector wants to push them on to the other one. If this provision reached over all of the services, as the noble Lord proposes, it would do away with trying to work out how the other fellow should pay for something rather than you. It would be very valuable if we could simplify this area and I therefore support the amendment.
Baroness Hollins (CB)
My Lords, I speak in support of this group of amendments. They aim to achieve equal standing for social care provision in the new education, health and care plans, and they have been ably introduced by my noble friend Lord Low. I pass on the apologies of my noble friend Lord Rix, who had hoped to be able to support these amendments.
Statements of special educational needs specify the special education provision that must be provided by the local authority. The Government have now recognised that health should also be an enforceable part of the new EHC plans, and the Bill has been amended accordingly. But if education, health and care plans are to live up to their name, we need to decide how to put the final piece of this jigsaw in place, which is the duty to provide the social care services that are set out in the plans. This is critical to children and young people with learning disabilities, a significant number of whom need care to help them to achieve their educational and personal aspirations. Let us imagine the position of a parent. They receive an education, health and care plan for their child which sets out all the education, health and social care provision that their child needs. Their child has a legal right to receive the education and health components of the plan, and the parent can hold those agencies to account if the services are not delivered.
However, the social care element seems not to be as enforceable. If the social care services identified in the plan are not delivered, there is nothing that they can do about it. We know that there can be problems with the way in which social care is currently delivered. Ofsted’s thematic inspection of social care for disabled children in 2012 found that social care was not always well co-ordinated and that many social care plans were not detailed enough or focused on outcomes. In a small number of cases, children had no plans or reviews were not held. Surely, those are precisely the types of problems that EHC plans are meant to solve.
We know that similar amendments were tabled in the House of Commons. The Minister in the other place said that he saw the rationale for placing the same duty on the provision of social care as for health and education. Therefore, what is the Government’s objection to these amendments? In many ways, they have already done the hard bit. Placing a specific duty on health to deliver the services set out in EHC plans is a major step forward and should be commended. That is why it is hard to understand a reluctance to consider the duty to deliver the social care part of an EHC plan.
As my noble friend Lord Low has helpfully set out, there are existing duties to deliver social care. This seems to be a matter of aligning existing legislation rather than creating a whole new set of duties. Parents’ expectations have been raised. This Bill will create education, health and care plans, and people will expect the plans to be delivered. At the moment, we are only two-thirds of the way there. I urge the Minister to consider taking the final step to create the truly joined-up plans that everyone is hoping for.
Baroness Hughes of Stretford (Lab)
My Lords, I also support this group of amendments and will speak to Amendments 162 and 163 in my name. Although Amendments 143 and 144A, which relate to Clause 37, are about the assessment process, they return to the heart of one of the most important debates that we had earlier in our deliberations; namely, the need to include all the needs of all disabled children. We will turn to the failure of the Bill to be sufficiently comprehensive on Report.
Turning to Amendments 162, 163 and 164, Amendment 164 essentially does the same as Amendment 163. The noble Lord, Lord Low, and the noble Baronesses, Lady Gardner and Lady Hollins, clearly have made the case as to why, in a new system that the Government are proposing in which all three elements of a child’s need—education, health and social care—are being brought together in an integrated system, it is very important that all three elements have the same status in terms of accountability. As the legislation is drafted, ECH plans would offer no more legal entitlement to support from social care services than do statements at the moment. We know that there is a great deal of variability in the extent to which children receive the social care provision that they need, as the noble Lord, Lord Low, has said.
In anticipation of what the Minister might say, he has already said in a letter to Peers that, first, the Government want, if you like, to square off the health provision because the health service is changing dramatically and he wants to make sure that health has a duty alongside the local authority to provide special educational need. That is why the Bill was amended from its first form to include health. I agree with the noble Baroness, Lady Hollins, that that is very welcome. He went to say:
“However for those with social care needs, the section 17 duties”—
in the Children Act—
“are a long-standing means to protect vulnerable children, including those with SEN and disabilities. Social care for vulnerable children under section 17 of the Children Act encompasses a wide range of needs and disabilities to emotional and family problems. It would not be right to prioritise as a matter of course the needs of those children with ECH Plans over all other children in need, for example young carers, asylum seeking children, or children suffering neglect”.
In saying that, the Government are admitting to what we fear, which is that there will not be an entitlement to provision for their social care needs in the way that there will be, under Clause 42, for their healthcare and special educational needs provision.
Are the Government really happy with that? They are proposing an excellent tripartite system. My noble friend Lord Touhig has drawn an analogy in discussions between us on this side of the Committee with a three-legged stool. The problem is that the three-legged stool will have one leg shorter than the other two, so for many families it will topple over because the social care elements—the needs and provisions specified in the plans—will not be enforceable. That is a real problem. It is very important that the three elements are equally visible and accountable and are seen as complementary. The absence of social care from the clause, although possibly technically and legalistically workable, sends entirely the wrong signal to service providers and, in particular, to parents and children. As the noble Lord, Lord Low, said, there needs to be clarity about the parity between those three elements of the service.
Baroness Howarth of Breckland
My Lords, I understand exactly what the Minister means about Section 17, but I cannot understand how that relates to this piece of the Bill. When we were discussing education with the previous Government, I remember being very forceful in saying to them, “You’re saying, ‘education, education, education’, but without ‘welfare, welfare, welfare’, children will not learn”. Unless we attend to the social care needs of children, particularly those children with disabilities, we know that they will not have the facility to learn. We know that unless there is help from specialists or social workers, if you have a child with serious behavioural problems at home, they will never get into ordinary school or even be able to survive properly in remedial school, and will end up in specialist residential care. That whole range of services will be needed as part of the social care package for those children.
As the noble Baroness, Lady Hughes, said, we are encouraging the Government to look at the whole, to get the thing together, to look at welfare alongside education and to look at how the two things interrelate. Those children will all have healthcare needs as well; very few children with those sorts of disabilities will not have healthcare needs. I thought that the Government wanted to pool all those services together in the interests of those young people.
Under Section 17, one would certainly not want children needing protection or suffering from neglect falling into a different priority; the local authority must look at them across the piece. I think that the word “must” helps them to do that, but having something in the Bill for those young people at least encourages local authorities to look at the whole.
Baroness Sharp of Guildford
My Lords, I have added my name to Amendment 164 and I endorse what has been said on this issue by the noble Baronesses, Lady Hollins, Lady Hughes and Lady Howarth. The aim of the Bill is to create not just a special educational needs statement but something that embraces health and social care as well. It is absolutely right that we should put social care on a par with health. Clause 42(3) states:
“If a plan specifies health care provision, the responsible commissioning body must arrange the specified health care provision for the child or young person”.
The other place insisted that this subsection should be included, so it seems right that social care should be put on a par with healthcare and education in the Bill.
Lord Nash
My Lords, I would like to respond to this group of amendments regarding the placing of a legal requirement on local authorities to secure the social care provision specified in EHC plans. I welcome the opportunity to debate this important issue and I understand the desire to ensure that our most vulnerable children and young people receive the support that they need and are able to seek redress where necessary. I thank the noble Lord, Lord Low, my noble friends Lady Gardner and Lady Sharp and the noble Baronesses, Lady Hollins, Lady Hughes and Lady Howarth, for speaking on this matter. However, as my honourable friend the Minister for Children and Families noted in the other place, there are already important protections for children and young people aged under 18 in the existing legislative framework for social care support. That is provided in Section 17 of the Children Act 1989, and for disabled children under Section 2 of the Chronically Sick and Disabled Persons Act 1970. Both these Acts will still apply alongside the measures being introduced in the Bill.
Lord Nash
The duty under Section 17 of the Children Act 1989 to meet the needs of all children in need is a general duty in recognition of the fact that social care needs are potentially limitless and that local authorities have to be free to decide how to prioritise spending on them, depending on resources. There is individually a duty under Section 2 of the Chronically Sick and Disabled Persons Act 1970, but that too is subject to resources.
Baroness Howarth of Breckland
I apologise for intervening. Having been a director of social services and having had to set those priorities, I understand completely what the Minister has said, but what I do not understand here is that if all these things are already set out in statute and are “may” duties, not “must” duties, as the noble Baroness, Lady Hughes, pointed out, why can we not pull them all together in this Bill? It would make it a fine Bill rather than a good Bill. Nothing is being added if the Minister is saying that the Chronically Sick and Disabled Persons Act and the children legislation already have these things. Are the local authorities not going to have to set their priorities anyway?
The other point I want to make is that we will have education and health but not social care; social care will again be relegated as the poor relation. I have not seen how the pathfinders have looked at this, but if they have considered them all as one, that would be a good indicator of the way forward.
Baroness Hughes of Stretford
Before the Minister responds, perhaps I may also give him the opportunity to deal with a point. He seems to be making a distinction between social care, special educational needs and healthcare. He said that there is a general duty in the Chronically Sick and Disabled Persons Act because social care needs, and therefore duties, are essentially limitless. That is why local authorities must be protected so that they can decide their priorities in the context of their resources. However, surely the same argument could be made about healthcare. Health needs and their care are essentially limitless, so the health service has to decide on its priorities in relation to its resources. Yet here the health service “must” provide the services set out in the plan while the same does not apply to social care. I do not see the distinction, certainly not between social care and healthcare in regard to the point about being essentially limitless.
Lord Nash
I am grateful to both noble Baronesses for their interruptions. As I said in my letter—and will now elaborate on a little—the reason is that we do not wish to imbalance the system so that giving children EHC plans results in deprioritising other children, given a climate of limited resources, which we all know —I hope—that we live in.
It is expected that any social care service specified in the EHC plan will be provided. We do not want to create a situation where local authorities specify only a bare minimum of services, because they cannot know the precise resource constraints that may apply in the future.
Noble Lords will be aware that the Bill places a duty on health commissioners—taking the point of the noble Baroness, Lady Howarth—to deliver the health elements of an EHC plan. As part of the SEN reforms, the Government have agreed to take specific action to protect children and young people with EHC plans within the newly reformed NHS. The education and health services are universal and it makes sense that there should be equivalent duties to provide the services in EHC plans. On the other hand, social care support for children in need is targeted only at those with greater needs, of whom disabled children form a significant proportion. As I said in my letter, to which the noble Baroness, Lady Hughes, referred:
“There is a greater risk that an individually owned social care duty for children with EHC plans will adversely affect other vulnerable children whose needs could be deprioritised, such as those needing child protection services or young carers”.
Social workers must be free to consider family, educational, social and environmental circumstances and local eligibility criteria when determining which services to provide. Local authorities with finite resources must be able to prioritise appropriately those children and young people with the greatest needs, whether or not they are disabled or have SEN.
Baroness Sharp of Guildford
I apologise for interrupting the Minister again. The amendments concerned say that it is where the plan specifies social care; it is not an open sesame to any sort of social care. If what is specified can be overruled anyhow, what is the point of having a plan that specifies it?
Lord Nash
As I have said, there are very significant duties around disabled children. The plan is not intended to affect that. Amendments 162, 163 and 164 would prevent such local decision-making, to which I have just referred, creating an individually owed duty prioritising the social care needs of children with SEN over the social care needs of other children in need.
Similarly, Amendments 143 and 144A should not stand. Social care provision is defined deliberately broadly in the Bill. Clause 21(4) includes any provision required under the Children Act 1989 or the Chronically Sick and Disabled Persons Act 1970 and therefore will be included in the design of the local offer. It is only where that provision is reasonably required by the learning difficulty or disability of a child or young person that it will have to be included in the EHC plan.
Amendments 143 and 144A would require any services provided under the 1970 Act to be included in the EHC plan. However, the vast majority of services for disabled children that are provided under the 1970 Act will be reasonably required by the learning difficulty or disability of the child and therefore must be included in the EHC plan anyway.
On Amendment 143, moved by the noble Lord, Lord Low, we are not convinced that there should be a requirement that all services provided under Section 2 of the 1970 Act must be included in EHC plans regardless of individual circumstances. EHC plans are for children and young people with learning difficulties or a disability that gives rise to special educational needs. Where this also gives rise to health and care needs, that must be included in plans so that a co-ordinated approach can be taken across services. Where there are unrelated health or social care needs, it may or may not be appropriate to also include them in an EHC plan, for example, depending on whether the child or young person would benefit from a co-ordinated service response. I believe that those decisions should be left to local professionals, in full consultation with children, their parents and young people.
At the same time, Amendment 144A would remove the important discretion the Bill gives to the local authority to decide whether provision made under Section 17 of the Children Act should be included in the plan, where it is unrelated to the child or young person’s learning difficulty or disability. This discretion is essential as there may be circumstances where the children’s interests that we are trying to meet require that we do not bind the hands of local services in this respect—for example, where there is provision related to child protection, which is highly sensitive and is not always appropriate to include in an EHC plan. Whether or not social care provision is linked to the learning difficulty or disability of the child or young person, it will continue to be provided in accordance with existing legislation.
Concerning my noble friend Lady Gardner’s point about there being a possible gap between adult and children’s social care, I reassure her that young people aged 18 and over who are eligible for adult social care will, under provisions set out in the Care Bill, have a statutory care plan. For young people with SEN, our intention is that this should form the care element of the EHC plan. Both Bills contain provisions that will significantly improve the transition between children’s and adult social care. In view of what I have said, I urge the noble Lord to withdraw his amendment.
Lord Low of Dalston
My Lords, we have had an extremely good debate with some very cogent contributions from everyone who spoke in support of the concept enshrined in this group of amendments: that there is not a lot of point in specifying provision if there is no possibility of enforcing it. As I see it, my amendments were seeking only to give effect to the integrated approach between education, health and social care that has been the Government’s vision ever since they published the Support and Aspiration Green Paper.
Initially, the Bill simply contained provision for education but the department was badgered about putting in an integrated approach, so it badgered the Department of Health and, in due course, got it to cave in. A health provision was put in but, for some reason, we do not seem to have had the social care provision inserted at the point of provision. That seems extremely odd since, as has emerged in the debate, there are already provisions in the Chronically Sick and Disabled Persons Act for ensuring the provision of social care services anyway. I am not quite sure what the difficulty is in delivering social care, when there are already those statutory obligations in that Act to lock this legislation on to. It seems clear that there should be no difficulty in bringing in the social care provision, using the Chronically Sick and Disabled Persons Act as the vehicle.
The fact that needs are limitless and that it is wrong to privilege some children over others has been advanced by the Minister as a reason for not unifying the legislation. However, it seems to me that that splits off the enforceable obligations relating to social care at the wrong point. As the noble Baroness, Lady Sharp, said, if social care provision is specified in the plan then it should be provided. Otherwise, what is the point of the plan? If the authority thinks that it cannot provide certain services or cannot make certain kinds of provision, it should not put them into the plan. Providing for things to be specified in the plan without providing the legislative framework for securing the provision seems to be a mistake, and that view has prevailed throughout the debate.
There has been a strong head of steam in the debate about the need to provide an integrated legislative framework for enabling the enforcement of the social care provision specified in plans. The Committee has spoken strongly and pretty much with one voice on this, so we will need to return to it on Report. For now, I beg leave to withdraw the amendment.
Lord Touhig
“( ) any provision deemed necessary to be made available to the family of the child or young person which may assist in the promotion of the wellbeing of the child or young person concerned.”
Lord Touhig
My Lords, Amendments 144 and 146 are tabled in my name and that of my noble friends Lady Hughes and Lady Jones and Amendment 175A in my name only.
Clause 37 deals with EHC plans and subsection (2) specifies what should be in the plan. Amendment 144 states that the plan should specify any provision necessary to the family of the child or young person. As with a number of other amendments, it seeks to place the capabilities of the child or young person’s family at the heart of any assessment process, which is important in properly informing the provision that they may need to have specified in an EHC plan.
It is prudent that family life and home life are considered when the provision is made. Families are key to the well-being of children and young people with special educational needs and disabilities and to ensuring that they reach their full potential. They are a crucial resource in improving the outcomes of those children and young people and we should not overlook them. In the other place, the Minister said that EHC plans should describe the range of services that are needed to meet the needs of a child or young person and that the focus of plans must be the child or young person. He cited other things that would benefit parents and families, such as short breaks or the provision of transport. He said that the Government did not think it necessary to add anything specific to the legislation but would continue to develop the code of practice. I am not sure that he is right in that respect, but I am encouraged that the Minister said that he will look again and reflect on Amendment 131, tabled and spoken to by my noble friend Lady Jones. As that is very similar to Amendment 144, he might care to reflect on Amendment 144 at the same time and give us some good news afterwards.
Amendment 169 is tabled in response to the report of the Delegated Powers and Regulatory Reform Committee on this Bill. The Government have not tabled any amendments in response to the report, so I hope that the Minister will take this opportunity to explain how the powers will be used.
I turn to Amendment 175A. All too often, we hear of the adversarial struggle that parents face to obtain the right support for their children. If anybody has any doubt about that, I suggest a five-minute conversation with the noble Baroness, Lady Browning, who will enlighten them about the way parents often have to struggle on behalf of their children. The stated intention of the Bill is that it will make it easier for families to get the support they need. That is a noble intention.
However, an oversight in the Bill about what happens when a family moves is causing great uncertainty and anxiety to a great number of families and support organisations. We all know the terrible struggle that families with children and young people with special educational needs and disability too often have to go through to access vital services. Seven out of 10 parents of children with autism, for example, say that it has not been easy to get the educational support that their child needs.
Without Amendment 175A, such families will continue to have to struggle to access the services that they desperately require. The Bill currently perpetuates the status quo, whereby when families move from one local authority area to another, they do so without any clear idea as to what support their child might receive. They can also face the prospect of costly legal battles, with the appalling result that children and young people end up missing out on education while such battles are fought.
In many cases, parents feel trapped. A parent told the National Autistic Society—here I declare an interest as a vice-president of the National Autistic Society—that they feared moving because,
“we would have to start the assessment process from scratch, even though Mohammed has very complex needs. The stress of doing that all over again, along with the risk that we might lose his place at his current school is terrifying for us”.
It cannot be right that, should the family move, they might have to restart the assessment process, potentially disrupting the education and healthcare of children and young people.
The amendment is intended to echo existing clauses in the draft Care and Support Bill, which set out a local authority’s responsibility both when someone moves into the area and when someone moves out. It is impracticable to expect local authorities to replicate exactly the provision agreed by a different authority. However, it should be expected that provision is based on the previous assessment and agreed outcomes rather than starting from scratch. The positives of such streamlining are manifest: withdrawing the shadow of fear for families that they may have to undergo complex assessments for a second time; and ensuring crucial continuity of provision of services for children and young people.
Regulation 3, paragraph 15, entitled “Transfer of EHC plans”, sets out in detail what should happen when a child or young person with an EHC plan moves to another local authority area. Unfortunately, it makes no mention of continuity provision. I wonder whether the Minister will be prepared to review that. Alternatively, will he commit to, at a minimum, strengthening the regulations that will dictate the portability of education, health and care plans to ensure that there is clear guidance for local authorities and coherence between this Bill and the Care Bill?
As a brief aside, when I served as a Defence Minister, I constantly found that servicemen were reluctant to move, sometimes even when it involved a promotion, if they had children with special educational needs and their children were statemented, because they had to go through the whole process again. We were working on a plan for a statement passport. Unfortunately, I had a phone call from No. 10 and Mr Blair awarded me the DCM—don’t come Monday—so I was no longer a Minister and was unable to take that forward. However, there is merit in having such a passport. By ensuring that education, health and care plans are portable across local authorities, we will ensure continuity of service. I think that we all want that, and, therefore, I beg to move.
Baroness Howe of Idlicote
My Lords, I have tabled two amendments in this group. Before I speak to them, I want to say how impressed I was by what the noble Lord, Lord Touhig, had to say about his amendment, which I certainly fully support. It is important that movements by families of this kind should be facilitated and that they receive the same care as they would have, had they stayed where they were.
Amendment 147 would insert a new subsection after Clause 37(4) stating that:
“In making a decision for the purposes of this section in relation to a young person aged over 18, a local authority must seek psychological advice from an educational psychologist”.
I have tabled the amendment to explore two specific concerns about this clause. The first is about the support available to young people with special educational needs aged between 19 and 25. Although educational psychologists principally work with children and young people aged from nought to 19, the profession is increasingly supporting young people over the age of 19 in a number of settings, including the further education sector. Currently, educational psychologists across the country are playing an important role in supporting these young people. However, under the provisions of this clause, it is not clear what role educational psychologists will continue to play in post-19 settings, and how this will be promoted. The proposed age extension to 25 years has been welcomed for the assessment process, but that will need careful workforce development planning to ensure that young people aged 19 to 25 years are well supported by a sufficient number of educational psychologists in future.
It would certainly be helpful if the Minister, when he replies, could set out clearly how he envisages the new proposals helping educational psychologists to contribute to supporting young people. It would also be useful if he could explain the impact of the changes on future workforce development. The Government clearly need to ensure that enough educational psychologists are being trained to meet future demand. I would also like some clarification on the role of educational psychologists in the assessment of children and young people who come in from outside the system; that is, if they have moved to the UK from abroad. Under the current proposals, it is unclear how these children and young people will be supported. I hope that the Minister will be able to provide us with adequate reassurance on this important issue.
I turn now to my second amendment, Amendment 168, which would amend Clause 44, headed “Reviews and re-assessments” by inserting a new subsection:
“Following a review of re-assessment, a local authority has to seek psychological advice from an educational psychologist”.
One of the reasons that this whole area is coming to the forefront of our discussion is the increasing emphasis being placed on mental health problems. I hope that this issue is being taken more seriously than perhaps it was in the past.
I am encouraged that the Bill will retain the existing protections for parents, including an explicit right for them and for the school to request education, health and care plans. I know that during scrutiny of these clauses in the other place, the Minister for Children confirmed that under the proposals, there will be access for all children and families to specialist services such as educational psychology on an equitable basis. Currently, under statute, a reassessment of SEN follows essentially the same process as the initial assessment. If a child or young person’s needs change, a further assessment can be requested and, if carried out, the local authority must comply with all the statutory requirements, including meeting time limits and consulting with professionals as specified in the regulations; that is, educational professionals, educational psychologists, social services and health services.
However, under the Bill, a new concept of reassessment is now being introduced which allows a local authority to determine the format of the reassessment. Local authorities will no longer have the same duty to consult and obtain evidence from designated professionals and can choose to review only a specified aspect of the EHC plan. Although the code of practice states that reassessment must follow the same process as an initial assessment, I know that there are concerns that under the Bill, there is no guarantee that EPs will be consulted when a reassessment takes place. The fact that children and young people undergo a reassessment because there is a significant change in their needs makes it more important that educational psychologists are involved, to ensure that the child’s voice is considered. Educational psychologists will also work with parents and schools to ensure that the right support is found for the child.
Lord Lingfield
My Lords, I have one amendment in this group, which is to Clause 37(5). It is to provide a standard form of education, health and care plan rather than use the more discretionary wording of the Bill. At the moment—and this touches on the point made by the noble Lord, Lord Touhig, concerning passports for special educational needs—statements are in a standard form. If there is no similar standard form for education, health and care plans they will surely be subject to each local authority’s drafting preferences. As a result, EHC plans may not be in a consistent format and may vary widely in their level of detail. This could cause confusion and difficulty for parents and young people, especially if they move from one local authority to another. Relocation of this kind, under current economic circumstances, is becoming extremely common.
Your Lordships will have noticed, in relation to Clause 30, and the local offer, that there are strong arguments for a consistent national framework for the key tenets of the new system of assessment and provision brought in by the Bill. In addition—as the Minister reminded us when we debated Amendment 71—in his appearance before the Education Select Committee on 6 November last year my honourable friend the Parliamentary Under-Secretary of State for Children, Schools and Families stated:
“The first thing I want to be absolutely clear about is that the current protections that parents and young people have in the current statementing system are intended to be carried forward into the new system”.
In the spirit of this, and as I sought to express in this amendment, I believe that these key duties relating to statements should remain the same for EHC plans, and that, in particular, the requirement for a standard form, and the duty to be specific about provision, should remain. I hope that the Minister will be sympathetic to this.
Baroness Sharp of Guildford
My Lords, my name is added to that of the noble Baroness, Lady Howe, for Amendment 147 and I endorse what she has said on this issue. Statements for special educational needs require an educational psychologist to endorse them and it is obviously sensible and important that this should be extended to the post-18 age group. I probably also should have put my name to Amendment 168 because the argument there is just as cogent and important.
While I am on my feet, I should say that I have a lot of sympathy with the amendment in the name of the noble Lord, Lord Lingfield. As he said, as we have a set format for statements of special educational needs, it would seem sensible for it to be carried forward in relation to the EHC plans.
Lord Addington (LD)
My Lords, perhaps I may very briefly add a few words of support, particularly to the last amendment in this group. Good transference of these provisions around the country would be an opportunity for the Government to deal with a fairly ancient wrong. It has always been difficult and has always been seen as too difficult, but if we can embrace it now we will go forward and take on board something which runs through a lot of this legislation; namely, that it has genuine cross-party awareness and support at heart. Even if this amendment is not perfect—even the noble Lord can make an error in drafting—I hope that we can say something positive in this regard. If we can go forward and see how it can be addressed in the future, that would help everyone and would probably make people’s lives a little bit easier.
Baroness Whitaker (Lab)
I speak in support of Amendment 175A in the name of my noble friend Lord Touhig. I have in mind a particular group of children with disabilities who move and I am not sure whether this amendment exactly covers them. If the Minister is going to say that Clause 47 covers the concerns of the noble Lord, Lord Touhig, will he clarify whether Clause 47, or the new clause proposed by Amendment 175A, would cover the situation of travelling children? This might be the child with disabilities of a showman who is based in one area, say, for three or four months over the winter, and then moves every few weeks to wherever the parents’ have work. The care plan needs to be transferred to each local authority. I had thought that Clause 47 might cover that, so my first question for the Minister is: is that covered? My second question is: if he entertains my noble friend’s amendment about children who move residence, as opposed to moving where they live from time to time, would that cover the situation of travelling children who return to a base but only once a year?
Earl Attlee
My Lords, I am grateful to the noble Lord, Lord Touhig, and other noble Lords who have either moved or spoken to amendments concerning education, health and care plans. I welcome the opportunity that these amendments give to discuss the EHC plan, as it is a vital part of our reforms. For the first time, it will provide a single plan across the whole nought-to-25 age range, and will be focused on how education, health and care services will work together with families and young people to secure improved outcomes for children and young people.
Turning first to Amendment 144, I share the concern of the noble Lord, Lord Touhig, to ensure that family support is included in an EHC plan. The EHC assessment process will consider the needs of the child or young person across education, health and care, including the circumstances of the family where there are social care needs for someone under the age of 18. For example, if, based on family circumstances, social care provision is required under Section 17 of the Children Act 1989 to meet the child’s special educational needs, it must be specified in the plan.
The existing duties will continue to mean that children and young people receive the assessment they require for their needs, supported by the new duties, in Clauses 25 and 26, for local authorities and the health service to integrate and jointly commission services for children and young people with SEN, and by chapters 4 and 7 of the draft code of practice, which focus on multi-agency working to produce a joined-up EHC plan.
I turn to Amendment 147. The noble Baroness, Lady Howe, is right to want to ensure that educational psychologists are involved in decisions about EHC plans for young people aged over 18. Doing so will assist local authorities in making evidence-based decisions on whether remaining in education will be the best option for individual young people and whether they continue to need special educational provision.
This is why we have already made it clear in Regulation 6(1) of the draft assessment and plan regulations that educational psychologists, along with other relevant professionals, must be consulted when local authorities are carrying out an assessment for an education, health and care plan for any child or young person, including for young people aged over 18. Further detail on that is set out in section 7.7 of the code of practice. The noble Baroness raised quite a few detailed points, and I think that it would be better if my noble friend Lady Northover wrote to her on those. She asked about the training of educational psychologists. The Government carried out a review of training in 2011 and, as a result, has put the arrangements for their training on to a secure basis, including central funding for the National College for Teaching and Leadership.
I fully understand the intention of my noble friend Lord Lingfield through Amendment 147B. It is vital that EHC plans provide consistent, clear and specific information on outcomes and provision. Draft assessment and plan Regulations 11 and 12 and chapter 7 of the draft code of practice set out detailed requirements and expectations about the preparation and content of EHC plans to ensure consistency, including that provision should be specific, detailed and quantified. In addition, Section 3.3 of the code provides details on the information, advice and support that must be provided, including trained independent supporters where appropriate.
My noble friend commented on the format of the plans. I repeat the commitment of the Minister for Children and Families to protect existing rights and protections. That certainly includes being specific about the provision to be made. However, I am not convinced that a standard format is itself a right or protection. It is better to leave flexibility to design plans around the needs of parents, children and young people.
I do not believe that it is helpful to have prescription in the form of a standard template. We have left flexibility for local areas to design EHC plans best to meet local needs. To ensure consistency, we have included in section 7.9 of the draft code of practice a list of the key information that every EHC plan must include in distinct sections, including arrangements for monitoring progress. Having skimmed it a few hours ago, I have to say that it is comprehensive. We have also been working closely with pathfinders to develop and publish example EHC plans.
The Countess of Mar (CB)
My Lords, the Minister said that he was against having a statutory form to satisfy local needs. I thought that we were talking about children’s needs.
Earl Attlee
We are talking about children’s needs, and local authorities will need to ensure that their template and the way that they do it suits the needs of their children. What we do not need is central government dictating exactly what the template will look like.
Government Amendments 148 and 149 enable regulations to make provision about amending and disclosing education, health and care plans. Equivalent provisions currently exist in paragraphs 2A(5) and 7 of Schedule 27 to the Education Act 1996. The amendments also require that any amendment to the plan applies to Clause 33, which requires that children and young people with a plan be educated in mainstream provision other than in specified circumstances.
Having the ability to make amendments to plans will ensure that local authorities will retain the flexibility to make minor amendments to keep plans up to date without the need for a full review or reassessment—for example, when a particular outcome in a plan has been achieved. Assessment and plan draft Regulations 26 and 27 set out how we would propose to use the powers on amendment, including requiring that local authorities consult fully with the parent or young person.
Regarding the regulation-making power and disclosing EHC plans, our proposed new regulations are in assessment and plan draft Regulation 17, which will be laid following consultation, subject to noble Lords’ approval of these amendments. The regulations ensure that sensitive information in EHC plans must be protected and can be disclosed only with the child’s or parent’s or young person’s consent except in specific circumstances, such as to share with schools and colleges.
Lord Touhig
My Lords, we have had quite a wide-ranging debate and the Minister has had to cover a huge number of issues in his response. I am sure that all noble Lords will want to read Hansard and reflect on his comments to decide whether there is any purpose in taking these matters further. As regards the amendments to which I directly spoke, the Minister’s answer on Amendment 144 was not quite what I had expected, but I will look carefully at what he said in Hansard. On Amendment 169, the Delegated Powers and Regulatory Reform Committee report on the Bill said:
“We invite the House to ask the Minister better to justify the scope of the powers conferred by clause 44(7)(b) which to us, in the absence of an explanation, appears to be inappropriately wide”.
Again, I am sure that I will not be alone in studying the Minister’s reply to see if he has satisfied any concerns. Amendment 175A seeks to ensure portability. I was encouraged because the Minister was nodding vigorously while I was speaking, so I had much hope that we would be going in the direction that I want. Again, I will look carefully at his remarks in Hansard to see whether there is any need to pursue this matter further on Report. I am grateful to all noble Lords who have taken part. We have had a very good debate and I beg leave to withdraw the amendment.
“(6) Regulations under subsection (5) about amendments of EHC plans must include provision applying section 33 (mainstream education for children and young people with EHC plans) to a case where an EHC plan is to be amended under those regulations.”
Lord Lexden
“(f) an independent school”
Lord Lexden (Con)
My Lords, in moving Amendment 153 I shall speak also to Amendments 157 and 159. In doing so, I declare my interest as president of the Independent Schools Association, a body representing the heads of some 300 smaller and less well known independent schools that form part of the Independent Schools Council, of which I was once the general secretary. The amendments are short and straightforward, and I do not need to detain the Committee long in outlining them.
The purpose of Amendment 153 is to remove all doubt and achieve absolute clarity on a crucial point that seems to be generally agreed in actual practice; namely, that parents and young people will be able to make representations for any independent school to be named in an EHC plan, not just those on the list approved by the Secretary of State under Clause 41. The Explanatory Notes to the Bill expressly state at paragraph 216 that:
“Parents and young people will … be able make representations for an independent school or post-16 independent specialist provider not included in this list as is the case under the current legislative framework”.
My noble friend Lord Nash, in a letter to Mr Barnaby Lenon, the current chairman of the Independent Schools Council, also stated:
“I can assure you that parents and young people will still be able to make representations for independent schools that are not on the list approved under clause 41 of the Bill, and the local authority will … need to consider those representations”.
Finally, I shall quote from the recently published draft SEN code of practice, to which much reference has been made in these debates:
“Parents and young people may also make representations for places in non-maintained early years provision or at independent schools or Independent Specialist Providers … that are not on the list mentioned in (f) above and the local authority must consider their request”.
All that seems clear enough; indeed, complete unanimity could hardly be more clearly expressed, and yet Clause 38(3)(f) provides that the right of parents and young people to make representations for an independent school can be exercised only in respect of,
“an institution approved by the Secretary of State under section 41 (independent special schools and special post-16 institutions: approval)”.
That list, of course, does not include all independent schools so the unanimity so clearly expressed in the Explanatory Notes, in my noble friend’s letter and in the draft SEN code of practice is not reflected in the Bill itself. That is the point.
Lord Touhig
My Lords, I will speak to Amendment 158 in my name and in the names of my noble friends Lady Hughes of Stretford and Lady Jones of Whitchurch, and to Amendment 161 in my name.
Clause 39 deals with requests for particular schools or institutions in EHC plans. As drafted, the clause sets out that if the school requested is unsuitable for the child, or incompatible with either the provision of efficient education for others or the efficient use of resources, the local authority will ensure that the plan names a school or specifies the type of institution which could be appropriate. This amendment would ensure that parents agreed with the school chosen by the local authority when their first choice did not work out, before the local authority is able to name the second choice school in the EHC plan. This issue has already been discussed in relation to a previous clause.
It is, shamefully, already the case that some schools unfairly reject children with special educational needs; the Bill would continue to allow them to do so. I have been taking part in the Lord Speaker’s outreach programme and not so long ago I visited a school. I looked through the school’s prospectus, which said, “We welcome children with disabilities and special educational needs”. The next sentence started, “However”. That is, I fear, too often the case. Concerns have already been expressed about this issue by other noble Lords—notably, at Second Reading, by the noble Baroness, Lady Grey-Thompson. This amendment would ensure that, where parents try to name a school and a local authority relies on an exception under subsection (4) in order to refuse to name that school and then puts forward another school, the second choice school can only be named on a plan if the young person or parents agree.
I turn to Amendment 161. Clause 41 enables the Secretary of State to approve certain institutions, such as independent schools, for the purpose of enabling the institution to be the subject of a request to be named in an EHC plan. Subsection (5) gives the Secretary of State power to make regulations about giving and withdrawing approvals. This amendment would require the regulations to also set out the rights of appeal, the timetable for that and what the relationship with the local offer will be in such circumstances.
A similar amendment was tabled by Robert Buckland MP in the House of Commons. Robert Buckland was my Conservative opponent when I was first elected to Parliament. He is now chairman of the All-Party Group on Autism and is a doughty champion of people with special educational needs. He has done a tremendous amount of work and many of his arguments are well worth listening to. When he argued this in the other place, the Minister said that:
“The indicative regulations set out the procedures and timetable for the Secretary of State to follow on approving institutions … Regulations 5 and 6 set out the procedures for the Secretary of State to follow in withdrawing approval.”
However:
“The regulations do not set out procedures on how to appeal or review the Secretary of State’s decision”.—[Official Report, Commons, Children and Families Bill Committee, 16/4/13; col. 508.]
The Government appear to believe that such regulations are unnecessary. Consequently, without this amendment, families and young people are left without a route of appeal in such circumstances. That is a serious omission from the legislation which serves to undermine the power of children, young people and their families to get the best for their youngsters’ needs. The Minister’s colleague did not see the merits of that argument when it was advanced by Robert Buckland in the other place: I hope he will be convinced by it in this place.
Baroness Perry of Southwark (Con)
My Lords, I very much support the amendment in the name of my noble friend Lord Lexden. I recently spent a day at Gretton School in Cambridge: an independent school entirely for children across the whole range of autism. Some of the most severely autistic young people are in classes of four and five. At the end of my visit, I took my hat off to the patience and skill of the school’s teachers. As I said, it is an independent school; it also offers boarding. It takes children from a wide range of local authorities from the eastern and East Anglia regions. Most of them come with statements from their local authorities and are supported by them, but many parents have to pay additional fees for boarding. Gretton School and others such as those my noble friend described have an important part to play in the range of offerings for disabled children. It is important that they are named in the Bill, as otherwise local authorities may simply assume that they cannot be included in EHC statements. I very much hope that the Minister will look sympathetically at these arguments.
Lord Addington
My Lords, perhaps I may briefly add something. It has been a tradition that the independent sector has periodically supported the state system in specialist areas. If we are to use specialist support and help here, then making sure that it is stated up-front that that is possible will probably be more helpful than otherwise.
Lord Nash
My Lords, this group of amendments concerns independent specialist provision. I thank all noble Lords who have spoken in this debate. I particularly thank my noble friend Lord Lexden for his Amendments 153, 157 and 159, which seek to ensure that independent schools, including those specially organised to cater for children with special educational needs, continue to play an important part in SEN provision.
Currently, parents can request that a maintained school is named in a statement of special educational needs. The local authority is then under a qualified duty to name that school and, if so named, the school has to admit the child. The Bill extends to young people the right to ask for a particular institution to be named in an EHC plan and the coverage is extended to a wider range of institutions. Parents or young people will also be able to ask for an academy, including a free school, a further education or sixth-form college, a non-maintained special school or an independent institution approved under Clause 41 to be named in an EHC plan. The local authority will then be under the same qualified duty to name the institution and the institution will be under the same duty to admit the child or young person. For this change to be of real benefit to parents and young people, it is important that, when a parent or young person requests one of these institutions, the local authority is under a qualified duty to name that institution in the EHC plan and that the institution is under a duty to admit the child or young person.
Turning to Amendment 153, I understand my noble friend’s desire to ensure that parents and young people can ask for any independent school to be named on an EHC plan and not just those on the list under Clause 41. I reassure my noble friend that parents and young people will be able to make representations for any independent school, and the local authority must consider their request. In doing so, it must have regard to the general principle in Section 9 of the Education Act 1996 that children should be educated in accordance with their parents’ wishes, so long as this is compatible with the provision of efficient instruction and training and does not mean unreasonable public expenditure. Paragraph 7.11 on page 111 of the draft SEN code of practice makes this clear. Of course, the local authority would not be under the same conditional duty to name the school in the EHC plan as it would in the case of an institution approved under Clause 41, and the school would not be under a duty to admit the child or young person.
My noble friend’s amendment would place local authorities under a duty to name an independent school in an EHC plan with no guarantee that the independent school would admit the child or young person, leaving the local authority unable to fulfil its statutory duty to secure the special educational provision in the plan. As we have heard many times from noble Lords in this debate, it is important that children, parents and young people are clear about what they are entitled to. This is key to their confidence in the new system.
Turning to Amendments 157 and 159, I reassure my noble friend that Clauses 39 and 40 require the local authority to consult the institution which might be named in an EHC plan, including an independent special school or independent specialist provider approved under Clause 41. This will allow meaningful discussions, especially if a school or college feels that it cannot make appropriate provision to meet the pupil’s needs. After this consultation, the authority will name the institution that it feels is appropriate. If it is decided that an institution approved under Section 41 is appropriate and that institution is named in the EHC plan, the institution is under a duty to admit the child or young person. It is important to remember that only those institutions that have chosen to apply to be approved under Clause 41 and are subsequently approved will be under such a duty.
Amendment 158, tabled by the noble Baronesses, Lady Hughes and Lady Jones, and the noble Lord, Lord Touhig, seeks to protect the right of children, young people and their parents to choose the school or institution named in their EHC plan. I agree with the intention behind the amendment—the importance of a person-centred system is at the heart of our reforms. The Bill places specific duties on local authorities to consult a child’s parents or a young person while drawing up an EHC plan. Clause 38 requires the local authority to send the draft plan to the parents or young person and to make clear their right to make representations about its contents, including the right to request a particular school or institution. In the event that a parent or young person is not satisfied with the school or institution named in their EHC plan, they have recourse to mediation and an independent tribunal.
Lord Lexden
My Lords, I thank all who have taken part in this brief debate, and particularly my noble friends Lady Perry and Lord Addington for making clear their strong support for the great work that is done in independent schools, particularly those of a specialist character dealing with special educational needs. I listened carefully to my noble friend’s reply, and I thank him for dealing with the points so fully. He will understand that in listening to him I did not extract complete assurance and total satisfaction. I shall read the comments in Hansard in full and consider what further action might be appropriate, as many other noble Lords will be doing. For the time being, I beg leave to withdraw the amendment.
Baroness Sharp of Guildford
My Lords, I shall speak also to Amendments 177 and 179 in my name. In Clause 49, we move to the issue of personal budgets and direct payments. The purpose of these amendments is to probe issues concerning direct payments and personal budgets. The Bill provides an entitlement for schools or colleges to make representations to the local authority when it is considering making a direct payment to a child or a parent. The amendment provides an alarm for local authorities to be able to exercise a judgment about whether to make an individual payment.
Clause 49 gives the parent a statutory right to require the local authority to prepare a personal budget and to meet direct payments, even in circumstances where the school or college does not think that this would be sensible or justified in terms of efficiency or economy. This is not to disparage the vital contribution that parents make, but to suggest that there will be occasions when their wishes would not necessarily be in the best interests of their children or reasonable in the context of an efficient and cost-effective system.
The case has not been made in the pathfinders that the introduction of direct payments to parents will help children with special educational needs. The evaluation of the pathfinders shows that the demand for direct SEN payments to parents has been extremely low. The evaluation states that many commentators are apprehensive about the extent to which this testing should be rolled out to a wider population. Of the 290 direct payments across the 14 case study sites in the pathfinders, 270 out of 290 dealt only with school personal transport. That means that there has been no investigation of the feasibility or desirability of making direct payments to parents for educational elements of the provision, such as the deployment of a special teaching assistant.
The pathfinder information pack acknowledges that personal budgets are more established in social care and health settings than in educational settings. The pathfinders themselves found that schools, colleges and parents were often confused about which elements of funding, in an educational context, could be used as a personal budget to give families more choice and control. The reasons cited for poor take-up are the challenges and complexities in the direct payments offer. Personal transport budgets were in fact by far the easiest to disaggregate. The pathfinder information pack acknowledges that it is essential to have a good market development strategy in place.
A remaining concern for teachers is that the fragmentation of budgets will have a detrimental effect on the viability and quality of services which pupils need to access, and will lead to a lottery of appropriate SEN provision. Teachers are also concerned about the loss of the quality assurance role carried out by local authorities and do not believe that giving individual packets of money to individual parents is the most cost-effective way to deliver the provision to meet needs. The case for direct payments, they feel, has not been proven by the pathfinders.
The warning in the evaluation report that there are reservations about the extent to which testing can be rolled out to a wider population needs to be carefully heeded. Teachers continue to have significant concerns. In a recent survey, 65% of SENCOs—the special educational needs co-ordinators in schools—were concerned about allowing parents to control funding for SEN provision. That is not because teachers fail to recognise the essential role of parents, or their unparalleled knowledge of their child’s individual needs and aptitudes; it is because teachers also recognise that teachers, schools and parents must work as equal partners, with the professional judgments and expertise of teachers respected and valued alongside the contribution from families.
The pathfinders have not, it seems, proven that to be an option that parents are demanding or which teachers have confidence can work, or will benefit the children with special educational needs whom they teach. Demand for direct SEN payments has been low, and many children’s charities believe that the introduction of individual payments will further accelerate the disintegration of specialist services, such as the support services for deaf children, which the Council for Disabled Children is campaigning to save in different local authorities. The case that direct payments will support the SEN reforms in a meaningful way has not yet been proven. I beg to move.
Baroness Jones of Whitchurch
My Lords, we have Amendments 180, 271 and 273 in this group, which I shall address. We have touched on personal budgets in a previous debate. At that time, the noble Baroness, Lady Howarth, spoke movingly about some of the problems experienced by those in adult social care in managing employment challenges when they had to employ staff and the financial complexities of the budgets that they were expected to manage. We understand the concerns that have been expressed and share a number of those that were raised by the noble Baroness, Lady Sharp. We have taken a slightly different approach to the issue. In principle, we support the concept of personal budgets and direct payments, which give parents more flexibility and say over the support that their children get. It is a principle that we have supported for other forms of care in the past.
This is a new area of social policy. We feel strongly that these reforms are based on evidence and are not rushed through. As we know, the pathfinder pilots have been extended and now will not finish before the autumn of 2014. We very much appreciated the chance to meet with some of the pathfinder champions a couple of weeks ago when there were some very good examples of the improved quality of life that personal budgets could bring, as well as some of the difficulties and challenges that they presented.
It seems that the rollout of personal budgets is the least well researched and analysed, not only the impact on the individuals concerned but also on the institutions from which the services will be procured. Our Amendment 180 would build in essential time to reflect and learn from the pilots by requiring regulations to be made by affirmative resolution and a report to be published after the pathfinders have concluded, setting out the evidence and guaranteeing proper scrutiny by Parliament.
It very much feels as though we are legislating on this issue prematurely. Given that we are considering the Bill now, it is not clear how the Government plan to take account of the findings of the pathfinders. There are many things on which we remain unclear—for example, how devolving budgets will work on a practical level; how they will impact on the quality of provision and on costs; and how we can ensure that providers are reliable and accountable. It is also unclear how institutions with devolved budgets—for example, academies—can be required to make a contribution to personal budgets from their own funds. These are some of the issues that we feel need to be debated further.
As we know, interim findings from the pathfinders were published in June. In a subsequent letter, the Minister stated that they show,
“a clear appetite for parents to be involved in the decision making process and to have choice and control”.
However, he also referred to the challenges that the pathfinders faced in implementing personal budgets, particularly direct payments. He stated that the department has established an “accelerated testing group” to make progress in this area. I would be very grateful if he could update us on that work and explain how the conclusions from this group will impact on the provisions in the Bill.
The findings also made clear that there were complexities about resources being calculated and allocated. Such concerns are exactly why we think that these reforms should not be rushed through. We should take time properly to consider the evidence, and we believe that our amendment provides the mechanism to do that.
Our Amendments 271 and 273 reflect some of the concerns flagged up by the Delegated Powers Committee. It stated:
“We take the view that, because these are novel proposals and the whole system of personal budgets will be set out in the regulations, the regulations should be subject to the affirmative procedure at least in relation to their first exercise”.
We agree that these changes are too big and too significant to be dealt with by negative resolution. Our amendments would guarantee a positive decision of both Houses as these regulations go forward.
We are grateful that, belatedly, the Government have agreed with this view and have gone some way to meeting our concerns. However, we feel that our amendments are more comprehensive than those tabled by the Government. I hope that I have persuaded noble Lords that we should delay a decision on the regulations on personal budgets until the pathfinders have concluded and that noble Lords will agree to support our amendments.
Baroness Howarth of Breckland
My Lords, I spoke at more length than is usual for me on this when I raised it, under Clause 30, in relation to the arrangements to assist young people and parents managing a personal budget, should they choose one. I therefore wish to support the noble Baronesses, Lady Hughes and Lady Jones, on Amendment 180. It is clear that some families find that personal budgets bring them freedom, and freedom of choice, but only if they have help in understanding how to manage that budget. I agree with the noble Baronesses that this is little researched, yet we have more information from the adult services which could be looked at. Some of the problems for these young people and for the families of these children will be the same as those experienced by adults who have disabilities. There is no reason why we should not be able to gather that information together and extrapolate from it into some of these areas.
I certainly have grave anxieties about this moving forward quickly, and not only on behalf of the parents and young people. If it is not thought through, in terms of funding, there is a grave danger that educational institutions that depend on payments could find themselves unable to plan; if families have personal budgets with which to pay for the educational element, it could cause serious difficulties. I therefore support the amendment, which moves forward on personal budgets to give families freedom—where there is proper research—but takes it steady so that we do not cause even more difficulties than we already have in the adult field.
Lord Nash
My Lords, I would like to speak to this group of amendments concerning personal budgets and the recommendations of the Delegated Powers and Regulatory Reform Committee on personal budgets and Clauses 54 and 55, on appeals and claims by children.
I first turn to Amendments 180, 271 and 273 and government Amendment 269, which respond to recommendations from the Delegated Powers and Regulatory Reform Committee.
I hope that the noble Baronesses, Lady Hughes and Lady Jones, will be pleased to note that government Amendment 269 to Clause 107 takes forward the advice of the DPRRC, as sought by Amendments 271 and 273. Amendment 269 will require affirmative resolution by both Houses of Parliament for the first order to be made under Clause 49(3) and for affirmative resolution in both Houses, in relation to Clause 54(2), on pilot schemes for appeals by children.
With Amendment 180, the noble Baronesses, Lady Jones and Lady Hughes, also seek assurance that the pilot scheme for direct payments for special educational provision will be evaluated. I am pleased to be able to reassure noble Lords that we are meeting the commitments, given when the pilot scheme was established, to evaluate the scheme. For example, the Process and Implementation Research Report on the pathfinder programme, published by the department in June, includes a standalone chapter on the testing up to March this year.
However, we recognise that there is more to learn. That is why, as the noble Baroness, Lady Jones, mentioned, we established our accelerated testing group of pathfinders, whose work has been fundamental in developing the draft regulations made under Clause 49 and section 7.13 of the draft code. It is also why we have asked the evaluators of the pathfinder programme to deliver a standalone thematic report on this subject in 2014.
The specification for the report has yet to be finalised, but it will involve in-depth work with a small cohort of pathfinders and include further research on how direct payments for special educational provision have operated. In addition to the thematic research, I should stress that this is not the only source of evidence to support this policy. A quick comparison of the indicative code, published to aid consideration of this Bill in the other place, against the consultation draft, shows how far our knowledge and understanding have developed this year. This knowledge continues to grow. Pathfinders are increasingly offering personal budgets to all new EHC plan-holders with a resultant increase in numbers. We have also recently supported the development and publication of an implementation framework, for personal budgets for children and young people, by In Control and SQW, the pathfinder evaluators that are widely acknowledged to be the experts in this field.
We are therefore confident that we will have the knowledge and understanding to make the regulations ahead of the initial implementation of our reforms in September 2014, while accepting through my Amendment 271 that the House must have the opportunity to debate this issue further before we do so.
I turn to Amendments 176, 177 and 179. I completely agree with my noble friend Lady Sharp that schools, colleges and other institutions need to retain control where provision is delivered on their premises. I hope that Regulation 11 in the draft regulations to be made under Clause 49 reassures my noble friend, as it states:
“A local authority may not make a direct payment in respect of agreed provision which will be used or provided in a school or post-16 institution unless the head teacher, principal or the person occupying an equivalent position at the school or that institution agrees”.
Amendment 179 brings the issue of transparency to our attention. I agree that this is extremely important and is a key point of learning from the pathfinder programme, in relation to personal budgets. I hope that I can reassure my noble friend that we have made comprehensive provision in draft regulations and the draft code of practice.
Regulations to be made under Clause 30 will require that the local offer provides information about how to request an assessment for an EHC plan. The draft code of practice builds on this requirement and explains in section 5.2, on page 34, that this should include information about eligibility for personal budgets.
Draft regulations relating to Clause 49 set out the right of parents to request a review and require the local authority to provide in writing the reason for any decision to decline a request for a direct payment. Again, the draft code builds on this requirement. Section 7.12 states:
“The decision making process to establish and agree a budget should be clear and must be open to challenge, with parents able to request a review of decisions in relation to direct payments”.
With these reassurances, I hope that the noble Baroness will feel able to withdraw her amendment.
Baroness Jones of Whitchurch
Can I just ask for a point of clarification? I thought that the Minister was beginning to say that he agreed with our Amendment 180. That would be lovely, but I just want to clarify the timescale on this. As I understand it, the pathfinders are due to finish in June next year. The Minister then said, I think, that a report would be written by September 2014. Is the idea that when the Houses reconvene in October 2014 they will have before them a report that we would then agree through an affirmative process before the personal budget regulations have gone ahead? That is my question; it is quite simple.
Baroness Sharp of Guildford
I am very grateful to the Minister for his reassurances, about the role that school or college principals might play when direct payments are proposed and it is not necessarily in the interests of either the child or economy and efficiency to proceed along that route, and that the process of decision-making will be an explicit one.
I am also glad to have the assurance that, when decisions are made, they will take account of the pathfinders and that the process will not be put into effect until the full evaluation has been made. I welcome government Amendment 269 implementing the recommendations of the Delegated Powers Committee relating to the positive agreement of the House that we should go forward with this. In the light of this, I beg leave to withdraw the amendment.
Earl Attlee
My Lords, I think that this may be a convenient moment for the Committee to adjourn.
The Deputy Chairman of Committees (Baroness Andrews) (Lab)
The Committee stands adjourned.
House of Lords
Introduction: The Lord Bishop of St Albans
Introduction: Baroness Kennedy of Cradley
Culture: Art House Cinemas
The Earl of Clancarty
To ask Her Majesty’s Government what assessment they have made of the cultural value to the United Kingdom of art house cinemas; and whether they are taking any steps to preserve or promote such cinemas.
Lord Gardiner of Kimble (Con)
The Government see this sector as a key element of the film industry. It attracts substantial audiences and is an important part of cultural cinema-going. That is why the British Film Institute—BFI—which is funded by the taxpayer and the National Lottery, has three strategic priorities: to connect the widest possible range of audiences with the broadest range of films; to support film; and to preserve film heritage.
The Earl of Clancarty (CB)
My Lords, I thank the Minister for that Reply. Does he agree that the Competition Commission’s ruling following the Cineworld-City Screen partnership—that Cineworld should sell one each of its cinemas in Cambridge, Bury St Edmunds and Aberdeen—is misguided and culturally insensitive since it puts at risk the picture houses, including the Cambridge Arts Picturehouse, which hosts the Cambridge Film Festival, and which the BFI calls,
“an exemplary regional ‘arthouse’ cinema”?
Will the DCMS use all its influence to intervene to have this ruling overturned?
Lord Gardiner of Kimble
My Lords, I entirely understand and, indeed, sympathise with the noble Earl’s concerns, but responsibility for regulating mergers falls to the independent competition authority. The Competition Commission has decided that Cineworld, having bought the Picturehouse chain, should sell one of its cinemas in a number of towns. I know that the BFI has already communicated its concerns to the commission, and it is open to concerned parties to apply for a review of the decision to the commission appeal tribunal.
Lord Stevenson of Balmacara (Lab)
The question actually asked was whether the Government will take up this case because it is a grievous and terrible thing to contemplate the loss of three such picture houses. Will the Minister answer the question: will the Government take up with the Competition Commission their concerns, as so adequately expressed by the Minister?
Lord Gardiner of Kimble
I have to repeat to the noble Lord that the Competition Commission is an independent body. The Office of Fair Trading has asked the Competition Commission to look into the matter. Although there is concern and sympathy from many in government, this is now a matter for the Competition Commission, having been instructed by the Office of Fair Trading.
Lord Brooke of Sutton Mandeville (Con)
How many art-house cinemas are there in the United Kingdom?
Lord Gardiner of Kimble
My Lords, my noble friend has hit upon a problem, which is the precise definition of art picture house. There are independent cinemas as well as the mainstream ones. The problem is that a lot of art-house cinemas show mainstream films as well as the more cultural films. However, I think that we are talking about 300 independent cinemas.
Baroness Kidron (CB)
My Lords, I declare an interest as a filmmaker and a recent governor of the BFI. A report last week, Rebalancing Our Cultural Capital, documented the way in which arts funding has shifted towards the capital over several decades. The benefit to a Londoner is now three times that of someone living elsewhere in England, and I think that it is in this context that my noble friend asks the Question. Does the Minister agree that if we are to address this cultural imbalance, we must build on the success of existing art venues, such as the excellent art-house cinema in Cambridge that does so much more than show films? Could the DCMS, through its relationship with the BFI, perhaps find a way of distinguishing between commercial screens and the added cultural value that art-house cinema provides?
Lord Gardiner of Kimble
First, I think that the British Film Institute is doing a great deal of important work, with many programmes. The one that I will mention to the noble Baroness is the BFI Neighbourhood programme, which is part of a programme to help establish and develop up to 1,000 community venues for films across the UK. That is an important feature of what the British Film Institute is seeking to do. In addition, there are of course many other initiatives that the BFI is particularly concerned about, to ensure that there is the broadest range of opportunities for people to see films.
The Earl of Glasgow (LD)
My Lords, these so-called art-house cinemas are very important to the health of the British film industry. They are sometimes the only place where our films ever get shown. Does the Minister fully appreciate the importance of their survival, particularly outside London and the major cities?
Lord Gardiner of Kimble
My Lords, my noble friend is absolutely right. The picture houses are very important, particularly outside London; in particular in Cambridge, which of course is the venue for the Cambridge Film Festival. There are many reasons why these establishments are particularly important. They are part of our global reach, and all film industry is very important for the British economy. That, of course, is why the film industry has the tax relief it does, which is an indication of the Government’s support for it.
Baroness McIntosh of Hudnall (Lab)
My Lords, I declare an interest as a regular patron of the Cambridge Arts Picturehouse. Will the noble Lord consider that perhaps the Government have more of an interest in this issue than he has yet indicated? These picture houses often show live performances of work—for example, from the National Theatre—which is a way in which the public funding that goes into our major theatres is made to work much harder than it would if it depended simply upon people coming into the theatres to see the shows. There is a serious interest here for the Government to consider, which is why it would be a good idea for them to put some pressure on whoever needs to have pressure put upon them to make this happen.
Lord Gardiner of Kimble
The noble Baroness is a champion of Cambridge; I know that Bury St Edmunds in particular also has this feed-in from opera and theatre. I am well aware of the importance of that to many parts of the regions, where it is vital. I have to repeat that there is a procedure that has to be undertaken. Concerns have been raised and, as I said, it is open to interested parties to appeal on this matter. However, the problem is that when we have independence, we must mean independence.
Lord Howarth of Newport (Lab)
My Lords, I welcome the Minister’s restatement of the mission of the BFI. Nevertheless, has he noticed that it remains the case that across town the multiplex cinemas all show the same few films, whereas other films that have had excellent reviews are nowhere to be seen? What more can the Government do to support the better distribution and availability of high-quality films that are not expected to be money-spinners?
Lord Gardiner of Kimble
That is where the BFI very much comes into the equation and precisely where the experts, as I call them, are leading on this particular point—to ensure that the broadest range of films is available to the public. That is one of the key priorities of the BFI, and I hope that it is successful in that quest.
Wales: Financial Powers
(10 years, 6 months ago)
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Lord Wigley
To ask Her Majesty’s Government what plans they have to give additional financial powers to the National Assembly for Wales.
The Parliamentary Under-Secretary of State, Wales Office (Baroness Randerson) (LD)
My Lords, the Government announced on Friday that they will implement the key recommendations made by the Silk commission in its first report and will enable the Welsh Government to use their existing limited borrowing powers to improve the M4 motorway as soon as possible. I will issue a Written Statement on this to your Lordships’ House this afternoon.
Lord Wigley (PC)
My Lords, I hope that this Question standing on the Order Paper helped to expedite the long-awaited response from the Prime Minister, which I welcome as far as it goes. Will the Minister confirm that she and the Government accept that the Silk report presented a balanced package, and that cherry picking that package would unravel it? Will she therefore state by when the other 20 or so recommendations that were not covered on Friday will be announced? Will they be in the Statement that she will make this afternoon? In particular, will she give an assurance that the legislation necessary to enact all the commitments that were made on Friday will be on the statute book before the next general election?
Baroness Randerson
I thank the noble Lord for his Question. Undoubtedly the continued interest in this issue from all sides of the House and well beyond it will have had an influence on ensuring that we had a positive response to the Silk commission’s first report. The Silk commission made 33 recommendations but the announcement on Friday did not go into detail on many of those. A full response to the Silk report will be issued in the next couple of months so that we will be able to deal with this by the end of the year. The intention is that a draft Wales Bill will incorporate Silk recommendations that the Government have accepted, where legislation is necessary. The Government intend to pursue that, if possible, in the fourth Session of this Parliament.
Lord Morris of Aberavon (Lab)
My Lords, I was glad to hear the Prime Minister say on Friday that he believed in devolution. I was hoping for the Welsh Secretary to say something on his visit too. Does he also believe in devolution? In the absence of a more equitable allocation of financial resources by Westminster to Wales, do the Prime Minister’s proposals mean that to fund matters such as a Newport road development, Wales will be expected to pay for them out of new Welsh taxes?
Baroness Randerson
The noble Lord has asked two essential questions. My colleague the Secretary of State for Wales has worked extremely hard to ensure that this report has had a positive response from the UK Government. I remind the noble Lord that there was an agreement in October 2012 between the Welsh Government and the UK Government on the future of the Barnett formula. The agreement was that there would be a review process at each spending review, and that if there was future convergence—if that started again—then it would be dealt with by the two Governments working together.
Lord Roberts of Llandudno
My Lords, can the Minister tell me whether the question for a referendum will be devised by the Westminster Parliament or by the Welsh Assembly in Cardiff? Secondly, does she have any idea of a timetable for the referendum and the implementation of whatever it might decide?
Baroness Randerson
I thank my noble friend for those questions. We will provide for the referendum by primary legislation here in Parliament but it will be the responsibility of the Assembly to trigger the referendum, and it is right that the timing should lie in their hands. In relation to the actual question, there will be discussions between the UK Government and the Welsh Government but it will be for the Electoral Commission to study any suggested question and to provide advice, in the way that occurred at the previous referendum in Wales.
Baroness Morgan of Ely
I thank the Government for eventually responding last week in such a positive way to the recommendations of the Silk commission. Will the Minister explain, however, why they failed to grant permission specifically for long-haul air passenger duty and the aggregates levy to be devolved, as recommended by the commission?
Baroness Randerson
I thank the noble Baroness for her question. Regarding the aggregates levy, the noble Baroness will recall that the Silk commission referred to issues associated with that in relation to the European Union and permission for that. Therefore, until that is resolved, it is not appropriate that that goes forward. On long-haul air passenger duty, the Government are not yet persuaded of the case, but I urge noble Lords in general to await the full response in relation to the reasoning behind these recommendations to ensure that there is a full picture, which will come in the forthcoming weeks.
Lord Elystan-Morgan (CB)
My Lords, I would like to ask a general question with regard to the transfer of powers to Scotland, Northern Ireland and Wales. As the Minister will know, in relation to Scotland and Northern Ireland, transfer was on an all-embracing basis subject to a few specific clear exceptions. With Wales, the situation is very different. It is all piecemeal, sometimes involving hundreds of minor transfers over the years. Will the Government look kindly, therefore, upon a proposal that the situation in Wales should equate to that of Scotland and Northern Ireland, thereby bringing cohesion and simplicity and saving a whole generation of Welsh lawyers from constitutional neurosis?
Baroness Randerson
I am aware of the noble Lord’s continued interest in this issue. I am aware, too, that this point has been raised by a number of people. But I remind noble Lords that this is an issue for part two of the Silk commission, and something on which it is already working. I remind noble Lords that the remit of the commission was to look at modifications to the devolution settlement.
European Commission: Staffing
(10 years, 6 months ago)
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Lord Anderson of Swansea
To ask Her Majesty’s Government what assessment they have made of the number of United Kingdom nationals on the staff of the European Commission.
Lord Wallace of Saltaire (LD)
My Lords, the Government recognise that there is a problem with the level of UK representation among staff working in the European institutions. The UK represents 12% of the EU’s population but makes up only 5% of EU staff, half of whom are expected to retire over the next 10 years. The Government are committed to reversing this downward trend. In the short term, we are increasing the number of civil servants whom we send on secondment to the institutions and, for the long term, we are providing additional support to candidates who are preparing for the concours.
Lord Anderson of Swansea (Lab)
I am sure that the Minister will agree that it is against our national interest that there has been such a dramatic decline in the number of British civil servants in Brussels and that, further, we have not succeeded with one British national in the concours since 2010. Does he not agree that part of the reason must be that able British civil servants are deterred by the constant sniping at Europe on the part of this Government—although not, I may say, on the part of the party that he represents? Could not that be in part allayed by giving a guarantee to any civil servant from the UK who goes to Brussels that they will be able to return if they so choose? That was something that was available when we first joined the European Community, as it was.
Lord Wallace of Saltaire
My Lords, the decline in applicants for the European Commission started before the current Government came into office. It is partly a question of language inadequacy; you have to take the competition partly in your second language. Applicants from most other countries take it in English as their second language, in which they are very often highly fluent; we lack sufficient English, or British, students, who are fluent in French or German, the other two languages. If I may say so, there is no evidence that there has been a decline because of uncertainty about Britain’s future relations with the European Union. May I also say that the noble Lord is misinformed, and that some 20 British candidates have succeeded in the concours since 2010? He may have read an article that said that no British civil servant has succeeded in the concours since that date.
Baroness Falkner of Margravine (LD)
My Lords, would my noble friend agree that a postgraduate degree qualification from the College of Europe greatly facilitates employment in the European institutions? Could he tell the House whether the scholarships to the College of Europe, suspended by the previous Government in 2010, have been reinstated—and, if so, at what level?
Lord Wallace of Saltaire
My Lords, it is widely accepted that a year studying in both French and English in the College of Europe, in Warsaw or in Bruges, is very helpful in getting students accustomed to the ways of Brussels and what is required in the concours. The last Government cancelled the 24 British scholarships for the College of Europe in 2009. They have been partly reinstituted, with five from BIS for British officials next year, and a number of others from the devolved institutions. In addition, a small group of people, which I think includes several Members of this House, have contributed to a private scholarship scheme, which will fund three scholarships this year. So we are working at it and the number of candidates is now rising again.
Lord Wright of Richmond (CB)
My Lords, does the Minister not accept, in spite of what he has said, that many members of the UK public service may have been discouraged from applying for jobs in the Community institutions by the fact that they no longer have an assurance of a return ticket to the UK public service—quite apart from the career difficulties presented by the prospect of a referendum on whether or not we should remain in the European Union?
Lord Wallace of Saltaire
All I can say on that is that the evidence is not there. In terms of the secondment of national experts into the European External Action Service, the British are second after the French in the number of those who have succeeded in gaining places; so there is some considerable evidence there. The members of the Diplomatic Service have also been going round to graduate recruitment fairs over the past two years and that has helped to double the number of British applicants for the concours this year.
Lord Foulkes of Cumnock (Lab)
My Lords, surely as a Liberal Democrat Euro-enthusiast—
The Chancellor of the Duchy of Lancaster (Lord Hill of Oareford) (Con)
My Lords, we are wasting time. It is the turn of the Labour Party.
Lord Foulkes of Cumnock
Surely the noble Lord—as a Liberal Democrat Euro-enthusiast; and I am also a Euro-enthusiast—would agree that the problem has been exacerbated by the uncertainty over our future position within Europe. Would he, if he were 20 or 30 years younger, really apply for such a risky position?
Lord Wallace of Saltaire
My Lords, the Prime Minister made it clear in his speech in January that it is in Britain’s long-term interest to stay within the European Union. The Deputy Prime Minister made an extremely strong speech about the position that we will be taking on future membership. I look forward to a speech from the leader of the Labour Party—I think that Europe was not mentioned once in this year’s Labour Party conference—which will ensure that all three parties hold a similar position.
Lord Elton (Con)
My Lords, after reminding the noble Lord, Lord Foulkes, that he does not represent anybody any more than the rest of us do—we represent ourselves—could my noble friend tell us what steps Her Majesty’s Government are taking to ensure that the, we hope, increasing number of representatives of this country on the staff of the European Commission are aware of the detail of what the national interest actually is, and that they are kept aware also of the effects of European legislation and regulation on the economy, the community and the functioning of the law of this country?
Lord Wallace of Saltaire
My Lords, many of these things are very informal. When I go to Brussels I talk to British officials, as do many of my colleagues. There is a British-Brussels network. The last time I was in Brussels I addressed the alumni of an Oxford college that I used to teach in. There are informal contacts and they keep in touch. However, one does not wish to instruct officials of the Commission, who are there to do a good job and to network between the national and the European.
Schools: Unqualified Staff
(10 years, 6 months ago)
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Baroness McIntosh of Hudnall
To ask Her Majesty’s Government what are their reasons for encouraging the employment of unqualified classroom teachers in state-funded schools.
The Parliamentary Under-Secretary of State for Schools (Lord Nash) (Con)
My Lords, we do not seek to encourage teachers without QTS. Indeed, under this Government, the number of teachers without QTS has gone down by 20% from the level of 18,600 it reached under the previous Government. By the Labour Party’s sole measure for this, we are therefore doing rather well. We merely seek to ensure that our children are taught by the best teachers, not just those with a particular qualification. Under a Labour Government, a teacher who had been teaching brilliantly for 30 years and who had a PhD in his subject but did not have that particular qualification would either have to get it or face the sack. How daft is that?
Baroness McIntosh of Hudnall (Lab)
My Lords, I congratulate the noble Lord on somewhat sidestepping the Question that I put to him. In passing, I also note that he did not refer to the fact that his right honourable friend the Deputy Prime Minister takes a different view from him on this matter, but perhaps I should not intrude on private grief. The point is that knowledge, enthusiasm and, indeed, natural gifts may be necessary but they are not sufficient in developing professional competence. Does he not accept that, somewhat against the tone that he took in responding to my noble friend Lady Blackstone a couple of weeks ago, to make this point is not to be dogmatic? I do not think that he would disagree with me if we were talking about train drivers or brain surgeons. Will he explain why teachers are an exception?
Lord Nash
My Lords, a number of studies, including a notable one in 2007 by McKinsey, have revealed that a more effective system of selecting teachers is based on things such as their level of literacy and numeracy, interpersonal skills, commitment, willingness to learn and passion for their subject. There is no evidence that teachers with QTS teach better than those without it.
Lord Quirk (CB)
My Lords, I am no great fan of the current teacher training in this country, but rather than go on allowing people to teach in the classroom with no such training at all—Mr Gove confessed last week that we still have 15,000 of them—why do the Government not insist on bringing our standards of teacher training up to those of the best high-performing jurisdictions in Europe and the world, which they rightly seek to emulate, thus giving those in our great teaching profession the qualifications which are truly worthy of them?
Lord Nash
My Lords, we are seeking to improve the quality of teacher training by bringing more of it into schools. We now have 357 teaching schools and more teachers being taught under SCITT programmes. Ofsted reports that 31% of SCITT courses are good or outstanding as opposed to only 13% for higher education establishments.
Lord Storey (LD)
My noble friend the Minister is right to remind us that the number of unqualified teachers in our schools was higher under the Labour Government than it is now. That Government also allowed teaching assistants to teach classes. How does the Minister think we can ensure that qualified teachers get sufficient training to become the school leaders of the future?
Lord Nash
I agree entirely with my noble friend that this is very important and that we have to bring more young teachers into leadership. We trust head teachers to develop teachers in their schools through CPD. Many good schools and good academy chains have a very strong focus on doing this.
Baroness Jones of Whitchurch (Lab)
My Lords, the noble Lord may not have been around in 2001 during the passage of the Education Act 2002, and may be surprised to hear that not only his own party but the Liberal Democrats all voted against us when we said that all state schools should have qualified teachers, so I do not think we need any lectures from him on that. I think that most parents were shocked to hear that the Government have removed the requirement for teachers in all state schools to be qualified. Will the noble Lord explain why a Government who started off demanding higher qualifications have now gone completely into reverse gear and want the profession deskilled?
Lord Nash
My Lords, we have just been told by the OECD that our school leavers—Labour’s children—are among the most illiterate in the developed world. Indeed, we are the only country in the developed world where our school leavers’ grandparents were better educated than our school leavers were. We have also recently been told by Alan Milburn that we are the most socially immobile country in Europe. That is why we need to bring teachers from whatever field we can into our school system to improve it, rather than to be dictated to by dogma.
Lord Cormack (Con)
My Lords, in spite of what the noble Baroness, Lady McIntosh, said, is it not crucial that truly qualified teachers are those who have a deep knowledge of their subject, a love of it and the ability to transmit that love enthusiastically to others?
Lord Nash
I entirely agree with my noble friend. This is absolutely true and there are many such excellent teachers in the independent sector, many of whom work in partnerships with the state sector. I know that the Labour Party does not like to hear about the independent sector, because it is truly world class—
Lord Nash
It is not, actually; we have just been told that it has fallen well down the international league tables. Many of these independent schools quite voluntarily go into state schools and give lessons. Some of these teachers are unqualified; under Labour that will not be able to continue.
Political Parties, Elections and Referendums (Civil Sanctions) (Amendment) Order 2013
(10 years, 6 months ago)
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Lord Wallace of Saltaire
That the draft order and draft regulations laid before the House on 16 July be approved.
Relevant documents: 9th Report from the Joint Committee on Statutory Instruments, 11th Report from the Secondary Legislation Scrutiny Committee, considered in Grand Committee on 29 October.
European Parliamentary Elections (Northern Ireland) (Amendment) Regulations 2013
(10 years, 6 months ago)
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Baroness Randerson
That the draft regulations laid before the House on 18 July be approved.
Relevant document: 9th Report from the Joint Committee on Statutory Instruments, considered in Grand Committee on 29 October.
Enterprise and Regulatory Reform (Designation of the UK Green Investment Bank) Order 2013
Viscount Younger of Leckie
That the draft order laid before the House on 17 July be approved.
Relevant document: 9th Report from the Joint Committee on Statutory Instruments, considered in Grand Committee on 29 October.
Personal Service Companies Committee
(10 years, 6 months ago)
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Lord Hill of Oareford
That it is desirable that a Select Committee be appointed to consider the consequences of the use of personal service companies for tax collection, and to make recommendations, and that the Committee do report by 31 March 2014.
Energy Bill
17:36 - Division on Amendment 74 - Ayes: 237 / Noes: 193 - Amendment 74 agreed.
Lord Berkeley
Baroness Anelay of St Johns
My Lords, I invite colleagues to leave the Chamber quietly so that we may at least hear the mover of the amendment.
Lord Berkeley (Lab)
My Lords, the purpose of this amendment, in my name and that of my noble friend Lord Hanworth, is to require the Secretary of State, in dealing with the modifications to the licence conditions, to include in Clause 43(3)(b),
“provision imposing restrictions on the sale or purchase of electricity to or from group undertakings”.
This is an attempt to persuade the Minister, when she responds, to go a little further than she did in Committee last Monday when she said:
“There is no clear evidence that the divestment of retail businesses will increase competition or lower consumer prices”.—[Official Report, 28/10/13; col. 1386.]
I think that there is probably quite a lot of evidence, but we now have the opportunity to test this because, among many statements by the Prime Minister and the Secretary of State for Energy last week, Ed Davey said that they would introduce annual reviews of the state of competition in the energy markets and that the first of these new competition assessments will be delivered by spring of next year. He went on to say:
“The assessment will be undertaken by Ofgem, working closely with the Office of Fair Trading and the Competition and Markets Authority, when it comes into being”.—[Official Report, Commons, 31/10/13; cols. 1095-96.]
Those organisations, separately and together, are probably some of the best experts on competition issues we have in this country. It would be logical and right for them to include within certainly the first annual review a comment about separation. There has been an awful lot of talk about competition, which appears rightly to boil down to considering whether there is competition among those from whom you buy your electricity. However, the issue of competition at the other end and separating the generators from the retail end is just as important. I therefore wish to persuade the Minister to agree that the issue of separation within the assessment of competition that has been announced—and is very much to be welcomed—should be included. I beg to move.
Viscount Hanworth (Lab)
My Lords, I wish to speak to Amendment 61A in my name and that of my esteemed colleague, my noble friend Lord Berkeley. According to common testimony, the Bill is an extremely complex affair. It seems to have been designed by lawyers and parliamentary draftsmen to render politicians incompetent to assess its intentions and to predict its likely effects. There is a suspicion that the Government are not fully in control of this juggernaut.
Our anxieties in this respect are particularly acute in connection with the provision of a so-called route to market. Such a route should enable the independent generators to survive what seems to be the clear intention of the big six energy companies to squeeze them out of the market. The independent generators are important because they represent the germ from which a genuinely competitive energy market could develop. They are also important because they could be expected in ideal circumstances to provide a large proportion of the investment in renewable energy generation. Some of the Government’s documents recognise this potential. They imagine the proportion of new investment in renewables attributable to independent generators being between 30% and 50% of the total.
Amendment 61A reflects our knowledge that small generators are presently constrained to sell their output to the oligopolistic suppliers at a very heavy discount. A long-term power purchasing agreement costs the independent generators approximately between 10% and 17% of their net revenue, whereas in Nord Pool, which is the multinational Scandinavian exchange for trading energy, the equivalent cost is between 2% and 6%.
There has been recent evidence that some in the Government are becoming aware of the dysfunction in the energy market and the fact that, notwithstanding their ideological presuppositions, a free-market environment cannot be relied upon to engender competition. Indeed, the Secretary of State for Energy and Climate Change, Ed Davey, said last week in a Statement made to both Houses that he intended to,
“consult on the introduction of criminal sanctions for anyone found manipulating energy markets and harming the consumer interest”.—[Official Report, Commons, 31/10/13; col. 1096.]
One doubts whether this sound and fury has any practical significance. The Government seem to lack the leverage and will to intervene effectively in the markets.
The Labour Party takes a more positive approach. It promises to break the vertical integration of the energy oligopolists by separating the generators from the suppliers. The intention is to require energy companies to conduct all trades in a competitive manner on an open exchange. My proposal has been for a state-sponsored electricity and marketing board that would purchase its supplies from independent generators. It would aggregate them and sell them in competition with the supplies of the big six energy companies. In my opinion, the participation of the state would be the most effective way of introducing genuine competition into the energy market.
Lord O'Neill of Clackmannan (Lab)
My Lords, when an amendment of this character came up in Committee, I pointed out that we were talking about an amendment that would take us back to some of the original ideas that were circulating at the time of energy privatisation—you might say at the time just before liberalisation, because the two did not happen with quite the speed that one would have wished. I do not think much attention was paid to that point, but initially, we had a system in the UK where we had massive generators responsible for nuclear and the Central Electricity Generating Board. We also had regional electricity companies which could generate no more than 15% of their requirements.
Due to the attractiveness of the liberalisation process to some foreign energy companies, many of them in North America, we saw the acquisition of a number of the regional electricity companies by American companies. Thereafter, we began to see the merging of some of these regional electricity companies, and we boiled it down to what you might call the “big four”. Two of the companies had always been vertically integrated—that is to say, the two Scottish companies which at that time were Scottish Hydro and ScottishPower. By a process of merger acquisition, we had the vertical integration of the companies.
This was not what was intended by some of the ideologues who were the original authors of the liberalisation and privatisation programme. They wanted a system which would be akin, in generating terms, to something along the constitutional arrangements of pre-Cavour Italy. It would have had a catastrophic effect if it had been allowed to happen; a number of city states generating electricity in bits and pieces over the country, much as we had with gas and electricity prior to the Labour nationalisation in the 1940s.
It is fortunate that we did not have that, but what concerns me is that if we are going to have generators of a relatively small kind coming in—windmills attached to the national grid and water mills here and there—they are not going to change the character of the market to any great extent. We could have a situation similar to that in North America, where there are companies still considering the construction of nuclear power stations. In some instances, those stations cost twice the capitalised value of the companies that want to build them, so they have to look for partners across the world.
While these two amendments are well intentioned, I do not think that they will do very much in terms of promoting competition. My feeling is that if we are going to have the promotion of competition and the protection of the consumer from oligopolistic malpractice, we have to have a system of regulation which is capable of addressing that. These amendments go no real way to doing that. Quite frankly, I think they are something for another Bill. That is one of the reasons why I am supporting my party’s proposition that we spend 20 months after the next Labour victory putting through effective legislation which will change the regulatory framework, and may well result in a degree of reduction in the vertical integration process.
It is a problem; I do not deny that. However, we have to recognise that if we simply try to create opportunities for small players to become involved, we are not necessarily going to challenge the oligopolistic power of the big players. To challenge the purchasing power of the big four, big six or big seven if you were to include First Utility which, as I understand it, do not presently do any generating, we need far more in the way of regulatory conditions that would work. At the moment, I am not confident that these amendments can do that.
It is useful that, even at this late stage, we have probing amendments, but I find it very difficult and rather embarrassing that colleagues on my side of the House are supporting some of the random writings of the Austrian school of discredited economics that landed us with a great many of the problems that we are now confronting. I would like to think that my noble friend will withdraw his amendment. At the same time, something needs to be done but I do not think that the terms of the Bill and what we are trying to do at present makes the amendment appropriate. It is one thing for us to try to change the electricity market; it is quite another, at this stage, to try to change the structure of electricity generating and the integrated nature of our electricity industry.
Therefore, this is not the time for an amendment of this character. It needs to be better thought out and a lot more care and attention needs to be paid to the significant point which was the undoing of the Austrians in the recent past—that through a process of merger and acquisition you can easily change the nature of the industry. It could be argued that the Major and early Blair Governments did nothing about that process of acquisition and merging. However, unless we had changes on that side of the legislation as well, we could simply encourage the end of vertical integration and then see a process of merger and acquisition. That would take us back to where we are at present, which I do not think anyone would find a particularly satisfactory situation.
Baroness Worthington (Lab)
My Lords, I am grateful to my noble friend for tabling these amendments but, although we are sympathetic to their intent, it is fair to say that we would take a different approach.
This part of the Bill, which introduces measures to try to protect independent generators, is a clear indication that there is something very wrong with our electricity market. It is another layer of complexity that the Bill introduces to the market, and it is needed because we have probably all had considerable representation from independent generators saying that they are simply not able to gain access to the market on fair terms. That is very regrettable and a clear sign that something major needs to take place in the shake-up of the electricity market. Unfortunately, the Bill does not do that and was never intended to, and I am inclined to agree with my noble friend Lord O’Neill that another Bill would be needed to sort this out.
As I said, this is an extra complexity, and my general rule of thumb is that increased complexity equals decreased efficiency. I am sorry that we have had to enter into this market with new provisions to enable independent generators to gain access. All electricity ought to be sold into an open and transparent pool or market so that everyone has a fair crack at the whip and ultimately everybody can gain fair access to customers through supply companies. I fear that these amendments, although welcome, are something of a sticking plaster and would not really get to the root of the problem.
The Labour Party has made it very clear that our solution to this is to split up the vertical integration of the big six and to introduce a new regulator with real teeth, focusing squarely on the consumer and delivering better competition in all aspects of the electricity market. The amendments go some way towards achieving that but I do not think that they do enough, so I am afraid that, although we are sympathetic, we are not able to support them.
The Parliamentary Under-Secretary of State, Department of Energy and Climate Change (Baroness Verma) (Con)
My Lords, I thank noble Lords for the debate on the amendments and I shall speak to them after I have spoken to my own amendments in this group. The amendments standing in my name pertain to powers that enable the establishment of a power purchase agreement scheme, which could provide generators with access to an offtaker of last resort. The offtaker of last resort mechanism will benefit both independent renewable generators and investors by providing a guaranteed backstop route to market through which generators can sell their power. This will enable generators to use new and different routes to market, ending their dependency on established players and stimulating new entry and innovation in the PPA market.
The amendments I am speaking to today address specific concerns raised in Committee that the price at which electricity is purchased in PPAs under the scheme should be determined by reference to the current market price. Amendment 61 clarifies that a PPA under the scheme is an arrangement under which a supplier agrees to purchase electricity,
“at a discount to a prevailing market price”.
This amendment confirms our policy intent that the offtaker of last resort mechanism is exactly that: a last resort. Electricity purchased through the PPAs under the scheme must be purchased at a discount to a market price. This will give confidence to suppliers that they will not be required to purchase electricity at above-market prices. I assure the House that it is the Government’s intention that the level of discount should also represent a sufficient level of revenue to enable generators to raise finance. The discount level will form a key part of our consultation in early 2014.
Amendment 63 enables the Secretary of State to make provision in licence or code modifications to determine the appropriate discount and market price for PPAs under the scheme. I believe that these amendments clarify our policy intentions.
Amendment 61A, tabled by the noble Lord, Lord Berkeley, and the noble Viscount, Lord Hanworth, would mean that a PPA under the scheme is an arrangement under which a supplier agrees to purchase electricity at a discount to the market price and that the discount is no more than 5%. It is important that the discount is large enough to ensure that PPAs under the scheme are a last resort. The requirement for the discount to be no larger than 5% is not compatible with that; given that open-market PPAs typically have larger discounts, the scheme would quickly become a first, rather than last, resort. This would undermine new entrants to the PPA market and mean that anticipated benefits of the scheme in terms of facilitating a more dynamic and competitive PPA market would not materialise.
On Amendment 59A, I begin by stating my strong, and, I believe, shared desire to see ambitious action to improve wholesale market liquidity, which is crucial to allow independent generators and suppliers to compete without restriction. That is what Ofgem is doing through its ambitious package of reforms to address low levels of liquidity in the market, and what this Government will do should Ofgem’s reforms be delayed or frustrated. If it proves necessary for the Government to act, they should consider all options to achieve their objectives, including those listed in Clause 43. However, it would not be prudent to tie our hands to a particular course of action at this stage.
I hope that noble Lords have found my explanations reassuring and that the noble Lord will agree to withdraw his amendment.
Lord Berkeley
My Lords, I am grateful to all noble Lords who have spoken—some in support, some less so. We have had a very good debate. I think we all agree that this issue is not going to go away. We probably will need to see whether there is new legislation after the Labour Party wins the next election, or whether the annual review from the competition people will result in a recommendation. I beg leave to withdraw the amendment.
Lord Roper (LD)
Lord Roper (LD)
My Lords, in moving this amendment in my name and that of my noble friend Lord Jenkin of Roding, I will speak also to Amendment 62, which is in my name and that of the noble Baroness, Lady Liddell, and to Amendment 64, which is in my name and that of the noble Lords, Lord Jenkin of Roding and Lord Cameron, and the noble Baroness, Lady Liddell.
Lord Jenkin of Roding (Con)
My noble friend Lord Roper has spelt out very clearly the purpose that lies behind this group of amendments. The Government have allowed themselves to get into some difficulty on this. A very good point that may have been made during the discussion of the previous group of amendments concerns a feeling on the part of the independent generators that, although they welcome the addition of four clauses to provide for these power purchase agreements that represent the offtake of last resort, there is considerable scepticism within the industry as to whether they are actually going to be operated. As I mentioned at some length a week ago when I moved the amendment about more competition in the industry, there is a feeling that the oligopoly of the big six larger operators—they account for 92% of the electricity supply to domestic and commercial users in this country—is not going to allow this to work.
Some of the reactions from Ministers have to some extent been contradictory. This is what creates the uncertainty, and in some quarters a degree of scepticism, about whether this is in fact intended. In private, my noble friend’s ministerial colleague, my right honourable friend the Minister for Energy Michael Fallon, was reported as saying:
“I confirm that we intend to have the OLR mechanism in place around the time that the first CfDs are allocated, and Baroness Verma will also confirm this at an appropriate opportunity during the Energy Bill’s passage”.
We have not had that yet. These matters were discussed briefly at Second Reading. More importantly, there were some considerable debates in Grand Committee. Any statement of that kind was conspicuous by its absence. As my noble friend Lord Roper said a few moments ago, before the Bill leaves this House we must have a clear statement from my noble friend that that will happen. As he said in the previous debate, this is not just something to be enabled as a last resort; it has to be seen as an integral part of the new system. That is how it was presented but not how it has actually been drafted. The reluctance of Ministers to say on the Floor of the House what they have said privately to the industry is, quite frankly, disturbing.
It is not the first time we have seen that. Last Monday, I moved an amendment about competition in the capacity mechanism system that is being introduced, which my noble friend was quite firm in resisting. She has since written a letter saying that she is prepared to go on negotiating with the independent generators concerned, which is very welcome, but that was quite different from what Michael Fallon said before the Bill reached this House. He made it clear that he was expecting amendments seeking to promote more competition and to make it a very clear duty on the Government, and that he would not quarrel with that. I know that my noble friend was under some pressure last Monday because the Leader of the House was waiting to make a Statement on the European Council, but none the less she refused to do that. I felt it right to withdraw the amendment rather than spend more time dividing the House, and it was not at all clear that there were enough noble Lords in the House at that stage who would have supported it. Still, the fact of the matter is that we were faced with a contradiction between what the Minister for Energy said and what my noble friend has so far been able to say, no doubt under legal advice from her department.
With the greatest of respect to her, that is not good enough. If this offtaker of last resort is to mean anything at all, it must be perfectly clear that it will be able to operate where necessary and on the terms that my noble friend Lord Roper has already indicated. If my noble friend is unable to give that undertaking today, I ask that she goes back to her department and discusses the issue with her colleague, perhaps when he has returned from the Middle East, where he is at the moment. We should get a very clear statement on this when we reach Third Reading on 19 November.
I cannot stress too strongly the degree of unhappiness that exists in substantial sections of the independent industry, which feel that they are being messed about. One reads in the article in the Telegraph today about the difficulty in getting the investment going—as the Telegraph says, a large amount is simply waiting on the drawing board. To a large extent, that is due to a sense of uncertainty about the intention of this legislation. It is open to my noble friend, now or at Third Reading, to clear up some of these uncertainties, particularly those relating to hire-purchase agreements and the offtaker of last resort, on the lines of the amendments to which my noble friend has spoken, so that the companies and the funds that will be providing finance for them will know where they stand and can go ahead. At the moment, they do not feel that; I really must stress that very hard indeed.
Baroness Liddell of Coatdyke (Lab)
My Lords, in supporting Amendments 62, 64 and 65, I draw attention to my entry in the register of Members’ interests. I will be very brief because the noble Lord, Lord Jenkin, has very much encapsulated the nature of the debate around the offtaker of last resort and the issue of certainty.
I would perhaps be kinder than the noble Baroness’s noble friend as I think that the noble Baroness probably does get the issue that we are seeking to articulate here. It is about giving a degree of certainty to companies that are of necessity much smaller than the big six and have difficulty raising finance because in many cases they are involved in infant industries. In the front of my mind is the generation of renewable energy in the islands of Scotland; for example, in the Western Isles, Orkney and Shetland. I know there is to be a consultation on that, but there are opportunities throughout the United Kingdom to access the various kinds of renewable energy that will be available through the activities and investments of independent generators. However, independent generators need to go to the market to raise their funds and if there is not certainty that the Government are really committed to the offtaker of last resort—that it is not a programme for a situation that exists in extremis but is integral to the operation of the market for that 8% or perhaps even less that exists—not only will the market become unbalanced but we will fail to give support to industries and generating capacity that already have the potential to be world leaders.
The noble Baroness’s words at the Dispatch Box will be looked at very carefully by the industry and the funders. Those who have deep pockets and will be prepared to invest in the sector and allow it to move on to a harmonious future need certainty. I will not delay the House any longer but I urge the noble Baroness to think very carefully about what she says. The noble Lord, Lord Jenkin, is right. I suspect that the lawyers have had a lot to do with what her right honourable friend Michael Fallon has being saying and what she has been able to say. I have no doubt that she understands from her own business background that the issue of certainty for investors is what lies behind these amendments, which I support.
Lord Deben (Con)
My Lords, perhaps I might help my noble friend on this issue. There is a win-win solution, which is to recognise what has happened very recently in Germany. The big generators always start off being unhappy about the competition. However, RWE in Germany is expected to announce, after decisions made very recently, that it has concluded that it is no longer possible to take that attitude towards other generators in the German market. The Germans have been so tough about the provision for smaller generators. As I have said before in this House, it is remarkable that 50% of the very significant amount of renewable generation in Germany is done by municipalities, co-operatives and individuals.
Until recently, the big generators have fought that because they felt that their own business model was being undermined. It is quite clear from the latest evidence that RWE will take a different view, that it ought to become much more a facilitator of this rather than an opponent of it. If we get the way this is phrased in this Bill right, we will be able not only to help the independent generators but to help the bigger ones to move rather faster in understanding that this is going to be a multiple market in the future.
Therefore, I hope that the Minister will be able to discuss this again with her colleagues because it is a very fast-moving situation. This is not something that is the same today—literally—as a fortnight ago because we did not know the RWE movement then so we did not see, although we hoped, that that was what was going to happen elsewhere. If we can take advantage of learning from other people rapidly, this excellent Bill can be made that much better. I hope that she will find it possible to be a little stronger in what she says now and will take this away and discuss it with her colleagues, as my noble friend Lord Jenkin suggested, because there is now a new circumstance in which she will be able to be stronger in her support.
Lord Cameron of Dillington (CB)
My Lords, I support all the amendments in this group, as well as the amendments to which I have put my name. Last week we had our debate on the need to open up all sectors of the electricity industry to more competition. We on our side of the amendment were surprised at the reluctance of the Government to acquiesce enthusiastically to what we were proposing. We were even more surprised when later in the week the Secretary of State for Energy and Climate Change went on the “Today” programme and also spoke in the other place about how greater competition was at the heart of the Government’s electricity market reform. I have to admit I had the surreal feeling that there seemed to be one Government at that end promoting competition and talking about its importance and a completely different Government at this end seemingly trying to ward off competition. I hope that this week we have one pro-competition Government in both Houses.
In my short remarks in the debate last week, I linked the need for competition with the need for investment and spoke about how the two are closely intertwined. The UK’s aging energy infrastructure needs some £75 billion invested in new, largely renewable, generation facilities by 2020, and the Government are relying on independent generators, or at least their investors and financial backers, to produce some 35% to 50% of this—that is, £27 billion to £38 billion—before 2020, so this is not a marginal problem. Only by solving it will we ensure that we get the investment we need along with the much needed competition.
Of course, there is a problem. In an ideal world, an independent generator would want a backer for 15 years, because that is the normal length of any form of mortgage agreement for such a scheme, but no supplier is going to gamble on a 15-year PPA because the demand for electricity could reduce over 15 years and a supplier could find itself having bought more power than it could sell. Indeed, already four out of the big six suppliers are not buying power at all from independent generators, while the other two are charging up to 15% or 20% commission on even short-term contracts, which for the independent generator makes for an unviable PPA.
As has already been explained, this situation scares the independent generators and, above all, their investors, so no truly independent generator is going to invest without some form of compromise in the long-term marketplace. Equally, no aggregator is going to enter the fray with the big six oligopoly holding all the cards. We desperately need these independent generators to invest and, as the Government—well, the Government at the other end—keep telling us, it is only by encouraging more competition that we will achieve that investment.
The department has gone for an offtake of last resort—an OLR—to solve this problem, which is fine, but as it stands, the solution in the Bill is completely useless, as Clause 44 is so hedged about with “may”s rather than “must”s that no self-respecting financier would put any trust in it at all. The Minister’s letter of 26 July, I think it was, does not give them any encouragement either. It is a political cop-out rather than a financial foundation on which to build a competitive electricity industry. The words “political cop-out” may be a bit harsh, but the clause is clearly written from a political perspective, rather than the drafters putting themselves in the minds of an investor or a mortgage company and thinking, “What can I put in this Bill that will really reassure these much needed investors that we the Government say we desperately want?”. They just have not done that.
I hope we all agree that this is not a marginal issue. That is why it is vital that these amendments are adopted. It is vital that OLRs are available from day 1 of CFDs. It is vital that they are operational the moment—well, within seven days—of a generator finding itself squeezed out of the marketplace without a commercial PPA. It is vital that the price on offer is evidently—I stress that word “evidently”—going to be enough to reassure a financial backer that lending money in this new and uncertain marketplace is not going to be a wasted investment. There is an enormous amount hanging on getting this right, so I hope that the Minister will be able to reassure us.
Lord O'Neill of Clackmannan
My Lords, my previous remarks might have been interpreted as being antagonistic to small generators but I am not. What we are talking about here is a reform of the market that will encourage investment, but investment can only be encouraged if there is the prospect of stability. We are yet to receive from the Government a clear indication that there will be stability in this area.
I am not certain that praying in aid the German experience is necessarily that relevant seeing as Germany is having to accommodate the withdrawal from nuclear generation on a considerable scale and will be happy to get generating supplements or replacements from any source that it can. To a certain extent, that might be the same for the United Kingdom if coal is to be exited from our energy mix in a significant way. If that is the intention, and I believe that it is, we must have facilities available to mop up, or fill in the gaps, of what remains.
These amendments provide a clear and explicit set of measures. But they are only amendments and were the Minister able today to give us the degree of certainty required, I imagine that they would be withdrawn. However, what Mr Fallon said elsewhere probably was based on the optimism that has existed throughout the activities of the Department of Energy and Climate Change these many months—that every deal is just days away. Yet the days become weeks and the weeks become months. We do not have much more time. Therefore, it is essential that the Minister gives us a far more positive assurance than she was able to give last week. If she can do that, these amendments will melt like snow off a dyke, as we say in Scotland. However, if they do not, they will come back to haunt the Minister, because there will be a clear indication of what could have happened had there been a greater sense of urgency in the Department of Energy and Climate Change than had been anticipated by Michael Fallon before he went eastward.
The Earl of Caithness (Con)
My Lords, there can be no doubt that there is a unanimous view within the Chamber that we want independent operators and more competition. Of course, the difficulty for the Government is getting the balance right. We talked about the trilemma last week: finding the right balance of affordability, supply and decarbonisation of energy that we all want.
However, I disagree with the noble Lord, Lord Cameron of Dillington, when he spoke of Clause 44 being hedged around with “may”s and not “must”s. It always amuses me that when one is in opposition “may” should always be “must”, but the moment that one gets into government, one is advised that “must” should always be “may”. Therefore, I do not think that having “may” in Clause 44 will put off investors or financiers in any way.
My noble friend Lord Deben said that if we get this right, it will be a win-win situation. I think that my noble friend on the Front Bench is aware that it will be a win-win situation, but I do not think that the amendments actually help. They tilt the balance too far. In Amendment 62, the idea is to allow a party to a CFD to be able,
“to borrow money commercially for its business purposes at adequate levels, reasonable cost and over a reasonable period”.
As a businessman, I would love the Government to give me that guarantee for my business. It would be exactly what I wanted, because if I were not happy I could go to judicial review against the Government for not forcing financiers and investment people to give me the terms that I considered right.
That is a point of detail on the amendment, but my general point is that we are all agreed that we want competition, and I think that the Government have just about got it right in the Bill. However, I would like a firmer commitment from my noble friend the Minister that this will actually work in practice.
Baroness Worthington
My Lords, I support Amendment 60. I am grateful to all noble Lords for their contributions to this debate. I will not reiterate my earlier comments, which are that I consider this whole section of the Bill to be a sad necessity that need not have been there had the Government grasped the bigger picture of properly introducing competition during their energy market reforms. However, Amendment 60 seems to be eminently sensible. It is clear, from all the contributions we have heard today, that there is insufficient confidence among independent generators that the Government are serious about introducing something to assist them at this time. It is also quite clear that the clauses we are now debating are a last-minute addition to the Bill.
When the Government started out on this process they maintained that there was no problem and nothing to be worried about; I suspect that this was because they paid far too much attention to what the big six were telling them and insufficient attention to what the independent generators were saying. We therefore have these four clauses, which do not go far enough in providing the detail or the certainty that investors require. Ministers should at the very least be able to concede that these arrangements will be in place in time for the awarding of the first CFDs; that would be the absolute minimum.
On the other amendments, which are slightly more detailed—I agree with the noble Earl, Lord Caithness, that they may be too prescriptive for primary legislation—the regulations that flow from these clauses must be published before the Bill leaves this House, as we need to see the detail. I apologise if the draft regulations have in fact already been published; they may have been lost in the huge number of documents, for which we are grateful, that have been issued to us. However, if they have not been published, can the Minister tell us when they will be so that we can see how this policy will work and appreciate the detail? I hope that that will go some way to reassure the noble Lords who have spoken in this debate this afternoon.
Baroness Verma
My Lords, I thank my noble friends Lord Roper and Lord Jenkin, and the noble Baroness, Lady Liddell, for their amendments on the issue of route to market for independent renewable generators. Taken together, these amendments would place the Secretary of State under a duty to ensure that: a PPA scheme is in place by the time the first contracts for difference are allocated; the terms of PPAs under the scheme are demonstrably viable for eligible electricity generators and will enable them to borrow money on reasonable terms; eligible generators can obtain a PPA under the scheme within seven days; and that all generators eligible for a CFD are eligible for a PPA under the scheme.
I am grateful to noble Lords for the opportunity to clarify the Government’s intentions, which are very much in keeping with the spirit of these amendments. I assure the House that, as my right honourable friend Michael Fallon has said, the Government are committed to consulting on the introduction of an offtaker of last resort mechanism, and that they intend, subject to consultation, a scheme to be in place by the time the first CFDs are signed. That will give generators and investors the certainty that they need to make investment decisions. However, it would not be appropriate to place the Secretary of State under a duty to establish a scheme by a particular date before the final policy design has been completed and consulted upon.
The Government are also committed to ensuring that the mechanism is viable for eligible independent generators, which should enable generators to borrow money on reasonable terms. However, the Government cannot guarantee that, since access to finance and the viability of the scheme for individual generators are affected by a variety of factors that are out of our control. We also fully intend that those generators which need to access a PPA under the scheme will be able to do so quickly and simply via a transparent and fair process.
It is important that the scheme is targeted at those generators which genuinely need to access it. The scheme may not be suitable or necessary for all CFD-holding technologies, so we do not judge that it is appropriate for this to be required in primary legislation. I also assure the House that the Government intend to grandfather the terms of PPAs under the scheme, including the level of discount, from the date a generator signs its CFD.
I met with the Independent Renewable Energy Generators Group last week to reassure it on these points. It confirmed that it believes that the offtaker of last resort is a viable solution to its concerns, subject to the final decision—sorry; subject to the final design. The details of the offtaker of last resort mechanism will be specified in secondary legislation following consultation early next year, so it is not appropriate at this stage to set them out in the Bill. I reassure noble Lords that we aim to have secondary legislation in force by the time the first CFDs are signed. This is a challenging timetable. It is subject to consultation and parliamentary process. However, this should not have a material impact on generators since they will not need access to backstop PPAs until after projects have been commissioned, which is likely to be several months after signing the first CFD.
Noble Lords also asked when the first CFD allocations will become available. We have already signalled that we intend to consult, possibly in the early new year, and aim to have secondary legislation in force by the time of the first CFD. I hope that I have reassured noble Lords that the Government’s intention is to ensure certainty for smaller generators. We want to see greater competition. We believe that the measures we are taking and the mechanisms we are using are the right ones. I hope that the noble Lord will find my explanations reassuring and will therefore agree to withdraw his amendment.
Lord Roper
I am grateful for the support my amendment has had from all parts of the House. I am also grateful that the Minister has listened to what has been said and, indeed, made some reassuring comments. I am certainly reassured to a significant extent. She said that she wished to act in keeping with the spirit of the amendment and I am happy about that. I also understand the constraints imposed upon her by the consultation. However, I return to one of the points I made in introducing the amendment and that comes back to a phrase she used, which I hope I understood. She said initially the final “decision” and then moved on to say the final “design”. I believe that she meant the final design; that is, not whether or not there will be an offtaker of last resort but how it will work—the design for such an offtaker.
Lord Roper
My Lords, that is indeed a very reassuring statement. It suggests that the Government are moving in the direction that we wish. I suspect it means we will not need to return to this at Third Reading. We have had some useful assurances today and, on the basis of that, I beg leave to withdraw the amendment.
Baroness Verma
Baroness Verma (Con)
Baroness Verma
“Closure of support under the renewables obligation
(1) After section 32L of EA 1989 insert—
“32LA Renewables obligation closure order
(1) The Secretary of State may make a renewables obligation closure order.
(2) A renewables obligation closure order is an order which provides that no renewables obligation certificates are to be issued under a renewables obligation order in respect of electricity generated after a specified date.
(3) Provision made under subsection (2) may specify different dates in relation to different cases or circumstances.
(4) The cases or circumstances mentioned in subsection (2) may in particular be described by reference to—
(a) accreditation of a generating station, or(b) the addition of generating capacity to a generating station.(5) A renewables obligation closure order may include provision about—
(a) the meaning of “accreditation” and “generating capacity” in subsection (4);(b) when generating capacity is to be treated as added to a generating station for the purposes of that subsection.(6) References in this section to a renewables obligation order are references to any renewables obligation order made under section 32 (whenever made, and whether or not made by the Secretary of State).
(7) Power to make provision in a renewables obligation order (and any provision contained in such an order) is subject to provision contained in a renewables obligation closure order; but this section is not otherwise to be taken as affecting power to make provision in a renewables obligation order of the kind mentioned in subsection (2).
(8) Section 32K applies in relation to a renewables obligation closure order as it applies in relation to a renewables obligation order (and subsection (3) above is not to be taken as limiting the application of that section).
“32LB Renewables obligation closure orders: procedure
(1) Before making a renewables obligation closure order, the Secretary of State must consult—
(a) the Authority,(b) the Council,(c) such generators of electricity from renewable sources as the Secretary of State considers appropriate, and(d) such other persons, if any, as the Secretary of State considers appropriate.(2) The requirement to consult may be satisfied by consultation before, as well as consultation after, the passing of the Energy Act 2013.
(3) A renewables obligation closure order is not to be made unless a draft of the instrument containing it has been laid before and approved by a resolution of each House of Parliament.”
(2) In section 32M(1) of EA 1989 (interpretation of sections 32 to 32M)—
(a) for “32L” substitute “32LB”;(b) after the definition of “renewables obligation order” insert—““renewables obligation closure order” is to be construed in accordance with section 32LA;”;
(c) in the definition of “specified”, after “renewables obligation order” insert “or a renewables obligation closure order”.(3) In section 106 of EA 1989 (regulations and orders), in subsection (2)(b) after “32,” insert “32LA,”.
(4) In Article 56(1) of the Energy (Northern Ireland) Order 2003 (S.I. 2003/419 (N.I. 6)) (power to amend Part 7 of that Order to take account of amendments of corresponding Great Britain provisions), the reference to amendments made to sections 32 to 32C of EA 1989 includes a reference to subsections (1) and (2) of this section.”
Baroness Verma
My Lords, Amendment 66 provides the Government with the power to close the renewables obligation to new capacity. As noble Lords know, this closure is planned for 31 March 2017 as part of the transition to contracts for difference. We had previously considered that the renewables obligation could be closed using existing powers within the Electricity Act 1989. However, we have now concluded that a specific power in this Bill will put the closure arrangements on a more reliable and transparent legislative basis.
To ensure that consumers and industry have confidence that closure will take place consistently across the UK, the amendment provides the power for the Secretary of State to close the RO in England, Scotland and Wales. It enables the Northern Ireland Executive to make similar provision for the Northern Ireland renewables obligation. To give industry early certainty on the way in which the Government propose to use this power, we intend to publish this week detailed proposals on RO grace periods for those projects that are delayed due to circumstances beyond their control. These proposals will include a 12-month grace period for projects subject to current investment decisions, giving developers making such decisions this winter substantial reassurance that their investments are not at undue risk from the RO closure date.
Amendments 70 and 107 to 109 support Amendment 66 by making consequential drafting changes. Amendment 110 ensures that the power on RO closure will come into force immediately upon Royal Assent. This allows the secondary legislation for the RO closure to be brought forward quickly, which is important for investor certainty.
In response to the very helpful points made in Committee by my noble friend Lord Stephen and by the noble Baroness, Lady Worthington, the Government have brought forward Amendments 67 to 69 to clarify the scope of the powers for the fixed-price certificate scheme. Amendment 67 removes the power for regular reviews of support levels under the fixed-price scheme. The Government have no plans to change these support levels as, in a closed and grandfathered scheme, we are unlikely to need to do so. It is therefore appropriate to remove the provision for regular reviews, which implied that we expected to make such changes. However, it is also appropriate to retain a mechanism to change support rates if unexpected developments were to make that essential. I assure noble Lords that the conditions that must be satisfied for a review to take place will be specified in secondary legislation, and subject to statutory consultation and affirmative resolution by Parliament.
Amendment 68 places a requirement on the Secretary of State to exercise certain powers under the fixed-price certificate scheme in a manner which replicates the renewables obligation. This requirement confirms the existing purpose of the clause, in response to concerns raised by the renewables industry and by my noble friend in Committee. The fixed-price scheme will respect our grandfathering policy and will reflect the RO, which has always been our intention. Amendment 69 ensures that the duties on the Secretary of State in relation to the strategy and policy statement do not apply to the fixed-price certificate scheme in Northern Ireland. I hope that noble Lords have found this a helpful explanation of the amendments, and I beg to move.
Baroness Worthington
My Lords, I am grateful to the Minister for explaining the amendments that she has tabled and spoken to today. I am particularly grateful for new Clause 66, which was something that we debated in Committee.
The issue that was under discussion was that we are, in this Bill, removing the renewables obligation—the policy that has supported renewables and has led to a significant increase in renewable energy and different forms of renewable electricity. The removal of the renewables obligation is significant because it contained an inbuilt incentive on the big six to keep investing in new clean technology. We are now removing that through this Bill. Unfortunately we have not been able to convince the Government to replace any form of obligation into this Bill on either the Government or the suppliers. We are now entering a period where we have to entice investors rather than oblige them. That is an issue that may come back to haunt us—a phrase that has been used before today.
I seek words of reassurance that, in the detailed arrangements that are set out in the regulations that close the RO, the Government will not prescribe a date until they are absolutely certain when the CFDs can come into operation. The issue here is that this Bill is going to be subject to state aid clearance; we need to be absolutely confident that we do not wind down the existing support mechanism before we are completely sure that we have a new support mechanism in its place.
There has been mention of the year 2017 in numerous government consultation documents and documents on this topic. At this stage we cannot be sure that 2017 is the right year. I urge the Minister to make sure that draft regulations are not overly prescriptive and that they give us the flexibility we need to ensure that there is a very good transition from one successful policy to a new untested policy which we hope will deliver but, as has been mentioned on a number of occasions, we still have concerns that it will not—especially for independent generators.
Baroness Verma
My Lords, I thank the noble Baroness and reassure her that we are of course mindful of all the concerns that she has raised. The RO closure date of 31 March 2017 was chosen in order to allow for that period of parallel running between the RO and the CFD. If we were to extend the RO, we might need to hold a further banding review for the post-2017 banding levels, and generators would not know the post-2017 banding levels until 2015-2016.
Any accreditation after 2017 would receive less than 20 years of RO support. The RO is subject to a 2037 end date. It would be wrong to extend this given that the CFDs are being put into place to provide better value for generators.
Baroness Worthington
I merely point out that these amendments remove the need for banding reviews, so I do not think it is true to say that we cannot have more flexibility over the end date because of banding reviews as these amendments remove the requirement on government to review the banding. I urge the Minister to reconsider that.
Baroness Verma
“32XA Certificate purchase orders: corresponding provision
(1) This section applies where the Secretary of State exercises a listed power in the making of a certificate purchase order.
(2) The Secretary of State must—
(a) so far as the order is made for a GB purpose, exercise the listed power in the way that the Secretary of State considers will replicate the effect of provision contained in a renewables obligation order (whenever made, and whether or not made by the Secretary of State) by virtue of the equivalent GB power;(b) so far as the order is made for a NI purpose, exercise the listed power in the way that the Secretary of State considers will replicate the effect of provision contained in an order under Article 52 of the 2003 NI Order (whenever made) by virtue of the equivalent NI power.(3) The duty in subsection (2) to exercise any listed power in the way mentioned in that subsection applies only to the extent that it appears to the Secretary of State that—
(a) it is reasonably practicable to exercise the listed power in that way, and(b) exercising the power in that way is not inconsistent with other duties or requirements of the Secretary of State (whether arising under this Act or another enactment, by virtue of any EU obligation or otherwise). (4) In the Table—
(a) a “listed power” is any power specified in the first column;(b) the “equivalent GB power”, in relation to a listed power, is the power specified in the corresponding entry in the second column;(c) the “equivalent NI power”, in relation to a listed power, is the power specified in the corresponding entry in the third column, and in that column references to an Article are to an Article of the 2003 NI Order.
Listed power | Equivalent GB power | Equivalent NI power |
|---|---|---|
Section 32O(2)(a) | Sections 32A(2)(a) and 32G(2)(a) | Articles 53(2)(a) and 55(2)(a) |
Section 32O(2)(b) | Sections 32A(2)(b) and 32G(2)(c) | Articles 53(2)(b) and 55(2)(c) |
Section 32O(2)(c) | Section 32G(2)(e) | Article 55(2)(e) |
Section 32O(2)(f) | Section 32A(2)(c) | Article 53(2)(c) |
Section 32S | Section 32B | --- |
Section 32T | --- | Article 54 |
Section 32U(5) and (6) | Section 32C(5) and (6) | Article 54A(5) and (6) |
Section 32V(1) | Section 32D(1) | Article 54B(1) |
Section 32W(5) to (8) | Section 32E(4) to (6) and (8) | Article 54C(4) to (7) |
Section 32X | Section 32J | Article 55C |
Section 32Z1(2) (so far as relating to definition of “renewable sources”) and (3) | Section 32M (so far as relating to that definition) and (2) | Article 55F(1) (so far as relating to that definition) and (2) |
Section 32Z1(9) | Section 32M(7) | Article 55F(3) |
(6) The relevant part of Great Britain to which a renewables obligation order relates may be ignored for the purposes of subsection (2)(a).
(7) It does not matter for the purposes of subsection (2) whether or not a renewables obligation order, or an order made under Article 52 of the 2003 NI Order, is in force at the time when the listed powers in question are being exercised.
(8) In this section—
“2003 NI Order” means the Energy (Northern Ireland) Order 2003 (S.I. 2003/419 (N.I. 6));
“GB purpose” means the purpose of imposing the certificate purchase obligation on the purchasing body of GB certificates;
“NI purpose” means the purpose of imposing the certificate purchase obligation on the purchasing body of NI certificates.”
Lord Teverson
Lord Teverson (LD)
My Lords, in moving Amendment 71, I will speak to my Amendments 73 and 74 as well. I understand that people who know better than I have described my Amendments 71 and 73 as clunky and I immediately put up my hand. I am trying to do the very simple thing of turning something that the Government described as a grandfathering clause into something that really is a grandfathering clause. It came as some surprise to us in Committee, when we perhaps read the Bill with greater care than we had done previously, that in terms of emissions performance standards, the Bill effectively fixes an EPS right up until the beginning of 2045. I refer not just to plants that already exist but to those that will be built well into the future. The emissions performance standard in this section of the Bill applies to plants built right up to 2044.
I seek to improve this position. I hope that I am offering greater investor certainty in terms of grandfather rights to those who might invest in new gas plant or plant in other power sectors covered by the EPS. Certain vehicles, for example, are approved when they are manufactured and first go on the road and keep the relevant grandfather rights until the end of their working life. That is what I propose in this amendment. As I say, it would provide investor certainty in terms of grandfather rights but, just as importantly, it would ensure that a regular review takes place.
Section 5 of the 2010 Act refers to three-yearly reviews, but those are non-statutory. I have been reminded that Clause 58, on page 56 of this Bill, contains a statutory mechanism to look at these things every five years. I suggest that this should be done every three years and that there should not be a need to change primary legislation—that is the difference—in order to change the EPS. It seems to me a very strong lock if the EPS is defined specifically in the Bill. I understand that the existing provision in the Bill seeks to provide investor certainty but I seek to give greater investor certainty by saying that once a plant is consented it keeps that EPS right the way through, at least until it has to be reconsented. I hope that the Government will think that that is an improvement.
Amendment 74 deals with a very important area. Coal plants are effectively excluded from the EPS under this legislation. However, unabated coal plants are one of the main sources of our nation’s overall emissions of CO2. This is a major challenge in terms of our climate change targets and our desire to bring down carbon emissions in the United Kingdom. The amendment seeks to do a number of very positive things. It would help fulfil the Government’s intentions around carbon emissions and their energy policy. The Government have rightly made provision in the Bill that if certain major modifications are made to fossil fuel generating stations they have to be reconsented and the EPS becomes applicable, thereby making it impossible to run an unabated coal station. I seek to extend that provision to all major changes, including those plants attempting to reinvest to comply with the industrial emissions directive—the successor to the large combustion plant directive. We seek to do this because the Government’s trajectory for their carbon plan has always assumed that fossil fuel unabated coal stations will come out of UK generating capacity in an ordered manner after 2016. All that this amendment intends is to make sure that that actually happens.
Why is there a question mark now? It is because coal, primarily because of shale gas in the United States, has now become incredibly cheap. One of the outcomes has been that last year coal accounted for around 40% of total electricity generation and overtook gas which is now only about 28% of electricity generation—hence the UK’s carbon emissions went up last year quite significantly. The amendment would ensure that, although investment to prevent the output of mainly nitrous pollutants and thereby comply with the IED might now become economic and allow coal stations to carry on with this exemption from the EPS for many decades to come, the Government will actually keep to their trajectory in terms of taking carbon out of the system.
Let me first stress, perhaps paradoxically, what the amendment would not do. It would not take out coal immediately. As I said, it complies with the carbon plan which the Government have already published. Coal can continue to operate beyond 2016 under derogations and, in fact, can operate for some 17,500 hours, limited, right up to 2023. The importance of that is that coal-fired power stations can still operate during peak times and therefore make sure that we do not have blackouts. So the amendment does not get in the way of security of supply.
The other thing the amendment would not do is put up electricity prices. As we well know, electricity prices are primarily driven by the wholesale gas price and although coal prices have come down quite significantly, unfortunately, as we know, wholesale gas prices have not and so electricity prices have not either. It sometimes makes me ask what the generating companies have done with the extra margin from the coal production, but we will leave that argument for another day.
The amendment would ensure that there is no longer a baseload coal generation into and beyond the next decade. That is crucial for climate change and the Government’s wish to bring down carbon emissions. It would also meet those Government predictions. There are two other things that the amendment will make sure of: one is that there is a continued incentive for carbon capture and storage. Clearly and quite obviously, if unabated coal can continue exempt from the emissions performance standards, then CCS will go absolutely nowhere.
Crucially, the amendment would make sure that new gas investment can actually take place. It was interesting to read this morning in the Daily Telegraph, which has a great interest in energy, about a report that was, I think, released today by an organisation called EY. The article is headed:
“Gas and nuclear plants that could power all UK homes ‘on hold’”.
It goes on to say:
“Gas and nuclear power plant projects with sufficient capacity to supply electricity to every UK household are on hold … some 23GW of new gas plant has received planning permission but just 4pc is being built, with the rest suspended or on hold ‘with owners waiting to see if the economic and policy environment become more favourable’”.
One of the reasons it gives for that is the cheap coal influx from America which has made the situation worse.
As I often do, I endorse exactly what the Daily Telegraph says; this is a really important issue. We need new gas generation; the planning permissions are there and cheap coal is one of the reasons that investment is being held back. We need to move forward with it and the amendment is important because it helps fulfil the Government’s carbon plan and policy and makes sure that the investment that we need in new gas is actually able to move forward. I beg to move.
The Chairman of Committees (Lord Sewel)
I have to inform your Lordships that if Amendment 71 is agreed I cannot call Amendment 72, by reason of pre-emption.
Lord Jenkin of Roding
My Lords, if no one else wants to stand up at this stage, perhaps I may just say a few words. I have found this a very difficult question. I have received a good deal of representations in favour of my noble friend’s amendment, and others sounding a warning note. I have said to them all that I will want to listen to the full debate, particularly to what my noble friend on the Front Bench has to say.
As I see it—I may be wrong, and I am open to be corrected—the Government face something of a dilemma. The noble Lord, Lord Teverson, quoted the figures on the existing volume of coal-fired electricity generation in this country. I think he said that it is now about 44%, despite the significant closures of some of our biggest coal-fired power stations which have taken place in the past 12 months. The Government clearly recognise that there must be no power cuts and that the impact of such cuts on the country’s business and, indeed, on the Government’s reputation would be quite devastating. Therefore, as the Prime Minister said to me and a number of my noble friends back in July, there must be no power cuts and we will have to do whatever we have to do to make sure that we keep the lights on. As the Minister who presided over the three-day week back in 1974 I have every sympathy with that, because it is not a comfortable position for any Government or Minister to be in. That is the first priority of which the Government have to take account.
On the other hand, if the Government want to make it possible for coal-fired power stations to continue, there will be a severe impact on the incentive to build new power stations. The gas-fired power stations have much lower emissions; a modern station may have as little as one-third the emissions of a coal-fired station. Given that we have spent a lot of time during our consideration of the Bill discussing the need for a proper financial structure for the new generators, many of which would want to build gas-fired stations, one can see the Government’s dilemma. I am not entirely sure that I can see the matter as clearly as my noble friend Lord Teverson has, and I will want to hear the argument.
I, too, have a copy of the Daily Telegraph article. My noble friend left out rather a significant sentence and was very kind to my noble friend on the Front Bench. The article said that the problem was due to the Government’s “dithering”. We have heard a certain amount about that—it is what the Telegraph said and what my noble friend left out. As has been said many times, there is no doubt that there is a considerable hiatus in the investment in new generating capacity, a consequence of which has been the oft-repeated and increasingly serious Ofgem warnings about the narrowing of the margin between capacity and demand. The Government, therefore, simply cannot go on risking that hiatus. So what is to be done?
I have read an interesting report in a paper that was prepared for the European Climate Foundation by Simon Skillings of Trilemma UK. I found it a helpful analysis of the whole problem. One of the things that Mr Skillings said—and I am following some of the argument of my noble friend—is that:
“Perversely, the decision of large amounts of coal-fired generation to opt-in to the IED”—
the European directive—
“presents a greater threat to security of supply. This is because opted-in coal plant would be able to operate at higher load factors, presenting a significant risk to investors in new gas-fired plant and owners of existing gas-fired plant that may currently be mothballed”.
I have drawn attention, both on Second Reading and subsequently in Committee, to the substantial amount of gas-fired plant which is currently being mothballed, and which would take varying lengths of time to bring back into production. Mr Skillings continues:
“New plant is, therefore, less likely to be built, and mothballed plant is more likely to be closed, under these circumstances”.
That seems a considerable dilemma. I have to confess, having studied both sides of the argument and tried to understand all the evidence, that I am still unclear as to what is the right course.
As I said at the beginning of my speech, I have been replying to those who have been making representations to me about this group of amendments by saying, “I will want to listen to both sides of the argument before finally making up my mind”. I do not know whether my noble friend will want to press the amendment to a Division; we shall have to wait and see. Other noble Lords who have signed other amendments in this group may wish to come in and I will listen to them with equal attention. However, I find this a difficult dilemma. We have got existing coal power stations, they are producing energy and they are helping to close the gap between demand and capacity. Therefore, to countenance a significant reduction from that source and assume that it will be made up with generating capacity by new investment seems to be taking a considerable risk.
My noble friend has advisers who follow this a great deal more closely than I can, and I shall be interested to hear what she has to say. I have to confess that, for me, it is a difficult issue.
Lord Stern of Brentford (CB)
Coal is the dirtiest of fuels: it emits around twice as much carbon dioxide per kilowatt hour as gas; it is responsible for more than 40% of world energy greenhouse gas emissions, and for more than 25% of UK greenhouse gas emissions. Amendment 74 will encourage the switch from coal to gas; delaying that switch could substantially increase the cost of meeting our climate change targets. Gas itself has emissions which, if unabated, are far too high for the medium or longer term but may provide a useful bridge in the shorter to medium term—that is, until around 2030 or so. After that, gas or coal would have to be abated or replaced with renewables or nuclear if we are to meet our targets. Unless the world acts to phase out or abate via carbon capture and storage, in the next few decades coal will be very likely to take the world into very dangerous levels of greenhouse gas concentrations.
If we could be confident of a strong carbon price then Amendment 74 might not be necessary. That would be a clear way of addressing the colossal market failure associated with greenhouse gas emissions. Such a strong carbon price would likely make renewables and nuclear more than competitive with gas and coal in the next one or two decades. However, with apparent quarrelling within the Government, and possible backtracking and “reviewing” constantly in the air, who could be confident about such a strong carbon price?
Work as an academic economist, as chief economist of the EBRD, as chief economist of the World Bank and as head of the Government Economic Service in the UK has made it clear to me that government-induced policy risk is a major deterrent—perhaps the major deterrent—to investment around the world. That is indeed why energy investment in the UK has been so inhibited and it is why we need the clarity that this amendment brings. Clarity can unleash investment; confusion, on the other hand, risks both the lights going out and a world of dangerous climate change.
The Government have been working towards a clearer strategy in the Bill, and many, including me, welcome that, but they have allowed uncertainty and vacillation to creep back in. This amendment would go far to overcome the doubts on policy that the Government themselves have created. It would essentially drive out unabated coal from the UK by 2030 other than in a back-up role. That is exactly what we have to do to achieve our targets and to make our contribution. How can we ask others to stop treating the atmosphere as a dump if we are not prepared to move strongly to do so ourselves?
China, where I have been working for 25 years, India, where I have been working for 40 years, and many other countries look to Europe and the US for leadership. If we do not show that leadership, they will conclude that the rich world is not serious on this subject. Let us recognise that China—the largest economy in the developing world and the biggest emitter in the world—is changing. Targets in the 12th five-year plan were strong. A peak in emissions in 2025 is now being discussed in relation to the 13th five-year plan. I have been involved in a number of those discussions and, before now, dates earlier than 2030 have not been mentioned. In addition, a peak in coal consumption in China within a decade is under open discussion. However, China is looking at others, including us. We should not delude ourselves that because we are small our example does not count.
By accepting the amendment, we can provide the clarity that will unleash investment, reduce our emissions, manage effectively the costs of so doing and have a real influence on others. That is why I support Amendment 74 in the name of the noble Lord, Lord Teverson.
The Earl of Caithness
My Lords, when we discuss a group of amendments, the majority of which are government ones, one of the difficulties at Report is that we will not have heard the Minister talk to those government amendments. However, I expect that my noble friend will talk to them and I should like to ask her to take a little time to explain why we have the date 31 December 2027 in Amendment 73B.
Carbon capture and storage was one of the areas highlighted in the report of Sub-Committee D, which I referred to last week. I think we were all saddened that so little progress had been made on it. Therefore, I should also like my noble friend to say how she anticipates an increase in the use, and perhaps even the commercialisation, of carbon capture and storage, particularly when Germany has turned its back on it and apparently does not want to take any active part in it.
Turning to Amendment 73 in the name of the noble Lord, Lord Teverson, I understood that in any case the Government were going to review the EPS on a three-yearly basis. The Bill states that it will be statutorily reviewed every fifth year in accordance with the 2010 Act, but I understood that they were going to do so on a three-yearly basis as well. I wonder whether my noble friend could confirm that.
With regard to Amendment 74, which is obviously the key amendment here, I, like my noble friend Lord Jenkin of Roding, am torn. I have certainly received representations from people saying that this would be a disastrous way to go. The noble Lord, Lord Stern, made a very powerful case, as would be expected, but that is only one side of the argument. There is, of course, the trilemma, which we are all very much aware of: it is not just a question of decarbonisation and the removal of bad pollutants; there is also affordability of supply and continuity of supply. Like my noble friend Lord Jenkin, I have received representations that Amendment 74 would, if passed, jeopardise our security of supply.
I believe, too, that it puts us out of kilter with the rest of Europe. There is only a limited amount that we can do as an individual country. I was grateful that the noble Lord, Lord Stern, said that our voice is still heard; but we live in a nasty, tough, commercial world. If others can import cheap American coal and keep their energy prices lower as a result, and we prohibit ourselves from doing so, we put our businesses at risk. We make it more difficult to get the growth that this country so badly needs; and it is through that growth that we will be able to implement the reduction in carbonisation that we all want.
I am therefore unable to support my noble friend Lord Teverson on this—it takes us too far. It tilts the trilemma too much towards the green agenda and does not take enough account of the other important issues.
Lord Lester of Herne Hill (LD)
My Lords, I was in China the week before last, in Xi’an and Beijing. I will say just this. Having witnessed the smog that inhabits the whole of Xi’an and Beijing, and from my conversations with Chinese opinion-formers—who made it clear that they look to this country and recognise their own failings in not having tackled these problems earlier—I can confirm everything that the noble Lord, Lord Stern, has said about China. For those and other reasons, I support the amendment.
Lord Oxburgh (CB)
My Lords, I, too, support these amendments. We have to recognise that the Bill has been a long time in gestation. What has changed since the Bill was originally conceived is that the bottom has dropped out of the coal price. It is very important to point out to the noble Earl, Lord Caithness, that in fact cheap coal does not mean cheap power: it means big profits for the owners of coal-fired power stations. As the noble Lord, Lord Teverson, pointed out, the electricity price is effectively tied to the gas price because of the operation of the mechanisms. As things are at present, it is effectively the low coal price that is driving the operation of coal-fired power stations and giving very substantial profits to those companies that have them. Indeed, roughly half that capacity is owned and operated by the big six.
I will not draw on your patience longer, but simply say that I understand the point made by the noble Lord, Lord Jenkin. There is effectively a chicken-and-egg situation here. Unless we give the market the certainty that these amendments would give, we shall not see the investment in gas that is needed to maintain the attainability of our longer-term targets.
Lord Deben
My Lords, the noble Lord, Lord Jenkin has rightly pointed to the crucial problem, which is: how do we deal with that period in which there is fear that the lights will not stay on? That is a proper fear to have and should be the first fear of any Government, because there is a responsibility to keep the lights on. There ought to be a second fear, too: namely, that we keep the lights on in such a way that the next generation has an even worse position, because we have polluted the atmosphere further and made the fact of dangerous climate change even greater. We naturally have to look at this very carefully.
However, on this occasion it seems that those who are most concerned with keeping the lights on, and I certainly put myself in that category, and those who are also concerned with climate change, and I put myself in that category, too, are in fact pushing at the same door. If we do not have a mechanism whereby it is sensible to invest in gas, that bit of the transition will not take place. That would seem to most of us to make it more difficult to provide affordably for the energy that we need.
The noble Lord, Lord Oxburgh, as so often, put his finger on one of the other problems. When we talk about these things, let us not confuse the cost of production with the price at which it is sold. Those of us who, like me, have represented constituencies, know how many people are close to the edge when it comes to warming their homes. The whole question of affordability is utterly crucial. However, the idea that if we burnt coal we would get cheap power is not so. We need to have a mixture—a portfolio of means of generation—in which gas will play its part.
We have heard a lot recently about the opportunities that shale gas will give us. I find both extremes unacceptable—from those who think it means the end of the world at one end to those at the other who feel that it will be a game-changing matter. They are both wrong, but there is a place for gas. If that gas were produced at home, that would contribute considerably, not to a lowering in cost because it would have little to do with that, but to greater energy sovereignty, which is worth while.
The question is how we move from a situation which we hardly imagined, because the bottom had not fallen out of the coal market, in which we have to provide for the transition from coal to gas to one in which we do provide for that transition. The difficulty is that I suspect both those who tabled the amendments and the Government are on the same side—both groups want to achieve this. The real question is that there is a kind of fear of letting go of nurse’s hand—that is, the coal—in case we do not get the gas. I would like to turn it around the other way: if we do not do this, I am not at all sure that we will get the gas. That is crucial. I hope very much that the Government will enable us to have a situation in which we provide for that transition.
I have been trying very hard during these debates to remain entirely independent because all I have spoken are the words that the Committee on Climate Change, which I chair, has put forward. The committee has made it clear that it feels that this kind of transition needs to be facilitated in this way. I do not want to make this a great division because I do not think it is one; it is a question of how we do this safely in the new circumstances to which the noble Lord, Lord Oxburgh, referred.
I very much hope that my noble friend will be able to give us confidence in the Government’s answering of this question if she is unable to accept the amendments that are put before her. If we do not do one or other, we will find ourselves unable to guarantee reasonable prices or the continuance of the lights being on because we have not made the transference that is essential in any case and which I thought everyone supported.
Baroness Worthington
My Lords, I was pleased to add my name to Amendment 74, and I support the other amendments in the group. At the start of this process way back in 2010, the Government said in a consultation document:
“The objective of the EPS is to ensure that while coal continues to make an important contribution to security of supply, it does so in a manner consistent with the UK’s decarbonisation objectives”.
The way that the EPS is drafted does not achieve that aim. The EPS was a response to the Kingsnorth protests against the building of a new, unabated coal plant. It was borrowed, but not fully, from similar regulations in California. The Minister, Greg Barker MP, can take credit for introducing this policy. However, in California they are clear that the limits that are placed on coal stations apply in the event of a coal station seeking a life extension. That is what this amendment is designed to do: to complete this process by adding that important missing element.
New coal was never the most carbon-intensive source of electricity; old coal is. The world has moved on since Kingsnorth. Low coal prices and high gas prices have caused higher operating levels at coal stations now than ever before. As a result, as the noble Lord, Lord Teverson, mentioned, we have seen UK emissions going up, not down, and our carbon intensity increasing last year, not decreasing. How are we going to hit decarbonisation targets if we do not have a tool in our armoury to do something about this issue? We could have a policy of carbon pricing, as the noble Lord, Lord Stern, has mentioned. However, carbon pricing policy has not addressed this issue, and will not. We need regulation.
Turning to the security of supply, 8 gigawatts of old coal capacity has recently shut. This has brought down our historically high overcapacity to a more modest level, yet our carbon intensity is stubbornly high, at around 500 grams per kilowatt hour. This is because the 12 coal stations that are still operating, representing 15 gigawatts of power, are base-loading. They are no longer providing back-up power in the winter peaks but are operating throughout the year and making their owners a considerable amount of money. The Committee on Climate Change has been clear that were we to get the merit order of existing plants right, we could shave almost 200 grams off that figure overnight without having to build a single brick or power station.
The 12 stations that I have mentioned have tightening air quality regulations in front of them, which will affect their operating post-2016. However, they have a range of options for what to do in the face of those tightening regulations. One is not to refurbish; they will then be required to close by 2023. Another option is to convert to biomass. The final option is to fit the filters that would enable them to comply with the air quality standards. They could then remain open indefinitely. In that situation, they would certainly wish to continue base-loading, since they would have made new capital investment on which they would want to seek a return.
The new air quality standards start in 2016. I am sad to say that Defra, the lead department, is in danger of not complying with those regulations because it is failing to provide enough detailed information about what these power stations are planning to do. This can be only because it is intent on giving the maximum flexibility while the details of the Bill are worked out, because the Bill contains another very important element that changes the fortunes of coal: the capacity mechanism payments. The capacity mechanism will give existing coal plants an up-front cash injection just at the time they need it to make those refurbishment decisions. Plants will be eligible for three-year contracts. We cannot be certain how much those contracts will be worth, but it will certainly be in the range of £80 million to £100 million or more over the three years. The cost of fitting the filters is a surprisingly similar number of around £100 million for a 1 gigawatt plant.
If they decide to make these capital investments and tip into this compliant state, this will reduce their thermal efficiency even further. Are the department and the Minister aware of how inefficient these stations are and quite how much of the heat is escaping as lost energy into the atmosphere? That is quite apart from the carbon load that is also being added. Fitting these filters would also increase the operating costs of these plants. The chemical plants necessary do not operate for free.
The Government’s policy is not to support the application of an EPS to coal seeking life extensions, and no doubt we shall hear some of the reasons from the Minister. Other noble Lords have touched on the security of supply issue. As long as this question over 15 gigawatts of coal is allowed to remain unanswered, how can any investor in replacement capacity move forward? If you are not sure how many plants will be operating and whether they will be base-loading, you will find it very difficult indeed to make the case for investment in new capacity and to bring mothballed capacity back on. I will not go into too much detail on this but we have all had representations from gas investors saying that they support this amendment. We should just remember that, in a carbon-constrained world and under a carbon-budgeting system, every coal station that remains on the system displaces two gas stations because gas can operate with half the emissions of coal
Baroness Verma
My Lords, I will speak to the amendments in my name. I am grateful to my noble friend Lord Teverson and the noble Lord, Lord Whitty, for their amendments and to all those who have contributed to this debate. I remind the House of the policy intent behind the EPS. It is to ensure that no new coal-fired power station is built without CCS, and that it is done in a way that does not undermine the investment we will need in gas generation to keep the lights on at a reasonable cost to consumers.
Amendment 72 seeks to shorten the grandfathering period of the EPS from the end of 2044 to 2029. This shortening by some 15 years will increase uncertainty for gas investors. Without this certainty, we risk deterring or increasing the cost of new gas investments, with the obvious potential consequences for security of supply and costs to consumers. I recognise that 2044 is a long way off but this date is derived from what investors tell us is required. Under the current provisions, new gas plants consented in the later part of this decade and built in the early 2020s would have a little over 20 years of certainty in respect of how the EPS will apply to those assets. That is the amount of time that investors tell us is required to pay back all debt and see a return on equity in the project. In other words, with grandfathering, the EPS is not a barrier to financing new gas generation plants.
Noble Lords may be concerned that we may be locking in high levels of unabated gas generation well into the future that could risk achieving our legally binding 2050 carbon emissions target. I reassure noble Lords that the other measures under our market reforms will ensure that this is not the case and, therefore, that the EPS is consistent with our 2050 decarbonisation target. This is because unabated gas generation will be increasingly displaced by low-carbon generation over time. The Government set out clearly in our gas generation strategy how we expect gas plants’ load factors to decline as low carbon comes on to the system, and how in the very long term we expect it to be economically attractive for gas plants to retrofit carbon capture and storage equipment. Grandfathering the EPS until 2044 will not prevent this from happening. Grandfathering to just 2029 would risk deterring or increasing the cost of the investment in the new gas plants that we need to be built up to 2030.
I turn to Amendments 71 and 73. The approach proposed by my noble friend is very close to the one that we have already adopted. The Government have already committed to a regular three-yearly review of the EPS. The EPS will also be reviewed as part of the statutory review of EMR under Clause 58 of the Bill. The amendments would enable the statutory rate of emissions and the period for which it will apply to be revised very quickly following a review by way of an order. This is an approach that the Government have considered but have concerns about. The ability to revise the EPS very quickly could result in a specific investment hiatus in the run up to a review, due to the uncertainty that the review process introduces. Pre-development costs for power projects can run into tens of millions of pounds, so investors will be very aware of the risk that a quickly implemented decision to revise the EPS could render a project economically unviable, with the financial loss that could result.
That is why we have taken the approach that any future changes to the EPS should be by way of primary legislation. Combined with the three-year period between reviews, this will help to ensure that projects that are already in the planning system—by that stage having already had significant financial commitment—are able to complete that process before any changes to the EPS that would affect their project come into force. However, I recognise the spirit in which my noble friend has brought this amendment and the helpful intent to bring greater certainty to the review process and the process for making any future changes to the EPS. I will reflect on his suggestions with a view to how we might underpin his concerns without creating any unnecessary investment hiatus.
Turning to Amendment 74, the Government’s goal is an orderly transition away from coal to lower-carbon fuels over time in a way which does not create unnecessary costs for consumers. While we do not expect large numbers of coal plants to invest in clean-up equipment, a very small number of our more efficient plant may wish to do so. This amendment is very likely to deter that investment. In this scenario, more coal stations would have their operation constrained, and there could be more stations closing around the end of the decade than might otherwise be the case. This could require more gas plant to be built earlier to fill the gap at greater cost—ultimately, to consumers. Why should we close down our options in this way now when it could put our security of supply at risk and significantly increase costs to consumers? A small number of cleaned-up coal plants could provide greater diversity and bring additional resilience to the electricity system in the coming years, helping to ride any bumps in the road, given the significant investment challenge that we face.
I have also considered carefully the argument that by taking action to drive the closure of all of our coal power stations, we would be giving certainty to investors in new gas generation. While this may be conceptually true, it could also be true to say that you would give certainty to investors in electric cars if you banned all petrol vehicles, but that does not mean it would be a prudent or cost-effective thing to do.
Baroness Worthington
Is the Minister aware that the setting of the EPS on these refurbished plants would not cause them to close but would simply prevent them baseloading? They would still be available for the rest of the decade and the decade beyond to act as backup plant.
Baroness Verma
If the noble Baroness will allow me to continue, I may be able to illustrate further and more clearly the Government’s intentions.
The Bill is about creating the conditions for investment. Intervening in this way and targeting the EPS on a particular set of generators and their assets risks damaging the confidence of investors in the UK as a place to invest in the energy sector. This is precisely the opposite of what the Bill is designed to achieve.
The amendment would also create a direct interplay between the EPS and what is a complex European directive, and I question whether the proposed amendment would be compliant with the UK’s European obligations, especially those under the industrial emissions directive. The way in which European law interacts with our domestic law in this area is complex, and the Government are not in a position to reassure the House today that the amendment would be compliant.
In summary, to accept this amendment would not be consistent with the purpose of the EPS. It is unnecessary and could potentially have negative impacts. Our position is supported by the CBI which said in its Report stage briefing,
“the current EPS proposal should remain unchanged”.
Do not be mistaken, the Government do not want old coal hanging around for ever. We want, through the combined effect of all the measures in this Bill, to create the conditions for an orderly, cost-effective transition away from high-carbon coal through investment in lower carbon alternatives. We want this to be achieved in the way that best protects the consumer.
I turn now to the amendments that stand in my name. They seek to assist the development and commercialisation of carbon capture and storage by providing that a time-limited exemption to the emissions performance standard will apply to carbon capture and storage projects during their commissioning phase. While this has always been the Government’s policy intention, these amendments seek to provide certainty in the Bill. Amendment 73B provides for a three-year exemption period for fossil fuel plant that use a complete CCS system. It also provides that the exemption period may only begin once the complete CCS system is ready for use and is physically in place. The exemption is time-limited and available until the end of 2027. This reflects our view that the exemption is a temporary measure designed to assist the development of CCS and we expect learning from the first projects and those expected quickly to follow to remove the need for an enduring exemption.
Lord Teverson
My Lords, I thank the Minister for going through that so comprehensively. She is right that this is a very green Bill. My noble friend Lord Lawson was quite right to accuse it of being a decarbonisation Bill. That is exactly what it is.
I very much welcome my noble friend’s comments about Amendment 71 and my amendments around grandfathering clauses. I do not think that I got the phrasing absolutely right and I look forward to her looking at that.
On Amendment 74, I want to come back to something said by my noble friend Lord Caithness. He said that we need to be practical and down to earth and to get involved in the reality of energy. This amendment was precisely about that. We have to remember that, as this provision stands, it does not guarantee that coal capacity will be there; it is left entirely to the whims of investment committees of the big six as to whether they decide to invest. We give up control at that point—we do not know. The future is indeterminate. If we passed this amendment and it became part of the Bill, we would then know what would happen. To me, that is better than knowing what might or might not happen.
As the Minister said, we are looking for investor certainty here. The only way that new gas will be invested in as an intermediate technology is through that certainty. At the moment, that investment is not taking place, despite the clear ambitions that it should. However, I understand the position of the Minister that if it were not for this Bill we would not have an emissions performance standard. I advocated it several times to the party opposite pre-2010 and it was never accepted, so this is a major step forward. I beg leave to withdraw Amendment 71.
Baroness Verma
“(a) section (Introduction of carbon capture and storage: exemption from emissions limit), and(b) ”
“Introduction of carbon capture and storage: exemption from emissions limit
(1) The emissions limit duty does not apply during the exemption period in relation to fossil fuel plant for which there is a complete CCS system.
(2) For this purpose, a complete CCS system, in relation to fossil fuel plant, is a system of plant and facilities for—
(a) capturing some or all of the carbon dioxide (or any substance consisting primarily of carbon dioxide) that is produced by, or in connection with, generation of electricity by the generating station comprised in the fossil fuel plant,(b) transporting the carbon dioxide (or substance) captured, and(c) disposing of it by way of permanent storage.(3) The exemption period for any fossil fuel plant is the period—
(a) beginning with the first day on which the fossil fuel plant and its complete CCS system are ready for use, and(b) ending with—(i) the expiry of 3 years beginning with that day, or(ii) 31 December 2027,whichever is earlier.(4) In subsection (3), “use” includes testing in connection with the generation of electricity on a commercial scale.
(5) Subsection (1) is subject to any provision made by regulations under section 50(6)(b).”
Baroness Worthington
“(iii) substantial pollution abatement equipment dealing with oxides of sulphur, oxides of nitrogen, heavy metal emissions or particles is fitted to the generating station.”
Baroness Verma
“Modifications where carbon capture and storage process used in relation to part of generating station3A (1) Regulations under section 50(6)(b) may provide for the exemption in section (Introduction of carbon capture and storage: exemption from emissions limit) to apply with modifications in cases where the complete CCS system for the fossil fuel plant relates to only part of the generating station.
(2) For this purpose—
(a) a complete CCS system relates to part of a generating station if it is a system for capturing some or all of the carbon dioxide (or any substance consisting primarily of carbon dioxide) that is produced by, or in connection with, generation of electricity by that part of the generating station, and(b) “complete CCS system” has the same meaning as in section (Introduction of carbon capture and storage: exemption from emissions limit).”
(a) the generating station is used for the first time, or permanently ceases to be used, for the generation of electricity,(b) any period during which the emissions limit duty does not apply in relation to the plant by virtue of section (Introduction of carbon capture and storage: exemption from emissions limit) begins or ends, or(c) the generating station, or any CCS plant comprised in the fossil fuel plant, is altered.”
Baroness Verma
“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 Judd (Lab)
My Lords, Amendment 76 would insert a brief new clause after Clause 58. I declare an interest in that I am a member, supporter and honorary officer of a number of environmental and related NGOs working in this sphere. There is a considerable and significant consensus among a growing number of organisations that the approach put forward in the amendment is overdue. Prominent among those organisations is the Green Alliance—which really has done a great deal of important research—to which I personally am very grateful. I thank it for having very much prompted me to put forward the amendment. However, it is not just the Green Alliance. For example, the Committee on Climate Change noted in its recent report of 26 June that,
“further consideration should be given to banning specific types of biodegradable wastes, such as food waste, from landfill”.
I am glad to see that the noble Lord, Lord Deben, is in his place because nobody knows more about these things than he does. I was interested to be reminded that on 12 February this year he asked in this House whether it was not time that we banned this material—food waste—from landfill. As I recall, he argued that it was seriously dangerous to create methane. Banning it would enable us to insist upon wider recycling of what is wasted. Commenting on WRAP research into the feasibility of landfill bans, Liz Goodwin, chief executive officer, said:
“This piece of research shows that we could make some significant financial and environmental savings if we stopped sending certain types of rubbish to landfill”.
Tamar Energy and the PDM Group, both large AD investors, have called for food waste landfill bans. The Renewable Energy Association has also produced highly relevant supporting arguments.
During the first day on Report last Monday, proponents of the decarbonisation target amendment, backed by an impressive coalition of businesses, investors and civil society groups, powerfully argued that such a target would provide businesses with the certainty that they needed to invest. The target in their view would have lowered the cost of borrowing, the benefits of which would have filtered to consumers in the form of lower energy bills. A speedier move from a carbon-based energy system, which is becoming progressively more expensive, to a low-carbon system with high investment in energy efficiency would have guaranteed comparatively lower energy prices in the long term. In addition, the certainty of a target would have encouraged development of low-carbon supply chains and associated jobs in the UK.
Like the decarbonisation target amendment, this amendment would provide investors with greater certainty so that we can end the dumping of a substantial renewable energy source in the form of organic waste into landfill. This will benefit business and consumers, and help the UK to meet carbon and renewable energy targets. There are four key benefits. First, it will help the UK meet its renewable energy and climate change targets. Waste emissions, mostly from organic waste in landfill, represent about 3% of total UK emissions. Secondly, it would reduce the amount of waste going to landfill. As recently as 2009, the UK was still land-filling nearly 21 million tonnes of organic waste. Thirdly, the diversion of food waste from landfill would drive at least £693 million of feedstock to anaerobic digestion each year. Diverting this food waste from landfill would also save over £500 million in disposal costs. This is well demonstrated in valuable research by the Green Alliance. Fourthly, it would reduce risk. AD plants are not being built because of concerns about feedstock. Of Tamar Energy’s 40 proposed AD plants, 25 are at risk due to difficulties in sourcing food waste. Investment in these plants, which is already secured, represents the single largest clean-tech capital deal of 2013.
It was claimed in Committee that AD does not require targets because these would risk the creation of new compliance burdens for business and local authorities. However, the amendment would offer certainty to business. For example, as I have just outlined, Tamar Energy recently called for a ban on food waste to landfill. Feedstock risk is currently a major contributor to financing problems for the AD industry: banks are simply not lending to incineration plants without guaranteed feedstock arrangements with local authorities. It was recently reported that 25 of Tamar Energy’s 40 proposed AD plants are at risk due to difficulties in sourcing food waste, and that a landfill ban and separate food waste collections would address this problem. Indeed, PDM Group also supports a landfill ban for food waste as this would underpin investment in AD plants.
What is more, it is worth noting that the lack of concern in official quarters about feedstock risk for anaerobic digestion contrasts poorly with the strong concern about feedstock risk for conventional gas generation. In July 2012, the Chancellor announced £500 million in tax breaks for new oil and gas field development to give,
“investors the long-term certainty needed to make decisions on investment in … gas”.
In 2013, he halved the tax rate for onshore gas production. This contrast surely needs to be addressed. If the amendment does nothing else, it enables us to address it.
The Earl of Erroll (CB)
My Lords, I am flailing around slightly but I want to make a different point. The noble Lord’s point is well taken: there is no point in food waste unnecessarily going to landfill. It can also be composted in the right mixture with other green waste, and so on. That is an alternative, because it then makes a very good soil improver. The only problem is that the regulations around the mobile plant SR2010 No. 4 permits that you have to get can hold things up. They can be quite difficult to get and there is sometimes quite a backlog. The other thing is that you do not really know how much they are going to allow you to put on. Instead of trusting your agronomist to get your fertiliser recommendations right, the Environment Agency insists on trying to do it some time ahead. I am not quite sure why.
The Environment Agency seems to think that farmers are trying to poison their soil. A sensible farmer is not trying to poison their soil. They will have a proper agronomist giving recommendations. That would be much easier to manage, because you have to start putting the waste onto heaps during the year. You cannot suddenly get, in our case, 12,000 tonnes out of a composting operation in one month. You can only put it on in that gap when you are harvesting, before you cultivate the next year. You are expected to incorporate it within a day, because if anyone complains about the smell they come down on you like a ton of bricks—even though there can be other farmers spreading slurry and all sorts of manures around the place, so the smell could easily be coming from them.
At the moment, those who are trying to avoid food waste going to landfill are sometimes having a difficult time. It might be nice if the Environment Agency looked slightly more kindly on it at times. So far we have not had any real problem, but I can see it building up. Last year we suddenly had the amount that we could put on reduced, which caused a certain amount of chaos to our planning because we buy fertiliser a long time in advance, and so need predictability. It would be far better to leave it to our agronomist.
Lord Grantchester (Lab)
My Lords, this is the amendment that we discussed in Committee in July. On this side of the House, we have considerable sympathy and agreement with my noble friend’s amendment and the sentiments behind it. In Committee, the debate highlighted the achievements made by the previous Labour Government in initiating waste reduction plans; the progress made since the last election, with the setting up of the Courtauld agreement; and the developments made at EU level with the landfill directive, setting up targets to reduce the amount of biodegradable municipal waste entering landfill in 2020 to 35% of 1995 levels. The UK is on course to meet that target; there is an EU-wide review which should reveal that next year.
Over the past couple of years, the number of plants set up to produce energy from anaerobic digestion of waste has doubled to 110. The Minister spoke of encouraging this through feed-in tariffs and the renewable heat incentive, as well as the Green Investment Bank’s initiative, in her reply in July. My noble friend’s amendment is pushing at an open door; it is happening already, but as part of an industry and the EU-wide process rather than through adding it to the Bill.
In my response in July, I said that recycling organic waste for renewable energy generation is no substitute for eliminating the volume of food waste produced in the first place. Ten days ago, Tesco revealed that in the first six months of 2013 it generated 30,000 tonnes of food waste. Obviously, this figure revealed widespread differences between different foodstuffs. To reduce waste, it is important first to discover where that waste is taking place, so that action can be made more effective. Tesco added that, where possible, any food which could not be sold could also be donated to the charity sector, Foodshare and other food banks, or diverted to animal feed for livestock. This is also part of an effective answer.
While the Minister will be resistant to the amendment, it gives me the opportunity to ask her to commit the Government to certain helpful activities. Would she promise to report back to the House at regular intervals—I suggest twice annually—on actions that the Government are taking with the aim of reducing organic landfill waste, as well as undertaking to report back to Parliament immediately after the 2014 EU review is published, offering an updated strategy for reducing landfill of organic waste?
Lord Teverson
My Lords, I shall speak slightly out of order here, for which I apologise. I tabled a similar amendment in Committee, and I am very pleased that the noble Lord, Lord Judd, has brought this matter forward again.
This is not my noble friend the Minister’s area, or her department’s; it is very much a Defra area. Although I suspect that this Bill is not the best place to do this, I very much hope that Defra will take this area increasingly seriously and that the Government will find a way in which to move the agenda forward.
Baroness Verma
My Lords, I am grateful to the noble Lord, Lord Judd, for prompting further debate on the setting of targets for the landfilling of waste. Amendment 76 is designed to require the Secretary of State to set out a plan and timeframe, as soon as is practicable, for reducing and eventually eliminating the landfilling of organic waste. It would 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.
The Government support the minimisation of organic waste going into landfill and are sympathetic to the aims of this amendment. When we debated this matter in Committee, I outlined the considerable progress made in minimising organic waste entering landfill by the reduction of food waste and the increase in the number of anaerobic digesters generating energy from food waste. We very much agree with the points that the noble Lord made during that debate about the value of avoiding emissions of greenhouse gases from landfill. Preventing food waste is the most effective approach in carbon-saving terms: compared to landfilling, each tonne of food waste prevented means 4.2 tonnes of CO2-equivalent emissions are avoided.
We have worked very successfully with industry to reduce supply chain food and packaging waste by nearly 10% over the past three years, while the Waste and Resources Action Programme’s “Love Food Hate Waste” campaign helps consumers to make informed choices on reducing food waste. Household food waste is down by 13% since 2006, and we expect a 20% reduction to be achieved during the three phases of the Courtauld commitment that all the major supermarkets have signed up to. These results show that the voluntary approach can deliver real reductions in waste while allowing businesses to be more efficient and competitive. We want to build on this work with businesses rather than impose targets or restrictions. When food waste cannot be avoided, anaerobic digestion is currently the best option that we have, because it produces renewable energy and a valuable fertiliser. Over the years, we have provided a range of support through WRAP for anaerobic digestion, including £11 million in grant funding.
The substantial increase in the number of anaerobic digesters generating energy from waste continues. We now have more than 100 megawatts of capacity for waste and, together with the long-standing use of anaerobic digestion in the sewage treatment sector, this gives us capacity to generate 1.5 terawatt hours annually. In the Government’s anaerobic digestion strategy to tackle barriers to anaerobic digestion, we estimated that there was a potential to generate 3 terawatt hours to 5 terawatt hours of electricity by 2020. With another 300 megawatts of capacity consented or being built, the industry is well on its way to delivering that potential.
Most of the actions in our anaerobic digestion strategy are now complete. The Government published a second progress report in August and it is now for industry to use the outputs to ensure that the barriers they identified are removed. I hope the noble Lord will be reassured that we can continue to reduce organic waste entering landfill by encouraging food waste prevention and supporting a growing anaerobic digestion industry without introducing further targets to those set out in the EU landfill directive. I also add that current evidence suggests that further statutory targets would have an impact on businesses and local authorities in compliance and monitoring, risking additional cost burdens on business. It is likely that these additional cost burdens faced by industry and local authorities would be passed on to the consumer, which means that consumers could risk facing higher costs if additional statutory landfill bans were introduced.
The noble Lord, Lord Grantchester, asked about reporting on a reduction of landfill. Landfill tax is the main form of reducing organic waste from landfill. Defra is encouraging food waste prevention and encouraging the use of anaerobic digestion; the Environment Agency monitors emissions under the industrial emissions directive. Under the permitting regulations, the Environment Agency also monitors the air quality.
We are mindful of the concerns expressed by the noble Lord, Lord Judd, around this sector, but I hope that I have been able to satisfy the noble Lord that the actions that we are taking and our encouragement of industries such as anaerobic digestive generators to make use of waste will help him to decide to withdraw his amendment.
Lord Judd
I thank those who have participated in this short debate. I particularly thank my noble friend on the Front Bench for his rather double-edged intervention. I do not doubt his good will, but I have anxieties about his complacency—and I hope that he forgives me for putting it so bluntly. I am afraid that goes for the Minister as well.
What we have not heard from either Front Bench is any kind of response to what is already in evidence: that those who are responsible for developing the industry in this sphere are already running into difficulty. It is all right coming here and telling us, “We have got a trend and it is going well”; the warning signals are there: they are not attracting the money they should be attracting for investment. The reason for this is uncertainty over key supplies. Surely we do not wait until the whole thing collapses. That is not a very sensible approach to political management. If the warning signs are there, this is the time to take action. I sometimes find it quite extraordinary. In quite a number of countries in Europe it is absolutely taken for granted that this is the way to approach it; for example, Flanders, the Netherlands, Germany, Austria and Sweden all have compulsory arrangements in this area.
We say that we want to ensure that this change takes place and that we are very glad that it has proved itself as something that can develop. We do not, however, want it to dry up. I ask the Minister to go away from this brief exchange—perhaps I might very gently suggest that my Front Bench does the same—and look at what is actually happening now; not the trends in the past, but what is happening now. It is because of that that action is necessary.
I shall, of course, at this stage withdraw the amendment, but I hope that it is not just a matter of the Minister coming and reporting to my noble friend, “Ah, I’m afraid it has all dried up; it is not happening”. It is a matter of looking at it, saying what the warning signs are and taking action. I beg leave to withdraw the amendment.
Lord Whitty
Lord Whitty (Lab)
My Lords, in moving Amendment 76A, I shall speak also to Amendment 76B which is grouped with it.
We now come to the central part of this Bill which takes up 60 pages of the main Bill; it comes to something like 60 clauses and a large chunk—two-thirds—of the schedules. It has received relatively little attention in the course of the Bill’s proceedings, and virtually none in another place. We gave it reasonable consideration in Committee and we reached a degree of consensus. There are some things I still have queries about, but I am grateful to the Minister for explaining aspects of that and also to her officials who explained some of the aspects even further.
It still remains, however, that this is part of the Bill which has received very little public and wider attention. Yet it is one of the most important parts of the Bill because it regulates the nuclear industry. The policy of the Government, and to a large extent the policy of all parties now, is that of a significant shift towards nuclear power within our energy mix. We know the history of nuclear power is controversial, not only in the past here, but also worldwide. It is therefore essential that we get the system of regulation in this area right and the balance right. The Government have, to a large extent, done that. It has been quite a long gestation period taking what will be the ONR out of the Health and Safety Executive, giving it certain additional powers and clarifying in one piece of statute what its role is. I commend that. While it makes for a rather lopsided Bill, it is an important achievement. My amendments, therefore, are not attempting to upset the main thrust of the provisions within these sections, but they are trying to clarify some aspects of it. I hope that the Minister can give me some satisfaction on that.
One of the main roles of the ONR, and one of the most important public roles, will be the approval of designs for new reactors and the construction process that goes with it. Yet in all those pages there is very little mention of that role. It is mentioned here in Clause 60 and it is mentioned specifically under nuclear safety. The reason that it is so important is that both those who argue strongly in favour of nuclear power and those who argue strongly against it are concerned about the nature of the design of the reactor. It has been an issue in relation to the Hinkley Point approval that this reactor may not be the most appropriate reactor for the future—it may not be the most cost-effective and it may not be the best in terms of the contribution to the environment. Whether those criticisms are true or not, the Government rightly had a very heavy assessment, verification and approval process before they gave the go-ahead to the Hinkley Point project. The ONR in its shadow form and the Environment Agency both had a role in looking at that design. They looked at the design itself, its engineering, its safety requirements, its operational requirements, its effect on the ecology and the environment and of course they looked at its economics. They gave approval following a pretty long process and managed to rationalise the number of planning and other approvals that were needed.
I declare an interest in that until the end of last year I was a member of the board of the Environment Agency and I took a particular interest in the nuclear dimension of its activities. Both on the ONR/HSE side and on the Environment Agency side that was a very effective process. It was, however, an ad hoc process. It was a process that the Government invented when we were talking about several different designs that were possible and several different sites a couple of years earlier. It is still true that there has been some criticism of the choice of design being what some people refer to as an old design for what is a 35-year project. I do not want to enter into an argument about the merits of those criticisms myself, but it is important that the Government and the regulatory system have a robust system of ensuring that the design has been through the most rigorous appraisal system.
There are of course other designs that will be coming along. We have other sites that are capable and have been already designated by the Government as potential nuclear sites. There are other designs out there which are already operational or nearly operational: the CANDU system, a boiling water system, a PRISM system and there are companies and consortia that are promoting those here and elsewhere in the world. It is therefore highly possible that a different consortium from the one that is operating at Hinkley Point will come up with a different design which will need to be subject to an equally rigorous process. In that process it is vital that part of the responsibility of the ONR is to be at the cutting edge of nuclear technology and all the sub-technologies that go to make up the design. It is also important that it is cost-efficient.
The other criticism of the Hinkley Point deal is that we are paying too much for it. I again make no point on that at this stage. It is clearly right, however, that it is done on the most cost-effective basis, both for public acceptability and for the importance to the economy of moving to a greater share of nuclear power through the 2020s. It is also important that maximum safety is built in and, more generally, the protection of the environment.
Reading these sections of the Bill, one would not immediately deduce that this is, in a sense, the central role of the ONR. The approval of new systems, the new reactor designs and the appropriateness in the timescale is an important part of our ability to meet our carbon targets and to ensure that there is no detrimental effect either to the economy or to the environment. It deserves at least underlining—which is all my amendment does—that the role of the ONR in this respect is crucial and comprehensive, and that it is not only to do with safety but all these other matters as well.
Amendment 76A makes it clear that it is not only the safety of persons that is relevant but the safety of, and impact on, the environment. For that reason it is also important that there is specific reference in the Bill to the role of the Environment Agency. That agency played an equal role in the Hinkley Point case. The Environment Agency clearly has powers under the environment Acts but what we discussing is a joint responsibility. The ONR is not taking over that responsibility from the Environment Agency, which presumably could have been an option when the ONR concept was delivered.
Amendment 78B underlines what I have been talking about and makes it clear that in approving a design, and the construction plans that go with it, there is an absolute obligation on the ONR to ensure that they are of the very highest quality. The amendment also covers issues of cost-effectiveness, safety and security. This is central to the task of the ONR, as I have argued. The safety dimension is central to the safety of the population and of the environment. It is also important in a political sense. The public’s acceptance of the shift to nuclear power is fragile. It is significant but fragile, as we saw in Germany and other countries following the events at Fukushima. Therefore, it is important that the regulator we put in control of this system is seen as having a comprehensive and robust responsibility to deliver on all those elements when approving a major new reactor design. On every occasion we need to go through a very detailed process. It is important that it is written in large letters that this is one of the ONR’s central functions.
The Minister may say that this amendment is superfluous but in terms of reassuring the public it is important. The Government’s policy on this issue may be sufficient but the issue of the certification and approval of design must be an important part of the Bill. I hope that my few words on these two amendments will take it some way in that direction. I beg to move.
Lord Jenkin of Roding
My Lords, the House is very much indebted to the noble Lord, Lord Whitty, for the amount of time and the expertise that he has brought to bear on this important part of the Bill, as he rightly said. It has been a very long time in gestation. It was recognised two, even three, years ago that the difficulties which the ONR—it was then the nuclear inspectorate—faced in recruiting people to do the very specific task that is required when approving nuclear designs meant that they had to be sui generis so far as the terms of the employment were concerned. They could not be subject to the normal standard Civil Service rules. That is the primary aim of this part of the Bill: namely, to take the ONR out of the standard Civil Service terms of contract for the people it employs. It takes anything up to 20 years before an inspector becomes fully qualified to carry out the extremely expert work that is necessary to approve the designs of nuclear power stations and they are difficult people to come by. One needs to be competitive in this regard. The Select Committee on Science and Technology heard evidence from the former chief inspector, Dr Mike Weightman, who was very clear about this and, indeed, was glad that the issue was at last coming forward in this Bill. He made it clear that he had had to wait rather a long time for this to be done. The Government are very much to be congratulated on including the issue in the Bill.
Amendment 76A, in the name of the noble Lord, Lord Whitty, and others, seeks to add the words “and the environment”. As a former board member of the Environment Agency, the noble Lord has had much more experience of this issue than I have. As he rightly said, the regulation of this area is done by both bodies—the inspectorate, now the Office for Nuclear Regulation, and the Environment Agency. Their roles may overlap but they are most emphatically not the same. Nuclear science and technology is essentially the area of expertise of the ONR whereas the Environment Agency has the broader role of looking at the impact of a nuclear plant on the surrounding environment and at atmospheric pollution and so on. These roles are not the same. I will be interested to hear what my noble friend has to say on this. However, if I may say so, to add “and the environment” would confuse the issue. This part of the Bill does not deal with the Environment Agency, which continues to do exactly what it did when the noble Lord was a member of its board. I would be interested to know the reaction of the Environment Agency to the amendment. I think it would say, “It is not for them, it is for us”, meaning the agency. As I say, I shall be interested to hear what my noble friend has to say but it raises a question.
As regards Amendment 78B, we need to pay greater attention to cost-effectiveness. I do not know how many noble Lords have read the very interesting article by my noble friend Lord Ridley published a few weeks ago in which he talked about the cost pressures of the nuclear inspectorate on the price of a nuclear power station. I do not have the article in front of me but I remember he said that the inspectorate is taking a very, very safe system and insisting that it will be a very, very, very safe system. The question is: what will that cost? I would be interested to know to what extent it is the inspectorate’s role to consider the cost of the additional requirements that it may impose on the design of a plant.
I am absolutely satisfied that the public will expect the inspectorate to have very high standards. Indeed, I spent some years as the honorary president of the Energy Industries Council, which represents some 650 companies in the supply chain for all the energy industries. One of the things I find myself saying over and over again is that if firms are going to sell to the nuclear industry they must get used to nuclear standards which, for the most part, are considerably higher than general engineering standards, and rightly so. However, is it the role of the ONR to look to the question of cost? It has to consider the design of the plant that is put before it. As the noble Lord rightly said, there will be several. It is already looking at the advanced boiling water reactor put forward by Horizon Nuclear Power, which is now owned by Hitachi. It is not yet looking at either CANDU or PRISM—the other two items the noble Lord mentioned—which are still being examined by the Nuclear Decommissioning Authority and the department. However, if a design is put forward for either of those two items, the inspectorate will have to look at those as well. Should it be concerned about the cost? The only cost with which it ought to be concerned is whether we are expecting too high a standard at too great a cost, and whether this is absolutely essential. I suspect there is a temptation to say that anything which makes an installation safe—even if it has to be very, very, very safe—should be done even if it costs a lot. I do not agree with that. There must be a role here for looking at the particular cost for the particular requirement that the inspectorate is asked to look at.
As I say, I shall be interested to hear what my noble friend says about that but I think there may be greater merit in this amendment than in Amendment 76A.
Lord Wigley (PC)
My Lords, I apologise that I was unable to play much of a role in Committee on this important Bill because of a clash with other work here. When one is in a party of one, or one and a quarter at best, it is difficult to spread oneself around. I have a considerable interest in the question of nuclear energy and I am not in the mainstream of my party’s opinion. My party has tended to be anti-nuclear on the basis of fearing consequences if accidents of the sort we have seen in Japan and elsewhere were to happen. I did a degree in physics at Manchester University which contained a large element of nuclear physics; I worked for a time building the Trawsfynydd nuclear power station; and the Wylfa nuclear power station is also within the old county of Gwynedd, my home area. Therefore, I was most grateful to the noble Lord, Lord Whitty, for introducing the amendment in a broad context, bringing in the environment, because the environmental consequence of nuclear decisions is central to the public perception.
We are expecting the go-ahead, in Anglesey, for the Wylfa B station, something that I am very much in support of, as is a majority of opinion within the county of Anglesey. There are, however, many people who have worries about safety. As the noble Lord, Lord Whitty, mentioned, those worries have to be taken on board and have to be central to the thinking of the structures we are dealing with here. I listened to the noble Lord, Lord Jenkin, a moment ago, saying that there is sometimes the danger of going for the extra step of safety at a disproportionate cost. Obviously, there is a risk that has to be taken at some point, but the communities are only happy to support the nuclear industry when they think that that risk is very small indeed, that all steps can be taken to minimise those risks and that structures are being put in place to do that.
In the context of this part of the Bill and this amendment, one aspect of the environmental impact that arises from nuclear energy is the environmental impact associated with decommissioning. The Minister may recall that I raised this question at Question Time not so long ago: it is a matter of some concern. The new generation of nuclear power stations have easier and faster decommissioning built into them—one is very much aware of that. It is not the same decommissioning process as was necessary for the previous generations. One thinks of the Trawsfynydd nuclear power station which stopped generating electricity 20 years ago and is still being decommissioned, with 700 people still working on site on the decommissioning and another three years at least of work for those 700. That is an enormous cost. One accepts that, with luck, the costs of decommissioning will be less when the technological needs of decommissioning have been more appropriately designed into the original design of the nuclear power station, but there are always uncertainties.
The question that I put to the Minister on the back of the amendment, which deals with the environment—and it is an environmental consequence—is what if those who are involved in the construction and running of nuclear power stations and who are charged with the internalising of the costs of decommissioning into the overall cost package were to go bankrupt? What if that company goes to the wall? What happens to the steps needed to ensure safe decommissioning with regard to the impact on the environment if it is not properly handled?
I understand that at the point of negotiating contracts with companies such as Hitachi and the others, the Government clearly want to make sure that the companies that may make profit out of this pay the costs that are consequential on the work they are undertaking. Of course, it is right that this should be so, but there still needs to be some guarantee, at the end of the road, that the communities that are hosting this new generation of nuclear power stations cannot, under any circumstances, be left with a nuclear hulk the cost of decommissioning of which nobody is willing to take on. I believe that assurances along these lines are needed in order to make it easier for those, such as myself, who are in favour of nuclear power, to be able to argue the case. It is a worry and I have not heard how it will be addressed in those unfortunate, unlikely but still possible circumstances that could arise at some date in the future.
Lord Judd
My Lords, after the slight wobble with my Front Bench a moment ago, I am very glad to find myself 300% on board with them. I think that the amendments are absolutely right; I hope that they press them hard and that the Minister will find the opportunity to respond positively.
I always get a bit worried about what is happening with climate change in the sense that I am never quite sure that the principles with which I grew up still apply, but if the prevailing wind in Britain is still south-westerly, I live 12 miles north-east of Sellafield so I obviously take these arguments very seriously indeed. I am in favour of the next generation of nuclear energy: there is no argument about that, and obviously we in Cumbria will play our part in one way or another. That is given, but this is highly dangerous, lethal engineering of which we are speaking and it seems to me that we cannot have anything but the highest standards. I was very glad to find myself sympathising with a great deal of what the noble Lord, Lord Jenkin, was saying, but I could not quite buy his total argument that very, very, very safe was perhaps too much. I think that the developments have to be as safe as they can be.
As we go into this new generation of construction we have heard quite explicitly from the Government—it has been repeated tonight—that we have not got the necessary expertise. This is a very hazardous development. I think that we need some very specific, concrete plans from the Government for bringing the preparation of our own engineering capacity up to date and I urge my own colleagues in opposition to take this seriously too. I do not like the prospect of our being dependent upon foreign expertise in the area of safety: I do not think that it is in any way an ideal situation.
The noble Lord, Lord Wigley, made the point about, “What if?”. I do not think that one can ask too many such questions when we are going into this very important new development. The basic issue is that we have an engineering deficit in terms of our own capabilities and we are putting ourselves into the hands of foreign engineers. Everyone will know that I am an internationalist second to none, but it seems to me that we need to be very clear about how we are going to generate the expertise in this country and very fast indeed.
The Earl of Caithness
My Lords, I am slightly wary of the amendment including the environment in the duties of the ONR. The only reason for that is that I think that it confuses the issue. My noble friend Lord Jenkin was absolutely right: the environment should be with the Environment Agency and design should be with the ONR. If we give the ONR the environment as well, I think that there will be more confusion than light and that would be an unhappy situation.
The noble Lord, Lord Judd, talked about the importance of having our own people on the safety and security standards. Have we not blown it, from being world leaders to having to rely on overseas firms? Not that I am against that, but to have lost the world lead that we had is one of the great tragedies of the past 50 years. I am particularly sad that the fast breeder reactor at Dounreay, just down the road from my home, is not flourishing but is being decommissioned.
One of the reasons why we lost our world lead is that we did not take public opinion with us. This is a crucial issue and Amendment 78A in the name of the noble Lord, Lord Whitty, is perhaps more relevant in that regard. When the ONR and the Environment Agency look at these plans they have to be able to say that this has the seal of approval under the highest standards and quality that are right for Britain. If that does not happen, we will lose the support of public opinion again. It will be back to not just square one but minus five on the scale. That would be a sadness.
The noble Lord, Lord Whitty, reminded us that there are different designs. That is a concern and I wish that we would stick to one design in the competition. If you can replicate that design, you are going to lower costs. My noble friend Lord Jenkin referred to my noble friend Lord Ridley’s article of not so long ago in the Times. One of his arguments was that we should have a number of smaller nuclear plants, all identical. You could then set the safety standards right at the beginning, replicate the plants and have in-house expertise. Although I am a great proponent of and believer in competition, there is an argument here for saying that, having reached this stage, we ought to stick with one design and replicate it because that will help lower costs and help us get the relevant expertise into this area. If you have to have one set of expertise for what you are building at Hinckley, another for Anglesey and another for elsewhere, that might stretch us too far. I would therefore welcome anything that my noble friend can say on that.
Lord Mackay of Clashfern (Con)
My Lords, as I read subsection (1) of Amendment 78B, it seems to distinguish between design and construction; and in subsection (2), cost-effectiveness seems to be required only in relation to construction and does not seem to apply directly to the design. That may be deliberate—I am not sure—but that needs some explanation.
The Duke of Montrose (Con)
My Lords, I should like to express my opinion and interest in Amendment 76A. It is clear from what it says that the ONR will have responsibility for protecting “persons” against risk of harm from ionising radiation. In fact, pretty well all the risks that one can think of are those that affect persons. Perhaps in slight contrast to my noble friend Lord Caithness, my worry would be that the Environment Agency will have a big role in the approval, design and putting in place of a nuclear power station but it is more likely that the Office for Nuclear Regulation will be the body that is watching what happens day by day as the plant is running. While one can state that someone has responsibility for the environment—which is a nice, all-embracing term that we might think would take care of everything—we need to consider what the threat to the environment might be. We do not expect nuclear power stations to blow up but a whole lot of my sheep were prevented from going to market because of the nuclear explosion at Chernobyl, and various neighbours of mine were required to put all their sheep through a nuclear scanner. One man actually tried to put his dog through it in order to show the possible dangers from radiation. However, there is the possibility of food supplies being affected. At Fukushima, the issue was marine pollution. I want to be sure that the Office for Nuclear Regulation will be aware of the ongoing operation of plants in order to protect those elements.
Baroness Verma
My Lords, I thank the noble Lords, Lord Whitty and Lord Grantchester, and the noble Baroness, Lady Worthington, for their amendments. I also thank all noble Lords who have taken part in this important debate on the nuclear regulation clauses in the Bill. My noble friends Lord Jenkin and Lord Caithness, who have a great deal of experience and knowledge in these matters, are right to point out that there could be some confusion if we were to take these amendments as they are laid out.
Amendment 76A seeks to expand the ONR’s nuclear safety purposes to include responsibility for the environment. As my noble friend Lord Jenkin pointed out, a regulatory framework is already in place to protect the environment and the relevant agencies—the Environment Agency, the Scottish Environment Protection Agency and Natural Resources Wales—are well placed to carry out this role. The interim ONR has a strong working relationship with these regulators, which will continue once the ONR becomes a statutory body.
I understand noble Lords’ interest in the regulation of the environment but it would not be appropriate to expand the ONR’s purposes to overlap with those of established regulators. This would create conflict between two different regulators in the same field and place additional regulatory burdens upon members of the regulated community. As I said earlier, it would create confusion.
Amendment 78B seeks to include a new clause in the Bill concerning the design and construction of nuclear installations. It places a responsibility on the ONR, in conjunction with the Environment Agency, to regulate the design and construction of installations. The amendment also requires that the ONR alone is responsible for ensuring not only the highest technological and safety standards but that the most cost-effective measures are taken.
First, I reassure noble Lords that the regulation of the design and construction of nuclear installations is firmly within the ONR’s purposes and that the organisation, through well established legislation such as the Nuclear Installations Act 1965 and the Health and Safety at Work etc. Act 1974 will continue to do this. Secondly, the ONR has a strong working relationship with the Environment Agency in its generic design programme, and this will continue to be in place. To place such a duty in the Bill is therefore unnecessary. It would also be inappropriate to place the ONR under a duty to require the industry to use the most advanced technology available. The role of the ONR is to ensure that the design and construction of nuclear installations meet safety standards. This may involve the use of new or advanced technology. However, the focus is rightly on achieving the highest possible safety standards.
I reassure noble Lords that in undertaking its function with respect to the design and construction of nuclear installations, the ONR will work to ensure that these plants are designed and built not only to be safe but to make use of appropriately advanced and proven technology. It would be grossly inappropriate to place a duty on the safety regulator to regulate the cost efficiency of the construction of these installations. Such a requirement risks diverting the ONR’s attention away from its crucial safety role and placing potentially conflicting requirements on its regulators.
I agree with the sentiment that nuclear installations must be designed, built and operated to deliver value for money. However, I do not believe that this should or can be achieved by placing the safety regulator in the position where it must ensure that this is the case. It is for companies such as EDF to build and operate new nuclear power stations and make decisions about which reactors they use. It is important that any reactor used is safe and effective in its design, and the UK has a strong regulatory regime in place to ensure that that is the case. I understand that we need to have value for consumers, but it is not the role of the ONR to involve itself in the cost of design. The central role for the ONR is to ensure that we have the highest standards of safety in place.
My noble friend Lord Jenkin asked whether the ONR was expecting too much in terms of safety. The ONR expects nuclear installations to reduce risk as far as is reasonably practical. That is an established tenet of health and safety law and the nuclear industry is comfortable working within this regulatory framework.
The noble Lord, Lord Wigley, asked what would happen to the decommissioning costs if an operator became bankrupt. Under the funded decommissioning programme, operators of new nuclear power stations will be required to meet agreements from the Secretary of State to ensure that costs of waste management and decommissioning are met from day one for operators. These arrangements will need to be independent of the operator and will therefore take account of the operator going bankrupt.
Lord Wigley
I am very grateful to the Minister. I have no doubt that there will be a funding process that ensures that there is a pool of money to meet what is foreseen as the decommissioning costs. However, what happens if the standards, as they develop over a lifetime or 20 or 30 years, change in a way that leads to additional costs, or if the economic circumstances of the company disintegrate, for whatever reason, and it is not able to top up that pool as it goes along? What, then, is the safeguard that she and the Government can give to communities that there will be somebody who will step in and not leave them with a nuclear hulk, with all the implications that that could have? Those assurances are needed by the communities that are going to be welcoming these nuclear installations.
Baroness Verma
My Lords, I take the noble Lord’s concerns very seriously. It may be helpful if he would allow me to write to him in further detail about the decommissioning plans that we have in place. I will try to reassure him that the independents with these funds in place are away from the operators, and we are keen to make sure that the funds are met. However, since I have not reassured him enough, I think it may be helpful to write to him.
My noble friend the Duke of Montrose asked if the ONR will regulate ongoing operations of power stations. The ONR will continue to regulate and monitor installations as they are operating and beyond. It will continue to work closely with the Environment Agency and, of course, the other, separate agencies of the devolved powers to ensure that the effects of nuclear power generation on the environment are monitored and action taken where necessary.
My noble friend Lord Caithness said that we should have a single design for reactors. The Government’s position has always been clear in that we encourage diversity in reactor design but of course, as with all things, they have to meet the highest standards that we expect of them.
Lord Judd
Frankly, I am a little confused, and I wonder whether the Minister could put me right. She said earlier in her response that of course these things were up to the company to perform as required. Of course, this is all happening as a result of a tough political decision by the Government. We cannot walk away, as a nation or a Government, from our ultimate responsibility. What some of us are concerned about is having systems in place that ensure that companies are indeed performing as expected. In this context, we come back to what we were discussing earlier, that we cannot be certain that everything is being done as it should be because we ourselves say that we have not got that expertise. Can the Minister address these issues? There really is a credibility gap.
Baroness Verma
My Lords, I recognise that the noble Lord, Lord Judd, talks about the resources and the capabilities that we require going forward. We are mindful of that, and so is the ONR. There are a range of measures that the ONR is already engaged in to replace a depleted number of experts. I reassure the noble Lord that in saying that it is for companies to build and operate does not detract from the ONR’s main business, which is to ensure that reactors meet the highest standards of safety. We are measuring two things together, including the fact we have got the resources and capabilities in place, which the ONR is very aware of, as are the Government.
This is a historical vacuum that we are filling—the ONR is well aware of it—but there are a great deal of measures that the ONR is taking to ensure that we have those ongoing capabilities coming forward. We know, and take seriously, what the noble Lord is asking.
Lord Judd
I really am grateful to the Minister because she is trying very hard to reassure me and I always find myself being seduced when she is at the Dispatch Box with her arguments. However, I hope that she will agree with me that it is an aspiration on our part; as a nation, we have not got the means to be certain that what we are aspiring to, and exhorting people to do, is in fact being done. That is why it is so incredibly urgent to close this engineering expertise gap and to make sure that the credibility is foolproof.
Baroness Verma
I shall try to seduce the noble Lord better next time, but in the mean time I hope that the noble Lord, Lord Whitty, withdraws his amendment.
Lord Whitty
My Lords, I thank the Minister and everybody who has taken part in this debate, and I will answer some of their points. The noble Lord, Lord Jenkin, is clearly right that the trigger for setting up the ONR under a new statutory basis was to take it out of the Civil Service, and a large part of the reason behind that was the need to ensure that we have adequate expertise in this field. It is a field that has been allowed to run down; we are probably not without expertise at this point, but they are ageing. Some of them are tempted elsewhere and it is a global market, and therefore it was important for us to ensure that this happened.
Although that may have been the trigger, we have a wider prospect here of a largely comprehensive regulator having its duties set out in a fair amount of detail in this Bill. It would be wrong to say that it is entirely a reflection of the fact that we potentially face a scarcity of resources. Having said that, it is of course important, as the noble Lord, Lord Jenkin, and my noble friend Lord Judd have said, that we address that issue in terms of training provision, investment and our ability to compete for global talent. However, there are wider issues involved here as well.
Objection was made to the reference in the first of these amendments to putting “and environment” in the responsibilities of the ONR. I have no desire—and my previous colleagues at the Environment Agency would no doubt shoot me if I had—to change the boundaries of responsibility between the EA and the ONR. It is important that they are both operating in this area and operating to their own expertise. However, it is also true, if you look at nuclear processes, and some other processes as well, that the hazard involved, the potential risk and the need for minimising that risk is not only to the personnel in the immediate area and those who may be visiting in the immediate population, but also to the environment. If my noble friend Lord Judd lives 12 miles from Sellafield, he will know what I am talking about. If anything were to happen at Sellafield, not only would he and the population in his village be at risk but the totality of the environment of West Cumbria would be at risk as well. It is therefore important that, in approving a particular process or way of dealing with that process, the ONR at least takes cognisance of the fact that there is an environmental dimension. The expertise and regulatory authority may rest with the Environment Agency but the ONR will also have to take that into account. I do not find that confusing; it rounds off what the responsibilities are but does not change the regulatory boundaries.
Baroness Verma
Baroness Verma
My Lords, the amendments in this group respond to a number of issues, the majority of which were raised in Committee or by the Delegated Powers and Regulatory Reform Committee. They are intended to add further clarity to the Bill.
Amendments 77 and 78 have been tabled in response to the suggestion of the noble Lord, Lord Whitty, that we define “associated sites” within this part of the Bill. I thank him for his contributions to the debate and hope that he finds that the proposed definition adds clarity to Part 3.
Amendments 79 to 82 are made in response to the DPRRC’s recommendations that a parliamentary procedure be applied to the production of approved codes of practice. A procedure akin to the negative procedure will now apply to any issuance or amendment of an ONR code, and the Secretary of State’s approval must be granted for the withdrawal of such a code.
Amendment 83 has been tabled to ensure that the provisions on disclosure of “protected information” in Schedule 9 apply to information shared by HMRC under Clause 89 and an inspector appointed by the ONR under the Health and Safety at Work etc. Act 1974.
Amendment 84 aligns the definition of “relevant provision” in Schedule 10 with the definition in Clause 73.
Amendments 85 to 87 apply the affirmative resolution procedure to the first set of nuclear regulations that the ONR makes under the Bill, any nuclear regulations which amend the Nuclear Installations Act 1965 or the Nuclear Safeguards Act 2000, and any such regulations that create new offences. This is in response to the recommendations made by the DPRRC, for which the Government are very grateful.
Amendments 88 to 90 will allow the Secretary of State to make transitional provision for the ONR to continue to apply certain regulations under the current regulatory regime until specific regulations are made for the ONR. This includes provision for the conduct of inquiries and the current health and safety fees regime for the nuclear industry. These small amendments will allow us to make a smooth transition to the statutory ONR and will also ensure that the ONR is not significantly reliant on grant in aid for the first few years of its existence.
Amendment 91 clarifies that compensation can be paid by the Secretary of State only in respect of property transfers and not in respect of staff transfer schemes.
Finally, Amendment 92 has been added to allow for regulations to be made jointly under the Energy Bill and the Health and Safety at Work etc. Act 1974 where the Energy Bill requires an affirmative resolution procedure to be followed. Where this is the case, we have chosen that the route followed by such regulations should be subject to the subordinate legislation provisions in Clause 104.
I hope that noble Lords are satisfied with my explanation of these amendments and can agree to their inclusion in Part 3 of the Bill. I beg to move.
Lord Whitty
My Lords, I very much welcome these amendments. Obviously, I particularly welcome the ones that relate to my suggestions for the definition of sites. I think that they make a significant improvement and add clarity.
I am sure that were the noble Lord, Lord Roper, here, he would very much appreciate the move in the direction of the Delegated Powers Committee that the Government have taken in introducing a number of these other amendments. It is always right that any Government should not only take note but follow the advice of the Delegated Powers Committee’s recommendations, otherwise they would find themselves in serious trouble. The Minister has managed to avoid that, at least in this part of the Bill.
The transitional provisions in Amendments 88 to 90 also seem sensible. I welcome the amendments and hope that the House will accept them.
Baroness Verma
Lord Whitty
“(3) At least one non-executive member must have experience of, or expertise in—
(a) matters relevant to nuclear safety management;(b) representation of employees in health and safety;(c) matters relevant to the ONR’s nuclear security purposes.”
Lord Whitty
Amendment 78A deals with the governance of the ONR. There is relatively little in all these pages about that governance; the amendment attempts to beef it up, in terms of who should be the independent members, or non-executive members or whatever you like to call them. It relates to two issues, which are separate and can be dealt with separately if the Government so wish, although they need to take both of them on board.
The first relates to the expertise of the members of the governing body, on nuclear safety and nuclear operations in particular. That point has been raised with us by the potential operating companies of nuclear installations. The second relates to expertise in the area of worker representation and attempts to carry over the provision that has always been there under the Health and Safety Executive and the shadow ONR.
The only reference to expertise in this section of Schedule 7 is to a non-executive member who has expertise in,
“matters relevant to the ONR’s nuclear security purposes”.
That is important; some would argue that it is very important. We know that it is different, and has different connotations, from somebody having expertise in the area of nuclear safety and operating systems for nuclear safety. We would be looking out for somebody who has industrial expertise in managing such systems and who was not a member of the ONR staff. That is, the post could not be filled by appointing the chief inspector, who would be, in any case, a member of the governing body. If I were to second-guess—although “second-guess” is probably the wrong expression—we would be looking for somebody who can bring expertise to bear from a different perspective from that of somebody directly employed by the ONR.
The Government must have received representations—if I can put this in a subtle way—from those who very soon might be operating such a system. They want to see that those overseeing the ONR have expertise in the operation of the safety system and the general management of such sites, or at least that one of them does so.
Secondly, we have seen that the ONR is, essentially, a spin-off from the Health and Safety Executive. Since 1974, the Health and Safety Executive has operated on a tripartite basis. That has been reflected in its superstructure and, in a slightly informal way, in the oversight structure of the shadow ONR that operates under the HSE’s purposes. It has helped the engagement and co-operation of the workforce and has ensured that the worker side of operating complex plants and sites is fully taken into account. It is my contention that that needs to be reflected explicitly in the new structure. If it is not, a valuable part of the whole HSE experience will be lost; and it is unnecessary to lose it in a structure in which the ONR is responsible not only for nuclear safety but for health and safety generally on nuclear sites. It is important that we retain that structure and oversight.
Lord Jenkin of Roding
My Lords, the noble Lord’s amendments go too far. We are talking about only five non-executive members who are going to be appointed by the Secretary of State. One must have regard to the main purpose of non-executive directors of a board, which is, broadly, to hold the executive to account. I have been a chairman of a board, although only part-time, in a totally different environment, and found the non-executive members of that board extremely useful. They assisted me in holding the executive members of the board to account—not because of their expertise in a particular area in which an executive director would be operating, but because they had wider experience and could look at the activity of the executive in a wider context.
That is obvious in the provision in the Bill for at least one non-executive member to have responsibility for the security aspects of the ONR’s job. I do not know whether this is the Government’s intention but it seems to me that what is wanted is not somebody who is expert in nuclear security, but who has wider experience of the whole of the national security position and can bring that background knowledge and perspective to the particular issues that arise in the nuclear field.
If that is right, it is entirely understandable that the Government should want to see that in the schedule. On the question of safety, however, I do not understand what, exactly, a non-executive member’s role would be. This is essentially a management matter. A non-executive director would want to be sure that the right procedures were being followed, particularly when it is a question of appointing someone who will have some executive responsibility in this. You want somebody with the experience of being able to do it, but to have a specific safety non-executive person would be very difficult. I am not sure where it leaves the professional management. Is it constantly being second-guessed? That is not what you want from a non-executive board. It should not second-guess the management but satisfy itself that the management is approaching the problem in the right way and has made sensible decisions.
To some extent, that is equally true of labour, staff relations and so forth. I would not expect a non-executive director who had come straight from a human resources job to say, “I’m going to tell the human resources director exactly how to do his job”. That is not the way in which non-executive members of the board should be expected to operate.
The amendments mistake the purpose of having non-executive directors. The Bill has the right approach because having someone with a wider experience of national security could be extremely useful, and nuclear security could be looked at in that context. However, I would not want to take it further and I would be very much opposed to the amendments proposed by the noble Lord.
Lord Judd
My Lords, with great respect, I do not follow the arguments of the noble Lord, Lord Jenkin. We are not talking about a chocolate factory or even a motorcar manufacturer: we are talking about highly sophisticated, advanced, cutting-edge science. It has the potential to adversely affect staff and the wider public acutely. It is not either/or; it is a matter of having people with wider experience. The noble Lord is right: that is the purpose of a non-executive director. However, there must be people on the board who know what they are talking about, if they talk about it, when we come to the specific issues of this special, advanced and potentially very dangerous new form of energy generation.
This is not, incidentally, just limited to the nuclear sphere. I remember very vividly many hours toiling home to the north-west finding myself isolated on Preston station in the small hours. Railtrack had built up a great record of property development and all the rest, but it was suddenly realised after Hatfield that it had neglected the very special knowledge about how to run the railways and what that is about. It is not just any industry: it is about having the knowledge and background to ask whether management is taking this or that into account. It is not an either/or.
In the case of the railways, with that awful Hatfield incident, we had reached a stage where virtually nobody knew where the danger spots were on the track across the country. If we take those experiences seriously, it is a matter of getting the right combination of knowledge and expertise. I realise that when you use the word “expertise” you are beginning to go down a questionable road, but there has to be enough real knowledge of the special tasks and hazards, together with the wider experience to which the noble Lord rightly referred.
Lord Stoddart of Swindon (Ind Lab)
My Lords, I support the amendment, especially subsection (3)(b) dealing with,
“representation of employees in health and safety”.
That is so important. I worked at a power station myself. It was not a nuclear power station, but it was a power station. I was also secretary of the local advisory committee. I therefore have some experience of how essential it is that working people are taken into account regarding management of a plant.
Those advisory committees, incidentally, both at national and local level, were set up under the electricity and gas Acts of, I think, 1949 and 1950. There was a statutory duty to provide opportunities for employees to be consulted, at least, not only on matters of health and safety but on the broader workings of power stations and other installations. Indeed, it is necessary for employees to have those powers because it is helpful to management to ensure that working at ground level is safe. Managers cannot know everything that goes on, but most of the employees do. I support the amendment simply and solely because the question of employee consultation should appear somewhere in the Bill.
Baroness Verma
My Lords, I thank the noble Lord, Lord Whitty, for this amendment to Part 3 of the Bill, and my noble friend Lord Jenkin for his sensible and measured intervention. Noble Lords will recall that we debated the matter of the make-up of the ONR board in Committee. Amendment 78A would introduce a requirement for the ONR board to have at least one member with experience of, or expertise in, nuclear safety management and one member with experience of, or expertise in, employee health and safety representation.
As currently drafted, the legislation allows the Secretary of State to appoint non-executives with skills and experience that best meet the needs of the ONR. This may include experience or expertise in nuclear safety, which I think is what the phrase “nuclear safety management” means, although this is already provided by the chief nuclear inspector, who is an executive member of the board. This experience or expertise may include that of employee health and safety representation. However, that should be a matter for the Secretary of State to determine over time and, while the matters identified in the amendment are no doubt of great importance, it should be left to the Secretary of State to determine whether that experience would benefit the ONR.
The ONR also requires flexibility to change its skills-mix over time as it develops as an organisation and as the industry it regulates changes. The amendment significantly restricts the flexibility available to the Secretary of State in setting those appointments to only two non-executives. It would be unwise to restrict the ONR’s flexibility in this way. However, the legislation does make provision for a non-executive with security expertise. This role is required to ensure that the ONR’s security interests are carried out in the context of wider national security policies. It is required to prevent nuclear security matters being developed in isolation from the wider, national security agenda. The current security non-executive, for instance, does not have specific nuclear security experience.
Turning to employee representation on the board, as I have explained, the intention is to have a skills-based board, not one made up of representatives. Therefore, just as it would be inappropriate for the board to include a representative of the nuclear industry, it is also inappropriate to mandate a representative of workers.
It is important to remind noble Lords that the Health and Safety Executive, which will retain overall policy responsibility for wider health and safety in Great Britain, including health and safety on nuclear sites, will have a trades union representative on its board. Thus the interests of employees will continue to be represented in the ONR’s wider work on health and safety on nuclear sites. In addition to this, Schedule 7 makes provision for the Health and Safety Executive to appoint one of its members to the ONR board, should it wish to do so, and for the arrangement to be reciprocal. This will also provide for employee interests to be represented on the ONR board. I hope that noble Lords find my explanation reassuring and I hope the noble Lord will withdraw his amendment.
Lord Whitty
My Lords, on this occasion I cannot say that I am happy with the Minister’s response. The nature of the board, together with the expertise of the personnel of the ONR, will determine the degree of confidence there is in the ONR. On the issue not of worker representation in the sense of somebody who represents the workers of the nuclear industry on the board but of someone who has knowledge of working concerns, which in HSE terms has normally been a trade union representative, the fact is that the Government are taking out of the HSE an important, high-profile and, in industrial relations and personnel terms, quite a delicate part of its responsibilities. They are abandoning what was the great strength of the HSE, that at the highest level it had tripartite representation which had the confidence of all sides of industry and the Government. Most of the other provisions of these clauses of the Bill reflect procedures and responsibilities which have been directly or indirectly under the aegis of the HSE. It is odd that the one thing removed is the HSE’s governance, which has proved its worth for over 40 years. That is a serious mistake.
Expertise in nuclear safety management affects the confidence that the management of the industry has in the ONR. One hopes management will have confidence in the inspectorate and the chief inspector, but it has been put to me and I expect it has been put to the Government that the operators of nuclear installations want to think that there is somebody who knows their side of the story in the governance structure. They are worried that that is not prescribed in the Bill. The Minister says the Secretary of State will make a judgment and it is quite possible that he will appoint people with these qualifications or background, but the Government do not want to stipulate that in the Bill. However, sometimes it is the Bill which gives the confidence and the particular appointments are what give confidence. At the moment we are potentially reducing the confidence that workers in the nuclear industry might have in the governance and therefore the direction of the ONR—unnecessarily threatening it, because the rest of the provisions, I think, look after their interests well. We are also threatening the confidence of management of nuclear sites in the overall governance of the ONR.
These may not be big issues in practice but in certain circumstances they could become big issues. It is therefore important that the Government take on board the argument so that, if we cannot stipulate it in the Bill, the Secretary of State will have regard to these two dimensions to make sure that the ONR operates not only in the best traditions of the HSE but in a way that inspires confidence in the industry and the workforce. I fear that, by not accepting this amendment, the Minister may be jeopardising both. It would not be a big thing for either proposal to be included, maybe not in the terms that I have them here but in terms of how the Secretary of State should look at appointments to the governing body.
I am disappointed. I thank my noble friend Lord Stoddart—who I think I can call my noble friend on this occasion—and my noble friend Lord Judd for their support for my position. I regret that the Minister has not been positive. I am slightly surprised that the noble Lord, Lord Jenkin, was not more supportive at least on the first of the propositions, but I understand his position. However I do not fully understand the Government’s position and I hope that they will think again. For the moment, I beg leave to withdraw the amendment.
Baroness Verma
(a) ”
“(b) ”
Baroness Verma
“Procedure for issue, revision or withdrawal of codes of practice
(1) The ONR may—
(a) issue or revise a code of practice under section 71 only in accordance with subsection (8);(b) withdraw a code of practice under that section only in accordance with subsection (11).(2) Before issuing, or revising or withdrawing, a code of practice, the ONR must submit a proposal to the Secretary of State.
(3) Before submitting a proposal to the Secretary of State the ONR must consult—
(a) any government department or other person that the Secretary of State has directed the ONR to consult, and(b) any other government department or other person that the ONR considers it appropriate to consult,about the proposal.(4) A direction under subsection (3)(a) may be general or may relate to a particular code, or codes of a particular kind.
(5) A proposal for issuing or revising a code of practice must include a draft code of practice or, as the case may be, proposed revisions of a code of practice.
(6) Where the ONR submits a proposal for issuing or revising a code of practice to the Secretary of State, the Secretary of State may approve the draft code of practice, or proposed revisions, as the case may be—
(a) without modification, or(b) with the consent of the ONR, with modifications.(7) If the Secretary of State approves the draft code or proposed revisions, the Secretary of State must lay before Parliament the draft code or proposed revisions in the form approved.
(8) Where—
(a) the Secretary of State has laid a draft code or proposed revisions of a code before Parliament, and(b) no negative resolution is made within the 40-day period,the ONR may issue the code in the form of the draft laid before Parliament or, as the case may be, make the proposed revisions in the form so laid.(9) For the purpose of subsection (8)—
(a) a “negative resolution”, in relation to a draft code or proposed revisions, means a resolution of either House of Parliament not to approve the draft code or proposed revisions;(b) the “40-day period”, in relation to a draft of a code or proposed revisions, means the period of 40 days beginning with the day on which the draft is laid before Parliament (or, if it is not laid before each House of Parliament on the same day, the later of the 2 days on which it is laid).(10) For the purposes of calculating the 40-day period, no account is to be taken of any period during which—
(a) Parliament is dissolved or prorogued, or(b) both Houses are adjourned for more than 4 days.(11) Where—
(a) the ONR submits to the Secretary of State a proposal for the withdrawal of a code of practice, and(b) the Secretary of State approves the proposal,it may withdraw the code.(12) The ONR must—
(a) publish any code of practice issued under section 71; (b) when it revises such a code, publish—(i) a notice to that effect, and(ii) a copy of the revised code;(c) when it withdraws such a code, publish a notice to that effect.”
Baroness Verma
Baroness Verma
Baroness Verma
“(2A) Nuclear regulations fall within this subsection if—
(a) they are the first nuclear regulations to be made,(b) they include provision amending or repealing any provision of—(i) the Nuclear Installations Act 1965, or(ii) the Nuclear Safeguards Act 2000, or(c) they include provision creating a new offence by virtue of section 67;and for this purpose nuclear regulations which revoke and re-enact an offence are not to be regarded as creating a new offence.”
Baroness Verma
(i) ”
“(ii) regulations under section 76, or(iii) regulations under section 92.”
(ba) section 15 of that”
Baroness Verma
Baroness Verma
“(1) Section 82 (general provisions as to interpretation and regulations) is amended as follows.
(2) In subsection (3)(b), after “subsection” insert “(3A) or”.
(3) After subsection (3) insert—
“(3A) In the case of a statutory instrument which also contains regulations under section 66 of the Energy Act 2013 (nuclear regulations), subsection (3) is subject to section 104 of that Act (subordinate legislation).””
EU: Eurojust (EUC Report)
(10 years, 6 months ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Baroness Corston
That this House agrees to the recommendation of the European Union Committee that Her Majesty’s Government should exercise their right, in accordance with the Protocol on the position of the United Kingdom and Ireland in respect of the Area of Freedom, Security and Justice, to take part in the adoption and application of the Proposal for a Regulation on the European Union Agency for Criminal Justice Cooperation (Eurojust) (document 12566/13) (4th Report, HL Paper 66).
Baroness Corston (Lab)
My Lords, I move the Motion in my capacity as chair of the European Union Committee’s Sub-Committee E on Justice, Institutions and Consumer Protection, which prepared the report now before the House for endorsement. The Motion invites the House to agree with the committee’s recommendation that the Government should opt in to the negotiation of the proposed regulation reforming the European Union Agency for Criminal Justice Co-operation—the agency which is more commonly known as Eurojust. The proposal falls within the area of justice and home affairs which will apply to the United Kingdom only if the Government exercise their right under EU treaties to participate in its negotiation, adoption and implementation or, in other words, to opt in to this. The Government have to do this within three months of the proposal being presented to the Council, which in this case means before 21 November.
On the same day in July as the Commission brought forward the Eurojust regulation, it also published an accompanying proposal creating the European Public Prosecutor’s Office, the EPPO. The Government have already made clear in the coalition agreement their intention not to participate in the proposed EPPO and on Monday last week this House approved a reasoned opinion challenging the EPPO on subsidiarity grounds. The reasoned opinion was also prepared by the EU sub-committee that I chair.
Unfortunately, as the proposed Eurojust regulation was published just before the House rose for the Summer Recess, it was not possible to publish this report and schedule a debate in the House within the usual eight-week window that would have been afforded to the committee. However, there is fortunately sufficient time for a report from the EU sub-committee considering the opt-in and for this debate to be held in the House today before the Government’s deadline to decide expires.
The Government have already given a clue as to their intentions regarding the opt-in, in a letter dated 21 October from the Security Minister, James Brokenshire MP, a copy of which appears in the appendix to the report. In it, he says that:
“Pending the views of Parliament”,
the Government will not be opting in to the negotiations for the proposed regulation. For reasons that I will turn to in a moment, the Government have concluded that the regulation,
“would have significant implications for the UK’s systems of law”.
The letter also makes clear the Government’s intention to revisit their decision once an agreed text emerges from the negotiations.
I fear that this decision by the Government not to opt in to these negotiations from the outset could be construed by our fellow member states in the EU as representing a lack of commitment by the UK to a very important crime-fighting agency. The UK is one of the agency’s main users and, after the terrorist attacks in the US in September 2001, has played a key role in the agency. For example, for seven years of its 11-year history, the elected president of Eurojust has been the UK member. I note that the Minister says that the Government’s decision not to opt in has been taken pending Parliament’s view, but it seems that their intention is clear: the UK will not be opting in. In this context, it is difficult to foresee the position of president of Eurojust being bestowed on the current UK member. Although the committee acknowledges the validity of the Government’s concerns for the UK’s criminal justice system, the Government must also accept that the simple example of the Eurojust presidency illustrates that there is a price to be paid, perhaps in relation to our influence, when the UK chooses not to opt in to EU legislation.
Essentially, the regulation retains Eurojust’s core functions but includes new provisions reforming the agency’s governance and management structure. Notably, this includes Eurojust’s interaction with the proposed EPPO, the UK’s participation with which has been ruled out by the coalition agreement. The proposed regulation also includes provisions augmenting the existing powers of Eurojust’s members and new arrangements governing Eurojust’s accountability to the European Parliament and to national parliaments.
The Government have some concerns. In their Explanatory Memorandum, the Government praised the current legislation governing Eurojust and, in the context of the Government’s 2014 block opt-out decision—into which my committee has undertaken two recent inquiries, along with Sub-Committee F, chaired by the noble Lord, Lord Hannay of Chiswick—communicated their intention to opt back in to the current legislation. On the other hand, the Government also raised a number of concerns with the proposed regulation on Eurojust, including its potential ramifications for fundamental rights. However, in light of the Minister’s letter of 21 October, it now appears that there are two key concerns which have convinced the Government that it is not in the UK’s interests to opt in to this proposal. Both concerns are discussed in our report.
The first of those concerns relates to the aspects of the proposal which change Eurojust’s governance and management structure, including in respect of Eurojust’s interaction with the proposed EPPO. Once the Commission followed the treaty requirement that the EPPO be created out of Eurojust, it was inevitable, given the Government’s clear policy of non-participation, that this issue was always going to be difficult for the Government. However, the report argues that the issue is not enough to rule out the Government’s participation in the negotiations about the Eurojust regulation. Indeed, the committee believes it strengthens the arguments in favour of opting in.
The second of the Government’s key concerns relates to the requirement in the proposed regulation that the powers conferred on members of Eurojust by their member states are mandatory rather than discretionary, as is the case under the current legislation. The Minister says in his letter that mandatory powers of the type envisaged by the proposal,
“would cut across the separation of powers between police and prosecutors in England, Wales and Northern Ireland”.
The Minister also warns of the potential ramifications of mandatory powers for the role of the Lord Advocate in Scotland. I note the Government’s concern in this regard and take the opportunity to ask the Minister about the extent of the Government’s consultation with the devolved Administrations before deciding whether or not to opt in to this proposal, particularly in light of the clear evidence given to my committee by the Lord Advocate during the recent Protocol 36 inquiry of the benefits of Eurojust to the Scottish Government and his concern that the UK should not leave the agency. That may well be a message for both Front Benches.
The report itself suggests that the Government opt in to the Eurojust regulation, drawing on much of the evidence given to the two recent inquires on Protocol 36 and Sub-Committee E’s own recent inquiry focusing on fraud in the EU’s budget. The overwhelming weight of the evidence taken during these inquiries, which is reproduced in the report, highlights the importance of Eurojust’s work to member states. The report argues that the Government’s participation in these negotiations is all the more important given, first, the provisions in this proposal introducing significant interweaving of Eurojust with the proposed EPPO and, secondly, the Government’s clear stance of non-participation with the EPPO. It is my committee’s view that the UK Government will not be alone in their opposition to the EPPO—indeed the treaty anticipates this eventuality by including specific enhanced co-operation provisions for agreement. Furthermore, last week saw sufficient reasoned opinions issued by national parliaments, including one from this House and one from the other place, to force the Commission to review the proposed EPPO.
Our report therefore suggests that the UK ought to be a full participant at the table for the important discussions addressing the position of those states that wish to work together in Eurojust but do not want to participate in the proposed EPPO. These negotiations will shape Eurojust’s future and, although the committee acknowledges the validity of the Government’s concerns, the committee would not want to see the Government pursue a course of action which would diminish our influence on these important negotiations.
Finally, although the Government have decided, under the Protocol 36 decision, to opt back into the current legislation governing Eurojust, my committee cannot foresee a situation whereby the UK would be allowed to remain a full participating member of Eurojust under legislation superseded by this proposal. In this context, we fear that there is a clear danger that in deciding to opt out of these negotiations the Government could be taking the first step on the road to the UK’s non-participation in Eurojust, which we would all come to regret. My committee would strongly caution against such a course of action.
Lord Hodgson of Astley Abbotts (Con)
My Lords, I am a member of Sub-Committee E and support the proposal ably moved by our chairman, the noble Baroness, Lady Corston. We return tonight to the issue of European co-operation in judicial and criminal investigative matters. The topic is of course a veritable Rubik’s cube of interwoven advantages and disadvantages, and trying to establish the pattern that will best suit this country is very difficult, especially for a non-lawyer such as myself.
As the noble Baroness has pointed out, the pattern of the Rubik’s cube has changed in the past week with the decision of this House and the other place to issue a reasoned opinion on the grounds of subsidiarity against participation in the European Public Prosecutor’s Office. I spoke in the debate in favour of that decision on theoretical, legal and operational grounds. We heard in that debate from the noble Lord, Lord Rowlands, who introduced the subject, of growing concern among other states about the proposal. As I understand it, from what the noble Baroness has said and from what the noble Lord, Lord Rowlands, told us in our committee meeting earlier this week, since then concerns have been found to be even more widespread and substantial than was originally thought—indeed, so substantial that it appears that the EPPO proposal in its present form is now effectively dead in the water. The Minister might like to confirm whether this is the case and the Government so assess it when he comes to wind up.
If so, this removes one of the Government’s major objections to the Eurojust proposal—that it implicitly provides a stalking horse for the development of the EPPO, the interweaving of the organisation which we describe in paragraph 40 of our report. We say:
“As we have noted, the proposed Eurojust Regulation includes significant provisions which interweave the two institutions both corporately and operationally. Viewed in the context of the Government's policy of non-participation, this might point towards the UK electing not to participate in the negotiation of the Eurojust Regulation”
The next question really is whether the Government have some other principled objection to Eurojust in any form. It would appear that they cannot and do not. First, because this country has been part of the Eurojust set up ab initio, as the noble Baroness pointed out, and secondly, because although the Eurojust regulations fell within the subjects covered by the opt-out afforded to us by the treaty of Lisbon, having exercised that opt-out, the Government have already announced that they propose to opt back in to those parts that cover Eurojust.
As to the operational need for a co-ordinating mechanism such as Eurojust, one only has to reflect on the increasingly global nature of crime and, in particular, what one might call the new crimes such as cybercrime which flit from country to country, indeed from continent to continent, and require a very highly co-ordinated international response.
I have had the honour to serve on one or more of the EU Sub-Committees of your Lordships’ House for several years. An abiding feature of inquiries focused on activities to combat EU cross-border crime has been the value ascribed to what they call joint investigation teams or JITs which are, of course, established under and by Eurojust. It would be a shame for this country not to be in a position to aid their further development by not participating in the negotiations on these future regulations.
That leaves two final issues which could underpin the Government’s apparent plan not to opt in to this proposal. First, there is the proposed change to the structure and governance of Eurojust. I find it hard to believe that this country should not opt in to a body on the sole grounds that an executive board should replace a management board with a director. It seems to me to be arguing about a distinction without a difference. Secondly, there is the different nature of our legal system compared with those of most of our fellow EU members—in short, the adversarial as opposed to the investigative approach. I recognise this challenge and I see why the Government have drawn our attention to it in their explanatory memorandum. However, since the UK has been involved in Eurojust for some 10 or so years, these do not appear to have been insuperable problems in the past and I see no reason why they should be so in the future.
I am forced to conclude that Eurojust is an organisation which has proved its value in the past, evidenced by the Government’s decision to opt in again to the existing regulations. The major threat implicit in the regulation we are discussing tonight was the introduction of the EPPO, but that is not now going to happen. In my view the Government ought to take advantage of this changed mood among our fellow EU members to opt in and to ensure that this regulation is fashioned to the advantage of this country. Otherwise, having avoided participating in the negotiations, we may find ourselves having to accept a directive that has not been fashioned in the manner most advantageous to this country. It is also hard to understand how we are going to be able to opt in to old Eurojust—that is, the existing regulations—and not participate in the new Eurojust that will result from the proposals now under consideration.
When John Maynard Keynes was once asked about why he changed his mind, he famously said when circumstances change I change my mind, what do you do? Circumstances here have changed dramatically with the EPPO and since the Government reached their preliminary conclusion, I hope that my noble friend will persuade Mr James Brokenshire that this was a mistaken approach and we ought now to participate and ensure that these regulations are taken forward to the best advantage of this country.
Baroness O'Loan (CB)
My Lords, I support the noble Baroness, Lady Corston. I have the privilege to serve on the European Union Sub-Committee on Justice, Institutions and Consumer Protection, which is chaired excellently by the noble Baroness.
The Government have made it quite clear that the current legislation on Eurojust represents a,
“positive model of cross-border co-operation”.
The Government have stated that it is their intention to seek to opt back in to the existing legislation on Eurojust following the decision to exercise the 2014 opt-out of 130 EU police and criminal justice measures adopted before the treaty of Lisbon entered into force in 2009.
When the sub-committees were considering the general issue of the opt-out, Eurojust was one of the measures on which there was a high level of consensus in favour. Eurojust provides judicial co-ordination meetings, judicial co-operation agreements with third countries, office facilities, the facilitation of mutual legal assistance agreements, the acceleration and execution of European arrest warrants and the funding of joint investigation teams with the accompanying translation costs. As the Government have recognised, all of these are of considerable value to the United Kingdom. In these circumstances it is very clear why the Government wish to opt back in to the existing arrangements.
The DPP, in evidence, to the committee said that Eurojust costs the UK just £360,000 per annum and costs would be much greater were these arrangements to be the subject of individual bilateral liaison between magistrates in each country. Those of us who were involved in the process of criminal investigation prior to 2002 are aware of how very much longer all these things took prior to the establishment of Eurojust. We know that sometimes things took so long and became so complex that criminals were able to avoid justice. We must also bear it in mind that even if criminals are ultimately apprehended, the ancient maxim that justice delayed is justice denied still applies.
The committee in its 23rd report of the 2003-04 Session, stated that Eurojust was,
“a model of how to make progress in an area where the differences between national jurisdictions are so great that it would be unrealistic to aim for harmonisation. It is also an example of the sort of effective practical co-operation that an EU agency can provide”.
The Government’s concerns have been articulated very clearly by the noble Baroness, Lady Corston. They are threefold: ramifications for fundamental rights; concerns in relation to the governance and management structures of Eurojust; and the nature of the extended powers to be given to national members. The decision is imminent and the sub-committee to which I belong has recommended that we should opt in. The real problem with Eurojust is well recognised. It is the extent to which the new proposal interacts the European Public Prosecutors Office proposal with Eurojust. I understand the reservations in relation to the EPPO. They are shared by a significant number of other states. As we say in our report, the UK will not be alone in opposing the EPPO.
The UK needs to be at the table to participate in these fundamentally important negotiations in the Council. We need to ensure that our voice is heard in these debates, particularly in support of those other members who wish to support less radical change to Eurojust, as the UK does. These will be complex and important arrangements. Ultimately it is likely that the current Eurojust arrangements will change. If we are not part of the negotiations, we will not be able to influence the outcome as effectively as if we were at the table. It is not impossible, as we say in the report, that if the UK fails to take its place at these negotiations, they will proceed. Eurojust will change, and the UK will find itself unable to opt back in to the existing arrangements, leaving us at a significant disadvantage in the fight against crime. The existing Eurojust will disappear, and we will not have brought to bear our very considerable influence on the creation of the new Eurojust. This can only leave the UK at a disadvantage.
As we contemplate the fight against crime and terrorism across borders, we have good cause to ensure that co-operative arrangements are as comprehensive as possible, while still retaining and maintaining our national independence. In Ireland last night, a massive bomb was intercepted by the Irish police. It was destined for the north. It would have caused carnage. We have increasing levels of evidence of more militant views in many communities, with the creation of many murals glorifying what they called the armed struggle. We have to consider the concerns we know exist in Northern Ireland about the possible effects of the current opt-out proposals on the protection of security in these islands. We have also to consider the ramifications of the interdependence between organised crime and terrorism in the context of this proposal. For example, we have two individuals who are subject to TPIMs currently on the run. They are subject to TPIMs because they were regarded by a judge as a threat to national security.
We cannot revert to the times when we were dependent on bilateral arrangements and individual processes took months, if not years. If we opt out of Eurojust under the protocol 36 arrangements and find ourselves unable to opt back in because things have moved on, that may well threaten the coherence of the whole package which the United Kingdom will present to the Commission when it seeks to opt back in to the various measures. European arrest warrants, the other 34 measures and, indeed, the other measures which have been recommended for inclusion in the package are interdependent. The Government stated in their response to the 13th report:
“Europol currently provides support in over 280 operations involving UK law enforcement”.
If we opt in, we can negotiate so as to secure the removal of the powers to direct national law enforcement agencies to initiate investigations or share data. We can influence other states to achieve an outcome acceptable to the UK. We will definitely do so more effectively if we are sitting at the table than if we are on the sidelines watching, seeking ultimately to rejoin a Eurojust on terms for which we have not argued and which ultimately we may even be unable to accept.
We put our whole protocol 36 situation at risk if we do not opt in. Eurojust represents great value to us. We must ensure that we have a voice in the ongoing debates, and I ask the Minister to consider again the decision the Government have made.
Lord Rowlands (Lab)
My Lords, if only I could improve upon the powerful and compelling case that the noble Baronesses, Lady O’Loan and Lady Corston, and the noble Lord, Lord Hodgson, have made on our committee’s report. This time last week, we had a consensus on our report on the EPPO. As I understand it, we have a consensus of a rather different kind tonight: a consensus of two Front Benches opposing our report. I find that all the more puzzling given the events of the past week or two.
As the noble Lord, Lord Hodgson, said, since we wrote this report, the context has changed. We have seen a very significant and “important”—in inverted commas—rebellion across a number of European Parliaments to the draft proposal on the EPPO. It was our case that if the Government joined in the debate and discussion on Eurojust, they would find enough allies to change and alter that report effectively. Surely the evidence of the past week or two has been that there are such allies and that if one engaged in an active and proactive way on this measure, one would find enough allies to change or transform the report itself. Our case has been strengthened by the events of the past week or two, and therefore I am puzzled if both Front Benches for some reason oppose the conclusions of our report.
We all accept the value of Eurojust. The Government accept the value of Eurojust. They want to opt back in to Eurojust under the opt-in proposals. We all support that opt-in to the system. I certainly share the Government’s concerns about the existing draft proposal. Almost all those concerns are about the interrelationship between it and the proposed draft for the EPPO. If those fall—if, in fact, the Commission is going to have to withdraw or revise its proposal—surely there will be a consequential fallout in the draft Eurojust proposal. Will the Minister bring us up to date on what has happened since last Monday, when there were enough reasoned opinions across Europe to mean that the Commission will have to review it? What has the Commission intimated? It has suggested that it is going to do so, and it accepts and understands the voices of concern. If it does that, does it not also have to review and almost withdraw this proposal because they are totally interlinked? A portion of the Eurojust draft is related to the proposed public prosecutor’s office. Will the Minister tell us whether, if the Commission has to review the EPPO, it will also probably have to undertake some kind of review of this draft?
In this case, we have a compelling case for joining in the negotiation because we now have a good clear view that we could affect those negotiations in a very positive way. As other members of the committee have said, one of the things that swung me in favour of our report—and I was sceptical at the beginning because I understood and appreciated the Government’s concerns—was that we could influence this because we sensed there would be a lot of other supporters. The other reason why I supported it was that I looked down the road and thought that a bizarre situation could happen in which the Government opt in to the existing measure and then find that this measure has been revised and it belongs to an existing measure which down the road may well be of a different kind, and they have opted out of that. I think that would cause a very puzzling and bizarre situation in the relationship between the United Kingdom and the Eurojust system.
There is one thing on which we surely have consensus: we are in favour of Eurojust and we are in favour of the United Kingdom’s participation in it. Therefore, I beg the Minister to tell us what has happened since last Monday and whether the impact of what happened in the past week or two means that the Government should rethink their position on this issue and should at least keep an open mind on the question of opting in, negotiating and influencing what I think is a very important organisation.
Lord Elystan-Morgan (CB)
My Lords, the matter before the House concerns only Eurojust, but it is clear that Eurojust and the EPPO have a very close nexus one to another. There are two ways of looking at that nexus: one is positive and the other is negative. It seems to me that the Government, and the Opposition for that matter—one is in the luxurious position on the Cross Benches of being able to say, “A mild plague on both your houses”—are approaching the matter from an utterly negative point of view. The Government have asked the question: is Eurojust in any way tainted by association with the EPPO? They answered yes; ergo, it must be rejected.
I argue that there is a forceful and utterly convincing case to the contrary. I am proud to say that I, too, am a member of Sub-Committee E. We have heard a great deal of evidence over the months with regard to European fraud. The official figure for fraud was €440 million or something of that nature. I do not think that anybody applied their minds to it properly, as the evidence was very different, appearing to range somewhere between €3 billion and €5 billion, possibly even in excess of that latter figure. Nobody was charged with overarching responsibility. That is where the case for the EPPO comes in. There is a saying in Welsh: “Everybody’s concern is nobody’s responsibility”. That is the situation here. Unless there is a body that is charged with the particular commission of looking at European fraud in a serious way, as has never happened before, I think that the whole system will be jeopardised to its very roots.
If one accepts that there should be an EPPO—and the noble Lord, Lord Hodgson, has pointed out that the objections are sere thin, casuistic and have no merit whatever—it seems to be the case that the Eurojust situation very much fits into that picture. It seems to me that the whole situation is tainted by the prejudices that have become so prevalent in the last few months in relation to Third Pillar matters. We have heard abundant evidence to show that it does not matter a row of beans what we do about 90 to 95 of those 130 measures, as most of them have virtually no effect upon our situation. One or two are of peripheral significance. Yet somehow or other the Government have managed to taint the whole situation by pretending that this is a massive battle for British sovereignty. In doing so, they are jeopardising something like 30 to 35 matters that are of crucial significance in so many different fields, and doing so cynically in order to pretend that we are somehow winning a great victory in relation to the 95 matters that never mattered at all.
I therefore very respectfully ask the Minister, whom I believe to be one of the most reasonable Ministers in government, to consider yet again whether he may be wrong in this particular matter.
Lord Hope of Craighead (CB)
My Lords, perhaps it is appropriate that someone who was not a member of this sub-committee should say a word or two about this issue. I come to this against the background of having been chairman of Sub-Committee E more than a decade ago, when Eurojust was just appearing on the horizon.
It is fair to say that initially there was a certain amount of suspicion as to whether it would be right for the United Kingdom to have any part to play at all, for reasons that are easy to understand: we have our own system for the administration of justice, our own prosecutors and prosecution system, which is so very different from that in the countries on the continent. However, I have kept an eye on this from a distance, and everything that has happened since then has supported the points that have just been made: Eurojust is beneficial and indeed essential to the battle against cross-border crime that we all must face up to. The only way to deal effectively with cross-border crime is cross-border co-ordination. The report says that pan-European co-ordination is required. Indeed, it is global co-ordination that is required.
From my position, based in Scotland, I would attach considerable importance to the evidence that was given by the Lord Advocate. I know that the Lord Advocate and his team have been closely involved in matters that lie at the heart of the Eurojust project. I will not mention names, but various issues have arisen where they have been hands-on in dealing with cross-border matters and the co-operation that is available through Eurojust has been absolutely crucial to the way in which they have been able to carry out their work. I do not think that anyone in the justice system in this country would have any doubt that Eurojust is beneficial and something that we should continue to support and be part of.
Lord Stoneham of Droxford (LD)
As a member of the sub-committee that produced this report, I support what has been said tonight, the report itself and the words of the noble Baroness, Lady Corston.
A lot of the arguments have already been made so I will not repeat them. However, I will say three things that I believe are important. Everyone knows that Eurojust aims to,
“improve the coordination of investigations and prosecutions among the competent judicial authorities of the European Union Member States”.
That is its purpose. It is inevitable, in a competitive single market, that just as capital, labour and goods will move between borders, criminals recognise no borders either. They will use whatever weaknesses there are in domestic legal and police systems to ply their trade and to seek protection. It makes no sense, as the Government have recognised, that we should pull out of Europol, Eurojust or the European arrest warrant. They all complement each other. The Government have agreed this, and last week we also agreed that the further proposal for a linked European prosecutor was a step too far, and the coalition is opposed to that.
However, now we have proposals for a new regulation for Eurojust which will look at its structure, its new provisions for governance and management structure, new provisions for its accountability to the European and national Parliaments—including the fact that the Eurojust president will have to appear before Parliament—the setting up of an executive board, and the removal of individual member states’ discretion.
The Government have concerns about all of those and have pointed them out. They are concerned about the ramifications for fundamental rights, the change to Eurojust’s existing governance and management and the whole nature of the extended powers given to national members. However, as we have heard, it makes no sense at all and it is silly that we are not prepared to get involved in the negotiation of these new proposals, and will mean that in Europe we will be seen as petulant and awkward.
Surely the great danger to us is that if we opt out of these negotiations things will emerge that we are not happy with. We know that there are many countries in Europe that agree with us on the whole issue of whether or not to have a European prosecutor and on getting further accountability of Eurojust. It is too important a body to us for us to ignore the process of reforming it. Finally, on this question we should send in the openers to bat, not rely on the tail end to pick up the pieces.
Baroness Hamwee (LD)
My Lords, my point is a general one. I apologise to your Lordships if it is trite—it probably is—but to me it is blindingly obvious that you cannot play the ball if you have taken your bat home. Every noble Lord will have had experiences of negotiation in some context, if only the domestic, and we know that if you choose to walk away you have to pick your moment. You have to be clear what the deal breaker is and know what your own compromise would be. However, until then you have to remain part of the story, not least because you risk losing respect if you are not prepared to get stuck in and stay stuck in to the project. You certainly risk losing influence. My noble friend’s phrase that you are “looked on as petulant” was absolutely spot on. You risk not being regarded as a serious player if and when negotiations resume. Indeed, you risk being thought of as having disqualified yourself from further negotiations in a serious way if you have distanced yourself.
Lord Rosser (Lab)
My Lords, I thank my noble friend Lady Corston for her introduction to the report from her committee and for the clarity of the committee’s case made in its report for the recommendation that the UK opt in to the negotiations on the proposed Eurojust regulation.
As has already been said, the European Union Agency for Criminal Justice Co-operation—Eurojust—was established just over 10 years ago. Provisions in the 2009 Lisbon treaty agreed by the member states included provisions that required the EU’s institutions to pass legislation in the form of regulations to determine Eurojust’s structure, operation, field of action and tasks. The proposed Eurojust regulation seeks to fulfil the member states’ aims.
Eurojust is involved in major crimes such as drug trafficking, human trafficking, terrorism and financial crimes, which cross borders and require co-operation between different jurisdictions if they are to be successfully investigated and prosecuted. Since 2003 there have been just under 1,500 requests from EU member states for co-operation with Britain through Eurojust. The objective of Eurojust is to support member states in conducting investigations, and we are very supportive of the value of the work that it undertakes.
As has already been said, the proposed Eurojust regulation will apply to the United Kingdom only if the Government indicate a decision to opt in by 21 November. The Government’s position in the House of Commons when it was debated there, I think last week, was that we should not opt in to the new Eurojust proposals at the outset of negotiations but should conduct a thorough review of the final agreed text to inform active consideration of opting in to the Eurojust regulation post-adoption, in consultation with Parliament. If the Government decide to opt in to the negotiation of the proposed Eurojust regulation, which seeks to replace two existing Council decisions, the legislation currently governing Eurojust will no longer fall within the scope of the Government’s 2014 opt-out decision, under which the Government are seeking to rejoin the current Eurojust arrangements as part of their 2014 opt-out decision.
In the House of Commons debate last week, the Minister referred to government concerns about the proposed connections between Eurojust and the proposed and strongly opposed European Public Prosecutor’s Office. The Minister also expressed government concern about the proposed new Eurojust regulation creating mandatory powers for national members. These powers, said the Minister, would allow a requirement for coercive measures at a national level with the ability to insist that national authorities take investigative measures in some circumstances, which could cut across the division of responsibilities and separation of powers between police and prosecutors in England, Wales and Northern Ireland, and the sole ultimate responsibility of the Lord Advocate in Scotland for determining investigative action in Scotland.
Unusually for this Government in regard to a European Union agency, they publicly rather value Eurojust. Their stance indicates they would prefer to stay in rather than find themselves outside because they do not like the look of the new regulation once it has been adopted following the deliberations of all those member states participating in the negotiations. In this regard it would at least clarify the Government’s position if the Minister could indicate whether, if the European Public Prosecutor’s Office proposal does not proceed, and with it the references to the link up with Eurojust, the Government will still not opt in to the proposed Eurojust regulation unless other significant changes are made to the proposed regulation. In other words, is it the connection with the EPPO proposal that is the showstopper for the Government or are there other aspects of the proposed Eurojust regulation that the Government also regard as a showstopper as far as opting in to the regulation is concerned?
The Government should be able to answer that question in general terms since they are not disclosing their negotiating position on what significant changes would be required as, under their stance in the House of Commons, they do not intend to opt in to negotiations anyway on the proposed Eurojust regulation. What the question does—if the Minister will give a straight answer—is indicate whether the Government’s relative enthusiasm for Eurojust is greater than their dislike of the proposed new regulation as it stands minus any interweave between Eurojust and the EPPO, or whether the Government’s dislike of the proposed new Eurojust regulations minus the interaction with the European Public Prosecutor’s Office is still such that if there is no significant change in the regulation in line with their position, they are prepared to accept no longer being a full participating member of Eurojust.
The view of your Lordships’ European Union Committee is that were it not for the provisions governing Eurojust’s interaction with the EPPO, the argument in favour of the UK opting into the negotiations would be clear and the committee would have no hesitation in recommending that the UK opt in. The committee’s view is that the Government’s key issues with the text could be dealt with during the proposal’s negotiation, but they recognise that the Eurojust proposal has not been brought forward in a vacuum but is closely associated with the Government’s policy towards the EPPO proposal. However, as has already been said, there will be changes in relation to the EPPO proposals since those proposals have been given what I think is known as a yellow card as a result of decisions by a not inconsiderable number of member states’ national Parliaments, which means that the Commission is now required to review its position.
The European Union Committee considers that the non-participation in the EPPO by other member states in addition to the UK, will inevitably mean that the contentious aspects of the proposal dealing with the reform of Eurojust will be subject to negotiations in the Council, and that the United Kingdom ought not to miss out on such negotiations. The committee takes the view that if the UK Government decide not to opt in to this regulation they will not be at the table for the important discussions addressing the position of those states wishing to co-operate within Eurojust but who choose not to participate in the EPPO. The committee says that it could not advocate such a course of action.
Referring to the Government’s position that they value the work of Eurojust, the committee says that it cannot foresee a situation whereby in practical terms the UK would be allowed to remain a full participating member of Eurojust operating under defunct or superseded legislation that they have decided to opt back in to, while the other participating member states co-operate under the new proposal once it is agreed. The European Union Committee has therefore recommended that the UK opt in to the negotiations on the proposed Eurojust regulations. Its report points out that the Director of Public Prosecutions said that the UK’s involvement in Eurojust provides many benefits and in his view represents good value for money, and that the Lord Advocate said that he would be concerned if the UK left Eurojust.
In his letter to the chairman of the European Union Committee, the Minister in the other place said that the Government would take an active part in the negotiations to protect the national interest, and also on the EPPO. The Government, he said, would also continue to challenge the Commission’s evidence base and justification for bringing forward the Eurojust proposals at this time. In addition, the Minister said that the Government would oppose any changes that would reduce the influence of member state representatives over the functioning of Eurojust, and seek confirmation that the opinions of Eurojust acting as a college are non-binding on member states.
The Parliamentary Under-Secretary of State, Home Office (Lord Taylor of Holbeach) (Con)
My Lords, I thank the noble Baroness, Lady Corston, and the European Union Committee, many of whose members have spoken in this debate, for bringing forward this Motion and for their work on this report. As noble Lords have said, we were here a week ago to debate the issue of the European Public Prosecutor’s Office when the House concluded that it should issue a reasoned opinion against that proposal as it breached the principle of subsidiarity. Today, we have turned to the related matter of the opt-in decision triggered by the European Commission’s parallel proposal for a Eurojust regulation. We have had a full debate and I have listened to it with great interest.
The Government’s view is that the UK should not opt in to the draft regulation on Eurojust at this time and we should conduct a thorough review of the final agreed text to inform active consideration of opting in to it, post adoption, in consultation with Parliament. I am pleased to say that a Motion to that effect was agreed in the other place last week. It has been very good to have the support of the noble Lord, Lord Rosser, expressing the Opposition’s view that this presented the right approach in the interests of Parliament and of Government.
The Government have said clearly that we value the current Eurojust arrangements, which is why we are seeking to rejoin them as part of the 2014 opt-out decision. I can only agree with the noble and learned Lord, Lord Hope of Craighead, and all other noble Lords who have pointed out the merits of the current Eurojust arrangements. Moreover, prior to the publication of the new Eurojust proposal, we said consistently that there was no need to reform Eurojust at this time; indeed, the Security Minister in the other place, James Brokenshire, made that case clearly at the 10th anniversary of Eurojust last year.
Current legislation is still undergoing a peer evaluation, which will not be complete until next year, and the Commission has not put forward a convincing case as to why the new proposal is needed. However, regrettably, it has come forward with a new Eurojust proposal that contains a number of substantial concerns. In particular, as the European Union Committee’s report elegantly describes, the Eurojust proposal is interwoven with the EPPO proposal. The reforms proposed to Eurojust would see deep connections made to the EPPO with operational, management and administrative links between the two bodies. At this time we cannot be certain either about the shape of the EPPO proposal itself—not least given the subsidiarity yellow card that has been issued, as we know, as a result of our debate and debates in other parliaments—or how the relationship between the EPPO and Eurojust might ultimately be defined.
I say to the noble Lord, Lord Elystan-Morgan, that our concerns articulated in this House last week have not gone away. To update the noble Lord, Lord Rowlands, who asked where we were now as a result of last Monday, the number of votes from national parliaments on the EPPO means that the Commission must now review its proposal. Officials speaking on behalf of Commissioner Reding, however, have interpreted this as being the majority of national parliaments not opposing the proposal. It would be a huge mistake no longer to consider the EPPO presenting a risk for the new Eurojust proposal. That is our view of the situation at the present time. The Government therefore believe that it would be extremely and unnecessarily risky to bind ourselves to the European Public Prosecutor’s Office through our participation in the new Eurojust proposal at the start of negotiations. This would be a needless risk when we can review our place in Eurojust upon its adoption.
The new Eurojust measure also proposes to create new mandatory powers for Eurojust national members—powers which would enable them to require coercive measures at a national level. The current Eurojust measure works well and it does not force member states to give their national members such extensive powers. The new proposal unnecessarily removes this discretion. These proposals would cut across the division of responsibilities and separation of powers between police and prosecutors in England, Wales and Northern Ireland. It is quite clear that these proposals would conflict with the role of the Lord Advocate in Scotland, who has been at the apex of the Scottish criminal justice system since at least the time of the first recorded holder of that office, Sir John Ross of Montgreenan, in 1483. Before this debate I had no idea that the office so ably held by my noble and learned friend Lord Wallace of Tankerness had such ancient roots.
The evidence that the Lord Advocate gave to the committee was on the existing Eurojust measure about which there is no dispute among us—it is a valuable measure—not the new proposal. That evidence is therefore not relevant: the new proposal might actually undermine the role of the Lord Advocate. It was following consultation with the Scottish Government that we came to our view. On consultation, we have consulted the devolved Administrations in Scotland and Northern Ireland. They have told us that they understand our reasoning and they would not seek to demur from our proposed approach. The concern in relation to the Lord Advocate’s role follows consultation with the Scottish Government. Our clear view is that we should not opt in to the new Eurojust proposal at the start of negotiations because the risks it presents are unacceptably high for our criminal justice system arrangements.
I hope that I can also allay some of the concerns expressed in the European Union Committee’s report that we might “miss out” on these negotiations. Indeed, in introducing the debate, the noble Baroness, Lady Corston, made such remarks and they have been reinforced by the speeches of the noble Baroness, Lady O’Loan and my noble friends Lord Hodgson of Astley Abbotts, Lord Stoneham of Droxford and Lady Hamwee. All have talked in terms of our missing out or not being involved in the negotiations. I assure noble Lords that where we do not opt in at the start of negotiations we will nevertheless be actively involved. Not only will we be present in the negotiating room at all levels, we will be able to intervene as and when we wish. If we do not opt in to this measure now, we will nevertheless be at the negotiating table energetically representing our interests, and we will be able actively to consider opting in post-adoption based on the final text and the further views of Parliament. I hope that reassures noble Lords that this may be an opt-out or a non-opt-in to the revised proposal but it is not an opting-out of our responsibility to negotiate and make a success of Eurojust, which it has been for all participating countries in the past. I assure noble Lords that we will vigorously represent our views on both the Eurojust and EPPO measures.
Moreover, as your Lordships may be aware, Ireland has also said that it will not opt in to the Eurojust proposal at the start and, of course, Denmark cannot participate in post-Lisbon justice and home affairs measures, so we are not isolated or alone in our position. I reassure the noble Lord, Lord Rosser, regarding the other issues we are concerned about. The coalition agreement is clear that the Government will consider the impact of any of these measures on the UK criminal justice system when considering an opt-in to any measure. We have set out our concerns on that point very clearly and it is an area that we want improved.
I conclude by making clear our commitment to the current Eurojust arrangements—
Lord Hodgson of Astley Abbotts
I am extremely grateful to the noble Lord and I am sure that I speak for a lot of noble Lords when I say that I am reassured by the energetic negotiations that will take place around the edge of the formal negotiations, and I hope that they are successful. However, the question we are left with is what happens if the final negotiations are not to our satisfaction. What happens to our membership of Eurojust in its present form? It is hard to believe that our fellow members will allow us to remain a member of Eurojust on the old terms and not accept the new terms which we will have no part—at least, no direct part—in negotiating.
Lord Taylor of Holbeach
My noble friend and I have been involved in negotiations and I do not think that we ever went into them contemplating that approach to the issues. We went in there to achieve our objectives and that is exactly what the Government will be doing. We are not alone in taking this stance; we have the support of others. Eurojust has been an asset and we want to make sure that the new proposals complement the work that has already been achieved by it and do not get in its way.
I make no apology for not going into detail about our negotiating position but reinforce the fact that we are not in some sort of annexe. We are not down the corridor to be occasionally brought in to be involved in these negotiations. We are at the table negotiating on behalf of our interests and that is what our colleagues in Europe expect us to do. I do not share the view of my noble friend Lady Hamwee that we are not fully committed to negotiations. We are committed to negotiations. I have always believed that if you go into negotiations you do the best service to your colleagues and the issue under consideration by stating your position clearly and arguing for it. That is exactly what this Government will be doing.
I was in the middle of my peroration when my noble friend interrupted me. Our intention is to negotiate to protect the Eurojust arrangements, but our view currently is that as the new proposal stands it presents too high a risk to our criminal justice system to opt in at this stage. I hope, therefore, that noble Lords will understand why the Government cannot support the Motion.
Baroness Corston
My Lords, I thank those noble Lords who have contributed to this debate this evening. It was particularly gratifying to have the support of five members of Sub-Committee E and that of an illustrious past chair of Sub-Committee E, the noble and learned Lord, Lord Hope of Craighead, who was entirely right when he pointed out how important it is for the Government to be at the table at the outset of these negotiations. This report does not tie the Government’s hands. There would be no difficulty if the Motion was agreed to. The Minister listened to the debate and can take the views expressed and the report into account. The House usually supports the committees that it appoints to perform its scrutiny functions. This issue was very carefully considered by Sub-Committee E and was endorsed by the full EU Select Committee so ably chaired by the noble Lord, Lord Boswell, who I am pleased to say is in his place this evening.
However, I am mindful of the old adage that when you are in a hole you should stop digging, and since neither Front Bench supports the Motion and it is not going to be agreed to, I am willing to withdraw it.