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Lord Davies of Oldham: My Lords, I am happy to confirm that, since the noble Lord last asked that question, I have studied it with even greater care. The

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third rail manufactured in the way that the noble Lord indicates has some advantages in operation with regard to carbon emission, but the construction of the rail is expensive and carbon-emitting intensive, so it is not clear that the noble Lord’s proposal is cost-effective, even measured in terms of carbon.

Lord Faulkner of Worcester: My Lords, were there not more passenger railway journeys made in Britain last year than in any other country in Europe? Indeed, the number in Britain is higher than at any stagesince the days of the Beeching report. Is not the problem with Britain’s railways that which thenoble Lord, Lord Marsh, mentioned: lack ofcapacity and investment? Will my noble friendlook sympathetically at Network Rail’s request for substantial investment in rail capacity?

Lord Davies of Oldham: My Lords, that request will be looked at carefully. The Government certainly intend to continue their practice of increasing investment in rail and encouraging private investment. Next year we intend to publish our full plans on the future ofthe railways over a decade and more, when we will be able to inform the House about the nature of the investment that we envisage.

The Earl of Mar and Kellie: My Lords, when considering a new railway proposal, does the Minister assess its long-term benefits over, say, 60 years—for example, regeneration—or its immediate costs? If the latter is dominant, will that not lead to a less well engineered railway?

Lord Davies of Oldham: My Lords, we intend to take a long view on investment in rail, but thereis a limit to that. We are thinking of the 20-year period beyond 2007, while bearing in mind rail’s contribution to combating climate change.

Energy: Nuclear Power Stations

3.13 pm

Baroness Miller of Chilthorne Domer asked Her Majesty’s Government:

Lord Davies of Oldham: My Lords, the Government are not considering any such action. Decisions about the continued operation of each of the UK’s nuclear power stations are a matter forthe operators, British Energy and Magnox Electric, subject to rigorous regulatory oversight by the independent safety regulator, HSE’s Nuclear Installations Inspectorate. I am satisfied that the regulators are fully engaged with the operators onthis and that this is not a matter on which the Government need to take any action.

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Baroness Miller of Chilthorne Domer: My Lords, will the Minister accept that neither the operators nor the inspectorate actually knows either how the cracks will develop or what effect they will have on the core? Given that many of the stations are past their sell-by date already, is the Minister convinced that extending their life still further is a good idea? Will he further accept that it does not give the public much confidence that this report on aspects of essential nuclear safety was buried and had to be dragged out under the Freedom of Information Act?

Lord Davies of Oldham: My Lords, the report was not buried; it was relevant to the people who hadto take action consistent with the report. The inspectorate is in consultation with the operators to guarantee that effective action is taken. The noble Baroness will recognise that the alarm reflected in certain newspapers recently paralleled a similar occurrence five years ago, when the inspectors moved with dispatch to ensure the safety of the industry. She is right that two of the Magnox operations are coming close to the end of their working life, and action will be taken accordingly.

Lord Jenkin of Roding: My Lords, is it not clear that the problem of the cracks in the graphite blocks in AGR stations in fact has a long history that goes back a number of years? The report that the noble Baroness referred to, by a firm called Large and Associates, which purports to be a complete dossier of the correspondence between the inspectorate and British Energy, in fact is nothing of the sort. It is, if I may say so, a very partial document in both senses of that word. The Minister’s answer that this is quite rightly left to the inspectorate must be supported. As the inspector, Mike Weightman, wrote in the Guardian yesterday:

Cannot we put our entire trust in that?

Lord Davies of Oldham: My Lords, I indicated that the incident that was recently referred to in somewhat alarmist terms had been paralleled in 2000 and 2001. As the noble Lord has indicated, there have been features when the issue has arisen. The nuclear inspectorate has the right to and certainly would close down any reactor that looked at all as if it threatened safety standards. This is not about a threat at that level. This is a malfunction with regard to a limited aspect of the operation, not occasioning that kind of anxiety. The inspectorate has taken action to ensure that appropriate responses are made.

Lord Redesdale: My Lords, the Minister has said that we should not be too worried about the cracks in the graphite core, as there are cracks in the coresof Hinkley Point B, Hartlepool in Cleveland, Hunterston B, and Heysham 1 and there are suspected cracks at Dungeness and Torness. The Minister’s view that we should not be worried contradicts what the inspector said in his report. The inspector concluded that there was,

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Although it might not be dangerous as yet, if we are looking to plug the energy gap by increasing the life cycle of the AGR reactors, there could well be an incident.

Lord Davies of Oldham: My Lords, I do not want to minimise the concerns that the nuclear inspectorate identified with regard to the cracks and the requirement for action. If the noble Lord is going to quote the inspectorate, so am I: the Nuclear Installations Inspectorate does not view these as serious safety concerns. We are not talking about anxieties that lead to shut-down; we are talking about certain aspects of operating malfunction. I am not suggesting that we should be complacent about that situation; the Nuclear Installations Inspectorate is not paid to be complacent.

Lord Sewel: My Lords, is not one of the answers to the noble Lord opposite, perhaps in view of a future danger, that we should get on and build new reactors now?

Lord Davies of Oldham: My Lords, as I andthe noble Baroness who asked the Question have indicated, several Magnox reactors are reaching the end of their working life and need restoration or replacement. That issue will be considered in the energy review, for which the House will have to wait only a very short time.

Lord King of Bridgwater: My Lords, having represented for some 30 years the constituency in which the Hinkley Point AGR is located, during both its building and its operation, can I confirm to the Minister that the cracks in the graphite blocks were anticipated in the design and have been a matter of continuing importance to the NII in keeping the matter under review? Is not the answer to the noble Baroness who asked the Question that it is manifestly sensible to keep the AGR running, provided thatit can be operated safely, that that is the NII’s responsibility and that it will not authorise its continued working unless it is safe?

Lord Davies of Oldham: My Lords, I do not have anything to add to those comments.

Lord Avebury: My Lords, will the Minister place in the Library of the House copies of all the reports that have been made to the NII concerning this problem?

Lord Davies of Oldham: My Lords, I will certainly look at that question, but I emphasise that such reports represent some of the documents on the working relationship between the operators and the inspectorate. My problem in immediately acceding to the noble Lord’s request is the question of whether every inspectorate for all our industries should present all of their papers to the Library of the House. I am not convinced that that would be sensible.

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Leicester City Council Bill

3.21 pm

Read a third time, and passed.

Liverpool City Council Bill

Read a third time, and passed.

Maidstone Borough Council Bill

Read a third time, and passed.

Business of the House: Standing Order 47

The Lord President of the Council (Baroness Amos): My Lords, I beg to move the Motion standing in my name on the Order Paper.

Moved, That Standing Order 47 (No two stages of a Bill to be taken on one day) be dispensed with on Monday 17 July to allow the Consolidated Fund (Appropriation) (No. 3) Bill and the Finance (No. 2) Bill to be taken through their remaining stages that day. —(Baroness Amos.)

On Question, Motion agreed to.

National Lottery Bill

3.23 pm

Lord Davies of Oldham: My Lords, I beg to move that the Commons amendment and reasons be now considered.

Moved accordingly, and, on Question, Motion agreed to.

[The page and line references are to HL Bill 67 as first printed for the Lords.]

Lord Davies of Oldham: My Lords, I beg tomove that the House do not insist on its Amendments Nos. 1 and 2, to which the Commons have disagreed for their reasons 1A and 2A; do not insist on its Amendment No. 7, and do agree with the Commons in their Amendment No. 7A in lieu.

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The issue of prescribed expenditure has been debated fully during the passage of this Bill. For the reasons that we have previously explained in detail, we believe that the powers set out in Clause 7 are necessary. They serve an important purpose, given the exceptionally wide scope and large size of the Big Lottery Fund good cause. Covering as it doeshealth, education, the environment and charitable expenditure, the Big Lottery Fund good cause will be very different from the existing, much narrower arts, sport and heritage good causes.

We therefore need to be able to set out at thevery highest level—I emphasise this—the types of expenditure on which the Big Lottery Fund should focus. We are talking about broad areas of expenditure—not projects or programmes, not the split between the four parts of the good cause, not the split between the four countries of the UK, and certainly not specific grants. We feel very strongly that this should be done in a transparent and accountable way, and that there should be proper parliamentary scrutiny. That is why we are clear that it should be done by secondary legislation, subject to the affirmative resolution procedure. We have made available an illustrative order, demonstrating how the power to prescribe expenditure will be used in practice.

The ability to prescribe devolved expenditure is also central to achieving the greater devolution of decision-making to Scotland, Wales and Northern Ireland, which is the aim of this Bill. Amendment Nos. 1 and 2 would mean that the devolution arrangements in the Bill would not work. They would retain power for the Secretary of State where the Government’s intention is to devolve it. For that reason, we cannot accept Amendment Nos. 1 and 2 and I urge the House not to insist on them.

On Amendment No.7, I acknowledged at Third Reading that concerns about the perceived level of government control over the Big Lottery Fund were strongly and genuinely felt—both Front Benchers made these points substantially in debate. I did not accept that these concerns were entirely justified, but I undertook that the Government would amend the Bill to address them. That is what Amendment No. 7A does. We proposed our own amendment because Lords Amendment No. 7 would have put the Big Lottery Fund on a very different footing from that of all the other lottery distributors. It would have required the fund to “take into account” rather than “comply with” the important financial directions that we issue to all lottery distributors to ensure the proper use of public money. Amendment No. 7A brings the Big Lottery Fund into line with the other distributors in respect of both policy and financial directions.

I recognise that there has been some concern that our amendment maintains the power in new Section 36E(1) for the Secretary of State to issue any direction, which must be complied with. I emphasise that this is just not the case. The power to issue directions set out in new Section 36E(1) must beread together with the rest of that section, inparticular subsection (2). That subsection, under our amendment, provides that, where the Secretary of

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State intends to give directions under subsection (1) in relation to policy matters, her power to do so is restricted to giving directions specifying the matters to be taken into account by the Big Lottery Fund. The effect of new Section 36E is the same in relation to policy directions, despite the differences in drafting, as the effect of Section 26(1) of the National Lottery Act etc. 1993, which currently obtains. The Big Lottery Fund will be in the same position as all the other lottery distributors, a point on which we lay great emphasis.

I hope that the House will recognise that we have listened carefully to the views expressed during the passage of this Bill, and have been prepared to make changes where we believe that they are necessary. I therefore urge the House not to insist on their Amendment No. 7 but to agree with AmendmentNo. 7A.

Moved, That the House do not insist on its Amendments Nos. 1 and 2, to which the Commons have disagreed for their reasons 1A and 2A; do not insist on its Amendment No. 7, and do agree with the Commons in their Amendment No. 7A in lieu.—(Lord Davies of Oldham.)

Viscount Astor: My Lords, I am grateful to the Minister for his explanation. He listened to the concerns that we raised throughout the passage ofthe Bill in this House, and those concerns were largely addressed when the Bill went back to another place. That was extremely important, because we were concerned that the Big Lottery Fund, which, after all, is going to hand out 50 per cent of all the proceeds for distribution, was not going to operate on the same basis as the other distributing bodies. The Secretary of State’s power was greater than it was in relation to the other bodies and we felt that it should be the same. The Minister has made those changes.

More importantly, he has given us an assurance in writing that there is no possibility that the Secretary of State will be able to issue a direction under subsection (1) of new Section 36E to specify where lottery money is to be given. That is important because concerns have been expressed that, in the past, the principles of additionality have been broken by the distributing bodies. We had some clear examples of that as we went through the Bill, and the Minister's explanation has helped to assure us that it will not happen again. That is given greater strength by the amendments that the Minister acceptedat Third Reading, whereby under the Bill the distributing bodies will have to produce a report on additionality.

We welcome the Government's amendments and we thank the Government in this instance for being a listening Government. It does not happen very often but we must be very grateful when it does.

Lord Clement-Jones: My Lords, I, too, thank the Minister for his exposition. We had an important debate on prescription and compliance and there was a difference of opinion, but the Government listened and took account of the views that were held. In terms of the subject matter and the thematic

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approach to lottery funding, there was no argument that at the high level it was right that there should be an element of specification. However, in the detail and at the project level, we all felt that there was potential for prescription and for forcing the Big Lottery Fund to comply, and we felt that the Bill was wrongly set out in that regard.

The Government subsequently agreed in spirit to the opposition amendments and they have brought back what they believe to be the right way of expressing this in the Bill. On some of these issues, this is wet towel time, but I regret that this is a somewhat convoluted way of giving the Government the ability in the Bill to force compliance with a direction, which then means that something has to be “taken into account”. It seems to me that this two-stage process was more elegantly put in the original amendment, but those are the strange ways of parliamentary draftsmen, and who are we mortals to argue in the circumstances? I agree with the noble Viscount that, ultimately, the Government have come up with an amendment that meets the case, convoluted though it may be.

Lord Davies of Oldham: My Lords, I am grateful to both noble Lords, who have contributed to our final debate on the Bill. The various stages of the Bill have been extremely fruitful and constructive. I cannot pretend to noble Lords who have not been privy to all our discussions that it has always been sweetness and light between the three sides, but we have recognised that noble Lords opposite have been keen to ensure that the most accurate representation of the position as they saw it has been effected within the broad principles and framework of the Bill. We have differed to a degree, but I am happy that we have reached agreement on these amendments.

On Question, Motion agreed to.

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