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House of Lords

Wednesday, 22 October 2008.

The House met at three o'clock (Prayers having been read earlier at the Judicial Sitting by the Lord Bishop of Rochester): the LORD SPEAKER on the Woolsack.


Lord Bassam of Brighton: My Lords, before we proceed to the first Question I should like to say a few words about procedure at Question Time. We rightly take pride in being a self-regulating House, but it is helpful for us to be reminded of our normal customs from time to time. Self-regulation can only work if noble Lords in all parts of the House co-operate to make it work. The Companion makes clear that Ministers’ initial Answers to Questions should not exceed 75 words.

Noble Lords: Hear, hear!

Lord Bassam of Brighton: My Lords, they are on notice. The Companion also says that supplementary questions should be short, designed to elicit information rather than incorporating statements of opinion, and confined to the subject of the original Question. I am sure that the House will be delighted to know that I have reminded my colleagues on the Front Bench that answers to supplementary questions should also be concise. It is to the benefit of all Members of the House to keep questions and answers short. This will maximise the number of supplementary questions that can be taken in the 30 minutes available. I am sure that the House will find agreement with that.

Baroness Trumpington: My Lords, I think that the Minister forgot one thing: to remind his colleagues not to say “Well, my Lords”.

Lord Bassam of Brighton: My Lords, I am not going to get into a debate about terminology, but I am sure that the House has heard the noble Baroness well and good.

Earl Ferrers: My Lords, does the Minister realise what pleasure that statement has given? Everyone has thought that questions and answers are too long; and some Ministers courteously thank everyone for having asked a question, which of course is quite unnecessary. The fact that he has reminded noble Lords to be brief is of great benefit.

Energy: Winter Supplies

3.02 pm

Lord Ezra asked Her Majesty’s Government:

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The Minister of State, Department of Energy and Climate Change & Department for Environment, Food and Rural Affairs (Lord Hunt of Kings Heath): My Lords, the Government look to National Grid to provide a view on winter energy supply which sets out forecasts based on consultation with industry. The National Grid Winter Consultation Report was published by Ofgem on 2 October. The outlook is that if supply and demand conditions are as expected, supply should meet demand. The Government do not forecast energy prices. That was 60 words, my Lords.

Lord Ezra: My Lords, I thank the Minister for that brief Answer, and I shall be as brief as possible in my supplementary question. This is the fifth year in succession that I have asked a Question about winter energy supplies. Does he not agree that as each year goes by the situation becomes more difficult as our import dependence increases? On gas supplies, is it not regrettable that we are far behind the continent on gas storage capacity and that on 12 October so much gas was coming in that it could not be stored and the price of wholesale gas fell to zero—gas which we will surely need in the winter? On electricity—

Noble Lords: Oh!

Lord Ezra: My Lords, I shall stop there and leave electricity to itself.

Lord Hunt of Kings Heath: My Lords, I am sure that the House is grateful to the noble Lord for raising this issue in successive years; it is a vital matter. As the UK moves from self-sufficiency it relies on more imports and we have to ensure that there is appropriate diversity of supply, and we will do that. I believe that the decision to encourage new nuclear stations will be a great asset. As regards the margins, we believe that we have ample gas supply capacity. There are plans to build more storage; some is being built at the moment and there is more in the pipeline. Electricity capacity is 25 per cent over expected demand.

Lord Taylor of Blackburn: My Lords, does my noble friend agree that planning officers should be more aware of the national need for gas storage and that they should not take into account certain objections brought forward by certain residents in certain areas?

Lord Hunt of Kings Heath: My Lords, I think that that point is very well understood. Noble Lords who have taken part in the debates on the Planning Bill will recognise that the point has been made consistently there.

Lord Howell of Guildford: My Lords, the noble Lord, Lord Ezra, mentioned the past five winters. How many gigawatts of electricity generation will we have to close down in the next five winters, and how many gigawatts do we have planned to replace it?

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Lord Hunt of Kings Heath: My Lords, that is a very good question. Perhaps I can answer it in a slightly different way. I have the list of plants that have opted out of the large combustion plants directive; I could read it out but I shall put it in the Library of the House. Overall, however, 15 per cent of our present total capacity will have to close by the end of 2015. That is clearly a challenge but the Government are up for that challenge. It is one of the reasons why we are looking at diversity of supply, encouraging renewables and looking at new nuclear generation.

Lord Teverson: My Lords, Ofgem has recently pointed out that if you are not able to get dual supply—if, for example, you are not supplied with gas—then you pay considerably more for your fuel. A study has also shown that if you live in south Wales rather than in the north-west, you pay another extra £100. Perhaps most iniquitous of all, if you are in poverty and have to pay by a prepayment meter, you pay an extra £110 a year. What will the Government do to ensure that those inequalities are reduced and got rid of?

Lord Hunt of Kings Heath: My Lords, the noble Lord has raised some very important points about the current pricing regime. These matters are being earnestly looked at to ensure that consumers get value for money and to ensure that there is fairness in the system. His point about prepayment meters is very well taken. He will know of the Ofgem probe in this area and that my right honourable friend very recently met the industry to ask it to put this right.

The Lord Bishop of Carlisle: My Lords, can the Minister kindly confirm whether it is true that, as I have read, because we do not have the facilities to store surplus gas which we have produced, we have been selling gas to the French in the summer season and then buying it back at a higher price in the winter? If it is true, what plans do the Government have for remedying the situation?

Lord Hunt of Kings Heath: My Lords, as I think our debate yesterday showed, there is a real advantage in liberalisation of the European internal market. It is therefore important that there are unfettered flows between countries. If there is a question of storage, the proposals for more storage which are now in the pipeline will deal with it.

Lord Corbett of Castle Vale: My Lords, can the Minister confirm that yesterday, I think, the United Kingdom overtook Denmark in the amount of energy it produces by wind farms? Will he accept my congratulations on that, and go on to do even better?

Lord Hunt of Kings Heath: Yes, my Lords. It is a very good foundation on which to increase the use of renewables.

Lord Jenkin of Roding: My Lords, did the noble Lord hear the broadcast the other day by Mr Asher, the former director of Energywatch, in which he seemed to think that a probe by the Office of Fair Trading would somehow find some undesirable behaviour by the industry which the eight-month study by Ofgem failed to find? What is the Minister’s reaction to Mr Asher’s claims?

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Lord Hunt of Kings Heath: My Lords, I read reports, but I did not hear him. These matters obviously need to be considered. As the noble Lord knows, we have the Ofgem probe. We are taking action as a result of it and I am very hopeful that progress will be made.

Lord Dubs: My Lords, even if we are all right this winter, can the Minister assure the House that the safety margin for energy supply will be adequate in the next few years?

Lord Hunt of Kings Heath: My Lords, that is our intention. That is why we focus on diversity of supply and why the National Grid report in relation to our forecasts is so important. I believe that those have proven to be robust.

Bosnia and Herzegovina

3.10 pm

Lord Ashdown of Norton-sub-Hamdon asked Her Majesty’s Government:

The Minister of State, Foreign and Commonwealth Office (Lord Malloch-Brown): My Lords, the Government remain concerned at the slow rate of progress in Bosnia and Herzegovina on key reforms and at ongoing ethnic nationalist rhetoric from political leaders. The Government continue strongly to support High Representative/EU Special Representative Lajc√°k in upholding the Dayton peace agreement and in ensuring Bosnia and Herzegovina's progress towards the EU is sustained.

Lord Ashdown of Norton-sub-Hamdon: My Lords, I am grateful to the Minister for that Answer, but is it not the case that Bosnia is now going backwards rather than forwards and that there is a severe danger that we will sleepwalk ourselves back into a Bosnian crisis? Is not one reason for that the fact that Milorad Dodik, the prime minister of the Serb-dominated entity, has in the past two years reversed the progress made in Bosnia in the past 13? He has weakened the institutions of the state and strengthened those of his own entity with a view to preparing for secession if the opportunity arises. Will the Minister confirm that there are strict conditions before the Office of the High Representative is closed and that Her Majesty's Government will stick by them, not weaken them, and will not join those who see this as the appropriate moment to call for the withdrawal of the European force in Bosnia?

Lord Malloch-Brown: Yes, my Lords, I can confirm every part of the noble Lord’s question. It is the case that Premier Dodik of the Srpska Republic has proved an altogether malign influence in his demand for greater powers for it. I fear that at the centre he has, in a sense, found his equal in the federal structure demanding that it gets enhanced powers as well. The only way through this is to insist that the original provisions of the Dayton accords are met. Britain will take every step it can in the EU to make sure that the conditions

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are met, that the EU is strongly committed and that the Office of the High Representative remains until that time.

Lord Anderson of Swansea: My Lords, does the Minister agree that the noble Lord, Lord Ashdown, did a remarkable and successful job as high representative, that when he left at the end of 2005, it was on an upturn and that there has been much slippage since in terms of political corruption, ethnic nationalism and a standstill on the constitution? What in his judgment are the prospects of movement on drafting and agreeing a constitution by the date that the Council of Europe and others want of 2010?

Lord Malloch-Brown: My Lords, I agree with my noble friend that the contribution of the noble Lord, Lord Ashdown, was remarkable. When we see an article in today’s Guardian co-authored by the noble Lord and Richard Holbrooke, the American diplomat who negotiated the Dayton accords, warning that there is slippage and that we are forgetting Bosnia, we should take note and thank the noble Lord for raising this issue.

Lord Howell of Guildford: My Lords, does the Minister accept that we on this side completely agree with the concern and the analysis given by the noble Lord, Lord Ashdown? Will he reassure us that there is no question of closing the Office of the High Representative at this stage or, indeed, for some time ahead until some improvement occurs, which is clearly not happening now? Can he assure us that, as far as we have influence on it, there will be no rundown in EUFOR? There is a lot of work to do to bring these two warring parts of the federation together again; at the moment, they seem to be pulling apart.

Lord Malloch-Brown: My Lords, I assure the noble Lord that we will continue to press hard for the continuation of EUFOR at its current level. We have postponed the closure of the OHR until the fulfilment of five reform objectives and two conditions, of which the most important is that peace and security are in place. The review will occur in November at the GAERC meeting. There is absolutely no doubt that there is no meeting of those conditions and that the office needs to stay open.

Lord Wallace of Saltaire: My Lords, we are also in discussions, as part of the EU as well as bilaterally, with Bosnia’s neighbours, Croatia and Serbia, which, 15 years ago, were doing their best to divide Bosnia between them. Will the Minister reassure us that in the current negotiations on accession with Croatia and in our conversations on closer relations with Serbia, the continuing integrity of Bosnia is being fully pressed?

Lord Malloch-Brown: My Lords, I can certainly assure the noble Lord of that. He will also be aware that Bosnia signed its own stabilisation and association agreement with the EU this June, which demonstrates our commitment and that of Europe to bringing Bosnia, as an independent nation, into the EU at the appropriate time.

Lord Hylton: My Lords, has the Bosnian privatisation programme been completed yet?

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Lord Malloch-Brown: My Lords, the programme is not completed, although it remains strongly under way.

Agriculture: Combine Harvesters

3.15 pm

Baroness Boothroyd asked Her Majesty’s Government:

The Minister of State, Department of Energy and Climate Change & Department for Environment, Food and Rural Affairs (Lord Hunt of Kings Heath): None, my Lords. Breaching cross-compliance would result not in a prosecution but normally in a reduction in payment. As part of the EU’s direct payment to farmers, member states must set cross-compliance conditions aimed at preventing soil damage through the inappropriate use of agricultural machinery. No farmers have been found in breach of the relevant English standard. To enable farmers to complete their harvest, my department granted a derogation.

Baroness Boothroyd: My Lords, I am delighted to hear that there have been no prosecutions, but does not the Minister hold the view that British farmers are the best judges of whether to use heavy machinery on their wet fields? Surely they know better than Brussels bureaucrats how to protect their soil quality for future harvests. When can we expect this ludicrous EU rule to be abandoned so that British farmers can use their common sense?

Lord Hunt of Kings Heath: My Lords, I have every confidence in British farmers using their common sense. We are bound by the rules that have been set down in the EU. This is about the protection of the soil and minimising damage to it. I assure the noble Baroness that given the conditions this summer, in which farmers had difficulties completing the harvest, we showed the flexibility that was desired.

Lord Plumb: My Lords, given that farmers have no vested interest in damaging the soil and given that there has been no fine since 2005, as the Minister said, does he not agree that this is one of the most stupid laws that ever came out of Brussels? As he said, the regulation is for a good reason, but how many staff are used to implement this scheme, what is its cost and why does the derogation for 2008 cover only combinable crops? If we are talking about damaging soil, why not consider the problem area in Glastonbury, and why not make the derogation permanent?

Lord Hunt of Kings Heath: My Lords, since no breaches have come to the attention of the Rural Payments Agency, which is responsible for overseeing this, I can only assume that the bureaucratic burden has not proved to be very heavy. I accept the noble Lord’s point about the need for flexibility. We will review this, particularly in the light of current experience with our summers. I assure noble Lords that we will look for flexibility, but within the constraints that are set down.

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Lord Tyler: My Lords, will the Minister confirm that other member states have negotiated a more complete and comprehensive derogation? What steps could our Government take to make this a much less rigorous and much more flexible system than the one that it seems is being imposed on British farmers at the moment?

Lord Hunt of Kings Heath: My Lords, that is the purpose of the review that is taking place in the next few weeks and months. I hope that we will know the outcome in the new year in time for next year’s harvest. Clearly there could be a more flexible approach that does not apply to harvests, in view of the wet summer weather that unfortunately we now seem to be enjoying.

Lord Palmer: My Lords, would the noble Lord be awfully kind and answer the question put by the noble Lord, Lord Plumb? How much does it cost Defra to administer this wretched derogation scheme? Will he also explain why horticultural crops were exempted from this derogation?

Lord Hunt of Kings Heath: My Lords, as I have told the House, my department has attempted to be as flexible as possible, which is why the derogation was given both this year and last year. We will look to reviewing the system to see whether more flexibility can be provided in the future. It is not possible simply to produce a cost for this scheme, but because there have been no breaches I do not think that it has proved to be a heavy bureaucratic burden.

Lord Tomlinson: My Lords, may I suggest to my noble friend—

Noble Lords: Question!

Lord Tomlinson: My Lords, may I ask my noble friend to agree that, if so many things are wrong with this regulation and there are as many derogations as the noble Lord, Lord Tyler, says, and if it does not really apply to us, is this not a case for the deregulation task force? Can the results be sent to the former Leader of the House, my noble friend Lady Ashton, saying that getting this deregulated is one of the things that she could pursue on our behalf?

Lord Hunt of Kings Heath: My Lords, that is an interesting suggestion, which no doubt will be given earnest consideration. As we have seen in the UK a better approach to regulation, so we wish to see better regulation in Europe as well, and of course we will pursue that. In the mean time, we will use the discretion that we have to see whether this rule can be used more flexibly in the light of experience.

Lord Taylor of Holbeach: My Lords, will the Government in their review consider ways in which the administrators and inspectors who are utilised to enforce cross-compliance might be used more effectively to give much needed support to farmers and growers in technical and other matters?

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