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Lord Bradshaw: My Lords, in praising the Question, perhaps I may say that I shall remain a member of the Strategic Rail Authority until the end of this week, although this will continue to be a subject for debate. In reference to the use of monopoly powers, the provision of good rail facilities to East Anglia requires a new railway line across the country towards

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Birmingham and the West Coast Main Line. Have the Government given any consideration to how this can be obtained without a huge ransom being paid to Railtrack, which is in a monopoly position as regards the provision of such facilities?

Lord Falconer of Thoroton: My Lords, I agree with the proposition that it is important that there should be an upgrade in the Felixstowe-Nuneaton rail freight line in order to increase capacity. Work is already being undertaken in relation to that. A substantial feasibility and project definition work study has been completed. Railtrack expects to deliver project cost estimates by the autumn, and a project development group has been formed to direct progress. We expect a gauge upgrade to enable nine-foot six-inch containers to be ready by 2005, with additional capacity by 2008. I am sure that the processes by which this matter will be examined will seek to ensure that the Government and the nation receive value for money.

Lord Phillips of Sudbury: My Lords, the Minister has spoken of hopes with regard to planning in the East Anglian region, which is already snarled up. Will he undertake to ensure that there is no expansion of the port at Felixstowe until the facilities are in place to take the extra traffic?

Lord Falconer of Thoroton: My Lords, a number of special applications are being made in relation to Felixstowe. It would be wrong for me to comment at this stage on the detail of those applications. It is a matter for the planning process.

Energy Policy

3.2 p.m.

Lord Ezra asked Her Majesty's Government:

    Whether they are considering carrying out a review of energy policy.

The Parliamentary Under-Secretary of State, Department of Trade and Industry (Lord Sainsbury of Turville): My Lords, an announcement about a review will be made this afternoon by the Prime Minister. I cannot say anything about that announcement until it has taken place.

Lord Ezra: My Lords, I am sure that the House would have been interested to share a little of what the announcement might contain. Nevertheless, we shall have to wait until it comes before us. Will the review take full account of the need for the Government to achieve their carbon emissions reduction targets by 2010 and in particular of the role to be played therein by renewables and combined heat and power? Secondly, in the period after 2010, when the reduction in carbon emissions will be made more difficult by the withdrawal of nuclear stations, what priorities will be established?

Lord Sainsbury of Turville: My Lords, we are currently meeting our energy objectives in terms of

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security, diversity and sustainability. However, we cannot be complacent. In the future we shall become increasingly dependent on imports of fuel and particularly natural gas, which could eventually become a dominant source of supply. In the longer term, we need to reduce carbon emissions further to meet the challenge of global warming. In these circumstances, if a review were to take place it would need to be open-minded and to consider the contribution that all sources of energy can realistically make to our objectives. That includes combined heat and power, renewables and also the impact of the fact the we shall witness a rapid decline in nuclear energy in the period up to 2010.

Lord Lawson of Blaby: My Lords, why does the Minister seek to give more work to the Government than is necessary when they have plenty on their plate already? We need a sound economic policy, a sound environmental policy and a sound competition policy. But why, if and when those needs are satisfied, do we need an energy policy?

Lord Sainsbury of Turville: My Lords, it is appropriate that the noble Lord should ask that question. The current situation is a direct result of the work that he undertook to reduce all aspects of energy policy and to make it market-based. Important as the question of prices is, the objectives of an energy policy involve other issues. They involve the important question of security; namely, whether we are happy to be largely dependent on other parts of the world for our energy supplies. Diversity of supply is also important. Equally, our objectives in relation to global warming are extremely important. Such questions cannot be determined solely on the basis of market forces. They involve other issues, important though it is to have a clear focus on market forces.

Lord Palmer: My Lords, will the Minister accept that biofuels have an important and environmental aspect to play in any future energy policy?

Lord Sainsbury of Turville: My Lords, there is no question that they have an important role. It is one which any review would need to take into account.

Lord Berkeley: My Lords, in a week when the President of the United States--who has recently been dubbed "the toxic Texan"--is supposed to be visiting, will my noble friend confirm that the Government are still a hundred cent behind the important Kyoto initiative?

Lord Sainsbury of Turville: My Lords, there was universal dismay at the US rejection of the Kyoto agreement. The overwhelming majority of countries continue to support the agreement. It can come into force without the US, although clearly everyone would strongly prefer the US to be on board. We hope that the energy review that is currently being undertaken by the US will conclude that the US interest lies in working with the Kyoto agreement.

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Earl Russell: My Lords, does the noble Lord, Lord Lawson, remind the Minister of those who made fun of Noah for building the Ark?

Lord Sainsbury of Turville: My Lords, that is an extremely good analogy.

Lord Moynihan: My Lords, regarding one of the Government's flagship energy policies, I understand that briefing received by Ministers from DTI officials casts doubt on the Government's ability to deliver 10 per cent of power generation by renewables by the year 2010. Is that true?

Lord Sainsbury of Turville: No, my Lords. So far as I am aware, the briefing received by DTI Ministers makes it clear that the task is challenging but that it is one to which we are committed; namely, to have 10 per cent of our energy supply in renewables.

Lord Stoddart of Swindon: My Lords, the noble Lord mentioned security of supply. Will he confirm that we have huge reserves of coal which would provide such security? Will the review therefore examine the possibility of redeveloping the coal industry, which can be a large and valuable source of energy for this country?

Lord Sainsbury of Turville: My Lords, if there is to be a review, the answers should not be prejudged; rather, certain questions should be put to the review. If such a review takes place, that will be done.

Lord Avebury: My Lords, have the Government had an opportunity of evaluating the evidence made public in the "Equinox" programme on Channel 4 last week, based on the research of Dr Santo Bains at the University of Oxford? It revealed that at two points in the world's history there have been catastrophic releases of methane hydrates from the ocean floors which came at a certain point in the warming of the oceans, raising the temperature of the Earth by some 8 degrees. Does the Minister take this seriously? If so, should there be a far more drastic programme for the reduction in carbon emissions than we have seen so far?

Lord Sainsbury of Turville: My Lords, I refer to the great value of not announcing a review, which is what I am doing at this point. If such a fictional review takes place, it will deal with all the matters that are relevant to the Question on the Order Paper.

Baroness O'Cathain: My Lords, I realise that it is difficult for the Minister to comment on a so-called "fictional" review. However, will the word "nuclear" appear in the review? Is it not about time that we all reconsidered the nuclear industry?

Lord Sainsbury of Turville: My Lords, I hope I have made clear that if a review takes place it will only be sensible for it to cover the contribution that all sources of energy can realistically make. As I said, it is wrong to prejudge the results of such a review before one has even been announced.

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Address in Reply to Her Majesty's Most Gracious Speech

3.10 p.m.

Debate resumed on the Motion moved on Wednesday last by the Lord Archer of Sandwell--namely, That an humble Address be presented to Her Majesty as follows:

"Most Gracious Sovereign--We, Your Majesty's most dutiful and loyal subjects, the Lords Spiritual and Temporal in Parliament assembled, beg leave to thank Your Majesty for the most gracious Speech which Your Majesty has addressed to both Houses of Parliament".

The Parliamentary Under-Secretary of State, Department for Work and Pensions (Baroness Hollis of Heigham): My Lords, at the start of our first term in office we faced chronic under-investment in public services and a £27 billion deficit on the public finances. Our first task was to create a platform of stability and sustainable public finances, which we have done. As a result we now have inflation on target; the lowest long-term interest rates for 35 years, with business investment over the past two years of around 14 per cent of GDP; the lowest levels of unemployment since 1975, with more people in work than ever before and sound public finances.

We inherited an unsustainable level of debt. Between 1979 and 1997, 42p of every additional pound of public spending went on debt, unemployment and social security. By repaying debt (£34 billion last year), cutting unemployment (saving £4 billion last year) and safeguarding social security expenditure, this figure is now only 16p in the pound--42p in the pound in 1997, 16p in the pound now. This means that we have been able to free up resources. So we can now begin to plan with confidence for substantial increases in investment in priority areas.

A strong economy is the platform on which to build opportunity and prosperity for all. Fuller employment not only offers jobs and prosperity to people of working age but ensures that children grow up confident of their future and that people can save for a comfortable old age.

We have done much. Let me remind the House: in our previous term we introduced the New Deals. These have already helped to cut long-term youth unemployment by 75 per cent and long-term unemployment by over 60 per cent. The number claiming unemployment benefits is the lowest for 25 years and the New Deal is leading to real, sustainable jobs, meaning less spending on benefits for the unemployed and higher tax receipts.

In turn this has allowed us to make a start on transforming the tax and benefits system for families with children. We want a system that gives the most help at times when families need it most and which gives more help to the families who are most in need. We inherited a system which saw over 4 million

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children growing up in poverty and in which one in five children were growing up in homes where no one worked.

Our tax and benefit measures introduced since 1997 have meant that by autumn 2000 there were 300,000 fewer children living in families where no one was in work compared with spring 1997. By October this year all families with children will be better off in real terms by, on average, £1,000 a year compared with 1997. Child benefit for the first child has been increased by over a quarter since 1997 and we have provided extra support for the poorest children. A couple on income support with two children under 11 are now nearly £1,500 a year better off compared with 1997; or, to put it another way--I believe that this statistic is striking and I am sure that it will impress your Lordships--the benefit for a child under 11 in May 1997 whose parents were on income support was £16.90;. the benefit for that same child in October will be £32.95. That is a virtual doubling in cash terms, or an 80 per cent increase in real terms, in just over four years. That is what we mean by security for those who cannot work. That is what we mean when we say that we are delivering on child poverty.

We have also put in place a long-term strategy to ensure that all pensioners can share fairly in the nation's rising prosperity and to tackle pensioner poverty. Our first priority has been to help those on the lowest incomes. This year we are spending almost £4.5 billion a year more on pensioners in real terms than in 1997--£2 billion of this is going to the poorest pensioners. This will increase to over £5.5 billion next year--that is over £3 billion more than an earnings link would have given them.

However, this is not just about statistics; we have begun to make a real difference. Some 2 million of the poorest pensioner households are now at least £15 a week better off in real terms and all pensioner households are on average over £11 a week better off. So, much has been achieved in the past four years, particularly for children, pensioners and families of working age. But much more needs to be done if we are to achieve our ambition of an active welfare state.

What, therefore, do we still need to do? We now have the lowest levels of unemployment in a generation but almost 1 million people remain unemployed. Too many people are still denied the opportunity to work. That is unacceptable. So we are going to build on the New Deals to ensure that everyone who can work has the opportunity to do so. We shall introduce a new principle of "employment first" interviews for everyone coming on to benefit so that people know what their opportunities, obligations and responsibilities are and what they can expect in return. The New Deals for young people and older workers will focus on the hurdles of numeracy, literacy, IT skills and presentation, delivering help individually tailored to those who most need it.

Employment zones have already helped over 8,000 people into work in areas of persistently high unemployment. We are investing in action teams for jobs to unlock the employment potential in the most

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severely disadvantaged areas and groups. Early indications are that this innovative approach is already helping those who find it hardest to get work--6,000 people so far, one-third of those the teams have engaged with. These are people who not only have a long history of unemployment but also live in areas of persistently high unemployment. In this Parliament we are looking to build on the success of the employment zones and the action teams for jobs, extending them to new areas and to new claimant groups.

Our policies since 1997 are lifting over 1 million children out of poverty. But we must do more. So we have pledged to end child poverty within a generation, to halve it by 2010 and to reduce it by another million this Parliament. Further progress in this area needs major changes in the support we give to families. The children's tax credit has already cut income tax for families. It is worth £520 a year for 5 million families. Half a million families have been removed from paying tax altogether. From next year the credit will be raised further from £10 to £20 a week in the year of a child's birth.

We must also do more to tackle pensioner poverty and to help those on modest incomes who have worked hard and saved for their retirement. The pensioners' tax allowance already means that by next year seven out of 10 pensioners will no longer pay tax, or will pay tax at the 10p rate. We are pledged to extend the tax allowance further so that by 2003 no pensioner will pay tax until their income reaches £127 a week.

The basic state pension will increase by 2003 to £77 a week for a single pensioner and to £123 a week for a pensioner couple. The minimum income guarantee will ensure that no single pensioner will have an income below £100 a week and that no pensioner couple's income will fall below £154 a week.

However, before we can make further progress we need the right structure of government in place, one that will enable us to focus on the specific and diverse needs of our client groups. Your Lordships will be aware that after the election the Prime Minister made a number of such government changes which, taken together, will ensure a sharper focus on government priorities and a better ability to deliver public services.

The new Department for Work and Pensions brings together the former Department of Social Security with the Employment Service and the employment and disability responsibilities of the former Department for Education and Employment. The new department will continue our programme of welfare reform. It will mean a single, focused approach to the development of employment, equality and benefit policies for people of working age and pensioners needing advice and support. It will provide a joined-up, efficient, modern organisation responding to people's needs and the changing ways in which they wish to reach out to our services.

To underpin this continued reform of the welfare state we shall establish two new organisations: first, Jobcentre Plus to bring together in a single modern organisation the services currently provided to those of working age by the parallel services of the

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Employment Service and the Benefits Agency. We shall have 50 Jobcentre Plus offices up and running by the end of the year, providing a local, integrated employment and benefits service for the first time. Secondly, we shall establish the Pension Service, to provide a high quality service dedicated to pensioners.

Fundamental reform also, inevitably, means new legislation. The Bills announced in the Queen's Speech will enable us to take further steps to transform the help we offer people. The welfare reform Bill--the first of the three Bills coming from my department--will enable us to continue the work that we have already begun to reform welfare provision for people of working age, to ensure that everyone who can work has the opportunity to do so. Your Lordships will be aware that in our manifesto we announced a proposal for partners of benefit claimants, whether or not they have children, to attend work-focused interviews. The New Deal for Partners already offers help and assistance, on a voluntary basis, to enable partners of those receiving working-age benefits to get into work.

But we think it right to go further, bringing these arrangements into line with those for benefit claimants, particularly lone parents. This Bill will make receipt of benefit for partners conditional on participating in such an interview. Your Lordships will need no assurance from me that we are not proposing to force people to seek work where their family or other circumstances mean that that is not an option. The interviews will simply ensure that partners are aware of the support available through the New Deal and of the help available to them in work. I put it simply. Sometimes in a relationship the woman may have better employment opportunities than the man. It is not unreasonable that both partners should be aware of the choices available to them. We do not think that this is an onerous requirement. There will be safeguards to ensure that people do not lose benefit where the timing of the interview is not right or where the partner has no prospects of finding work.

We want people with disabilities to play a full part in the community. This means full civil rights, including equal access to education and other public services. We are also promoting the rights of disabled people in the workplace, working with the Disability Rights Commission. The chance to work is vital to ensure social inclusion for disabled people. The New Deal for Disabled People is already pioneering a range of these approaches. But we want to do more. Disabled people are still seven times more likely than people without disabilities to be jobless. Some 3.2 million people with disabilities are already in work. But 1 million more say that they would like to work but are not in work. It is unacceptable that many disabled people are written off when they could work, with the right support. This Bill will, therefore, extend the support offered to jobseekers through employment zones to sick and disabled people who are able to work. It will include proposals to help ensure that incapacity benefit claimants get the right support including help, where appropriate, to enable them to return to employment. Detailed proposals are still being developed and will be announced in due course.

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An active welfare state also means supporting people in work and giving them choices, particularly around the time of a child's birth, to balance work and life responsibilities. Your Lordships may recall that in last March's Budget, the Chancellor announced a range of measures designed to offer such support. This Bill will legislate to increase the standard rate of statutory maternity pay and maternity allowance from the current £62.20 a week to £100 a week in 2003; and the payment period will be extended from 18 weeks to 26 weeks. In other words, of the 360,000 women who receive these payments each year, most will get more than £1,200 in extra maternity pay.

I have already mentioned that we need to do more to relieve child poverty and to encourage people to move into work by making work pay. The new tax credits Bill, coming from both my department and the Treasury, will introduce the new generation of tax credits from 2003, as announced by the Chancellor in Budget 2000, enabling us to address both of those concerns. First, we shall draw together the various existing strands of support for families with children--including the child elements in income support, jobseekers' allowance, the working families' tax credit, the disabled person's tax credit and the children's tax credit--to create a seamless mechanism for channelling support to children. This new credit will provide a more transparent system of support and will be portable, spanning both welfare and work. It will build on the foundation of universal child benefit and will be paid to the main carer, in line with child benefit.

We shall support those in low-paid work through an employment tax credit, building on the adult elements of existing tax credits. The new credit will help to increase work incentives for low-paid workers and help to relieve in-work poverty in working households. We shall consult on the detailed proposals of both credits later this summer, with a view to introducing a Bill to Parliament later in this Session.

Since we took office we have been working towards a long-term strategy to make sure that everyone has a decent income in retirement, through a fair and proper balance of public and private provision. Since April, stakeholder pensions have offered a safe, flexible and value-for-money pension option for moderate and higher earners who do not have access to a good occupational scheme. As noble Lords will recall, this is a funded money purchase scheme for individuals without, for the most part, a second pension. From April 2002, we shall reform the state earnings-related pension scheme (SERPS) through and into the state second pension, benefiting 18 million of the lowest paid and certain carers and people with disabilities. Again, that is a huge increase in their future well-being.

The pension credit Bill--it is the third Bill to which I refer today--forms a key part of our strategy. We want to ensure that it pays to have saved. Pensioners will be rewarded--not penalised--for having worked hard to provide for themselves in retirement.

Through the pension credit, we shall also improve the way we deliver help to pensioners, significantly reducing the information they have to provide in

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support of their claim. This will enable them to get what they are entitled to more quickly and with much less intrusion. These reforms are long overdue, as I am sure your Lordships will agree.

People also have a right to expect that the right benefit is paid to the right people at the right time. Fraud and error undermines confidence in the welfare state and we are determined to tackle it. We have already saved £1 billion on fraud and error. The introduction of automated credit transfer will save a further £100 million a year. But there is much more to be done. We are committed to halving the rate of fraud and error by 2006--a major commitment. Fraud prevention will also be incorporated into the design of all new policies on benefits.

In this Parliament we shall also take forward further measures to support and ensure our long-term economic stability. My noble friend Lord McIntosh will say more about this in his winding-up speech. Briefly, we shall introduce a European Communities (Finance) Bill to enable the UK to adopt the Own Resources Decision (ORD) agreed at the 1999 Berlin European Council on the future financing of the European Community. The agreement reached at Berlin--it is a good one from the UK's point of view--will bring the UK's proportionate contribution (based on 1999 prices) to Europe's finances, after enlargement, down to the level of France and Italy.

We shall introduce a number of Bills to ensure that enterprise and competition can flourish. The Enterprise Bill will include measures designed to encourage enterprise, strengthen competition laws and promote safeguards for consumers. The export control and non-proliferation Bill will improve the transparency of export controls and establish their purpose. We shall publish a draft communications Bill to create a single regulator for the media and communications industries and to reform the broadcasting and telecommunications regulations.

In conclusion, a few weeks ago we offered the people of this country a programme based on three pillars: a sound economy, investment in public services, and a commitment to expanding opportunity and building social justice. I hope and believe that your Lordships will agree with me that in this Queen's Speech, and in particular in the Bills outlined today, we see that programme being delivered with your Lordships' help and that, as a result, our people in whom we are investing are truly our commonwealth.

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