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House of Lords

Monday, 3 July 2006.

The House met at half-past two of the clock: the LORD CHANCELLOR on the Woolsack.

Prayers—Read by the Lord Bishop of Chester.

Baroness Paisley of St George's

Eileen Emily Paisley, having been created Baroness Paisley of St George’s, of St George’s in the County of Antrim, for life—Was, in her robes, introduced between the Lord Molyneaux of Killead and the Baroness Boothroyd.

Lord Boyd of Duncansby

Colin David Boyd, QC, having been created Baron Boyd of Duncansby, of Duncansby in Caithness, for life—Was, in his robes, introduced between the Lord Irving of Lairg and the Lord Hardie.

Water Supply

2.45 pm

Lord Janner of Braunstone asked Her Majesty’s Government:

The Minister of State, Department for Environment, Food and Rural Affairs (Lord Rooker): My Lords, the Answer is no. Since the English and Welsh water and sewerage companies were privatised in 1989, they have become much more efficient and greatly improved our drinking water quality and the water environment.

Lord Janner of Braunstone: My Lords, I thank my noble friend for that Answer. However, does he realise what is happening to the water systems of this country at this moment, especially those that affect London? Does he know that, during a period of proclaimed danger of drought, Thames Water has announced an annual profit up by 23.2 per cent, to nearly £500 million, and yet it says that it does not have the funding to fix the water system and to mend the broken pipes? Does he know that in a recent poll a majority supported renationalisation of our water companies? In those circumstances, surely all water is a public resource and should be returned to the public ownership, in the public interest.

Lord Rooker: My Lords, I understand why my noble friend asks his supplementary, but there is no way under the present financial regime, or under the previous one, that there would have been £55 billion of investment in the less than 20 years since privatisation. I agree with what he says about Thames Water: it is the worst offender, losing through leakage something like 890 tonnes of water a day—I think that that should be million tonnes a day. It has a massively high leakage level. It has no excuse based on money, as its profits have been more than sufficient for it to carry out the infrastructure works; and, indeed, it is doing that throughout London. At the moment, parts of London are absolutely clogged and half the road has disappeared because Thames Water is replacing the Victorians’ legacy, on which we have dined out for too long.

Lord Marsh: My Lords, does the Minister agree that the privatisation of British Rail is an awesome threat to us?

Lord Rooker: Yes, my Lords, but let us face it: the privatisation of British Rail was probably the worst-organised privatisation of the whole tranche. What is more, the Government who did it were warned about it before they did it.

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Lord Forsyth of Drumlean: My Lords, I very much agree with the Minister in his opposition to the renationalisation of water. We know what it would be like from the experience in Scotland, where the Scots have enjoyed far lower investment in the water infrastructure and the taxpayer has had to pay considerably more. Will the Minister bear with me and say why the Government continue to refuse to require compulsory metering? It would save 10 per cent of water supplies, be good for the environment and create a market incentive for the privatised water companies to save the resources being squandered through leakages.

Lord Rooker: My Lords, before I answer the noble Lord, perhaps I may correct my earlier answer: Thames Water is losing 890,000 tonnes of water per day. Its leakage level is measured in weight.

The noble Lord is right about water metering: it would save an estimated 10 per cent of water. As I said last week, the Government have no plans to require compulsory metering nationwide. Water meters are being installed over the next 10 years in 90 per cent of premises in areas of water stress—as Folkestone and Dover were announced to be early this year—on the same basis as elsewhere; that is, at no cost to the individual, though there is obviously a cost to the system. The issues can be looked at where water stress is an issue, but there are no plans to install water meters nationwide.

Lord Livsey of Talgarth: My Lords, although I have some sympathy with the questioner, does the Minister agree that a better solution would be to convert them into not-for-profit companies, as they were before nationalisation, and such as happened at Newcastle and Gateshead and at Welsh Water, where surpluses are invested in the infrastructure, leaks are repaired and consumers can get a discount on their bills?

Lord Rooker: My Lords, I do not know the details about Welsh Water, but some not-for-profit company models and some co-operatives can be just as efficient as private sector companies, and that includes getting investment. A different model was chosen in England, and I do not think we are in a position to turn back the clock. As I said, the Government have no plans to do so.

Lord Foulkes of Cumnock: My Lords, is my noble friend aware that the noble Lord, Lord Forsyth, has told him only half the story about Scotland, where water is still in public ownership but Scottish Water is unable to raise money on the private market? Therefore, the regulator has suggested that in Scotland we might consider that Scottish Water should become either a mutual or a co-operative and thereby get the best of both worlds—able to raise money on the private market but unable to be taken over by private companies whether they be French or from any other country.

Lord Rooker: My Lords, there is obviously a real issue in the Chamber about Scotland. As I said to the noble Lord, Lord Livsey, there are other models. The current model of what is considered old-fashioned

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public ownership clearly does not allow the money required for investment to be raised. Changes are therefore required.

Baroness Gardner of Parkes: My Lords, is the Minister aware that people living in blocks of flats are disadvantaged because Thames Water will not install meters unless each occupant or flat owner in the block of flats agrees to have them installed? Can he suggest anything to improve the situation?

Lord Rooker: My Lords, I cannot suggest anything off the top of my head, but I understand the situation. There is a real problem in the south-east. It is essentially a south-east issue—the leakage, the inadequacy and inefficiency of Thames Water and the rainfall. The south-east is a water stress area—there is no question about that—and something will have to happen. I cannot answer on blocks of flats but, like a lot of other joint services in blocks of flats, services have to be provided. People will generally save money by having meters fitted, and they can have them fitted for free. If they want to go back to the old system after the first year, under the current arrangements they can do so.

Lord Taylor of Blackburn: My Lords, would my noble friend kindly speak to his colleagues in other departments to prohibit development in the south-east? People can come to the north-west, where we have excellent water and ample opportunity for development.

Lord Rooker: My Lords, I absolutely agree with that. There is something immoral about the idea of moving water round the country. We could not do that anyway, given the scale and weight of the water that would need to be moved. Yet we have in the Midlands, the north-east and the north-west natural resources and land. Surely it is the people and the jobs that need to move. We need some symbolic moves because we know that the country is very unequally balanced with all this pressure in the south-east. The answer is to move the infrastructure to where the resources are.

The Earl of Onslow: My Lords, the noble Lord rather off-handedly brushed aside the possibility of moving water around the country. Studies have shown that a national water grid would be sensible, because it would produce competition among water providers in the same way that gas, electricity and energy now have a genuinely competitive market. At the moment, the water companies are localised monopolies, and a national grid system would solve that issue.

Lord Rooker: My Lords, it would be the other way round if people, jobs and infrastructure were moved. It is a seductive suggestion to move water from where there is plenty of water. An average family of five uses three-quarters of a tonne of water a day, on an average of 150 litres per person. There are 20 million people in the Home Counties. Just think about what we are asking the infrastructure to do. What a waste of expenditure on infrastructure, when we could do it the

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other way round, if we did more to save water and be more efficient and ensured that our infrastructure and growth were in areas where the natural resources are.

Energy Efficiency

2.58 pm

Lord Ezra asked Her Majesty’s Government:

The Minister of State, Department for Environment, Food and Rural Affairs (Lord Rooker): My Lords, we are making good progress towards our household energy efficiency targets for 2010. This will accelerate as new policies take effect. The energy-intensive companies in the climate change agreement exceeded their interim targets in the first two milestones and are on course to achieve their 2010 targets. However, targets on reducing absolute carbon emissions and electricity use per unit of floor area of the central government estate are not currently being met.

Lord Ezra: My Lords, I note what the Minister says, but does he not agree that overall energy demand continues to rise at a time when we should expect it to decrease as a result of energy efficiency measures? Are not the Government's energy efficiency measures too fragmented to have a major impact, as the Science and Technology Committee contended in its report of last July? Will the Government therefore take advantage of the energy review to come forward with fresh thinking on energy saving, such as the offer of council tax rebates for improvements in home energy efficiency, bearing in mind that the domestic market is one of the most wasteful in energy terms and that a dramatic new initiative is required?

Lord Rooker: My Lords, the noble Lord has hit the nail on the head in many ways. As is implied in his question, no one key factor can deal with this issue. The energy review and the White Paper that flows from it will deal with both renewable energy and energy saving. That is for certain. I cannot pronounce on whether going down the council tax route is the way to do it, but we must certainly do more.

The more equipment we put into our homes, the more energy we use. Consumption is going up even with the savings that have been made. A lot of policy initiatives have been put into train in the past few years, and they will come to fruition. At the same time, our consumption is going up because people leave their equipment, such as televisions and radios, on standby, which I understand consumes some three-quarters of the energy that is used to run that equipment in the first place. A big change in practice and culture is required. I am not sure whether a council tax rebate would be the answer, but we certainly need some big initiatives in this area.

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Lord Paul: My Lords, what efforts are we making to educate children in schools about saving energy and about the colossal waste?

Lord Rooker: My Lords, I do not know about particular school programmes, although I know that a lot of work is being done in schools to explain what energy is, where it comes from, and the use of energy-saving equipment. There is nothing that we do not already know about this. Simple things such as modern light bulbs can save an enormous amount of energy, as can switching off lights when we do not need them. As some of the adverts say, “Don’t boil more water than you need”. All those simple little things can make an enormous difference. We are also changing building regulations, because in some ways that is the one way in which we can tackle the issue. On the Question asked by the noble Lord, Lord Ezra, from next summer, all homes in private occupation that are sold in this country will have to produce a home information pack that will include an energy rating. That will bring about change.

Lord Dixon-Smith: My Lords, the Minister is correct to draw the attention of the House to the fact that energy efficiency and energy economy are separate subjects. Of course, the economy has been becoming much more energy-efficient for a long time—long before we were concerned about global warming. However, a growing economy by and large continues to demand increasing amounts of energy so that energy consumption, as the Minister has pointed out, is still rising. Does he therefore accept that a solution for controlling emissions will be found by looking at the way in which we source our energy as opposed to looking at whether we use it efficiently?

Lord Rooker: My Lords, that is absolutely right. I have just come hotfoot from the Royal Show at Stoneleigh, where I saw examples of energy efficiency from the ground. You can get enough hot water from a few square metres of your garden a metre down to use for the house. You could do that everywhere, although obviously not for blocks of flats. There is a whole host of ways of using what is in fact solar energy; it does not have to come from solar panels. There are lots of examples of ways in which we can make better use of what the sun gives us that is now wasted, but we must tackle it from both ends by looking at emissions and new sources of renewable energy.

Lord Tanlaw: My Lords, when the Minister responded to the noble Lord, Lord Ezra, did he say that there has been a net increase or a net decrease in carbon emissions since new Labour took power? I understood him to say that there had been a net increase.

Lord Rooker: My Lords, I had to look at the issue last week when I repeated the Statement on Thursday morning. There are so many different figures and targets that it is incredibly complicated. That has probably been used as an excuse over the years for having done nothing about it, but I can say that the energy-intensive companies that signed up to the

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climate change agreements exceeded their targets in the first two milestones by saving 3.9 million tonnes of carbon. In the first three-year phase, we exceeded our targets under the energy efficiency commitment. We also delivered measures that saved 0.4 million tonnes of carbon per annum, which saved consumers £9 for each £1 spent. So there have been savings. There are other issues, but I will check the precise words that I used and will respond to the noble Lord in writing if I have to.

NATO: Membership

3.05 pm

Lord Wallace of Saltaire asked Her Majesty’s Government:

Baroness Royall of Blaisdon: My Lords, the UK strongly supports NATO’s open-door policy on enlargement. Enlargement is a catalyst for reform and stability and brings benefits to the alliance. It is NATO’s intensified dialogue, not membership action plans, which first formally offers the prospect of NATO membership, but, of course, without prejudice to a final decision by allies on membership. Currently, only Ukraine has intensified dialogue. It is unclear whether any Partnership for Peace countries might be given intensified dialogue at Riga.

Lord Wallace of Saltaire: My Lords, I thank the Minister for that reply. Does NATO now have a clear strategy towards Russia? After all, it is fairly clear policy in Washington that Ukraine should be offered membership at the Riga summit. A substantial lobby in Washington suggests that Georgia should be put on a membership action plan, which to the Russians looks like the beginning of encirclement. Azerbaijan is mentioned by many, and even Israel is mentioned by a few in Washington as a package that would be part of any move towards a two-state solution. Are we in active dialogue with our American allies on the overall logic of NATO enlargement and how that interacts with our policy towards Russia and other neighbouring countries?

Baroness Royall of Blaisdon: My Lords, we are in interactive dialogue all the time with our partners in the alliance. With respect to Russia, there have been comments and speculation about the pace of enlargement, but NATO decides by consensus, so decisions are taken after much consultation and discussion. Those discussions and that consultation are taking place on Georgia and Ukraine. As far as I am aware, there are absolutely no discussions on Israel joining NATO. The NATO Secretary-General visited Israel last February when Israel put forward a tangible proposal for enhancing its co-operation with NATO. We welcome that co-operation, but that is as far as it goes.

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Lord Garden: My Lords, the NATO parliamentary assembly at its meeting in Paris at the end of May urged member Governments to start the intensified dialogue with Georgia as soon as possible, preferably before this summer. It also urged member Governments to provide technical assistance to Georgia to speed up integration into Euro-Atlantic institutions. Do the British Government support that recommendation of the NATO parliamentary assembly? If so, what have they done?

Baroness Royall of Blaisdon: My Lords, we certainly welcome Georgia’s NATO aspirations, and we stand ready to assist its reform programme wherever possible. We very much hope that Georgia will be given its intensified dialogue later this year, but, in the mean time, progress must continue in Georgia. Once it has achieved its intensified dialogue, progress towards membership will depend on its achieving NATO standards.

Lord Hamilton of Epsom: My Lords, does the noble Baroness accept that one of the great achievements of NATO is to stop member countries going to war with each other—one thinks particularly of Greece and Turkey? Therefore, enlargement has a great role to play in producing stability over large areas of Europe.

Baroness Royall of Blaisdon: Yes, my Lords, I fully concur with that position.

Lord Elton: My Lords, is it not the case that the larger and more numerous the membership of NATO becomes, the more urgent it is to find some good working machinery to achieve standard rules of engagement for all NATO members, so that forces in out-of-area operations in places such as Afghanistan can operate at maximum efficiency?

Baroness Royall of Blaisdon: My Lords, common rules of engagement are extremely important in NATO. However, we also need to construct better partnerships with countries with which we work on the ground—for example, Australia and Japan—but which are clearly outside NATO.

Lord Howell of Guildford: My Lords, we will of course discuss Afghanistan later in a Statement, but the position of NATO there is extremely worrying and there is enormous concern about how the organisation can strengthen itself. On the more immediate question of expansion, is it not the position that the Baltic three—Lithuania, Latvia and Estonia—are being invited to join and that Russia is very concerned about that? Are we in a good dialogue with Russia, whose support we certainly need in dealing with other issues, such as Iran? Could that be improved if we spoke to the Russians, rather than leaving it to people such as Vice-President Cheney who seem determined to offend them?

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