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Lord Whitty: My Lords, I am again grateful for the general support for the approach taken in the measure. The noble Lord, Lord Dixon-Smith, claimed that the order was incomprehensible, but I think that he made a fairly good fist of understanding it himself. There are some inevitabilities in the phraseology, but this phraseology is to be used by energy professionals and the supply companies. I also take note of the strictures of the noble Baroness on the explanatory notes, which we will look at.

In relation the noble Lord's query about the purpose of this scheme, the prime purpose of the commitment is energy efficiency—or carbon saving, to be more precise—but the way in which that is delivered is skewed to have a social benefit, which is why the 50 per cent provision is there. It therefore makes a secondary contribution to the fuel poverty targets in the same way as measures such as Warm Front, which are primarily directed at fuel poverty, will also make a contribution towards energy efficiency. The number of fuel poor has come down significantly. Off the top of my head, I cannot remember the UK figure, but the number in England has now come down to about 1.2 million. We issued our fuel poverty strategy just a few weeks ago.

The noble Lord, Lord Dixon-Smith, posed rather wider questions about taxation matters—on which I am not allowed to comment, but I take his point—and on
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the need to educate consumers. The noble Baroness returned to that in relation to the energy efficiency centres and other sources of information. Although I agree that they need a much higher profile, the EST's energy efficiency centres have been very successful and have had a big increase in the numbers of people taking their advice. All areas of advice and means of getting advice to households, particularly vulnerable households, on this front and on other aspects of the fuel poverty and energy efficiency programme are important and we need to step up awareness more generally.

The noble Lord raised an issue relating to the definition of the fuel-standardised coefficients in paragraph 1(ii). We probably need the noble Lord, Lord Ezra, to explain it more simply and it may be that I should respond to the noble Lord's invitation to write, but, essentially, the factors are based on the relative carbon content of each of the sources of energy. That, in turn, is based on the Defra guidelines, which are set out in the company reporting guidance on greenhouse gas emissions. They are the same guidelines that are used elsewhere.

Lord Dixon-Smith: My Lords, how does the Minister explain the carbon content of electricity?

Lord Whitty: My Lords, the electricity coefficient is based on the sources of electricity. It therefore takes account of the relative carbon content of nuclear, coal, renewable and oil-based electricity. That is how we end up with that figure. However, I shall write direct to the noble Lord to set it out in more detail.

I congratulate the noble Baroness on her successful solar water investment. I wish that there were more of them. I also welcome her indirect reference to the support of the noble Lord, Lord Ezra, for micro-generation. Regarding the general policy in relation to energy efficiency in the household sector, we have set the 4.2 million figure as the statutory target. The 5 million figure was referred to in the energy White Paper. As explained, it is feasible to achieve the 4.2 million figure on current policies.

Although the overall energy efficiency target is now higher than at the time of the energy White Paper, the household factor is slightly lower. The reason is the one that the noble Baroness put her finger on: a number of people who have very effective energy efficiency measures in their houses will take greater comfort in greater warmth rather than save energy and money. That is the main reason for that reduction.

I think that the noble Baroness was being a bit churlish not to accept that, in the end, we made some substantial amendments to the Bill to which she referred. Clearly, other measures are needed to support these regulations, both in relation to the decisions of consumers and energy efficiency measures in other sectors of the economy. These regulations are a major way in which the interface between the supply companies and the householder can make a significant contribution to energy efficiency and can ensure, whether they are fully aware of it or not, that householders adopt measures that deliver the 0.7 million tonnes of carbon saving that we expect from this measure. The other measures will complement it. Other
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developments on the regulatory front, with which noble Lords are familiar, will also help, as will programmes such as Warm Front, which are primarily directed at fuel poverty but have an energy efficiency benefit.

I think that I have covered most of the points that have been raised.

On Question, Motion agreed to.

Information and Consultation of Employees Regulations 2004

The Parliamentary Under-Secretary of State, Department of Trade and Industry (Lord Sainsbury of Turville) rose to move, That the draft regulations laid before the House on 8 December be approved [3rd Report from the Joint Committee].

The noble Lord said: My Lords, the regulations before you today implement EC Directive 2002/14/EC on informing and consulting employees. For the first time, employees in the UK will have a right to be informed and consulted on an ongoing basis about the changes and developments in the organisations they work for.

The Government strongly support the objectives behind the directive. We want to see an end to employees hearing about job losses only from the media over breakfast or by text message. We want employees to feel valued, motivated and committed to the organisations they work for. Business will also benefit.

For companies working in an increasingly competitive environment, involving employees in the business can help them to gain a competitive advantage.

There is a good deal of evidence that the more people are genuinely involved and informed at work, the more committed they become. Business can benefit not just in reduced absenteeism and staff turnover but in higher levels of productivity, performance and customer satisfaction. Many businesses realise this and already have good employee communication policies in place. But we need such good practice to spread more widely in the UK.

The regulations break new ground in that they are based on a framework agreed with the CBI and TUC. I am extremely pleased that we were able to reach an agreement in this way, and I pay tribute to the CBI and TUC.

In agreeing the framework, we were guided by two key priorities—first, to ensure that employees have the right to be informed and consulted on management decisions affecting their future and, secondly, to do so in a way that avoids unnecessary burdens on business and provides flexibility.

We know that no two companies are identical, so we agreed with the CBI and TUC that we would not impose a single, rigid model on all. Companies can tailor arrangements to suit their individual circumstances, as long as employees agree with them.
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The regulations implement the framework agreement. I shall briefly explain some of the key provisions. The regulations apply to undertakings in the UK with 50 or more employees. These form 3 per cent of firms, although they employ 75 per cent of employees. The regulations will be phased in, giving smaller firms longer to prepare, although the Government would encourage all organisations, whether or not covered by the legislation, to inform and consult their employees, as a matter of good practice.

Regulation 7 gives employees the right to request formal information and consultation arrangements from their employer. Where at least 10 per cent of employees in an undertaking make a request, the employer will normally be required to initiate negotiations. If employees do not trigger the legislation in this way, the status quo will continue. However, if an undertaking already has a pre-existing agreement on information and consultation and a request for new arrangements is made by less than 40 per cent of employees, the employer may hold a ballot to determine whether the wider workforce endorses the request. It follows that where employers and employees are content with their current arrangements, the regulations do not force them to change anything.

Regulation 9 allows for a combined ballot to be held where there is a pre-existing agreement covering a group of undertakings. Regulation 11 permits employers to initiate negotiations without waiting for an employee request. Where an employer is required to negotiate an information and consultation agreement, Regulation 14 sets out what steps have to be taken.

Regulation 16 sets out what a negotiated agreement must contain and how it must be approved. Agreements must set out the circumstances in which the employees will be informed and consulted but specify neither the method, subject matter, frequency nor timing. It purposely leaves that to the employer and employees to decide, giving them the flexibility to agree arrangements best suited to them.

Once arrangements are in place, information and consultation may take place through elected or appointed representatives, including trade union officials. However, communications can also take place directly with employees, if that is what they want.

The standard information and consultation provisions in Part 4 apply only where negotiations have failed to lead to an agreement, or where an employer fails to initiate negotiations when required to do so. They oblige employers to inform and consult on specified matters in the way set out in Regulation 20. However, employers and information and consultation representatives are always free to reach a negotiated agreement at any time.

Regulation 22 provides for complaints to the Central Arbitration Committee about the operation of a negotiated agreement or the standard information and consultation provisions. It also provides for an application to be made to the Employment Appeal
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Tribunal for a penalty of up to £75,000 where an employer has failed to comply with a negotiated agreement or the standard provision.

Regulations 25 and 26 allow employers to protect confidential information.

Part 8 provides protections for employees and rights to time off for representatives.

The CAC has a very important role to play throughout the entire process, from taking decisions on the validity of employee requests, through to enforcing arrangements. ACAS also has a central role in conciliating, trying where possible to resolve any disputes.

The rights I have outlined are without a doubt very important and their potential is significant. We have consulted widely and have already begun awareness raising, with many highly successful regional road shows and master classes. DTI guidance has also been produced and we are also grateful to ACAS for putting together good practice advice and training materials.

But we want to do more than just raise awareness of these new rights. We want to encourage business, employees and unions to realise the benefits of a better informed and consulted workforce. The Government have high ambitions for the information and consultation legislation. Approached in the right way, it has the potential to cause culture change in workplaces throughout the UK. I beg to move.

Moved, That the draft regulations laid before House on 8 December be approved [3rd Report from the Joint Committee].—(Lord Sainsbury of Turville.)

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