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I can but welcome the regulations, but I do so feeling that there may well have been a better way of combining the needs of animal welfare and the use of modern science.

Lord Redesdale: We have no difficulty with the regulations. I have one question, since this provision has been updated to cover areas that were not formerly included. The Human Fertilisation and Embryology Bill is going through Parliament. Ova are collected from cattle, and human DNA is used with cattle ovum. Is the recovery of the ova from cattle covered by the regulations, or will we have to come back to that later?

Lord Soulsby of Swaffham Prior: If I may, I will speak seated. I want to speak briefly about wing-tagging. It is a good development in the law to permit it. Many years ago, I was concerned with some research looking at gulls and terns in East Anglia. There, the common method of tagging of chicks was with leg bands. The mortality from that was remarkable, simply because the rings caught on grass and debris on the ground, and the chicks died. Wing-tagging is very much more effective. Frankly, I cannot understand why the RSPCA should object to it. It is a very good development, which will result in much more effective information on a range of wild birds for research and breeding purposes, and it will be safer than leg tags.

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Baroness Byford: Perhaps I may follow the comments made by my noble friend Lord Soulsby. If I heard correctly, the Minister said that a lot of wing-tagging may be done by conservation bodies and that he had not received representations from either the Royal College of Veterinary Surgeons or the BVA expressing any concerns. I should like to seek clarification on that point.

Secondly, my noble friend referred to alpacas and llamas. Have the Government changed their view on making a list of places where alpacas and llamas are actually being kept? Some of them are in quite big herds and clearly their welfare is a concern to us all. I should hate us to pass regulations and then say, “My goodness, why did we not think of that at the time?”. I should like a little more explanation on the position of alpacas and llamas.

Thirdly, going slightly wider and with no wish to be difficult, can the Minister bring me up to date on the question of the ear-tagging of sheep generally and what progress is or is not being made on electronic tagging?

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Lord Rooker: I am grateful for the comments of noble Lords and I shall do my best to answer the questions put to me. On the consequences of delay and the resulting loss of income to vets raised by the noble Lord, Lord Taylor, there was an original plan that these regulations would come into force in April 2008, but the date was moved forward to June in order to allow the consultation period to be extended. The consultation was deemed necessary as the original consultation brought up too many issues which we felt that stakeholders should be given the opportunity to comment on. The regulations were changed to reflect those issues. Web-tagging was added to the list of permitted procedures and the purposes for which wing and web-tagging can be performed were extended to include breed improvement programmes. When making the decision to extend the consultation, stakeholders in the sheep and goat breeding industry were consulted, and we were informed that moving the coming-into-force date to June would have no significant effect.

We have had no information on the impact of the fact that these procedures have effectively been about since last year, or at least I do not have a note to that effect. I personally have heard nothing from the RSPCA. The department may have had something, but as a Peer you disappear off the radar when you are a Minister. Some of these organisations do not send you anything. I open my own post, so I know that I have had nothing about these regulations. I do not know why the RSPCA is upset, but frankly all the information we have is from welfare organisations. Moreover, as the noble Lord, Lord Soulsby, said and it has been explained to me, it is much more welfare-friendly to avoid having to ring the legs of chicks for breeding programmes. The chicks are so tiny that by definition the band has to be very small. It can restrict growth as well as risk causing damage if it snags. There are major issues of welfare improvement here.

The noble Lord asked about the reason for the 36-hour limit. This provision concerns welfare in a breed improvement programme, so it is quite specific about when neck-tagging or web-notching can be carried out since they are legally classified as mutilation procedures. It may be because the skin at that age is very loose so it is easy to insert a small tag into the chick’s neck. Later it becomes more difficult. We have been informed by the industry that it is not done any later, so the regulations are following advice.

Both the noble Baroness and the noble Lord asked about camelids, a question also raised in the other place. For a mutilation to be added to the list of permitted procedures, we consider that it needs to be shown that it has a welfare or management benefit, and that such a benefit could be weighed against any welfare costs. During the consultation, we were not presented with sufficient evidence to show that there are welfare or management benefits associated with the artificial insemination of any species other than sheep and goats. Several stakeholders did raise the issue of allowing certain artificial insemination techniques in camelids, but stated that research in this area is still at an early stage. We do not think that there is enough evidence to justify including camelids in the regulations. However, if in the future the artificial insemination of camelids or any other

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species can be shown to have a welfare or management benefit, the next time the regulations are reviewed, that certainly could be considered for inclusion.

We may have covered all the techniques currently in use—the regulations are bringing us up-to-date with techniques currently in use that were missed out of the exemptions. Other scientific research on new techniques—we can always improve and get new techniques—is likely to be covered by the Animals (Scientific Procedures) Act and a licence for research granted under that Act. That would alert us to possible new techniques, which we may want to cover in the permitted exemptions. So it is not as though some new technique will be invented and put into industrial use without our knowing about it, because a research licence must be issued in the first place and that will alert us to a new technique. As I said, the amendments are essentially covering existing techniques that were missed from the regulations when they were originally brought forward.

The noble Lord mentioned that wing-tagging was much improved. The type of tags vary according to the size of bird. I must tell the noble Baroness that I have nothing whatever to say about sheep identification—well, I have a lot to say, but I have no brief in front of me, and I am not going to speak off the top of my head.

The granddaddy of all questions, to which I have not had an answer, came from the noble Lord, Lord Redesdale. I did not expect to be discussing the embryology Bill currently being debated on the Floor in the other place this afternoon. All I can assume is that all the techniques covered by that Bill are fully regulated for all concerned, whether the animals or the humans, by the authority set up by Parliament to deal with that. I do not think it is a matter for Defra, but if I am wrong I will write to the noble Lord. I have to say: 10 out of 10 for the question.

Baroness Byford: The Minister did not answer my question about consultation on conservationists being able to do the procedure, rather than it being a veterinary procedure.

Lord Rooker: I said that we will come forward with another regulation. We have had a preliminary consultation with royal college officials, but we are not out on a consultation process at present. There will be a formal consultation before the exemption order under the Veterinary Surgeons Act is made, but the indications from our discussion with officials of the royal college is that it will be uncontroversial to allow non-vets to carry out some of these procedures, and we will need to change the law for that. That will require consultation, which will take place in autumn this year.

Baroness Byford: So they are not coming in yet.

Lord Rooker: No, they are not coming in with the regulations, there will be a separate consultation later in the year for that. That will be done quite separately and we will have them in force by the autumn, which is some months away.

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Lord Taylor of Holbeach: I asked the noble Lord earlier about the consultation procedure and the degree to which it had dropped the catch. I am not seeking to apportion blame, but somehow something quite significant in ensuring that the regulations worked—we are now addressing the deficiency—went wrong. Has the department looked at that and should the department have a more proactive role in ensuring that it stimulates the necessary response?

Lord Rooker: That may be so, but the fact is that the industries concerned did not consider these to be mutilations in the sense discussed under the animal welfare legislation. That is why they did not respond. It is not that they were unaware when the Animal Welfare Bill was going through the House: it was of major concern to all keepers of animals. They simply did not consider this to be covered by the mutilation provisions for the exemption order. It was not a failure, because we had consulted. We have hundreds of consultees on the address list, it is amazing, but we do not know everything.

The fact is that, as I have discovered in other issues, especially with mercury in barometers, industry does not always respond. In this case, it was genuine in the sense that it did not think that it was covered and we did not know about that aspect. I am hopeful that there will be no more cases, that what is being done to bring these regulations to the House will have alerted anyone to any other issues. I know that the matter has been raised in the other place as well. It is something that we will have to watch for, because techniques are employed, and people bring new techniques in from abroad and think it is perfectly all right to do so. We need to know about these things. We will see whether we can redouble our efforts on consultation to spell things out. If people have a doubt about the technique, or about whether what they are doing is covered, they at least should be proactive and ask whether it is covered, so that we can take advice when we are drafting the regulations. It is a fair point, and we will see that it is followed through.

On Question, Motion agreed to.

Financial Assistance Scheme (Miscellaneous Provisions) Regulations 2008

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The Parliamentary Under-Secretary of State, Department for Work and Pensions (Lord McKenzie of Luton) rose to move, That the Grand Committee do report to the House that it has considered the Financial Assistance Scheme (Miscellaneous Provisions) Regulations 2008.

The noble Lord said: As noble Lords will recall, the financial assistance scheme—FAS—offers help to certain people whose benefit occupational pension schemes have not provided them with the pension that they were expecting. The regulations present the first key steps towards the delivery of the full package of reforms to the FAS that we announced in December last year.

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As noble Lords may be aware, the December announcement covered changes to the structure of the FAS as well as to the benefits that will be paid. Where schemes were not already committed to buying annuities from insurers, we announced that the Government would take in the residual assets of those schemes and make associated payments as they fell due. Taking in those assets helps finance greater benefits to existing FAS members, which will be broadly comparable to those provided by the Pension Protection Fund. The residual assets will also help provide for assistance to be extended to those members of schemes connected to solvent employers.

In December, we guaranteed that all members would receive 90 per cent of their accrued pension, subject to the cap, instead of 80 per cent as before. We also said that we would pay assistance from a member’s normal retirement age, or 60 if their normal retirement age was earlier, rather than from 65. We said that certain members would be able to apply for early reduced payments on ill health grounds. We also committed to indexing FAS assistance broadly in line with PPF rules. We said that we would ensure that members whose scheme assets were taken into the Government would not be denied the lump sum that they could otherwise have expected to receive from those assets.

While some of those changes are relatively simple to deliver, others are complex. Earlier this year, I wrote to the noble Lords, Lord Skelmersdale and Lord Oakeshott, detailing our plans to deliver the reforms in phases to help ensure that changes are made as quickly as possible. First, the regulations before us today will implement the first two cornerstones of the reforms: payment at the 90 per cent rate and payment from the NRA. It is important to realise that for many current FAS recipients those changes alone will make FAS assistance broadly comparable to PPF compensation, but there is still some way to go to deliver the full reform package for all beneficiaries.

Next, I expect to bring a further package of regulations to your Lordships before the Summer Recess. That package will allow early access to payments on ill health grounds, subject to actuarial reduction, extend the scheme to certain solvent employer schemes and prepare the ground for further PPF involvement in designing and implementing the reformed scheme. Finally, by the end of this year, we intend to consult on further regulations to deliver the full package of changes. In addition, to support the changes that we intend to make through regulations, we also plan some amendments to primary legislation through the Pensions Bill.

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I thank the FAS Operational Unit for its continuing work to deliver payments in a rapidly evolving environment. Your Lordships may recall some of the issues we have faced in the past whereby eligible FAS members have not received payment because information has not been provided to the Operational Unit by pension schemes. Your Lordships may also recall the review carried out last year by Mercer Human Resource Consulting, which reported that the process of gathering

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data to operate the FAS is fit for purpose and is managed in a satisfactory manner. That conclusion is ably supported by the number of payments now being made.

As of 9 May 2008, 5,531 beneficiaries are in receipt of FAS payments and a total of around £18.5 million has been paid to date. This is a step change in comparison to the position at the same time last year when around 1,100 people were in payment and around £4.4 million had been paid out. Passage of these regulations will help increase payments further. The operational unit has assessed more than 1,500 members who will be eligible for payment when they reach their NRA. Of these, more than 300 will be eligible for payment immediately when these draft regulations come into force. We estimate that some 5,000 people are currently between their NRA and 65, and thus stand to benefit in the coming months as their information is provided to us.

As well as delivering the 90 per cent rate from NRA, the draft regulations make a number of changes to FAS legislation to support those enhancements. Complementary changes are made to the Pensions Act 2007 to ensure that primary legislation is consistent with the changes we are making to secondary legislation. The draft regulations also include some amendments to FAS revaluation rules and transitional protection for certain members affected by those changes. Under current FAS rules, assistance payments are revalued to 65, regardless of the member’s NRA. Revaluation from NRA to 65 was a feature of the original FAS as we felt that it would be unfair to expect people to wait up to five years from their NRA to receive assistance without that assistance benefiting from some form of index-linking.

Under the changes to FAS made by these draft regulations, FAS payments will now be made from NRA or, if later, age 60. This means that assistance payments for some people already receiving FAS will be reassessed and new entitlements will be paid for the period from NRA. The bringing forward of payments for those members means that the period of revaluation will be shorter. In some cases, where there is a significant period between NRA and 65, the reduction of the period of revaluation may mean that ongoing payments will not increase significantly when payments are reassessed from 80 per cent to 90 per cent. In extreme cases, ongoing payments might even fall. However, any members in this position will receive significant payments to cover the period from their NRA.

The draft regulations also include related changes to the revaluation that applies to deferred members’ accrued pensions. In certain current cases, such revaluation can apply beyond the age of 65. Changes are made by the draft regulations to ensure that accrued pensions cannot revalue beyond that age. These changes might mean that some beneficiaries whose entitlement dates do not change may not see a significant increase in their ongoing payments. It is unlikely that such members will see their existing payments fall as a result of the changes. However, in the event that members might otherwise be in this position, the draft regulations provide transitional

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protection so that ongoing assistance payments for those who are already receiving FAS payments and whose entitlement date does not change will not reduce from the level currently in payment. The draft regulations also amend payment ages for certain FAS beneficiaries who qualify as a result of death benefits payable by qualifying schemes.

Depending on individual pension scheme rules, some spouses, unmarried partners or dependent children of members of pension schemes who die before the start of scheme wind-up qualify for pensions from their schemes. Under current FAS rules, such members, in common with other qualifying members, receive payment from age 65. In order to reflect the revised payment rules that will apply to other FAS members, such people will be eligible for payment from the later of 14 May 2004 and the date that they became eligible for payment under the qualifying scheme’s rules.

Some of these recipients may have qualified for payments as dependent children. Under typical pension scheme rules, payments to dependent children are made only until a fixed age; that is, 18 or until they leave full time education. To reflect such arrangements, the regulations specify that assistance payments to any such recipients end on the date that they would have stopped receiving their pension from their pension scheme.

As your Lordships may recall, opposition spokesmen in the other place agreed to proposals made by the Minister of State for Pensions for a written consultation period of two weeks for these regulations. This helped to facilitate their speedy implementation. We have published a full response to the issues raised during that consultation period, and two substantive matters were raised that may be of interest to your Lordships.

First, it was noted by some respondents that FAS payments will continue to be made only from 14 May 2004—the date FAS was first announced—even if members reached their NRA before that age. We continue to believe that it is right that FAS payments relate only to periods after the date FAS was first announced. And retaining the 14 May 2004 date assists in current administrative delivery and helps control costs. However, we will continue to consider this point before consulting on further draft regulations later this year.

Secondly, it was noted that the definition of NRA used in the draft regulations might not reflect members’ expectations of the age at which they would have been able to take some or all of their scheme pension. We will continue to consider the issues raised in relation to the definition of NRA in the context of achieving broad comparability with the PPF, subject to further consultation and draft regulations later in the year. However, we have retained the definition of NRA in the draft regulations to enable enhanced payments to be delivered as quickly as possible, using information already held by the operational unit.

We have built strongly on the foundations provided by the Young review. The announcement that we made in December will ensure all of the estimated 140,000 people who have suffered pension losses as a consequence

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of their schemes winding up underfunded between 1 January 1997 and the advent of the Pension Protection Fund will receive benefits broadly comparable to the PPF. We are maintaining momentum by these regulations which will deliver key elements of the reforms to the immediate benefit of many members.

In my view, these regulations are compatible with the European Convention on Human Rights and I therefore commend them to the Committee. I beg to move.

Moved, that the Grand Committee do report to the House that it has considered the Financial Assistance Scheme (Miscellaneous Provisions) Regulations 2008. 18th report from the Joint Committee on Statutory Instruments.—(Lord McKenzie of Luton.)

Lord Taylor of Holbeach: I thank the Minister for his introduction of these regulations. I welcome the order as an important step in a five-year battle by 125,000 of the earliest victims of the Prime Minister’s economic incompetence to get as much as possible of the pensions they were due. Let me remind the Committee that during that time some died, others had to work beyond normal retirement age, sometimes with serious medical conditions, and all faced the prospect of penury.

I would not usually rehearse the history of this unhappy matter, but the circumstances surrounding it are exceptional. The measures in the regulations could have happened much earlier if the Government had not chosen to reject out of hand the Conservatives’ lifeboat fund amendments to the Pensions Act 2007, which your Lordships supported. Those amendments could have raised the compensation by the FAS to the 90 per cent offered by the Pensions Protection Fund. The treasury would have immediately made a loan to ensure that higher payments could be distributed as soon as possible. That loan would then have been paid back fully out of unclaimed assets, ensuring no cost to taxpayers.

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