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On the elections, the noble Earl is of course right. However, the point was that if the orders had not been quashed by the High Court, and had the Bill not followed as the result of a general election, this tranche of councillors would have stood for election or re-election next May, when the other year's worth would have done, too. There would have been two years' worth of elections in the one year, so again no additional costs would have fallen.

Either, as we had expected and hoped, there would have been elections associated with the general election, in which case there would have been no additional costs, or there would have been elections after 12 months, in which case there would have been no additional costs because elections would have taken place in any event. The additional costs that we are talking about occur because these by-elections are being called in the middle of the electoral year.

Baroness Hanham: My Lords, we had quite a round robin of a debate on this amendment. I agree with my noble friends that it did not seem to lend itself to anything very much around which the debate centred.

It has been said that some things are a bit rich, but I actually do believe that it is a bit rich to try to lay at the door of the department the fact that the Secretary of State made a decision against advice from the Permanent Secretary of the department and did not follow the procedures that he himself had set down. It seems to me to be quite rich to start saying that that is all to be laid at the door of the DCLG.

This was a political move towards the election and it was clear that the decision was taken by the Secretary of State for compelling reasons, which were never quite laid out. Some of it was to do with Total Place, but there was not a great deal of information about that at the time. Total Place was an extra that was put in on the combining of budgets.

This is now a matter for the authorities. They now have to hold elections and if they do not know when to do so, they must seek their own legal advice. They must also bear the cost of what has happened. This is what would happen normally. Any UK council would have to bear them for any by-election. I understand that we have received no representations about it from the authorities and that they are taking their own legal advice.

The amendment does not seem to get us anywhere. It has been the base for a long wander around this whole issue, trying to lay the blame where the blame is not due. This situation has arisen, as I have said ad nauseam, because the Secretary of State did not follow advice or his own criteria. As a result, we have ended up with what other people have described as a total mess. It is still there, my Lords.

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Lord Rosser: My Lords, issues have been raised about the wording of the amendment. I said at the beginning of my contribution that of course amendments in this House should not relate to the issue of who should be paying for what and how much-hence, the wording of the amendment, which calls for a report. Amendments are not meant to be tabled in this House relating to the paying of moneys or to financial affairs, in that sense of the word.

We want to see these elections held shortly. One of the issues concerned, and why it is perfectly relevant despite the constraints affecting the wording of the amendment, is the reference to costs. Obviously, if we are going to end up with a significant difference of opinion between the department and the local authorities over the timescale within which these elections could occur, that could affect the costs. The Minister has been abundantly clear in her view of what the law says. I simply refer again to the letter that she sent to me on 8 July, stating that as a result,

There are no ifs and no buts; instead,

Obviously, I asked the Minister whether she stood by that very clear legal opinion-there were no ifs or buts in what she said. I put to her that there were, apparently, in legal circles people who held a different view. I asked her about her interpretation as to whether these were casual vacancies or whether they were ordinary vacancies. That, it seems to me, affects the question of whether they have to be held within 35 days. I can only note with regret that although the Minister, in her letter of 8 July, was quite willing to offer a very specific view of what the law says, when challenged here today about what she said, she dodges the question, to put it bluntly, and declines to answer. That is the first point.

The second point relates to costs. Unless I have not been listening properly, the Minister has given no indication of who should pay the costs. I simply reiterate that the Minister, in her letter to me, was quite clear that the issue that had arisen at the elections was as a result of the decisions taken by the previous Government-that is, central government. One would therefore have thought that, if that was her view, she would then say that it was not the responsibility of the local authorities to pick up the bill but the responsibility of central government. Once again, we do not seem to have had a clear response, or any response at all, to a clear question.

However, I will carefully read the Minister's reply in Hansard to ensure that I have not misinterpreted it. In the mean time, I beg leave to withdraw the amendment.

Amendment 4 withdrawn.

Clause 2 : Consequential electoral provision

The Lord Speaker (Baroness Hayman): The Question is that Clause 2 stand part of the Bill. It was spoken to in an earlier group. As many as are of that opinion will say Content.

Noble Lords: Content.

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The Lord Speaker: As many of that opinion will say Content.

Noble Lords: Content.

The Lord Speaker: I remind the House that the noble Baroness, Lady Hanham, has given notice of her intention to oppose the Question that Clause 2 stand part of the Bill. The Question is that Clause 2 stand part of the Bill. As many as are of that opinion will say Content. The contrary Not Content.

Noble Lords: Not Content.

Clause 2 disagreed.

Clause 3: Extent, commencement and short title

Amendment 5

Moved by Baroness Hollis of Heigham

5: Clause 3, page 2, line 43, leave out subsection (2) and insert-

"(2) Subject to subsection (2A) this Act comes into force on such day as the Secretary of State may by order appoint."

Baroness Hollis of Heigham: We come to the final pair of amendments today, Amendments 5 and 6. That brings us back to the issue raised by various noble Lords, including the noble Baroness and the noble Lord, Lord Rennard, which is that there are alternative ways to proceed through partnership arrangements which would have the same effect. The Bill states that it comes into force on the day that it is passed. Amendment 5 would instead allow the Secretary of State to determine when that should happen, and Amendment 6 specifies some requirements that we believe should be in place before he does so.

Why are we suggesting that those pre-requirements should be in place? Back in 1994-95, as the noble Lord, Lord Deben, will well remember, when Norwich narrowly failed to become a unitary authority, a strong argument was then put by Norfolk County Council that partnership arrangements could do all that was required to bridge services and increase scrutiny and accountability. That was the argument in 1994-95. Lots of promises were made. As far as I am aware, not one of those promises has been delivered. Those promises of collaborative partnership and structural arrangements were empty air. The sense of betrayal in the city was profound.

Now, we read on page 1 of the summary of the impact analysis:

"It will be for councils themselves across England to work together, as many already are, to benefit from e.g. joint working ... This approach, driven by the councils themselves, will help to reduce costs and improve coordination between different tiers of local government".

In her letter of 8 July, the Minister says that the savings envisaged by unitary status should be achievable,

In other words, the Minister is essentially recommending partnerships in lieu of structural reform, a point made several times by the noble Lord, Lord Rennard. Fine words repeated twice. How will the Minister ensure that? She argues that joint working is an appropriate alternative to unitary status. We were told that in 1994-95, but nothing happened. The Minister has

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argued strongly that despite the fact that the status quo is poorer value for money than making Norwich and Exeter unitary, none the less, partnership arrangements can achieve the value for money she wants. How will she ensure that this time around? In particular, how will she ensure that the two county councils are required to provide the essential information about services, costs and clients that the two district councils need, when those same county councils have refused to divulge much of the necessary information required under previous orders?

If the Minister really means what she says about joint working-I am sure that she does-she will take seriously the push for detail in Amendment 6, because if she does not, as in the previous round in 1994-95, we are back to empty platitudes, which the Minister and the department are willing to utter but not deliver.

What is called for in Amendment 6? In all three examples which I have given, it calls for arrangements for intelligent partnership between county and city, but it is a partnership that must be informed. That means that the relevant information that the county holds must be available to the district councils on the effect on their services. Without that information about the cost of the services as carried out in those two district councils as measured against service delivery, those words about joint working are worthless. To say that it is up to the good will of the local authorities will not do. That was said in 1994-95, but nothing happened. If the Minister means what she says-and I am sure that she does-she needs to come in behind that request to ensure that the county is required to engage with the district councils of, respectively, Exeter and Norwich, to establish constructive partnerships. She cannot use the localism argument to deny the city's unitary status, on the one hand and, on the other, to refuse to help us to construct intelligent partnerships, which the counties do not particularly want.

The first proposition in Amendment 6 is that district councils should be able to scrutinise the county's spending plans and financial statements. That information is not difficult to disaggregate from county totals on a district basis. It cannot be unreasonable to have that information made publicly available to sit alongside parallel information from the city councils, so that, for the first time, the residents and council tax payers, as well as the local authorities, can have a coherent and holistic analysis of combined local authority policies, priorities and expenditure. As it stands, the counties are under no obligation whatever to tell the city what they propose to do in the city, even when it affects the delivery of the services that the city, as district authority, is responsible for.

6.15 pm

For example, Norfolk has reorganised the geographical areas for children's services by brigading Norwich, the most deprived district in Norfolk, with one of the more affluent, the wealthiest, South Norfolk. Unless we can disaggregate the statistics between those two authorities about service needs, service delivery and costs, the result of putting the two together-the poorest and one of the wealthiest-is a fudged mean

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average, and Norwich children will fail to get the services that they need. Incidentally, the district council, as a housing authority, will not be able appropriately to help vulnerable families with vulnerable children.

Even more urgently, the coalition Government propose to replace regional development agencies with local enterprise partnerships. I do not express a view about one or the other at the moment, but that is currently under consultation, and will probably be in operation by next April. They are to be local authority and business-led, covering a natural economic area. That makes perfectly good sense. In the south-west, that would probably embrace Devon and Cornwall in one new partnership. At the moment, district councils are finding it very difficult to be allowed to engage in that. The counties and, in Devon, the two existing unitaries, seem to be the only bodies that count in the new partnerships. If Norwich and Exeter cannot be unitary, yet at the same time they are the key drivers of economic development and jobs in the counties, surely they should be represented on those bodies as of right. Will the Minister give guidance to that effect?

In one field only, as a city council in Norwich, we have been able to disaggregate the statistics for the city, as opposed to other district councils. I refer to education. That shows that the city is underfinanced by £12 million a year to cross-subsidise small rural schools. I support keeping small rural schools open-it is a way to keep vibrant local communities-but not at the expense of stripping out education services from some of the most deprived council estates in the eastern region. The alternative is to impose a proper precept to pay for it, not to asset-strip the city.

Had we become unitary, we would have had a recalculated grant formula which would have rebalanced spending. We now need that same information to press for fairer spending across the county. To do that, we need the statistics for the districts. That must be a reasonable request, but we are resisted at every stage. Although we were promised some such response in 1994-95, it never happened. It will be very interesting to know whether, similar promises having been made to the Boundary Committee by the counties, we will get it in future. I doubt it, unless we have the help and support of Ministers. The citizens of this country and the council tax payers in the relevant cities are entitled to know that information if they are to be active members of their community.

The county has set up a Norwich area committee-this relates to the second part of the amendment-but it meets just twice year, has no senior members on it and is powerless. We need ways of ensuring that Norwich city councillors and Exeter city councillors can properly air concerns on behalf of their constituents. For example, on urban planning, when the city of Norwich and Norwich businesses wanted to pedestrianise a central shopping street called Westlegate-we pioneered pedestrianisation in the city of Norwich in the 1960s under the late planning officer Alfie Wood-a county committee with no Norwich members vetoed it, presumably because they wanted to drive their cars through a shopping street which business wanted pedestrianised. They would not move in response.

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In the next two years, as the noble Baroness, the noble Lord, Lord MacGregor, and the noble Earl, Lord Cathcart, know, all the street lights in Norfolk and Norwich will be turned off at midnight. That is great in the Fleggs and the rural areas, and I have no problem with it, but, unless they can obtain and afford a taxi, Norwich residents, including me, will not be able to take the 10 o'clock train home from London because most of the walk home will occur in total darkness. The risk of mugging and assault is real for anyone, and the perceived threat, I fear, is even greater. How many people, especially women, who, unlike me, have no car or who, unlike me, cannot afford a taxi, and for whom there is no public transport, will have to risk attack in the city of Norwich before the county understands that what makes sense for a Broadland village, which I respect, is nonsense in the city. Would the Minister, who is a former leader of Kensington and Chelsea, tolerate that in her borough?

Norfolk County Council, as in 1994, recently said to the Boundary Committee recently that it would set up a Norwich area board which would include a dedicated portfolio holder-a member of the cabinet with special responsibility for Norwich-and that it would devolve certain powers. Will this proposal be taken forward as given in an understanding or commitment to the Boundary Committee? Has it been taken forward? You must be joking. There is a litany of empty promises, vacuous promises and broken promises, and then the Minister is surprised when the Boundary Committee recognises how poorly served Norwich is by the present county council arrangements. I understand and accept that senior members of the county council, because they are Conservative, do not live in or represent Norwich. That is the democratic will of the people. What I cannot accept is their apparent arrogance and indifference to the city's needs, even though it is the powerhouse of the county. They say repeatedly that they did not want Norwich to become unitary because it would rip the heart out of the county, but they treat Norwich not as its heart-if they did, they would pay rather greater attention to it-but as something like an appendix, which may grumble occasionally, but is irrelevant to the county body's functioning.

Finally, the same issue and arguments apply to the police. Norwich has just one representative on a police authority of nine members, even though a third of all crime in Norfolk is in Norwich and even though there are double the number of incidents of anti-social behaviour per capita in Norwich than in the rest of the county. Equally, on the Devon and Cornwall Police Authority, the Isles of Scilly, with a population of 2,000 and two constables, has a seat, but Exeter, with a population not of 2,000 but of 125,000, does not. Yet in Exeter, the police rate is huge-it is larger than the precept that the district council makes on its own citizens-and Exeter has no right to a voice on the police authority. That simply cannot be right. Why is it that there is more crime in cities? We know that it is drugs and drink and the people who come into the city: the unemployed, the young, the homeless, the transient, the disturbed and the distressed. That is true of most cities, and it is before we get to the rowdiness

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of young people wanting a good time. Yet not all of this is understood by rural councillors or by a police authority whose members live miles away. As a result, we get rural policing standards imposed on a city.

When we were unitary, we had a joint Norwich and Norfolk constabulary, which balanced views and needs on a proper partnership basis. Even after unitary status was taken from us in 1974, in the later 1980s, during the miners' strike, when Kent miners wanted to come to Norwich to block foreign coal being imported on to our quays, as leader, I could go to the Norwich chief superintendent, and we could sort it out. There was no trouble; neither the foreign coal nor the Kent miners found it wise to come to Norwich. That sort of partnership is no more. Despite the best efforts of the police operationally-this is no criticism of officers of the police force-the county police authority has no understanding of city needs because there is no appropriate, proportionate presence on it. This amendment would help to rectify that.

To conclude, Amendments 5 and 6 effectively call on the Minister to make good her words today and ensure that the partnership that she is praying in aid in lieu of structural reorganisation is delivered. I simply ask her whether she means what she says-I am sure that she does-and will she therefore help to ensure that her words are taken forward in the practices of county and district councils? Her reply to this amendment will tell us, I hope, what we need to know. I beg to move.

Baroness Butler-Sloss: In opposing these amendments, I shall give a slightly different perspective. I am not in a position to say what happens in Norwich and Norfolk, but I have just been taking some advice from a senior representative of Devon County Council who has been listening with great interest to this debate. I am told that for the past 10 years, Exeter, in joint stewardship with Devon County Council, has outperformed the national average in a very successful way. There has been a fruitful partnership between Devon and Exeter. The relationship between them, despite all of this, is good, and as soon as the inconveniences that have arisen because of the order in relation to Exeter have finally been put to rest, it is the intention of Devon County Council and Exeter City Council to look to go further and better on economic development in a way that has already been successful, and they expect to be even more successful in future.

There are three areas to which I shall refer in particular. The first is economic development, which I have already mentioned. The second is highways-there has been very close co-operation between both councils on highways-and the third is cultural activities, which have also been very successful. These proposed amendments are bureaucratic and, in my view, unnecessary. They are undoubtedly unnecessary for Devon and Exeter, and I very much hope that the Committee will not wish to support them.

Lord Howarth of Newport: I shall speak in support of Amendments 5 and 6. They must surely meet with the Government's approval, making, as they do, for transparency, accountability, equity and localism.

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Mr David Cameron, setting out Conservative Party policy in November 2009-before he was Prime Minister-said:

"We will require the people and organisations acting for the state to be directly accountable to the people they are supposed to serve ... Through decentralisation, transparency and accountability we can give people power over the services they use, over the way their tax money is spent, over how their local area is run".

It is surely self-evidently right that people in Exeter, Norwich, King's Lynn and Yarmouth and people across the whole of Devon and Norfolk should have the right to know how the county council's resources are being spent, district council by district council, across the range of service areas: social care, children's services, highways maintenance, culture and libraries.

I have a report from Exeter that is rather different from the report that the noble and learned Baroness, Lady Butler-Sloss, has just received from her friend on Devon County Council. I am advised by a very senior person in Exeter that, as in Norwich, they simply cannot establish with any accuracy or confidence how much the county council spends on services in Exeter or what its performance in delivering them is.

We recommend from Norwich that, by 30 September each year, Norfolk County Council should be obliged to provide a detailed analysis of the money that it has spent and the services that it has delivered in each district council area in the previous financial year. Moreover, I propose that, when the county makes its budget for the year to come, it should equally set out in detail what money it proposes to spend on what services in each district council area. It would not be difficult for the authority to produce the financial information in that form. If it were to do so, that would cast light on whether Norfolk or Devon has been in good faith in claiming to be equally committed to the good of all the communities in the county, with their greatly varying needs, and how effective these counties have been in addressing those needs. We will see, for example, what progress the counties have made in tackling inequalities in educational attainment and in ameliorating social deprivation. Such issues are enormously important in themselves but are particularly so in this context because, in rejecting the case for unitary authorities in Norwich and Exeter, the counties, supported by the Government, claimed that they could deal with these problems better. Taxpayers and citizens are entitled to see the evidence on that as it emerges.

This clarity of accounting would also better enable productive partnerships between the districts and the counties. We believe that there should be a Norwich City Council scrutiny committee with the responsibility of scrutinising Norfolk County Council's policies and spending in the area of the city. It is remarkable, as has been mentioned before in our debates, that not one member of Norfolk County Council's cabinet lives in or represents any part of the Norwich City area, yet that cabinet routinely takes decisions that have major impacts on the lives of people in the city. My noble friend Lady Hollis explained to the House just now the fatuity of the Norwich area committee. Does the noble Baroness, Lady Hanham, defend this lack of accountability? Having unitary authorities would have dealt with this problem. These are the last amendment of the afternoon and this is her last chance to accept at least these amendments.

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6.30 pm

Earl Cathcart: My Lords, I will try to stick to the amendments rather than be tempted into going off at tangents. Amendment 5 says that,

That is unnecessary, because Clause 3(2) already says:

"This Act comes into force on the date on which it is passed".

The Secretary of State has already decided that the Act will come into force when it is passed.

I find Amendment 6 strange, as the Secretary of State is not required to lay before Parliament a statement about arrangements for co-operation between district councils and county councils for any other two-tier system, so why now? In any event, the spending plans are a matter for local councils, not for Parliament. The leader of Norfolk County Council acknowledges in a letter to me:

"The economic climate is such that there is an even greater need for local councils to co-operate and share at this time, if we are collectively to protect vital public services in Norfolk".

I have no doubt that the county council intends to co-operate fully with other councils.

Secondly, Norwich City Council already has two twin-hatters, by which I mean members of both the city council and the county council. Surely these twin-hatters can scrutinise the spending plans and financial statements and raise issues on behalf of their constituents. That is why they are there. The noble Lord, Lord Howarth, talked about decisions made by cabinet. However, those decisions have to be passed by a full council on which these two twin-hatters sit, so they should know what the arguments are and put the case for Norwich City if they think it appropriate.

As for the police authorities, the police are a county council responsibility and, as such, and quite rightly, the authorities comprise a number of county councillors-eight in all-and independent members: in other words, non-councillors. Of the eight councillors, one is from Bowthorpe, Norwich, to which the noble Baroness, Lady Hollis, referred, and one is from Thorpe St Andrew in greater Norwich. Having a quarter of the appointed councillors-

Baroness Hollis of Heigham: The Bowthorpe councillor speaks, basically, for the south Norfolk area, which is not the Norwich City area, on the police authority.

Earl Cathcart: We may be splitting hairs, but he lives in outer Norwich. In any case, I think that there is city council representation on the police authority. The amendment is extraordinary in that no other council is required to report in this way through the Secretary of State. It is also unnecessary, because all the things for which the noble Baroness, Lady Hollis, is calling already happen.

Baroness Shephard of Northwold: Does my noble friend not agree that the force of this amendment is to ask the Government to get Norwich City Council and Norfolk County Council to get on? Is that not rather overegging the power of the state? I hope that the opposition spokesman will bear that in mind when summing up.

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Lord McKenzie of Luton: I will speak only briefly on this issue, given the time and the important business that is due to follow. I support the thrust of what my noble friends are trying to achieve by this amendment. We have heard of the specific issues and challenges that arise, the relationships between Norfolk and Norwich, and differing views of the relationships between Exeter and Devon. I am bound to say that I do not see twin-hatters as the way to solve all this, as they are subject to the vagaries of the electoral system; they are not a reliable or desirable way to do this.

The nub of what my noble friends are seeking is to recognise that if we truly support partnership working and if Total Place and area-based budgeting is to become a reality and a success-as it must, given the dramatic cuts that are coming down the line from central government-information, the role of councillors, the engagement of councillors between authorities and representation are absolutely central issues, as they are to the assertion made by the noble Baroness, Lady Hanham, and her party on the way forward for Norfolk and Devon. Even if she does not embrace the formulation in the amendment, will she follow up in writing if she cannot say so fully today quite what mechanisms are and should be available and which mechanisms will be introduced to ensure that all this partnership working, to which we all subscribe, can really become fruitful and deliver the outcomes that are wanted for local citizens and local taxpayers?

Lord Rennard: My Lords, these amendments contain worthy aims about co-operation between the councils concerned-something that obviously everyone should seek, although we may not have been a model of co-operation among politicians in our debate today.

The noble Lord, Lord Howarth, made some good points about the unfairness in the balance of representation in Norfolk. I must say from the Liberal Democrat Benches that there is an obvious answer to that unfairness and lack of balanced representation in many local authorities: proportional representation for local council elections. I am sure that that will be a subject for a debate in future.

I do not, as noble Lords will know, believe that the process of local government reorganisation in these areas, in particular the way in which the previous Government tried to railroad through new structural changes in their dying days, has been exactly conducive to the sort of co-operation that is now required. However, nor do I think that it is compatible with a localism agenda for the Secretary of State to have to report to Parliament on plans for co-operation between the councils in these areas. That must be agreed locally. It is something that I believe local people will want and vote for in the elections. It is not something that could practically be controlled from the centre. The uncertainty and the consequential divisions of the last few years, and the last few months in particular, need to be set aside. The councils concerned now need to do what many other councils are looking at in terms of proper co-operation without the need for structural reorganisation at this point.

Baroness Hanham: My Lords, I thank my noble friends Lord Rennard and Lord Cathcart for virtually winding up this debate for me, because they have said

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more or less all that I wanted to say. There are two main issues here. First, in order to produce the sort of report that is being asked for before the Act starts would mean more delay. Frankly, I think that there has been enough delay and chivvying around with these orders. As I said earlier, this is the end. We must stop this now and let everyone get on with working normally. The amendment would only delay that.

The second issue is that it is not up to Parliament to sort out how local authorities collaborate with each other. It is certainly up to Parliament to say that there is an expectation that local authorities will work together-that counties will work with their districts and districts will work with their parishes. They are going to have to do so because, as the noble Lord, Lord McKenzie, said, there is going to be far less money. If services are to be provided to a standard and in a way that all local authorities will want, there will have to be close relationships between all levels of authority.

I do not see that these amendments are for Parliament. The first one would certainly delay the issue, which would be an enormous mistake. We have many examples of where there is excellent co-operation in services in terms of procurement, transparency, social services, children's services and waste collection. I have a long list of every single responsibility in local authority services of where co-operation is taking place, but I shall not weary the Committee with it. All of us know that there are good collaborative arrangements.

I think that Norwich's miseries have had a good airing today. A lot of information has been given about how things take place and I am sure that that will be noted. I have no doubt at all that Norfolk and Norwich will read Hansard avidly and so will note the noble Baroness's concerns about the difficulties and how things stand. I was going to say that I do not support these amendments. Indeed, I do not think that Amendment 6 in particular has anything to do with Parliament, so I hope very much that the noble Baroness will withdraw her amendment.

Baroness Hollis of Heigham: My Lords, I thank all noble Lords for contributing to the debate. Perhaps I may run briefly through the comments by individual contributors. The noble and learned Baroness, Lady Butler-Sloss, said that she represented the views of a senior county councillor in Devon. I am sure that is the case, but forgive me for noting that, as county councillors, they would say that, wouldn't they? Of course they would say that the arrangements are fine. I have met senior-

Baroness Butler-Sloss: I am grateful to the noble Baroness for allowing me to interrupt. If I said "county councillor", that was absolutely wrong. It was a senior executive working for Devon County Council.

Baroness Hollis of Heigham: Forgive me, but that does not affect my point. If I misheard the noble and learned Baroness, I apologise. I understood her to say that it was a senior county councillor, but if it was a senior county official, none the less it is from the county perspective. Like my noble friend Lord Howarth,

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I have met district councillors in Exeter from all the political parties, so far as I am aware-I am not sure whether the Conservatives were there, but the Liberal Democrats certainly were-who have given us a very different view and say that such co-operation as is being recommended and extolled by the noble and learned Baroness, Lady Butler-Sloss, is simply not happening on the ground.

6.45 pm

Lord Burnett: My law firm has offices in Exeter. I know Exeter well and a lot of the time I work there. The noble Baroness should rest assured that the people whom I come across-those who live and work in Exeter-are entirely happy with the co-operative arrangements, which are now working very well indeed.

Baroness Hollis of Heigham: I can only say that that is not the view that I or my other friends have been given by senior members of the district council. Perhaps I may also say, for what it is worth, that if the noble Lord were to ask his noble friend Lord Tope whether that was the view that he was given when the delegation from Exeter came to see him, I think that in all honour the noble Lord, Lord Tope, would support the comments that I am making.

I come next to the noble Earl, Lord Cathcart. He asked, perfectly reasonably, "Why these two councils and not other councils?". The reason why this amendment was tabled and the reason-I shall come on to this-why this should go through Parliament is precisely that, as a number of noble Lords have said, the benefits of unitary status that Norwich and Exeter have sought can be achieved by partnership arrangements. That is why we are talking about Norwich and Exeter. We are not talking about other places that are not seeking such arrangements. We are talking about two authorities that have been denied unitary status, which they believe would produce best value for money and the most effective delivery of services. In place of that, constructive partnership arrangements can have the same effect. That is why this amendment concentrates on those two authorities.

I would be delighted if other district councils in Norfolk, in Devon and across the country equally benefited from the ability to disaggregate county council statistics about the value for money, effectiveness and cost of the delivery of services in their district. That would be splendid. However, it is these two authorities that are being told that this is an effective, value-for-money alternative to unitary status-hence the amendment.

Why are we saying that this should go through the Secretary of State? The noble Baroness, Lady Shephard, the noble Lord, Lord Rennard, and I think the noble Baroness, Lady Hanham, said that this is not a matter for Parliament. My problem is this. If the Government are seriously arguing that collaborative partnership arrangements are, in the Government's eyes, a proper and appropriate alternative to unitary status, that collaborative partnership arrangement depends on both parties-the county council and the district council-co-operating fully, which I am sure happens elsewhere in the country. If, for that co-operative arrangement, information about the costs and delivery of services is required by the cities involved so that they know what

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is happening in their cities as a result of county council services, but the county councils refuse to divulge the information, on which partnership must rest, what does the noble Baroness suggest can be done?

We cannot have unitary status because that has been denied to us. We cannot have collaborative partnership because the information is being withheld. What does she suggest we do? That is why I have moved this amendment: to focus Parliament's attention. Warm words are nice-

Viscount Eccles: I thank the noble Baroness for giving way. I think that what she is suggesting is to pass an unenforceable law.

Baroness Hollis of Heigham: My Lords, no one has asked the Committee to make a judgment on this, so I think that the noble Viscount is being just a little premature.

The point of the amendment is to test the validity and the viability of the noble Baroness's assertion, which has been reinforced by a number of noble Lords during the debate, that constructive partnership arrangements are a viable alternative to unitary status. We were promised that in 1994-95, but despite those promises it did not happen. Norfolk County Council has already promised some of this to the Boundary Committee, but so far it has not happened. For these arrangements to work, we must have the information, but so far the council has refused. The noble Baroness says in all conviction, I am sure, that these alternative partnership arrangements are a viable option in place of unitary councils, but how is she going to advise us to make it stick? What advice can she give Norwich when Norfolk refuses to give it the information that it needs to make those partnership arrangements work? Will she please tell me? I will give way to the noble Baroness, because I have run out of remedies.

Baroness Hanham: As I said, there has been a barrage of questions about Norwich today. Councils will be required, first, to be transparent and, secondly, to co-operate and co-ordinate with other parts of local government. Parliament will not be able to do anything if, as the noble Baroness suggests, there is a block between Norwich and Norfolk. However, I do not believe that that can be the situation. My advice is to get in touch with Norfolk and make sure that you all work together and co-operate. This is not a matter for Parliament.

Baroness Hollis of Heigham: Will the noble Baroness support us when we seek from the county council the information the city needs in order to build these partnership arrangements?

Baroness Hanham: The noble Baroness asks the question again. This is entirely a matter between Norwich and Norfolk County Council and arrangements should be made at that end. There is not a role for the Government in this unless there is complete obduracy-and I rather doubt that that will be the case after this debate has been read and understood.

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Baroness Hollis of Heigham: I thank the noble Baroness for her response. I hope that she is right and that there will not be complete obduracy. She is resting her case for opposing Norwich and Exeter becoming unitary on the ability to construct partnership arrangements between the two authorities. However, if one of the parties refuses to give or disaggregate the necessary information on which the partnership is to be built-and as a district council we have no way of requiring them to give that information-and the Government will not impress upon it the need to give that information, in what way will her alternative recommendation of a partnership have any validity whatever? In one or two years' time it will be exactly the same as it is now, and as it was in 1994, and as it was in 1988 for all I know.

That is not enough. We cannot build services for citizens who are paying their rates and their taxes by precept on ignorance, but that is what we are doing. No Government of any political complexion should expect councillors to go to their taxpayers and ratepayers and say, "These are the services, but we do not know whether we can do better than this because the information is being withheld from us". How can we deliver, as we all want, effective, value-for-money, transparent and accountable services when that information is withheld?

We shall return to this on Report. I hope the noble Baroness will be able to help by impressing on the relevant county councils their possibly legal but certainly moral obligation to share information so that the citizens of the counties of Devon and Norfolk get the best possible services, which we all want them to have. I beg leave to withdraw the amendment.

Amendment 5 withdrawn.

Amendment 6 not moved.

Clause 3 agreed.

In the Title

Amendment 7

Moved by Baroness Hanham

7: In the Title, line 2, leave out from "2007" to end of line 5

Amendment 7 agreed.

House resumed.

Bill reported with amendments.

Arrangement of Business


6.54 pm

Earl Attlee: My Lords, because the Question for Short Debate in the name of the noble Lord, Lord Haskel, will now be taken as last business, the timing for the debate becomes 90 minutes rather than 60 minutes. Speeches should therefore be limited to eight minutes, except for the speeches of the noble Lord, Lord Haskel, and the Minister, which remain limited to 10 minutes and 12 minutes respectively.

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Environment: Low-carbon Technologies

Question for Short Debate

6.55 pm

Asked By Lord Haskel

Lord Haskel: My Lords, I thank my noble friends, including the noble Lord, Lord Smith, who will be speaking in this debate. I also thank the Minister, who, unfortunately, is the only speaker from the government side. Perhaps I may also say how much I-like everyone else, I am sure-am looking forward to the maiden speech of my noble friend Lord Prescott. He has been a real champion for a low-carbon environment, and over many years he has really delivered on that.

The coalition, however, has so far only made promises. Its agreement promises to,

of measures-

Those are fine words, and yes, many measures are needed to run a low-carbon economy. The purpose of this debate is to find out whether the Government are really going to do it. But even if they do, they will not be successful unless they have the political will and the determination to see it through.

What are these measures? The first is money. You need public money to stimulate private investment, because science and technology is too risky for the private sector alone. It is a kind of market failure. The Enterprise Minister recognised that when commenting on the new enterprise capital fund and the growth capital fund announced in the recent Budget. The Government plan to create a green investment bank during the next Parliament. The Conservative Party Green Investment Bank Commission reported at the end of last month that the green investment bank must be established now because of the lack of funding for small low-carbon projects and the hope that a green investment bank would encourage more investment in the green economy from the private sector. It made the important point that these institutions need the clear goal of reducing carbon, not of creating shareholder value. It is not there to crowd out the private banks.

Another reason why that Conservative commission is anxious for the green bank to start is that money is global. If the state procrastinates or keeps changing its mind, the money will go elsewhere, probably into something far less risky than technology. Last week's NESTA report makes exactly this point. I hope the Minister will listen to his own supporters who are concerned that, without these financial measures, much of our investment in science, technology and innovation will be wasted.

What about people? People are a key part of these measures. The Royal Society's report The Scientific Century contains a section called "Scientific People" and it says it all. It deals with the shortage of secondary school science and mathematics teachers, because without good teachers there is little hope of inspiring children

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to stick with science and engineering; with the need for inspiration and encouragement for students to stick with STEM subjects; and with the shortage of skilled people in the supply chain. Diversity in the science and engineering workforce remains a real challenge, and we now have to compete with the United States and elsewhere to attract the best talent. It may be a statement of the obvious, but the point I am trying to make is that unless we teach, train, attract and encourage enough good people, the project will not succeed.

So what about the science and technology itself, which is perhaps the key measure? We are inundated with reports, all of which argue the intellectual case for maintaining a strong science base to enable Britain to engage in research, development and innovation. The environmental industry has produced its own manifesto on how we can contribute to economic growth through technology. In many ways, it agrees with the recent Hartwell paper-which the Minister says he has read-which states that decarbonisation goes hand in hand with improving our quality of life.

According to Mr Willetts, the Science Minister, government procurement can also help promote a low-carbon economy. Last Friday he said on the radio that he would like to encourage government procurement from innovative, small technology companies. It is obvious that the coalition has not yet got the hang of joined-up government, because the small business research initiative operated by the Technology Strategy Board has done, and is doing, precisely that. During the past couple of years, some 400 companies have had contracts from 14 government departments. I hope that the Minister will tell his honourable friend about it.

What about jobs? The way that the market seems to work is that the moment something we invent here needs scaling up, it is outsourced to Asia or eastern Europe. So most of the jobs created by new products will not be located here; they will be located there. The Government have said that we need to create 2 million new jobs in the private sector in the next five years. I am not suggesting protectionism, because protectionism never works anyway; but I am suggesting that "making it here" is another aspect of the low-carbon market which needs the Government's attention. I know that my noble friend Lord Sugar has something to say about that.

A lot of low-carbon technology deals with energy. Renewable energy and nuclear energy are seen as having a key part to play. The problem is that there is no single best solution. The Committee on Climate Change points out that, at the same time as strengthening our ability to generate low-carbon electricity, we have to reform the energy market, achieve a floor price for carbon, and improve the energy efficiency of buildings, agriculture and transport. All this requires the Government's attention; all this is part of the "measures".

So where do we find the political will, the commitment and the determination to do all this? I hope the Minister will agree with me that the first task of the Government is to get the balance right. Because of the financial crisis, the level may have to be reduced, but it is no use being selective. You have to do it all.

Secondly, the Government can show political will by setting high standards. The market wants standards to create a level playing field; business wants high

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standards to encourage innovation; and the British people want high standards to make Britain a better place to live. I know that the Government are reluctant to regulate but, as the Committee on Climate Change says in its report, regulation is needed to achieve the reduction in greenhouse gases which the law demands. It is needed because exhortation and social responsibility have not worked. Another way of showing political will is to tax carbon emissions instead of taxing work and innovation. Before the election, the Liberal Democrats were very vocal on this, but, since then, they have been uncharacteristically quiet. Is the Government's vision limited to cutting the deficit, or is there a greater ambition-an ambition to create a low-carbon economy by tackling all the measures that I have raised? Or is this too much for a Government who believe in smaller government? We need to know, because there is an awful lot riding on it.

The Minister has indicated previously that many of these issues will have to wait until the spending review in October. That is not good enough, because markets do not wait for Ministers. If they sense delay and procrastination, they just move on regardless. So here is an end-of-term suggestion for the Minister that he could be getting on with. He should cancel the use of all ministerial cars in central London and instead use the mayor's free public bicycle scheme, which starts soon. It will save money. It will reduce carbon. The technology is proven. Most Ministers have the necessary skills. It demonstrates the Government's commitment to a greener economy. It is leadership by example. I look forward to seeing the Minister with his trousers tucked into his socks.

7.06 pm

Lord Bhattacharyya: My Lords, I thank my noble friend Lord Haskel for securing this important debate and for his characteristically wise opening remarks. However, I find myself in the unusual role of a warm-up man-or should that be "warm-up Peer"?-to my noble friend Lord Prescott. Given his great work at Kyoto, he could not have chosen a more fitting topic with which to open his account. I am sure that the whole House looks forward to his contribution today and in the years to come.

I have to admit that I am grateful to my noble friend. I doubt whether the Press Gallery would be paying such close attention to this vital debate without his presence. Despite the terrible inattention of Lobby correspondents and despite what my noble friend Lord Haskel said, most people are very conscious of the low-carbon message. That is shown in the fact that low carbon is already being widely adopted.

Today, the low-carbon revolution is being driven by consumers, not legislators. For example, car manufacturers know that buyers look at a vehicle's emissions performance as well as the quality of the trim. The green revolution is now consumer and market led. Much of the technology exists and it is now a matter of achieving competitive pricing, which will come with scale.

By taking a consumer focus, we can be realistic about the future, which is happening in the majority of countries. If we are not, we might fall prey to the hocus-pocus that we find in any new market. For

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example, the all-electric car, which has received huge publicity during the past few years, is a long way from being a widely used reality. Imagine the impact on the grid if tens of thousands of cars were plugged in to charge every evening. We need giant strides in battery technology and massive investment in infrastructure before this will be viable.

At the same time, car manufacturers are achieving massive reductions in emissions through light-weighting, advanced hybrid technology, improved engine efficiency and technology to guide drivers. We should focus on an integrated research programme that includes practical low-carbon innovations alongside the "green sky" big infrastructure projects.

There are two reasons why such investment in practical low-carbon technology is essential. First, reductions in emissions have been a consistent goal for a long time. The "easy" emission cuts have already been made and emission cuts from now on will be far harder to achieve. The bulk of post-1990 reductions came from the switch from coal-fired power stations to gas. To find sources of lower-carbon energy today will require huge investment. The sums involved are staggering. The Green Investment Bank Commission says that up to,

Given that scale, we must do all that we can to encourage private actors, whether individual or corporate, to make low-carbon choices, thus reducing the pressure on our energy infrastructure.

Secondly, if emissions caused by the production and transportation of imported goods are included, some argue that UK carbon consumption rose by a fifth between 1990 and 2005-a point made forcefully by exporting nations whose emissions are rising today. We are not merely responsible for what we produce; we are also responsible for what we consume. This means that reducing global emissions requires behavioural change by British consumers. If we are to encourage consumers to choose low-carbon products, we need innovation to make those choices attractive. In other words, there is no point in developing a new green engine if drivers find it inferior to current ones, or in designing green homes that families cannot afford to buy.

Government funding for low-carbon technology, then, must bring businesses and research groups together at the very beginning. We must encourage innovators to develop practical solutions that help consumers adopt low-carbon behaviour. There is an obvious opportunity here to supply the world with the low-carbon technology that consumers demand. Grasping that chance requires support for industrial innovation clusters. It demands that we invest in product and process-based research and innovation.

We should, of course, also be mindful of the need for value for money. We should acknowledge the work of the National Audit Office, whose report into renewables in June proposed fewer but more affordable and effective funding bodies. One suggestion is to bring together the regional growth fund-I do not know what that means-with the Technology Strategy Board and targeted

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research council funding to create a focused green technology body. When funds are tight, we have to do it in a highly focused manner. Such a clearly defined group would have the resources to make a real impact in low-carbon innovation. That support would encourage innovators, from manufacturers to research laboratories, to invest in green technology programmes. It is not that we are behind any other country in green technologies; it is because the advantage of having financially efficient products is not there.

We must keep a clear focus on consumer-focused practical innovation if we are to meet our targets. Otherwise, much of our investment will be wasted. We cannot afford that, either for the environment or financially. A low-carbon economy requires practical action, not the recitation of mantras. Whenever Prime Ministers and Chancellors talk about low carbon, I do not think any of them really understand what it means. With a clear focus on practical solutions, we can develop low-carbon products and processes that will secure growth, jobs and the environment. That is something all sides of the House would wish for. It is within our grasp. Let us take this opportunity to make it a reality.

7.13 pm

Lord Prescott: My Lords, first, may I express appreciation for the very warm reception given to me by noble Lords here in this debate and in the House? It is quite different from the House of Commons, I might comment. I have no interest to declare, except to declare the political interest of pursuing social justice and, indeed, global solutions to global problems. I am therefore most pleased to have another parliamentary Chamber in order to make that case and I look forward to doing so, no longer as the Member of Parliament for my constituency in Hull but as a Lord of Hull-not pronounced with the big H-a very proud city, full of Yorkshire people. I am delighted to find another opportunity to represent their case.

It will come as a surprise to some to know that I am related to others of this House. A person of my family served this House with distinction: a Member known to some of your Lordships as Lord Bancroft. I have discovered only quite recently that I am related to him. In fact, we share the same great-great-grandfather, a Welsh miner in the 1830s. Lord Bancroft became the secretary to the Cabinet and the head of the Civil Service, but was removed by Prime Minister Thatcher because he was not prepared to change the Civil Service. That just shows it is in our genes. Lord Bancroft was the Permanent Secretary to the Department of the Environment in 1977. Twenty years later, I had the honour to become the Secretary of State of that department and, as has been referred to, the European Union negotiator for the successful Kyoto agreement on climate change.

I welcome having this opportunity for my maiden speech and I congratulate my noble friend Lord Haskel on this debate. It is a timely and important debate, as I am sure the speeches will show, but I want to reserve my comments to the consequences of climate change, because it is important to get a global solution to that global problem. Unless we can solve the output of carbon, either at the national level or globally, we will

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inevitably be affected by the result. I shall address my remarks in this limited time to securing a Kyoto 2 agreement at the coming conference in Cancun in Mexico, in December this year. I do so from my experience as a Kyoto negotiator and as the present Council of Europe rapporteur on climate change. I attended the recent Copenhagen conference and will be attending the Cancun conference in December. I have, in the past two months, visited China a number of times to discuss the issues of climate change.

Copenhagen was not a success. Expectations for it were too high, especially in hoping for an internationally agreed and legally enforceable agreement. I said at the time that it was not possible to get that. My colleagues in the previous Government believed that we could, which contributed to the failure of Copenhagen. Kyoto's legally enforceable agreement applied to only 47 developed countries; in Kyoto 2, we are now dealing with 187 developed and developing countries-a much more difficult problem. Moreover, the Kyoto agreement took four years to negotiate and finalise while at Copenhagen, because a few leaders arrived, it was expected that it would be done in four weeks. As we soon showed, that was not possible.

However, Copenhagen accepted the climate change science-that is now readily accepted-the need to reduce carbon outputs and limit the global temperature increase to 2 degrees centigrade by 2050, and to provide sufficient funds for developing countries to invest in low-carbon economic growth. Yet an international, legally enforceable agreement could not be agreed. That was not only opposed by China, India and most of the developing countries but could not be implemented even by America or China, so in those circumstances it really was not possible.

A continuing difficulty at those Copenhagen negotiations was that they were not able to establish proper criteria for carbon targets. The mood at Copenhagen was soured by the Americans claiming that as China and the US had the same absolute output of carbon, the cutbacks should be the same. That totally ignored any concepts of population and fairness being taken into account; namely, that the measures should be per capita, per person in order to be fairly accepted there. It also needed to be embodied in the concept of the UN principle governing a global solution, that of common but differentiated responsibilities and respective capabilities.

Bearing in mind the prediction in the excellent work done by the noble Lord, Lord Stern, for the previous Government-it has had a tremendous effect on thinking on climate change and is much to his credit as a Member of the House-when we take into account that the world economy will have grown to be three or four times larger by 2050, while emissions will have to be kept to a quarter of the level they are today. That is a staggering conclusion when we are talking about the efforts to be made to reduce the amount of carbon. Therefore, in order to have burden-sharing, carbon production must reflect targets on national carbon outputs per capita.

For example, if we look at the United States, it may be the same in absolute terms but if we look at it by population, it is in fact 20 tonnes per person for

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America, 10 tonnes for Europe, five for China, two for India and one for poor old Africa. It is impossible to assume that somehow we can find an agreement that simply cuts the carbon. It has to reflect social justice and the right of developing countries to develop prosperity and reduce unemployment and poverty which they have in that early stage. Social justice is at the heart of any possible agreement at Cancun. It does not make it any easier, but we must bear in mind that 2 billion people live on this planet on less than $2 a day and that they are largely in the developing countries.

My concern is not repeating that same mistake of anchoring on to the problem of a legally enforceable agreement. My concern was heightened by the statements given by the Prime Minister in the other House and by the noble Lord, Lord Strathclyde, the Chancellor of the Duchy of Lancaster, who said that they believe that is still the target for Mexico. If we make that the target for Mexico, we are bound to make the same complaint and have the same failure. We cannot afford to have another failure at Cancun.

There is an alternative, which I hope the Government will consider, particularly as they say in the same statement that they want a successful conclusion at Mexico. They are absolutely about that. What they can do is to get each nation to declare a voluntary agreement, as many of them are doing, put them together in a global package and let them operate and see how it works in the next few years. That would require them to change the end date of 2012 from Kyoto 1 and extend it to 2015. After all, we are specialists in Europe in stopping the clock. That would allow us to look into whether we can voluntarily exercise this agreement. It needs transparency and accountability and we have to think how to do that, as a challenge for Cancun. If we can do that, we can prevent a failure if we hang on to the legal framework; if we use the voluntary commitment, which China and America have in their programmes, we can make that the global target, work for the agreement and build the trust. Let us see how it works in the next few years. I think that is the way forward.

Failure must not be allowed to happen at Cancun. I believe that the proposal would be a sensible compromise, allowing a continuing discussion and progress to a fully acceptable Kyoto 2. I believe that China and Europe, representing the largest developed countries and the largest developing countries, could make this happen. I hope that the UK will do all that it can to see that is brought about.

7.21 pm

Lord Giddens: My Lords, I congratulate my noble friend Lord Haskel on initiating this debate. I especially congratulate my noble friend Lord Prescott on his marvellous maiden speech, delivered with his characteristic verve, passion and good humour. The noble Lord has been an inspirational force in left-of-centre politics for many years, but he has also been a doughty environmental campaigner. As he has mentioned, he was key negotiator for the UK in Kyoto. As he did not mention, he made a massive impact on the consequences of those negotiations. He has been a rapporteur for the Council of Europe on climate change, as he said-but he did not say that he had represented the Council of Europe

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at Copenhagen at meetings although, as he did say, they did not lead to great success. Nevertheless, we are on track to reach an outcome of the sort that he described.

My noble friend Lord Prescott, rightly emphasised strongly the importance of China in climate change negotiations and the importance of being sympathetic to China's position and the difference between China and the industrial countries. That is a very appropriate emphasis. Noble Lords will agree that by any reckoning the noble Lord is a notable addition to your Lordships' House, and I hope that all other noble Lords will join me in giving him a hearty welcome.

"Deeds not words" was the motto of the suffragettes and it is an appropriate slogan for Governments in dealing with climate change and energy security. Unfortunately, for many Governments across the world, it is the other way around, with lots of promises and plans but very little action on the ground. As the Minister will know from our several meetings, I am very pleased that the Government are sustaining the cross-party consensus on climate change and energy policy initiated by the preceding Government. However, as my noble friend Lord Haskel has said, now is the time for action. The business leaders who will help to drive change are waiting for much clearer signals than they have received so far. Many, as I know from speaking to them, are already feeling frustrated.

Will the Minister respond to three sets of issues? First, the Government have stated unequivocally that they will introduce a floor price for carbon. It is perhaps the single most important measure to help to stimulate an investment in low-carbon technologies. But how far has government thinking advanced? Will the floor be established by a carbon tax on energy producers? What will be the implication for EU regulations? I do not think that it is good enough any more simply to say that we should wait until autumn, because that excuse is wearing thin. What is the Government's initial orientation towards the issue? Is it possible to produce a consultation paper during the summer which would give businesses, in particular, the chance to be involved in an open discussion leading up to whatever decisions are taken in October?

Secondly, the Committee on Climate Change has proposed that CCS should be extended to gas-fired power stations, not just to coal. Will the Government accept that one of the four planned CCS trials with coal should be with gas, as the committee proposed? That is a very important question, given that there is a lot more natural gas in the world than we thought even seven or eight years ago because of the possibility of extracting natural gas from shale. Therefore, natural gas could continue to be an important transitional technology towards a low-carbon economy but, as the committee shows, it will need CCS if such a plan is adopted. Again, I do not think that saying that they will let us know in due course is a substantial enough position. Do the Government accept the idea in principle that we should put money into investigating CCS for natural gas production of electricity?

Thirdly, speaking as a social scientist and economist, I think that a lot more work needs to be done on what a low-carbon economy actually is or will be. It cannot

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be just an economy like the existing one, with a lot more low-carbon technologies in it. It is a transformative thing and we have to look at it holistically. To my mind, there is still a good deal of loose thinking about what a low-carbon economy will be like. For example, in respect of jobs, the implications of a low-carbon economy for job creation are a crucial phenomenon. Even in official documents I have seen it stated that low-carbon technologies will create thousands, perhaps hundreds of thousands, of new jobs. But this is a meaningless statement unless these are net new jobs, and I do not see where the analysis is-at least, I have not traced it in official documents-of what the net implications are of a transfer to low-carbon technologies. A lot of jobs are likely to be lost in the older technology industries.

We need a different entrepreneurial model to look at job creation in an emerging low-carbon economy. I would label this the Starbucks model. No doubt like other noble Lords, I lived in America for many years. There is a lot of coffee in America, but most of it was pretty horrible; the only good thing about it was that your cup was endlessly refilled. Who knew that Americans-and, indeed, people in many other countries too-were harbouring a desire for a much better kind of coffee and the sociability that went along with it? That is what the initiators of the Starbucks chain spotted. It would be the same for entrepreneurial opportunities in the emerging low-carbon economy, because job creation will come largely from the structural changes in habits which such a transition will bring about and express. In spite of the talk about a return to manufacturing, we will still live in a predominantly service economy. It is the entrepreneurs who will spot the opportunities that the transformation of a society to a more sustainable economy will bring about, as well as who will make money and create jobs. It is not just up to the Committee on Climate Change to think about this. The Government must think about it, the Treasury must think about it, and it must be linked to actual practice. I repeat the theorem with which I started: "Deeds not words".

7.30 pm

Lord Smith of Finsbury: My Lords, I join in the thanks to my noble friend Lord Haskel for initiating this important debate, and I echo my noble friend Lord Giddens's warm congratulations to my noble friend Lord Prescott on his typically robust, well informed and passionate maiden speech. I join in the warm welcome that my noble friend has been given on all sides of your Lordships' House.

As chairman of the Environment Agency, I am acutely aware of the reality of climate change. The agency stands at the point where environmental change, changing weather patterns and the challenge of climate change have their greatest impact on individuals and their lives. We have to deal with the increasing incidence of flooding, the increasing threat of drought, the extremes of weather that we are increasingly going to experience, the difficulties of scarce water resources that we may well encounter in years to come and the impact that climate change is having and will increasingly have on biodiversity.

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The report issued this week through the United Nations by Pavan Sukhdev that looks at the economic importance of biodiversity is likely to be as important in many ways as the Stern report was in looking at the economics of climate change itself. The conclusion, of course, has to be something that is almost universally agreed across all sides of this House: we have to reduce our carbon emission as a country, and we need to make the shift as rapidly and sensibly as we can to a low-carbon economy.

My noble friend Lord Prescott graphically outlined the disappointments of the Copenhagen process. He himself played a game-changing role in the original Kyoto conference, and the progress that he was outlining to us needs to be a real possibility for the future. There is, however, a temptation for us to take the view that because Copenhagen was such a disappointment, and because other countries have not signed up in legal form to carbon and other greenhouse gas emission reductions, we should therefore not do anything ourselves. We cannot and should not wait for the rest of the world to take action.

My central point today, and the reason why the topic that my noble friend Lord Haskel has chosen is so important, is that insisting on high environmental standards and driving low-carbon emissions presents an economic opportunity for this country, not a potential burden. A huge potential market is opening up now around the world for low-carbon technologies, innovative products and carbon-free ways of generating and using electricity and of finding new products to ensure that we can continue as a developed world-and, I hope, as a developing world-to have high standards of living but in a low-carbon way.

There are real opportunities here, but unless we insist on those high standards and put in place both the regulation and the incentives to ensure that industry responds, we are not going to seize them. Look at what happened, for example, when wind technology began to take off. It was Danish and German companies that seized the opportunity, invested in product design and made the products. Now, if we want to buy wind turbines, we frequently have to go abroad to purchase them.

A recent report by PricewaterhouseCoopers surveyed businesses across the world at a very senior level. The result of that research was that there was a common thread across the whole business community: they got the seriousness of climate change and they wanted to be part of the low-carbon future, but they wanted certainty and clarity from government in order to enable them to get there. That is why I welcome the coalition's commitment to putting a floor price in place for carbon. That is probably the most important thing that can possibly be done in order to get that clarity and certainty. Of course it needs to be done in the right way, at the right place and with the right prognosis for the carbon price in place as well, but it presents a real opportunity.

There are three obvious areas, among many, where government decisions, actions, incentives and investment can help. The first is carbon capture and storage. The coalition Government have, rightly, committed themselves to continuing with the four demonstration projects

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that the previous Government put in place. I welcome that. We need to get on with it, though; we need to ensure that we are ahead of the game, using the advantages that we have with regard to this technology. We have much more usable carbon storage areas under the North Sea than many other countries do-let us turn that to our advantage and develop this technology quickly.

The second area is electric cars. The full carbon benefit of electric cars comes only when we decarbonise electricity production, but none the less we know that it will take years for the technology of electric cars to be fully developed so we ought to be putting the effort in now.

The third area is wave and tidal power. We have done far too little as a country up to now in the research that is needed into the development of wave and tidal. We are a country surrounded by waves and tides; we ought to be able to use these forces of nature to our advantage. We need the Government to provide the right framework, to stimulate the research and early development that are needed, to support innovation, to help with the provision of essential infrastructure, to require standards and, yes, to insist on regulation where necessary, and then the marketplace will respond. It needs to be a partnership between the Government putting the framework in place and the market then doing what the market does best, which is to innovate and be entrepreneurial and develop the products and sell them to those who wish to purchase them.

I am pleased that this development of the low-carbon economy has been such a priority item in the agreement that formed the coalition. There now needs to be urgency about its implementation.

7.38 pm

Lord Berkeley: My Lords, I congratulate my noble friend Lord Prescott on a fantastic speech. It is not just we in this country but, I suggest, people in many parts of the world who should be indebted and grateful to him for the work that he has done on climate change and sustainability. Maybe Kyoto has not gone as far or as fast as he, or any of us, would have liked, but I am pleased to hear that he is going to continue with some of this work. It is a major achievement that we have got this far.

I also congratulate my noble friend Lord Haskel on securing this debate. It is interesting that, just as we found last week in the debate on the railways, the Benches opposite are empty, apart from the Front Bench and one sole survivor from the Liberal Democrats, whom it is good to see in his place. Is there any interest in the Conservative Party in energy or, for that matter, in railways? There was not a single speaker from the Conservative Party in the railways debate last week. There were many Liberal Democrats interested in railways, which was great, but I wonder how many speeches from Liberal Democrats we will hear tonight. Maybe we will hear one-or maybe we will not.

That is indicative of something that has worried me in the period since the election. I wonder whether there is a coalition policy on energy; perhaps the coalition is still working it out. I understand that in the nuclear field it may be difficult. The Liberal Democrats

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were very much against nuclear power in their manifesto, while the Conservatives were much in favour. I do not know how you can have half a nuclear policy. Maybe we will have nuclear power stations if there is no state subsidy or subvention. I suspect that that will be quite difficult. It may reinforce the point made by my noble friends Lord Haskel and Lord Giddens: if the businesses do not see a clear way forward soon, they will go somewhere else. That would be unwise, but there is certainly a lack of enthusiasm here. I hope that the Minister, when he replies, will tell us all that there is a firm energy policy and what is going to happen, rather than something that is possibly a little skin deep.

I will confine my remarks tonight mainly to biomass, which is a useful renewable. It is not often spoken about. It is a fairly balanced means of generation in terms of carbon in and carbon out. What I like about it is that not only is it sustainable but there is quite a lot of it around. I think that it offers the fourth largest amount of energy after coal, oil and gas. It is not too difficult for us to import what we do not have locally from Canada, North America and the Baltic, without destroying areas of farmland. It fits well into the generating mix because it is a proven technology. The equipment and stations can be built quite easily and quickly. It is not intermittent like wind, wave or solar power. You can switch it on or off in accordance with demand. It is an important part of the renewable mix. I still worry about some of the others. People talk about the Severn barrage, the development scheme for which I worked on about 30 years ago. Producing a tonne of cement needs a tonne of carbon; I am not sure what the figure is for steel. One must think about the carbon cost of building some of these things, in addition to their generating carbon savings when they are working.

The other benefit of biomass is that you can mix it with coal and generate power using both products at the same time. Companies such as Drax, which operates one of the biggest power stations in this country, are working on it by mixing it or even building a plant that works only on biomass. It is also interesting to explore the possibilities for much smaller plants. I have been talking to people in Cornwall, who tell me that it is quite economic now to build plants of 20-megawatt size, which is ideal for places where there is demand but, at present, very little supply. You save the extra costs of transmission from the bigger areas, which also gives the generators something of a financial advantage.

There is local opposition to anything like this. We have had and will have many debates about changes to the planning system, as proposed by the Government, which seem to centre on localism. However, I have not heard anyone explain how to separate localism from nimbyism. That, if we are not careful, will prevent the construction of many projects, be they large or small, some of them part of the remit of the Infrastructure Planning Commission, which the previous Government proposed. One of the advantages-if it works-of localism when it comes to small biomass plants is that it would be possible for discounts to be given to local residents if they supported one of these plants locally. It is not the same as burning waste without any filters

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on top. It is a sustainable type of generation and should be welcomed. However, I am not sure of the extent to which the local authorities that will be giving planning permission for these things will go along with them, even if they get a discount. It happens very well with wind power in places such as Denmark. The local authorities participate in the financing and, somehow, the construction. We will have to see, but maybe the Minister can explain how it will be easier to get planning for some of these things under the new localism agenda.

I shall say a little about transporting biomass. Rail freight is useful in this. I declare an interest as chairman of the Rail Freight Group. It is not just about shoving branches into power stations and fires. Biomass usually comes in pellets or chips. The only problem with moving it is that it does not much like getting wet. It must be kept dry during storage and transport. It has less than half the density of water, so the volumes are quite large. There is a lot of potential for generating jobs in ports and on railways, and using the same supply chain as for coal does not work too badly. However, there is a cost to it. Biomass must be harvested, which is rather more expensive than digging up coal in Australia, and it must be processed, as well as transported. For this product to be used effectively, there has to be a recognition in the renewable obligation that the cost of transport and processing needs to be taken into account rather more. It is still a new technology, or a variation on it. If one wants the private sector to invest in small generating stations, or even to change the very big ones such as Drax and others, it needs more comfort that in the longer term it will get a reasonable return on its investment. It can then go ahead with it.

In conclusion, biomass offers a major and useful contribution to the renewable part of our generating capacity, which we will need. Co-firing with coal is one thing. If we have new, smaller stations with local benefit and something to help with planning permission, biomass could be a significant part of a flexible and sustainable energy policy, which I am sure the Government will develop.

7.48 pm

Lord Sugar: My Lords, I join other noble Lords in congratulating my noble friend Lord Haskel on initiating this debate. I also welcome my noble friend Lord Prescott and congratulate him on his excellent maiden speech. There was I thinking that he would be nervous, but obviously not. I think we are all in agreement about the need to deploy low-carbon technology in the future, for the obvious and well debated reasons. Therefore, I will not labour on that subject, but instead focus on the emerging opportunities available to UK industry in low-carbon technology.

Having spent 45 years in technology, I, like many of your Lordships, have experienced the rapid advancement in many industries. However, to my disappointment, I have witnessed time and time again how Britain has fallen behind, and regrettably does not lead in any sector. My fear is that we are going to miss out again.

I have time to discuss only one sector, wind turbines, on which my noble friend Lord Smith has already touched. This is one very good way of achieving our

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renewable energy targets. There has been talk that these sci-fi constructions will scar our landscape, but this technology is needed to secure our future. So it is no different from the days in 1883 when Thomas Edison introduced the first electricity pylons, which we have all come to accept. To those objectors I simply say: get over it, because it is going to happen-and happening, it is. As a small island compared with mainland Europe, we have nearly exhausted land sites where wind farms can work efficiently, so we have turned to offshore wind installations. I say "we", but your Lordships should not assume that any UK companies are enjoying this massive growth industry. No, once again, we are behind. As mentioned by my noble friend Lord Smith, foreign companies are winning the contracts dished out by the utility companies.

It is estimated that in the next five years in the UK, £11 billion will be spent on wind turbine installations. It is further estimated that more than £100 billion will be spent between now and 2028.

I am going to take a little time to look at these things. They are made up of turbines-which, for simplicity, let us say are giant dynamos with a propeller on the front-a tall steel tower with a concrete base and a load of sophisticated wiring, transformers and more wiring routing to a grid. This is not rocket science; it is large-scale engineering, metal bashing and construction. But do we in the UK get a slice of the cake? The answer is no. Your Lordships will be disappointed to hear that so far no more than 10 per cent-possibly 11 per cent-of the build cost is down to UK suppliers.

To embark upon offshore installations, specialised ports and boats are needed to service the projects. Britain has many ports that can be adapted to handle this traffic, with associated land for the construction of factories and grid stations. Recently we heard of the closure of a steel plant in Middlesbrough. Coincidently, in the same region, we have seen our shipbuilding industry completely decay. Let us take those two elements in the area that I just spoke of. It does not take a brain surgeon to work out that, given the opportunity, there is a workforce and facilities there that can take on and make the lion's share of this stuff. Frankly, they could do it with their eyes closed.

The current contractors which enjoy the orders dished out by the utility companies will of course accuse me of oversimplifying the technology and would no doubt put up arguments to defend their position. Certainly, there seems to be no patriotism from the utility companies when dishing out the contracts. They focus on employing contractors who have done it before. This ethos needs to change and change quickly.

I have heard that in recognition of the potential of the UK, some foreign companies are making noises in committing to a UK presence. I am sceptical about this; it smacks of the old screwdriver plants that were set up years ago to overcome tariffs and pressure from the then UK industry and Government. The Government hold the ace card here. The Crown Estate is responsible for dishing out the licences to the development companies. These companies need to generate renewable power in order to comply with the Government's renewables obligation certification scheme. Here is the solution

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which I should like the Minister to take away, despite the fact that there is no one else listening over there. No licences should be granted unless there is an undertaking that an agreed percentage of UK content and labour is used on the contract. This will force the hand of the current foreign suppliers to set up in the UK, buy from UK subcontractors, build plants and pay for modification to some of our ports. To be reasonable, the percentage can be phased in in a stepped manner, starting at, say, 25 per cent in the first year, rising to 70 per cent by the fifth year. Eventually, UK subcontractors will turn into main contractors and be able to compete and not only enjoy business in the UK but win valuable exports.

I am sure that my simple suggestion will raise issues of EC law, unfair trade and all that stuff. I say to the Minister, "Please take a leaf out of our French cousins' book". They somehow manage to use French contractors for all major projects. As an example, their public offices are littered with normally uncompetitive-on a worldwide basis-Alcatel and Sagem IT and telecoms equipment. The Minister has clever people at his disposal to overcome these hurdles and can do it if he wants to. The coalition has said that 500,000 people from the public sector will be put out of work. However, it goes on to give us the good news that the private sector will employ 2 million. Well, if that is true, here is a way to start to employ some of those 2 million. Britain needs to put a stake in the ground in this technology and become a major player.

My parting comment is that when the Minister returns to his office, I want the Siemens Fujitsu computer on his desk to prey on his conscience every single day as a constant reminder of my words today.

7.56 pm

Lord Woolmer of Leeds: It is a great pleasure to follow the noble Lord, Lord Sugar, with his typically incisive and practical proposals. I join my noble friends in thanking the noble Lord, Lord Haskel, for bringing forward this debate. Given the number of speakers, it is clearly a welcome and timely one. I join all other noble Lords in warmly congratulating the noble Lord, Lord Prescott. He is a fellow Yorkshireman, as it were, and, as always, managed to bring Yorkshire and Hull into a global speech-and quite rightly so. I warmly welcome the noble Lord.

I shall concentrate my remarks on two matters, biomass and carbon capture and storage, both of which are of enormous importance to the Yorkshire and Humber region, where I reside. Biomass has been touched on by my noble friend Lord Berkeley. It has many advantages as a source of electricity generation. It can be fully sustainable and can provide a reliable, flexible and responsive source of power generation. There is a plentiful supply of biomass. Contrary to what my noble friend Lord Berkeley said, taking its cycle of production as a whole, it is a relatively cheap renewable source. It is not being held back in its application by that matter.

There are three ways in which biomass can be used to generate electricity: co-firing in existing coal-fired power stations; building new 100 per cent biomass powered stations; and converting existing coal-fired

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power stations into completely biomass supply. The first is already in operation and is held back in its use of non-energy biomass only by an unnecessarily restrictive application of the renewables obligation scheme. I hope very much that, unlike the previous Government, the new Government will be willing to look more vigorously at that. Civil servants tended to resist Ministers' proposals because they did not want to damage wind power coming on stream and they thought they might keep coal in production. As studies show, these are unnecessary concerns.

The second way of providing 100 per cent biomass use in power generation is a very practical and known technology that could be brought forward within a relatively short period. It requires a further look at the regulatory environment, creating more certainty, particularly as regards grandfather rights. I know that the Minister and his department are looking at this. I hope very much that he can give us some additional reassurance on that tonight. The third, along with carbon capture and storage, requires support for a demonstration plant, either with the renewable obligations system or a new framework such that the Government may bring forward.

Yorkshire and Humberside has a number of big coal-fired power stations, and biomass is one-only one-important component in reducing CO2 emissions while maintaining electricity generation and employment. Wind power generation has dominated renewables thinking and that has had an impact on government policy. I very much hope that the new Government will look again at the way in which biomass really can play a major part.

I turn finally to carbon capture and storage. I welcome the Government's continued support for CCS demonstration projects and I was delighted at the establishment of the Office of Carbon Capture and Storage. I welcome the way in which the department and the Minister are being proactive in encouraging major interested parties to engage with them.

Last Friday, I chaired a conference in Leeds which brought together a wide range of interests in the Yorkshire region. There were contributors from DECC, National Grid, Powerfuel Power Limited which is developing the Hatfield CCS project, Drax Power, and representatives from a number of engineering, technology and service-related industries. There was a real sense at that conference for the first time that carbon capture and storage is a serious possibility within business planning horizons.

Why in Yorkshire are we so interested in CCS? The region emits 60 million tonnes of CO2 per year-equivalent to almost half of all emissions generated by households in just the Yorkshire and Humber region. Yorkshire is the second largest generator of CO2 in Europe after the Ruhr valley. There is a large number of power stations and heavy industry in the region. There are 14 emitters of more than 1 million tonnes of CO2 and these are mainly clustered in a corridor north and south of the M62. The region therefore has a genuinely large potential for reducing carbon emissions. It has large potential offshore storage sites in the depleting gas fields and saline aquifers. There is a

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number of existing gas terminals on the coast that could be linked between the pipelines and the storage facilities.

The next three CCS demonstration projects need to capitalise on this potential for huge benefits in reducing carbon dioxide emissions in the region. It is important from the start to develop a potential trunk pipeline with linking spurs. This requires the demonstration projects to use an oversized pipeline for CO2 transport. That might seem to be rather arcane, but is actually important. The important Hatfield project, which is likely to go forward, will emit about 4 million tonnes of carbon dioxide. That requires a pipeline of only 18 inches in diameter. However, if that goes to the coast, no one else can use it. A 40-inch pipeline, which is double the size, can transport 40 tonnes of carbon dioxide-10 times more. So the issue of installing an oversized pipeline is genuinely important.

The Committee on Climate Change commented on this in its recent report. I am delighted that the noble Lord, Lord Taylor, is in his seat, because when he took the Climate Change Bill through the House on behalf of the then Opposition, he wanted the committee to take decisions, not give advice. Let me tell noble Lords what the committee said in its report last month. It stated:

"The competitive bidding process for the CCS demonstrations will need to make clear how proximity to other sources of CO2 and the oversizing of CO2 pipelines will affect a project's chance of selection".

If the noble Lord, Lord Taylor, had had his way, that would have been a decision, not a piece of advice. So I ask the Minister and the Office of Carbon Capture and Storage to consider with the greatest care the huge potential of CCS in Yorkshire and Humberside, to consider with equal care the advice of the Committee on Climate Change on the cluster and pipeline capacity issues, and to ensure that the CCS demonstration project selection takes the advice of the Committee on Climate Change fully and effectively into account.

8.05 pm

Lord Hunt of Kings Heath: My Lords, it is good to be able to welcome my noble friend's initiative in securing this debate. I also congratulate my noble friend Lord Prescott on an excellent maiden speech. As noble Lords have said, he played a critical role in the successful Kyoto 1 negotiations. He has been a strong champion of the low-carbon economy and the environment, and he disclosed tonight that he has a family connection in your Lordships' House. I am sure that his noble kinsmen, as we tend to call them, will warmly welcome him. My noble friend's continued interest in climate change is very much welcome.

This is a very important debate. For me, climate change is probably the most critical issue that we face or are likely to face this century. My noble friend Lord Smith spoke of some of the difficult problems on climate change that we already face in this country. When we look at the impact of floods, water shortage, drought, mass migration and species extinction in so many parts of the world, we have to take action.

My fear is that since Copenhagen, and in the context of the current global economic turmoil, there is a real risk of climate change dropping off the agenda. We

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cannot afford for that to happen and we cannot ignore what happened at Copenhagen. As my noble friend Lord Prescott said, it was not a success. The fact is that an accord was agreed. I understand that more than 100 countries have now signed up to the accord and have made substantial emission commitments. They are not sufficient to meet the required increase limit of 2 degrees Celsius, but there is none the less some progress. Agreement was reached on the need for measurement, verification and reporting of emissions, which is absolutely essential if there is to be integrity behind global agreements. Agreement was also reached on fast-start finance of up to $30 billion by 2012, leading to $100 billion by 2020-a figure that the previous Prime Minister, Gordon Brown, originally suggested should be the aim.

It is important that we build on that. I ask the Minister to give a clear commitment to spare no effort in working for a globally binding treaty. I invite him to state what is the Government's negotiating strategy. We have heard very little about it in the past few weeks. My noble friend Lord Prescott gave some important pieces of advice to the Government on how they ought to approach the negotiations at Cancun. I particularly emphasise his point about the potential partnership between China and Europe, and on building on the agreements that have been reached. What is for sure is that the UK should be a leader. I am very proud of the actions that the previous Government took in introducing the Climate Change Act. The UK was the first country to introduce a legally binding framework to cut emissions by 80 per cent by 2050 through the mechanism of carbon budgets. I ask the Minister to confirm that the coalition Government are committed to carbon budgets. What is his response to the recent report of the Committee on Climate Change which stated that we should not bank overperformance in the first budget through to the second budget?

Binding treaty or not, the world is on a trajectory to a low-carbon world. My noble friend Lord Bhattacharyya spoke about a consumerist-led approach. It is vital that the UK is not left behind. My noble friend Lord Sugar had a real warning for us on this. The noble Lord, Lord Smith, spoke about the history of wind turbine manufacturing being a hard lesson that we had to learn. My noble friend Lord Sugar was sceptical about the positive signals about the potential manufacturing capacity of the UK, particularly for offshore wind turbines. However, I was confident at the time of the election that we would see this manufacturing capacity, but crucially that depended on government activism. We published the Low Carbon Transition Plan in 2009, which was designed to encourage the development of a strong low-carbon manufacturing capacity in this country by supporting a British-based offshore wind industry, capitalising on the UK's wave and tidal sector strength, providing venture capital support for developing low-carbon businesses, providing capital investment to establish the Nuclear Advanced Manufacturing Research Centre and supporting electric vehicles. I wanted to hear from the Minister tonight that the Government intend to continue to support these initiatives-or, as my noble friend Lord Haskel said, are we going to miss out on a huge opportunity for this country?

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There are issues that we have to tackle, such as skills, as my noble friend Lord Haskel said; support for UK manufacturing; and the need to set high standards to ensure a level playing field for UK companies. Government procurement policy can have a hugely positive impact in this area. We can provide practical support, as my noble friend Lord Bhattacharyya said. As my noble friend Lord Giddens said, business needs signals about what carbon price intervention is likely. Will the Government agree to the recommendation of the Committee on Climate Change on the potential extension of CCS to gas? What does a low-carbon economy mean when this is translated into jobs? My noble friend Lord Woolmer spoke of the huge potential of CCS. I agree with him. His comments about the overcapacity that is required to give confidence for investment in the future is important. Another point about CCS is that, given that coal will continue to be used extensively and globally, developing CCS technology has huge potential for our ability to export UK-based technology. It is a vital area that we need to support in future.

There are positive signals about what the coalition has agreed to, but action has not been so encouraging, as my noble friend Lord Berkeley said. I worry that the Government are returning to the 1980s philosophy of non-intervention in industry in this country. There has been confusion over the Government's approach to nuclear energy. I have heard what Ministers have said, but in industry there is great concern about the Government's policy and a lack of confidence in what it means. The decision on Sheffield Forgemasters was not a sign to give confidence to industry. The decision to abolish the Infrastructure Planning Commission and take planning decisions back to Ministers will not give confidence to the energy sector. Ministers have said that they will make planning decisions within the 12 months that the IPC was expected to make them. Well, we shall see.

I hope that the Minister tonight will be able to respond positively and to give the right signals that we, the public and industry require. However, the absence of any Back-Benchers from his party speaking in this debate is not an encouraging sign.

8.14 pm

The Parliamentary Under-Secretary of State, Department of Energy and Climate Change (Lord Marland):I thank noble Lords: this has been an impressive debate of great quality, as I have come to expect. I could listen for a long time to what such eminent speakers have to say. I thank the noble Lord, Lord Haskel, for tabling this important question about what steps the Government are taking to encourage low-carbon technologies in the marketplace. I am delighted to have the opportunity to respond. I am sorry that he is suggesting that I should get on my bike so early in my ministerial career, because it does not bode well for our future interchange. I also commend the noble Lord on his work as honorary president of the EIC. This debate allows the EIC to hold the Government to account, which is fundamental to making decisions and keeping the integrity of what we are trying to deliver. We welcome many of the EIC's recommendations. Its voice is clearly heard and its calls for action are much appreciated.

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I am particularly pleased to congratulate the noble Lord, Lord Prescott, on his much anticipated speech, which we all enjoyed. He was a key figure in the Kyoto agreement, showing genuine leadership and starting a platform for delivery. In my short time in the House, we have always enjoyed, respected and honoured forthright views. We are delighted to see the noble Lord here and look forward to listening to him with great interest in future.

This Government may be a coalition of the Liberal Democrat and Conservative Benches, but we need to establish a cross-party coalition to deal with the major infrastructure changes and challenges that are required to develop low-carbon technology. We have a shared responsibility. Nothing can be achieved overnight. We cannot yet know the full range of technologies needed to facilitate the move to a low-carbon economy, but we can say that the transition will not happen without early action and strategic direction. We also need cross-party buy-in.

I will say a few words about what the Government are doing to encourage the transition to a low-carbon economy. The transition is about a genuine transformation of the UK economy. As the Prime Minister said, our economy is heavily reliant on a few industries and a few regions. We need to change that by giving the industries of the future the opportunity and incentive to grow. Low-carbon technologies, goods and services are central to that vision. What does that mean? First, it means that the UK has to be a world leader-I agree with noble Lords who said this. Already, the sector employs more than 900,000 people and is worth more than £112 billion a year. The UK has the sixth largest sector in the world. The global market is set to grow by approximately 4 per cent per year over the next five years, from £3.2 trillion. We need to put ourselves at the forefront of that growth, seizing the benefits for the UK while also showing international leadership and providing momentum for a global deal.

Secondly, it means a low-carbon transition for the whole economy. The low-carbon sector is vital, but it is not the whole story. All businesses need to re-engineer their products and services. All businesses, from aerospace to consumer products to retail, need to cut the environmental impact of the products and services that they produce in order for us to develop.

Thirdly, it means businesses and households reducing their energy use and improving their resource efficiency. The noble Lord, Lord Haskel, made the point that the previous Administration failed to educate. Education is vital in this area and I completely agree with him. There are sound commercial reasons for focusing on the move to a low-carbon economy. We are already taking steps to turn rhetoric into reality. However, we need to do that in a way that takes account of the financial context. A low-carbon economy cannot and should not be delivered by government expenditure. It needs to be delivered by getting the incentives right to enable the business community to invest. That means setting the right incentives and stimulating private sector investment. Furthermore, as the coalition has made clear, we will support the key technologies which are vital to the UK's low-carbon future and which

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offer huge opportunities for economic benefit to the UK. These include offshore wind, marine energy, CCS and anaerobic digestion.

We are also ensuring that we have the right policies to stimulate demand for low-carbon technologies. They include the green new deal, which will help to create a new and much more dynamic market for energy-efficient goods and services, as well as helping consumers. We are committed to green government and shall lead by example, cutting emissions across government by 10 per cent. This comes within my personal bailiwick. I have just referred to the green new deal. We are also committed to the green investment bank to pump-prime investment in the new technologies and we are committed to cutting red tape. I have just written to 300 businesses that are relevant to our department asking for their views on what red tape we should cut.

I turn to the specific points made in the debate. I enjoyed the comment of the noble Lord, Lord Haskel, that we have to get on with it-a point made by other noble Lords, too. I hope that the noble Lord, Lord Haskel, argued with his own Government as forcefully as he has with us. I shall desist from being partisan, but his argument presupposes that his Government did not get on with things. He pointed out that we will not be responding to many of the comments on our energy policy until October. However, the truth is that, within the next two weeks before the Summer Recess, we will be giving an annual statement covering most of our policies for the next period. The noble Lord referred to the CCC. Its report is excellent and noble Lords on all Benches seem to embrace most, if not all, of it. Because of the timing of the parliamentary Session and our need to have a sensible debate-as good a debate as we had previously on that subject-we are not going to opine on it until October. However, of course we need to get on with it and I take on board his remarks in that regard.

The noble Lord, Lord Bhattacharyya, referred to electric cars. He is completely right: this is part of a vision that needs to be endorsed. However, it cannot be endorsed unless we have a low-carbon supply of electricity. He is also right that this issue must have consumer focus. I am grateful for his remarks.

The noble Lord, Lord Prescott, commented on voluntary agreements. He is completely right about that. Cancun requires greater endeavour and greater success than we had in Copenhagen. However, we must not build up people's expectations, as we did with regard to Copenhagen. This involves long-term debate and encouragement, as he rightly said and as he showed when in office. We need to keep up the pressure but we also need to keep expectations balanced.

The noble Lord, Lord Giddens, whose wonderful book, The Politics of Climate Change, has been very good reading for many of us on these Benches-my noble friend Lord Taylor and I have been indebted to him-talked about deeds, not words, and I think that I have covered that point. I have just been handed a note saying that time is passing very quickly. That is rather good, as it means that I do not need to answer most of his questions. However, he is right about CCS for gas. I can confirm that it is part of our policy to look at that.

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I want to move on quickly to the points made by the noble Lord, Lord Smith of Finsbury, who has done a fantastic job as chairman of the Environment Agency. He referred to the economic opportunity and said that we must show leadership. I want to make one particular point, which picks up on what the noble Lord, Lord Sugar, said. We are the leading market in offshore wind power. Only last week, we gave seven grants to seven British companies to deliver products that encourage offshore wind power. The noble Lord, Lord Smith of Finsbury, is also right about the need to look at tidal power. Marine parks are central to our theme.

The noble Lords, Lord Berkeley and Lord Woolmer, talked about biomass. Personally, at this point I am not convinced that it is absolutely fundamental to our energy development, but we must look at all ways of obtaining a sustainable low-carbon economy.

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I hope that the noble Lord, Lord Hunt, feels that he has handed over the baton to someone who will carry on his great work. I should tell him that the Prime Minister was in Washington this week with the Secretary of State, Christopher Huhne, talking to the American Government. He will be in India in two weeks' time with the Minister for Climate Change, Mr Gregory Barker, and is in strong dialogue with China.

Noble Lords should rest assured that the coalition is determined to move to a low-carbon economy; we are determined to make it happen. It is vital for generations to come that we support each other, that this is a cross-party issue and that we establish a broad alliance. I invite noble Lords to continue with these debates, because they are fundamental to our keeping the broad alliance going in the future. Again, I thank all noble Lords for their valuable comments, which I have taken on board.

House adjourned at 8.26 pm.

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