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House of Lords

Thursday, 20th November 2003.

The House met at eleven of the clock: The LORD CHANCELLOR on the Woolsack.

Prayers—Read by the Lord Bishop of Rochester.

Equitable Life: Penrose Inquiry

Lord Higgins rose to ask Her Majesty's Government:

    Whether there is any restriction on Lord Penrose's inquiry into Equitable Life from making a recommendation that compensation should be paid to anyone found to have suffered as a result of failure of regulatory agencies to protect the interests of policyholders.

The noble Lord said: My Lords, I beg to ask—rather unexpectedly—the Question standing in my name on the Order Paper.

The Parliamentary Under-Secretary of State, Department for Culture, Media and Sport (Lord McIntosh of Haringey): My Lords, I beg to respond rather than to answer unexpectedly. Lord Penrose is independent of the Treasury. It is a matter for him what recommendations he makes.

Lord Higgins: My Lords, I thank the Minister for that reply. The Penrose inquiry, which has been investigating since August 2001 the failure of the Treasury and related departments, was set up by the Treasury on terms of reference determined by the Treasury in a form which the Treasury knew might prevent the report being published in full. Meanwhile, the Parliamentary Ombudsman has felt inhibited from making a full report over a whole period because of the Penrose inquiry. Why was the inquiry set up in a form which might prevent the report being published in full? Will the Government accept any recommendations which are made in the Penrose report?

Lord McIntosh of Haringey: My Lords, I shall not respond to the two statements made by the noble Lord, Lord Higgins, before his two questions, although I happen to disagree with both of them. The inquiry was not set up with any preconditions; it was set up on terms acceptable to an independent judge—Lord Penrose. The only basis on which there would not be publication would be, for example, when it would be a criminal offence to disclose confidential information which had

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been received by the regulator. That is the only kind of constraint on publication. Otherwise, there will be publication.

Lord Higgins: And the second question, my Lords?

Lord McIntosh of Haringey: I am sorry, my Lords. The second—

Lord Higgins: My Lords, the second question was whether the Government will accept the recommendations of the report.

Lord McIntosh of Haringey: My Lords, how do we know what the report is going to say?

Lord McNally: My Lords, is the Minister aware that behind these formal statements there are real people, many of them elderly, for whom justice delayed is justice not at all? Is there any sense of urgency in this process?

Lord McIntosh of Haringey: My Lords, I entirely agree with the noble Lord, Lord McNally; it is certainly very important for those who have suffered as a result of the experience of Equitable Life to receive any comfort or redress due to them as quickly as possible. However, I should remind the House that Lord Penrose has been investigating 50 years of the activities of Equitable Life. If a comparison is being made with the Parliamentary Ombudsman, she and her predecessor were investigating only two years.

Electricity Supply

11.9 a.m.

Lord Ezra asked Her Majesty's Government:

    What strategies they are pursuing to guarantee security of electricity supplies for the future.

Lord Davies of Oldham: My Lords, maintaining the reliability of energy supplies is a key goal set out in the Government's energy White Paper. Through competitive markets participants have incentives to maintain reliable supplies of electricity. These incentives are backed by licence conditions and statutory obligations, enforced by Ofgem. The Government have a role to provide information to the market. A major component of this is our work with Ofgem, through the joint energy security of supply working group, to monitor energy security. The group's third report is on the DTI website and will be placed in the Library of the House.

Lord Ezra: My Lords, I thank the noble Lord for that Answer but does he recall that this week there have been no fewer than three Questions on the issue of electricity supplies—one from the Conservative Benches, one from the Labour Benches and now one from the Liberal Democrats—indicating the importance which we generally attach to this issue? Does he agree that the

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electricity capacity of this country is ageing rapidly and that over the next 15 years or so much of the nuclear and coal-fired plant could be withdrawn from the market? Does he further agree that in the mean time the gas price has risen very substantially—it has doubled in the past year—and is likely to rise again as the UK becomes a major importer, thus putting companies off investing in new gas-fired electricity plant? In those circumstances, how is this widening gap in electricity capacity to be filled?

Lord Davies of Oldham: My Lords, the noble Lord has—as have previous questioners this week—identified quite rightly the challenges that face the Government and our society in the changing electricity supply environment that we clearly foresee for the future. But he will recognise that these issues were addressed in the White Paper. There have been Questions which have expressed anxiety about this coming winter on which we were able to give full reassurances. As to the longer term—which is the burden of the noble Lord's Question today—the White Paper clearly identifies how we intend to supplant former systems of electricity generation with newer ones.

Lord Jenkin of Roding: My Lords, does the noble Lord recognise—

Lord Peyton of Yeovil: My Lords, while I do not in the least—

Lord Jenkin of Roding: My Lords, I am grateful to my noble friend. Does the Minister acknowledge that an increasing number of people recognise that there will not be security of supply unless the Government turn their option for nuclear power into reality? Is he aware that some 80 constituencies represented in another place have civil nuclear installations and that some 60,000 people are currently employed in civil nuclear generation? Is the Minister further aware that there are no undergraduate courses in nuclear engineering and only one post-graduate course in that subject? How will that option be made a reality in the light of those facts?

Lord Davies of Oldham: My Lords, I am not sure whether the noble Lord was in his place when this Question was addressed earlier in the week. I indicated then the resources that we are making available towards increased research for the nuclear industry because the Government recognise that resources are necessary to sustain the concept of the nuclear option against a background of changing circumstances. The noble Lord is right: there is a substantial amount of employment in nuclear energy at present. He will also recognise that it is a long-running programme of nuclear rundown—the final power station does not close until 2035. The Government will of course continue to keep the situation under active review.

Lord Bridges: My Lords, is not the difficulty that the Government's White Paper is not an action plan but

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an essay, which sets out, in an academic way, certain elements in the Question? Surely the Minister would agree that we require a policy that will lay down the basis for future supplies of electricity.

Lord Davies of Oldham: My Lords, the White Paper is not an essay. It is a very clear analysis of energy needs, the current provision that we have available and the strategies that we need to pursue to guarantee energy needs for this country. As the noble Lord will recognise, the Government are already acting against some of the perspectives of the White Paper. When anxieties are expressed about current supplies of electricity, we are able to demonstrate that we have taken action and that that action has been taken in the market place to guarantee that we have a sufficient cushion to supply electricity to the country.

Earl Ferrers: My Lords—

Noble Lords: Bishop!

The Lord Bishop of Worcester: My Lords, does the Minister share my memory, which I hope is correct, of a quotation associated with the noble Lord, Lord Ezra, that the principal competition he faced at the Coal Board was the second jumper? If he did make that observation, does it not underline, in our present situation, the need to make the general public aware of our profligacy and extravagance with energy use? That must be one of the major foci of strategy at present.

Lord Davies of Oldham: My Lords, I am grateful to the right reverend Prelate. He has reminded the House of a fact which I think has not been covered so widely in previous short debates on this issue. I refer to energy conservation and the way in which we can more jealously guard our fuel stocks in every respect. That means that for householders, too, there are ways in which energy conservation can be followed. The Government are concerned to produce incentives towards that end.

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