15 Mar 2011 : Column 123
15 Mar 2011 : Column 123
15 Mar 2011 : Column 123
Tuesday, 15 March 2011.
2.30 pm
Prayers-read by the Lord Bishop of Newcastle.
Northern Ireland: Bill of Rights
Question
2.36 pm
Asked by Lord Smith of Clifton
To ask Her Majesty's Government what consideration they are giving to the motion passed by the British-Irish Parliamentary Assembly on 22 November 2010 which noted the delay in the introduction of a Bill of Rights for Northern Ireland, as promised in the Belfast agreement, and called upon Her Majesty's Government to fulfil their obligation in that regard.
Lord Shutt of Greetland: My Lords, the Government remain committed to maintaining human rights protection in Northern Ireland and fulfilling our obligations under the Belfast agreement. Indeed, my right honourable friend the Minister of State recently met human rights organisations in Northern Ireland and stressed the difficulty of making progress without political consensus within Northern Ireland and the Northern Ireland Assembly. We will continue to consider how best to address this issue in the coming months.
Lord Smith of Clifton: My Lords, that is not a very satisfactory Answer because it gives a veto to the Stormont parties and it is not their prerogative to exercise that veto. Is what my noble friend said the agreed policy of the coalition? If it is, which Liberal Democrat Ministers participated and concurred in that agreement?
Lord Shutt of Greetland: My Lords, that is an interesting one. I am not the Minister; I am the Whip.
Lord Shutt of Greetland: I make it quite clear; I am the Whip and there are two Ministers in the House of Commons. Noble Lords will remember that we had the general election, following which the number of Members of Parliament in each party was rather different. Under the coalition agreement, the number of Liberal Democrat Members who became Ministers was rather smaller than the number of Conservative Members who became Ministers. My noble friend's right honourable friend and mine, Nick Clegg, the Deputy Prime Minister, paid a three-day visit to Northern Ireland in October, and I also had a three-day visit. Even though I am not a Minister, I endeavour to influence events and I hope to have a degree of success in that. Alongside my noble friend as the Liberal
15 Mar 2011 : Column 124
Baroness Royall of Blaisdon: My Lords, I remind the Minister, with respect, that he speaks on behalf of the Government as a whole. The Government have pledged to bring in a British Bill of Rights. I wonder what that means for Northern Ireland and whether the Government are going to pursue a Northern Ireland Bill of Rights and a separate Bill of Rights for the United Kingdom. I should be grateful for the views of the noble Lord the Minister.
Lord Shutt of Greetland: My Lords, I shall endeavour to speak for the Government. I was just giving the facts as to who is the Minister and who is the Whip. I hold the latter position, and I think noble Lords will find that that situation existed when we had a different Government. The noble Baroness may recall that the Belfast agreement came into being on 10 April 1998. It was agreed that there would be an Assembly with full legislative and executive authority for the six Northern Ireland government departments. Furthermore, it was agreed that the European Convention on Human Rights would be embraced in any Bill of Rights for Northern Ireland that supplemented it. Of course, it is 13 years since the Belfast agreement and things do not stay still. We got a Human Rights Act in December 1998. The devolved Assembly has these powers and from time to time legislative consent motions are required. On 16 February-
Lord Shutt of Greetland: If you want the answer you can have it-the Prime Minister announced that a group of people would be put together for a human rights Act for Britain. Therefore, the Belfast agreement has to embrace those other three factors.
Lord Kilclooney: My Lords, can the Minister confirm that the Belfast agreement brought benefits to the peoples of both states in the island of Ireland? Can he recall that there were obligations on the Dublin Government in that agreement to create a human rights commission, to ratify the Council of Europe's convention on national minorities, and to legislate for employment equality and for respect of the different traditions in the island? Can he confirm whether any of those four requirements have been honoured yet by the Dublin Government? For those that have not been honoured, will he make representations to the new Government elected in the south of Ireland a few weeks ago?
Lord Shutt of Greetland: My Lords, as I indicated earlier, I will do my best to speak for this Government. It is someone else's job to speak for the Government of Ireland. However, in another coalition agreement, between Fine Gael and Labour in the south, there is one line that the Belfast agreement and the St Andrews agreement
15 Mar 2011 : Column 125
Lord Glentoran: My Lords, I want to clarify a couple of things. While shadow Minister in opposition, my right honourable friend the Secretary of State, I and others in the team undertook that once the United Kingdom Government set up their own human rights Bill, Northern Ireland would have its share of it. That is where I still stand, and I suspect that my right honourable friend the Secretary of State is in a similar position.
Lord Shutt of Greetland: I am not absolutely clear about the question, but the Government are possessed of the fact of honouring the Belfast agreement. Within that there has to be a human rights element for Northern Ireland. What is not absolutely written in stone is that that has to be very separate.
Lord Bew: My Lords, will the Minister comment on the reality that the Belfast agreement does not impose an obligation on the Government to legislate on the human rights question; rather, it imposes an obligation on them to receive the report of the Northern Ireland Human Rights Commission? Rather more profoundly, that report is supposed to be based on the principle of "parity of esteem" for the "two traditions". That is explicitly said in the Belfast agreement. The Northern Ireland Assembly has in effect rejected the idea that it is so based. Is it not at this stage for those who believe in human rights legislation to carry on the argument in Northern Ireland with the Northern Ireland Assembly to see whether minds can be changed?
Lord Shutt of Greetland: It certainly is. The Northern Ireland Assembly voted by 46 votes to 42 that it did not want separate human rights legislation. There is an election, and things might well change following that election. If a united front in the Northern Ireland Assembly said that that is what it wanted, obviously the British Government would take due notice.
House of Lords: Life Peerages
Question
2.45 pm
To ask Her Majesty's Government whether they intend that the life Peers they have appointed should be Peers for life.
The Chancellor of the Duchy of Lancaster (Lord Strathclyde): My Lords, the Government confirm that they have no plans to remove the peerage from those in receipt of that honour.
Lord Grocott: My Lords, that is a very, very welcome Answer. I am almost at a loss for words. I am so much at a loss that I want to have it rephrased. Is the noble
15 Mar 2011 : Column 126
Lord Strathclyde: My Lords, I thought I had been entirely straight with the noble Lord. A peerage is for life. That honour should remain, but it should not necessarily guarantee a seat in the House of Lords. The noble Lord knows that well because he knows that the Government are committed to House of Lords reform, as all major parties agree that reform is needed and this coalition Government provide the opportunity to determine final proposals that can be put to Parliament after there has been a Joint Committee of both Houses.
Lord Cormack: My Lords, my Letters Patent give me the right to sit here for life. I assume my noble friend's Letters Patent do the same. Are we to attach more importance to the Letters Patent from the Queen or to the views of the temporary Deputy Prime Minister?
Lord Strathclyde: My Lords, in the passage of the House of Lords Act 1999 we went through this quite a lot. In the end, the view was that statute law could vary the terms of the Writ of Summons. Therefore, if it was the will of Parliament that life Peers should not be guaranteed a place in the House of Lords, I do not think there would be any problem.
Lord Campbell-Savours: My Lords, if membership of the House is to reflect the crude statistic of the national vote at the most recent general election, when can we expect to have 21 UKIP Members of this House and 14 British National Party Members?
Lord Strathclyde: My Lords, we have no plans to introduce members of those parties at the moment. Of course, if there was an elected House, it would be up to the electorate to decide who should sit in this House.
The Earl of Onslow: My Lords, is there not something totally glorious and hypocritical about the noble Lord, Lord Grocott, saying please may his peerage be guaranteed
15 Mar 2011 : Column 127
Lord Strathclyde: My Lords, it is good to see my noble friend speaking in this House, as he has done for many years, and long may that continue. Different people will take a different view of what the noble Lord, Lord Grocott, said but he has been entirely consistent since coming here in wishing to preserve the House more or less as it is. It is an important point of view, although not one with which the Government agree.
Lord Hunt of Kings Heath: My Lords, the noble Lord, Lord Strathclyde, too, has been entirely consistent in being a passionate exponent of an elected House. But yesterday he told the House that he expected that dozens, indeed hundreds, of new coalition Peers would be appointed over the next few years. Can I take that as indicating that he is therefore not very optimistic about the prospect of substantive reform?
Lord Strathclyde: My Lords, neither is the case. While there is an appointed House, it is always open to the Prime Minister to appoint new Members to it on a cross-party basis and the noble Lord will have seen the coalition agreement on that. However, if Parliament passes a Bill for an elected House, elections would take place.
Lord Tyler: My Lords, will my noble friend acknowledge that since 1997, when a Government, of whom the noble Lord, Lord Grocott, was a distinguished Member, were elected with a clear commitment to reform your Lordships' House to include elected Members and, by implication, to end the life peerage, all of us who have been appointed know that we are term Peers in practical terms? Will he further acknowledge that the big difference since May of last year is that instead of just talking about this for 13 years we have a Government who are committed to action?
Lord Strathclyde: My Lords, my noble friend is quite right. I do not believe that any new Member of this House, before accepting this great honour and, indeed, a job, has not considered what might happen if a reform Bill is finally published.
Shipping: Piracy
Question
2.52 pm
To ask Her Majesty's Government what action they are taking to mitigate and eventually eradicate the hijacking of United Kingdom shipping by Somali pirates.
The Minister of State, Foreign and Commonwealth Office (Lord Howell of Guildford): My Lords, Her Majesty's Government contribute warships to
15 Mar 2011 : Column 128
Lord Naseby: Is my noble friend aware that the situation gets ever more serious? Two major tankers have been hijacked in recent days, nearly 800 hostages are being held, and now no less than 10 mother ships are extending the amount of ocean in which the hijackers can operate. Since we as Her Majesty's Government are in the lead role, is it not time that in conjunction with our partners we use some of the UAV planes to pinpoint where these mother ships are and, if necessary, either sink them by an armed UAV or find some other means of sinking them? After all, the Tamil Tigers' navy was put out of action only by the Sri Lankan navy sinking the mother ships.
Lord Howell of Guildford: My noble friend is absolutely correct. The situation is getting more serious every week. More and more ships are being attacked by the hijackers and the piracy operation is growing, so he is completely right to recognise the seriousness, as do Her Majesty's Government. We are, as he says, in the lead on the Contact Group on Piracy off the Coast of Somalia. We are seeking to develop more substantial facilities to meet and track the pirates. The question of the UAVs is difficult. We have none, but of course our American allies do. A great many of these are currently deployed elsewhere, but my noble friend can rest assured that we intend to develop a more robust response in relation to these and other kinds of maritime air patrol because it is certainly needed.
Lord Anderson of Swansea: My Lords, the Minister will be aware of reports of a deal between the pirates and al-Shabaab, an affiliate of al-Qaeda in the Arabian Peninsula, whereby the terrorists cream off some of the money that goes to the pirates. Do the Government accept that this is likely to be true? If so, will it not have an affect on us in the possible financing of terrorism through the diaspora in the UK and in possibly making insurance companies in the UK liable for that financing?
Lord Howell of Guildford: I have certainly heard of these reports and there are a great deal of rumours surrounding the whole question of the relationship between pirates, pirate finance and terrorism in the region, but we have no firm evidence of this particular pattern of transaction. It is, however, something that we are investigating and watching very carefully indeed.
Lord Stirrup: My Lords, the Minister said quite rightly that the causes of piracy as opposed to the symptoms must be dealt with on land and cannot be dealt with at sea. Could he therefore tell us what
15 Mar 2011 : Column 129
Lord Howell of Guildford: In Puntland, Somaliland and Somalia itself we are making efforts to reinforce the facilities for both the prosecution and the imprisonment of pirates, so progress is being made. Frankly, Puntland is a rather more difficult region than Somaliland, which is very co-operative. In Somalia itself the transitional regional Government are working to build prisons and improve facilities. There is, of course, the wider problem in Kenya with which the noble Lord will be familiar. Some progress is being made, but it is not very easy.
Lord Chidgey: Is my noble friend aware that since January the Indian navy operating some 600 miles or more off its western shore has sunk three pirate mother ships and captured over 100 pirates, who are now being interviewed about their connections with terrorism in Mumbai? The Indian Government are also bringing forward tough legal measures to help them tackle offshore piracy. What is our Government's assessment of the proactive operational policies of India compared with the effectiveness of the EU operation, Atalanta, in both its maritime and its legal capacity?
Lord Howell of Guildford: Our assessment is positive, both of the Indian naval operations and the naval operations of other countries, including China. This is a co-ordinated effort, and maybe the co-ordination can grow tighter still. We think this should all carry forward in a closely integrated way. As to the legal aspects of the situation, there are the rules of engagement and the operational duties under which a sort of constabulary context is conducted towards pirates. This might need to become more robust in our different countries, but we have to stick by the law of the sea and we have to proceed carefully for fear of involving ourselves in far more complexities in this area, rather than reducing it and maybe being more effective against the pirates.
Lord Davies of Stamford: My Lords, I congratulate the noble Lord, Lord Naseby, on drawing the House's attention to a very pressing problem that, in my view, has not had enough attention up until now. Is it not absurd that we in this country should be supporting no fewer than three task forces, potentially leaving our sailors and marines at risk of their lives there, and doing nothing at all to interrupt the constant flow of money into the hands of pirates? We have in this country an elaborate structure of criminal assets legislation and anti-money laundering legislation. Will the Minister have a word with his colleagues in the Department of Justice and the Home Office to see whether we cannot use these existing mechanisms to interrupt the flow of money that is making piracy a growing and increasingly profitable industry?
Lord Howell of Guildford: I do not quite accept the noble Lord's point that we are doing nothing at all. He is quite right that this is a growing concern. We had an excellent debate on it just before Christmas and he is
15 Mar 2011 : Column 130
Lord West of Spithead: My Lords, I, too, congratulate the noble Lord, Lord Naseby, on raising this issue. Does not the Minister think that now is the time to reinvigorate action in this whole area? It is becoming a really dangerous issue. I believe that something will happen in the near future that will make us all pay attention. For example, the loss of two LNG ships coming to the UK would affect energy supplies. There could be a huge catastrophe, and it really is time to reinvigorate our efforts. Should we not look at all the aspects of this problem that have been mentioned and push this very hard?
Lord Howell of Guildford: The noble Lord is right that the time has come, and Her Majesty's Government have recognised precisely the point that he makes. However, this has become a global issue; it could affect Chinese, Indian and Asian interests just as much as European and American interests. This task must be tackled on a global level with great vigour before it gets very much worse.
Police: Expenditure Cuts
Question
3 pm
Asked by Lord Kennedy of Southwark
To ask Her Majesty's Government what impact the proposed cuts to the police service funding will have on operational effectiveness.
Lord Wallace of Saltaire: My Lords, I welcome back this familiar question in a slightly different form; no doubt we will see it again. The Government believe that police forces can make the necessary savings while protecting front-line services and operational effectiveness. Last year's HMIC report identified £1.1 billion of savings that could be made while maintaining police availability. We have identified significant further savings, including through better procurement and sensible pay restraint.
Lord Kennedy of Southwark: I thank the Minister for his reply. Before the general election, the leader of his party-now the Deputy Prime Minister, Mr Nick Clegg-promised to recruit an extra 10,000 police officers. The reality, as a result of decisions that the Government have taken, is that we will have 10,000 fewer police officers. Is this not another example of the Deputy Prime Minister saying one thing to get elected and another when elected?
15 Mar 2011 : Column 131
Lord Wallace of Saltaire: My Lords, we all have to pay for what we get. I was not aware until I saw a chart in the Guardian on 23 February that the previous Labour Government went into deficit on the Budget in 2002, ran an annual deficit on it of between £30 billion and £40 billion from 2003 to 2008 at the height of the credit boom, and therefore left us with no spare capacity when the boom collapsed. That is why we all have to take these difficult decisions.
Baroness Doocey: I declare an interest as a member of the Metropolitan Police Authority. Does the Minister share my view that the police could provide better value for money by cutting perks such as chauffeur-driven limousines for senior police officers rather than by cutting front-line services?
Lord Wallace of Saltaire: I had better declare that I travelled several miles in the chief constable of West Yorkshire's car last week from one police building to another. There are of course areas where the police can cut, and a number of rather imaginative schemes are already under way. I was taken on that day to the Yorkshire regional hub, which the four separate Yorkshire police services now share for a number of operations. That is the sort of thing which we need to take further.
Lord Hunt of Kings Heath: My Lords, how many front-line police officers will lose their jobs in order to pay for the politicisation of the police force through elected police commissioners?
Lord Wallace of Saltaire: My Lords, we will come to the Police Reform and Social Responsibility Bill in good time. We have seen in the past couple of months the normal form of negotiation through the public media. I saw in early February a suggestion that Greater Manchester, for example, would lose nearly a quarter of its strength. We now hear Lancashire Constabulary, I am very happy to say, talking about possibly losing up to 160 policemen in front-line positions. We are beginning to discover that it will be not be as difficult as we feared. Her Majesty's Inspectorate of Constabulary last week indicated that it expects much fewer police job losses than originally forecast. The Metropolitan Police, accounting for a quarter of all officers in England and Wales, has indicated that it will begin recruiting again shortly.
The Earl of Listowel: My Lords, is the Minister aware of the widespread concern about the impact of cuts to police funding on the child protection role of the police? Can he provide some reassurance on this point?
Lord Wallace of Saltaire: My Lords, one of the principles of this Government is to reduce the different pots under which funding is provided to the police and to allow the police to choose how they spend their money. Some areas of the country require much greater effort on child protection than others. We look to police forces, authorities and, in future, the commissioners who will keep them under check to choose their priorities in the light of local needs.
15 Mar 2011 : Column 132
Lord Hamilton of Epsom: Does my noble friend accept that the Benches opposite may accept that the deficit needs to be reduced as a general argument, but that they will not agree to any measure in particular?
Lord Wallace of Saltaire: My Lords, we all face a structural problem that the media and many of the public want higher quality public services and lower taxes. The call from the Labour Party for cuts in VAT, rather than to talk about how we pay for what we need in maintaining public services, is a good example of that.
Baroness Farrington of Ribbleton: My Lords, would the Minister care to answer the specific question about money being spent on implementing a policy which to my knowledge his party never voted for-single police chief commissioners? I declare my interest as having served for 20 years as a member of a police authority. Responsible chief constables are saying that to achieve savings of the magnitude needed, even if we accepted that they should be made, requires lead-in time. Rather than have these phoney elections, which will have to be backed up by panels to represent the whole community in the police authority, as the Government have accepted, would it not be better to spend the money on that? I have not met a single senior police officer whose priorities would be different from mine.
Lord Wallace of Saltaire: My Lords, I am deeply surprised that the noble Baroness was not aware of the 2006 Liberal Democrat party paper on public service reform, which did indeed raise the question of directly elected police commissioners, so it is not entirely new to our party. I understand that the Labour Party is proposing instead that one should have directly elected chairs of police authorities. I cannot quite get my head around how different that is from what we are proposing.
Warm Home Discount Regulations 2011
Export Control (Amendment) (No. 2) Order 2011
Employment Equality (Repeal of Retirement Age Provisions) Regulations 2011
Patents County Court (Financial Limits) Order 2011
Immigration and Nationality (Fees) Regulations 2011
Licensing Act 2003 (Royal Wedding Licensing Hours) Order 2011
Equality Act 2010 (Public Authorities and Consequential and Supplementary Amendments) Order 2011
Motions to Refer to Grand Committee
15 Mar 2011 : Column 133
3.07 pm
Energy Bill [HL]
Third Reading
3.08 pm
Baroness Anelay of St Johns: My Lords, I have it in command from Her Majesty the Queen and His Royal Highness the Prince of Wales to acquaint the House that they, having been informed of the purport of the Energy Bill, have consented to place their prerogative and interests, so far as they are affected by the Bill, at the disposal of Parliament for the purposes of the Bill.
Clause 3 : Framework regulations
The Parliamentary Under-Secretary of State, Department of Energy and Climate Change (Lord Marland): My Lords, it is amazing that, although I thought this is a fascinating Bill, the Chamber seems to be emptying quite quickly. I will do my best to encourage everyone.
Before commencing these amendments, I would like to place on record my thanks to all noble Lords for their magnificent contributions. Although those on the opposition Benches will not like it, this has been done in the true spirit of coalition across all parties. I would particularly like to thank those on the opposition Benches for everything they have done in making this Bill fit for purpose. I have been incredibly well assisted by the noble Baroness, Lady Northover, who has worked tirelessly on our account and I thank her very much.
I also thank our officials for their tireless work. The Bill will have passed through this House voteless-at least I hope that it will-and that would not have happened without substantial briefing and explanation to noble Lords during the course of the Bill. I want to thank my officials and everyone for that. As such, these government amendments show that we have listened to noble Lords, particularly on the opposition Benches and my noble friend Lord Deben. I hope that the first group of government amendments are accepted by the House.
Baroness Maddock: My Lords, during the passage of the Bill, I moved several amendments on, and we had long discussions about, the private rented sector. At Report, the Minister said that he agreed in great part with what I was saying and that he hoped to be able to bring forward amendments on the private rented sector going further than they had previously. They have gone a little bit further today. I hope that,
15 Mar 2011 : Column 134
In the time that we have been discussing the Bill, the most recent English housing survey has been published. It shows that the number of properties in the private rented sector has increased by 1 million in the past 10 years. Such properties now account for 15.6 per cent of England's housing stock and that number appears to be rising all the time. I remind the Minister, although it will not be his responsibility in the other place of course, that 20 per cent of private rented sector households live in fuel poverty. If we look at the bottom end-at bands F and G, which are the groups that I have spent a lot of time discussing during the passage of the Bill-that rises to 42 per cent. I have said at least twice during the passage of the Bill that, in many cases, we are footing the bill for the rent of these properties through housing benefit.
I thank the Minister for moving a little in my direction and I hope that his colleagues in another place will be able to take a further serious look on these issues.
Lord Best: My Lords, the amendments that I tabled called for a legally binding minimum standard of energy performance by the year 2016, but the Minister has not been able to concede that. I accept that the amendments that he has tabled are a small but helpful step in the right direction, but I want to place on record that I fear that the private rented sector will not do what it should do without a legally binding minimum standard being introduced by the Government for local authorities to implement. Without that, I fear that the Green Deal will not be as effective as it otherwise should be. But it is now for another place to discuss and I am grateful for the modest but important concessions that the Minister has made with these amendments.
Baroness Smith of Basildon: My Lords, I echo the Minister's comments about how the Bill has been conducted. It has been a great example of your Lordships working together to bring forward suggestions. I praise the Government for their efforts to look at the suggestions and amendments and bring forward amendments of their own. I recall at Second Reading the Minister said,
- "I will clarify that this is a framework Bill on which there is a lot of work to be done".-[Official Report, 22/12/10; col. 1151.]
During our deliberations, particularly in Committee and at Report, we have undertaken a lot of that work and brought forward amendments.
I also echo the Minister's thanks to his officials who have been very co-operative with us. We are grateful for that help and support. I also place on record my thanks to the many organisations that contacted us during the course of the Bill, such as Friends of the Earth, the Association for the Conservation of Energy, the World Wide Fund for Nature and many others. Their work and that of the energy companies have been endless. I have had more e-mails and briefing on this legislation than I have ever had in my entire parliamentary career. It has been very welcome and appreciated and we do not take that support and advice for granted.
15 Mar 2011 : Column 135
3.15 pm
I welcome the amendments before us today; indeed, the Minister has brought them forward based on our suggestions. As the noble Lord, Lord Best, summed them up, they are a very modest but welcome step forward. The Minister brings forward the issue of "materially" but also of "must" rather than "may", on which we had some splendid discussions in Committee. He has taken on board the comments we made and the amendments go part of the way to enhancing the consumer protections in the Bill and to providing more information and more certainty for participants and consumers.
None the less, however much I welcome the amendments he has brought forward, I must share with the House my disappointment, which is similar to that raised by the noble Baroness, Lady Maddock, and the noble Lord, Lord Best. I looked again at the comments the Minister made on Report and understood why I was so encouraged and optimistic about what he was going to bring forward. He was entirely genuine when he said:
"Throughout all these debates, which have been extremely well enunciated, and have found great favour with us, we have listened. We are all, after all, singing from the same hymn sheet, in particular on Amendments 69, 70"-
The Minister then listed those amendments, which noble Lords, including myself, had put down in support of quickly introducing regulations on the private rented sector. The Minister talked about "materiality" and said:
"It would be ridiculous if this"-
I took "this" to mean the amendments-
- "did not find favour with us in terms of a form of words. I accept in principle the intention of this."-[Official Report, 02/03/11; col. 1141]
I am very grateful for the amendments that he has brought forward, but I had expected him to bring forward something further around the issue of regulations on the private sector to improve energy efficiency and to have a baseline for energy efficiency in private rented sector homes-I expected amendments to be brought forward on that as well.
The Minister may not have had time to bring those forward, or he may be considering them as government amendments for another place, in which case we would welcome that. However, across all sides of this House, we have stressed how important it is that we move quickly with amendments to bring forward regulations for the private rented sector. I hope he is able to satisfy us today that his comments on Report did encompass the amendments he referred to there, and that he does intend to bring forward amendments on the private rented sector. A list of 31 organisations-including Macmillan Cancer Support, Age UK, Citizens Advice, Consumer Focus and Crisis-are all calling for a minimum energy efficiency standard for private rented properties. This is not an issue we can let slide by. I was encouraged by the Minister's comments on Report and I greatly welcome the amendments he has brought forward today, but I hope that they are a step on the way to the crucial amendments we need to seriously improve the private rented sector.
15 Mar 2011 : Column 136
Baroness Parminter: On behalf of these Benches and in the absence of the noble Lord, Lord Teverson, who is serving the House in another place today, I add our thanks for the way the Minister and his team have handled this Bill and the co-operation we have had from officials. It has been much appreciated. In particular, on Amendment 1, the way that the Minister has listened to the comments from across this House on the issue of moving from "may" to "must" well reflects the concerns that many of us have had about the need to upgrade consumer protection, if we are to make a reality of the Green Deal and all the aspirations that the Government rightly have for delivering our targets on lowering carbon emissions. It is an extremely welcome step and is an indication that the Minister is listening on this issue, as indeed he has on many others.
I remain disappointed that I was unable-either through lack of eloquence or other means-to persuade the Minister that provision for a consumer ombudsman was needed in this legislation. However, I accept what he has said and what his officials have confirmed, that the legislation is enabling in such a way that, should the Secretary of State feel that is desirable, that option remains open. I believe that an ombudsman for the general public is going to be essential in this important area and that this will be something that will come forward, if not in another place, then certainly in the future.
Amendment 1 is a welcome indication that the Minister is listening and confirms that he has been paying attention to the many useful points of clarification that have come from Members who all support ensuring that this Green Deal works.
Lord Whitty: My Lords, until the noble Baroness made her last point, I was not going to intervene on this amendment, but I would like to associate myself with the words of both my noble friend Baroness Smith and the noble Baroness, Lady Parminter, regarding the way the Committee and Report stages of this Bill have been conducted. I appreciate that the Minister has come some considerable way towards meeting a number of concerns although on this particular one I think the noble Lord, Lord Best, is correct about the need for minimum standards and the noble Baroness, Lady Parminter, is right about the need for consumer protection.
It is important that the Government and the House recognise that, in supporting the provisions of this Bill on the Green Deal, we all recognise that there is still a substantial amount of work to be done in putting the deal together and thereby inspiring confidence in householders and landlords, on the one hand, and in the various different parts of the supply chain, on the other, which will need to act together to deliver the Green Deal.
At several points-I will return to this on a further amendment-during the discussion in Committee and on Report, the Minister said we may need to make a number of amendments in another place. I think the Government will find that there are some anxieties both in industry and on the part of consumers about how exactly the Green Deal is going to be sold and how it is going to be delivered. I suspect therefore the
15 Mar 2011 : Column 137
Lord Marland: Again, I value very much the comments made by noble Lords. These comments have been made on several occasions and I am grateful for the compliments that have been made. The noble Baroness, Lady Parminter, was the most complimentary so she is top of my class. Seriously, I am grateful to everyone for their kind words.
The noble Lord, Lord Best, made a very good point about PRS properties and with that in mind we have brought forward the idea of a review in 2013. It is fundamental that we make great inroads into the private rented sector-particularly the F and G categories my noble friend Baroness Maddock mentioned and raising them to the minimum standards of category E -and the Government are extremely committed to that. However, we should allow the sector to lead by example to start with and if it does not take that opportunity then we must help it on its way. The Government are committed to taking people out of fuel poverty. That is part of the reason for the Green Deal building on other initiatives that have taken place; it is fundamental and we owe it to the country to get people out of fuel poverty.
The noble Baroness, Lady Smith of Basildon, asked me whether things that I said on Report stand now. I can confirm that they were on the record and I meant what I said. She can take heart from what I said then and the disappointment that she had with these amendments will be carried through into another place and will be left for them to debate. I am sorry to hear there is a little bit of disappointment, but we have, I hope, persuaded and also given way on a vast number of amendments. It would nice every now and then if everyone carried me rejoicing from these Chambers saying how marvellous it was-I do not think I am going to get that-but in any case I hope I have responded to the questions.
Clause 17 : Power to modify energy licences in connection with green deal payments
Lord Marland: My Lords, in break with tradition I am going to read a script I have been given because these amendments are complicated. They make small technical changes to Clauses 17 and 20 ancillary to amendments made on Report that apply to the Secretary of State's power to make licence modifications.
15 Mar 2011 : Column 138
Amendment 2 clarifies Clause 17(3)(f) and provides that provisions can be made in licences requiring payments to be made by or to licensees as well as enabling such payments to be made.
Amendments 3 and 4 provide that licence modifications made under the powers in Clauses 17 and 20 can be of the type envisaged by Section 7(3)(a) or (c) and (4) of the Electricity Act 1989 and Section 7B(5)(a)(i) or (iii) of the Gas Act 1986. Now you can understand why I read this out. I hope that these amendments will be supported. I beg to move.
3: Clause 17, page 14, line 6, at end insert-
"( ) Conditions included in a licence under section 7 or 7A of the Gas Act 1986 by virtue of the power under subsection (1) may do any of the things authorised by section 7B(5)(a)(i) or (iii) of that Act (which applies to the power of the Gas and Electricity Markets Authority with respect to licence conditions under section 7B(4)(a)).
( ) Conditions included in a licence under section 6(1)(c) or (d) of the Electricity Act 1989 by virtue of the power under subsection (1) may do any of the things authorised by section 7(3)(a) or (c) or (4) of that Act (which applies to the power of the Gas and Electricity Markets Authority with respect to licence conditions under section 7(1)(a))."
Clause 20 : Power to modify energy supply licences to make provision as to consumer protection
4: Clause 20, page 15, line 33, at end insert-
"( ) Conditions included in a licence under section 6(1)(d) of the Electricity Act 1989 by virtue of the power under subsection (1) may do any of the things authorised by section 7(4) of that Act (which applies to the power of the Gas and Electricity Markets Authority with respect to licence conditions under section 7(1)(a))."
Clause 40 : Power to make domestic energy efficiency regulations: England and Wales
15 Mar 2011 : Column 139
Clause 43 : Power to make tenants' energy efficiency improvements regulations:
Clause 46 : Power to make non-domestic energy efficiency regulations: England and
Clause 53 : Power to make domestic energy efficiency regulations: Scotland
Clause 56 : Power to make tenants' energy efficiency improvements regulations:
Clause 59 : Power to make non-domestic energy efficiency regulations: Scotland
15 Mar 2011 : Column 140
11: After Clause 71, insert the following new Clause-
(1) The Secretary of State shall, following consultation with energy consumers and other interested parties, prepare and publish a strategy to deliver the intended benefits of smart meters to consumers, including in particular low income and vulnerable consumers.
(2) It is the duty of the Secretary of State to report to Parliament on the progress of smart meter roll out every year starting from six months after the coming into force of this Part.
(3) In preparing the strategy the Secretary of State must set out how the smart meter roll out will-
(a) deliver to consumers the benefits identified in the impact assessment of July 2010;
(b) ensure adherence to an independent code of practice for installation;
(c) contribute to the carbon targets specified in the Climate Change Act 2008;
(d) contribute to the elimination of fuel poverty as specified in the Warm Homes and Energy Conservation Act 2000;
(e) improve competition in the energy retail market, including in particular in relation to prepayment customers;
(f) provide for the interoperability of smart meters;
(g) work alongside wider Government programmes such as the Green Deal and water metering roll out.
(4) The report should cover progress on the delivery of smart meters, including-
(a) the number of smart meters installed in the United Kingdom, defined as per the Ofgem definition of a completed installation;
(b) the costs and savings of the smart meter roll out;
(c) the estimated benefits to consumers and taxpayers of the smart meter roll out, with particular reference to low income and vulnerable consumers;
(d) estimated effects on the levels of fuel poverty;
(e) the estimated energy and carbon reduction from the smart meter roll out;
(f) the degree to which interoperability of smart meters has been achieved;
(g) customer satisfaction indicators, including levels of complaint;
(h) security of smart meters and smart grids in relation to privacy and commercial confidentiality."
Lord Whitty: This is in a sense left-over business from Report stage. Again, I am not looking to the Minister to accept the amendment as it stands but to recognise that some of the issues that it brings up need to be addressed by the Government during the Bill's stages in the Commons, one hopes, or possibly in secondary legislation.
The amendment deals with smart meters. We have had substantial discussions on smart meters in Committee; it is a very small part of the Bill but a very big part of the whole strategy for tackling energy efficiency in buildings, fuel poverty and the price of bills for everybody. Smart meters will therefore be key in improving energy efficiency, changing the behaviour of householders, reducing bills and providing the basis for introducing rather smarter grids into our electricity supply system. However, there are issues relating to smart meters. Unlike the Green Deal, which is voluntary for the
15 Mar 2011 : Column 141
I strongly favour this process and think that it will make a big contribution to energy efficiency; I think that at least some consumers will be able to alter their behaviour significantly and that we should therefore all support the strategy. However, there are some clear anxieties among consumers about the whole prospect of smart meters, some confusion about how they are to be delivered and in particular some concern about the lack of standardised and interoperable meters. I realise that on that front the Government are attempting to bring together the companies, and we are making some progress, but those concerns exist. There are also serious concerns, which noble Lords may regard as irrational, about privacy and what use may be made of the records of energy use. We must recognise those problems and recognise the possibility of serious consumer resistance that needs to be built in to how the rollout is delivered. It was an opportunity in this Bill to give a clearer framework to the totality of the smart meters' rollout. We are three years on from the 2008 Act and, clearly, there have been developments and slight changes in approach. The clause that would immediately precede the new clause that I propose is, in effect, simply to extend the possibility of altering licences to transmission licences. That may or may not be necessary, but it will probably be necessary in some circumstances-and I certainly support that change. Given that smart meters are such a major part of the provisions and we rely so strongly on them to reduce household energy use, we should perhaps have used the Bill for a slightly wider purpose.
3.30 pm
If households and landlords do not have confidence in the process of the rollout, if they are confused, if it leads to a backlash and slows down the programme significantly, it will slow down the achievement of our carbon targets significantly and aggravate the problems of fuel poverty. For example, if interoperability is not achieved, it could aggravate that confusion and limit the real choice of consumers in their ability to switch supply, at least in the short term.
We need to ensure that the framework provides for the Secretary of State to be able to monitor the progress of the smart meter rollout and report to Parliament, to the players in the industry and to consumers on how well the rollout is doing and whether there are problems. Benefits were identified in the overall impact assessment of July 2010 against which progress needs to be measured. The impact assessment on the Bill is fairly minor because it relates only to Clause 71, but the overall impact assessment sets some clear targets. We need to develop an independent code of conduct on how the suppliers and the installers operate with householders. We also need to monitor it against the targets for carbon set out in the Climate Change Act 2008 and the deliberations of the Committee on Climate Change. We need to see how far they can
15 Mar 2011 : Column 142
The issue of the recipients of the smart meter provision who are also in a Green Deal was not resolved in our discussions in Committee. Another dimension that was mentioned and is repeated in this amendment is that, in another part of government for which the Minister is not directly responsible, water metering is another major contribution to sustainability but also, indirectly but substantially, to energy usage in the home and in the totality of the water system. Putting in compulsory smart meters for energy without also addressing the water dimension could prove to be a problem down the line.
All I am suggesting in this amendment is that the Government have a clear framework in which they are assessing the delivery of the smart meter rollout, ensuring that we overcome difficulties in inculcating a degree of confidence in the market and in the recipients, and report in such a way that from time to time Parliament can debate the progress that is being made. I hope that the Minister can accept the spirit of this amendment and will indicate to his colleagues in another place, should similar or slightly more succinct amendments emerge there, that the Government give them serious consideration. I recognise that for now we are not going to do that at Third Reading in this place, but I am raising some issues which I hope the Government will take serious note of. I beg to move.
Lord O'Neill of Clackmannan: My Lords, I support my noble friend on this amendment, although I have to say that we tend to forget that at the moment a substantial number of meters are replaced every year. The replacement meters have been either replicas or slightly more updated versions of the previous ones. Sometimes they are placed in a different part of the household. If you are lucky, you might even be able to get the utility company to put one in your garden, if you have a garden, so that they do not have to come to your house to read it. What we are talking about initially is scale of operation. We have ambitions for 26 million households-18 million gas meters and some 25 million or 26 million electricity meters to be installed over a 10-year period.
I understand that that work is now going on at quite a rate in some of the utility companies. It would be unfortunate if, in such a large and potentially intrusive operation that will go into every household in the country, a clear form of parliamentary accountability were not involved. Obviously, in order that there be parliamentary accountability we need to know what is happening. I would therefore have thought that an annual report, while it might not be required reading for every Member of the Commons and the Lords, ought to be required reading for members of the appropriate Select Committees which take an interest in these matters. If necessary, that report could be debated annually in both Houses.
Many of us are concerned that we are still rather vague about what is being suggested for this rollout. This amendment goes some way towards identifying a
15 Mar 2011 : Column 143
In principle, this amendment is a good idea. If the Government accept it in spirit, they should be given an opportunity to go away and provide something of their own. A number of bodies outwith this House would want to be able to take the evidence that such a report would provide-for example, the Fuel Poverty Advisory Group which provides help and assistance to Ministers on fuel poverty. It would be emboldened and assisted in its work if it had the kind of technical information from such a report as is being suggested by my noble friend's amendment, so I give this my full support.
While an amendment of this complexity is easy for Governments to knock down, it might not be the last word on the subject, and it is incumbent on the Government to provide that. That will be a report of sufficient meatiness that it could be chewed over by interested parties and Members of both Houses, and could provide the companies with sufficient information and evidence to be able quickly to change anything that is wrong with the way they are going about their work. One problem that we can envisage here is that the scale of this operation is likely to create something akin to a juggernaut moving across the country and trampling households under its wheels.
Everybody wants to see the introduction of smart meters but it is incumbent on the Government, who have the responsibility of directing that if not actually implementing it, to ensure that public confidence both in the companies and in the whole concept is maintained. I do not think that we have heard many complaints about the work already done. However, it is too soon to reach conclusions, and any horror stories might well jeopardise a project in which everyone sees great virtue. I support my noble friend's amendment.
Lord Oxburgh: My Lords, I, too, have substantial sympathy with the amendment. Before one starts talking too much about juggernauts, it is worth placing on record that we had to have our domestic electricity meter changed a month ago. From the time the man who was doing the work came through the door to the time he left was about 12 minutes. It is a quick and easy operation, certainly so far as electricity meters are concerned.
However, an important point has been missed. By and large, the electricity companies have a poor understanding of their customers simply because they have no way of disaggregating their demand. With a better understanding of why, how and when loads peak in particular areas, which they do not have at the
15 Mar 2011 : Column 144
Lord Jenkin of Roding: My Lords, one matter which is not dealt with in the amendment-I do not know what my noble friend's reaction to this will be-is the question of the training of the technicians whose job it will be to install the new smart meters. Some noble Lords may recollect that I pursued this issue over the past year or two with the previous Government. I was informed that the sector skills council which dealt with this-the Energy and Utility Sector Skills Council-had applied for the necessary financial support to enable it to lay out a training programme for smart meter installers, only to be told that that could not be done under the then system, which I hope is in the process of being changed. I raised the matter with the previous Government and the noble Lord, Lord Hunt of Kings Heath, who undertook to look seriously at it, and I have pursued it with other Ministers in the present Government.
Attention needs to be given to this matter because, as a number of speakers have said, if people are going to go into consumers' houses it is important that they are properly trained to do the work. If eventually, as I have heard said, we are going to have combined gas and electricity meters-but perhaps not at the first stage-that will require a considerable new approach to training.
I have supported the smart meter programme from the beginning and have had some representations-not pressure; that would be the wrong word-made to me that it is a con trick in favour of electricity suppliers and distributors. I do not for one moment accept that argument. As speakers on all sides of the House have said, if it is properly handled and people are given all the information that they should have, which is very important, this could be of real value to consumers. The noble Lord, Lord Whitty, was wise to say that he did not really expect the Government at this stage to accept the amendment but, at some stage, something of this kind will be needed and I hope that it will cover the training of technicians as well as the other matters set out in the amendment.
Lord Grantchester: My Lords, it is clear that smart meters will play an important part in identifying energy usage to consumers and highlighting the impact of energy efficiency measures in the home. Consumer confidence in their operation is crucial.
The noble Baroness, Lady Northover, dealt comprehensively on Report with the intentions behind the amendments and gave a full account of the work her department was doing with the industry and in the discussions regarding a code of practice. It is important that the Government show leadership in this area. The House looks forward to receiving the noble Baroness's department's conclusions on this process, as there will clearly be a need for further work to develop the benefits and underline the importance of consumer engagement.
15 Mar 2011 : Column 145
It is important that there is a strong programme on the management of the operation of smart meters, and we support my noble friend's call that the department reports to Parliament on the measurement of the benefits they will bring to enable full accountability to take place.
3.45 pm
Lord Marland: My Lords, may I say how delighted I am to see the noble Lord, Lord O'Neill of Clackmannan, in his place? He watched at first hand the horrific events in Japan, where I spoke to him. What an awful time that must have been for him. We are delighted to see him back and, as usual, making some very interesting points.
The amendment of the noble Lord, Lord Whitty, is extremely valuable. He makes, as always, some very good points. Fundamental to this debate has been public confidence: the public must have confidence about the rollout of smart meters. As a department, we are committing a substantial amount of resources to smart meters, as we must get this right. I am not sure that all operators will be as good as the one who came to the home of the noble Lord, Lord Oxburgh; I suspect that, because of his great scientific knowledge, the noble Lord was telling the operator how to install it. Twelve minutes sounds like a very good target for anyone to try to achieve. The training of technicians is fundamental, as the noble Lord, Lord Jenkin, said; there must be great vigilance in this area so that the consumer can have confidence.
The noble Lord, Lord Whitty, made two specific points on the strategy for consumer benefits. We have been carrying out consultation since July on the wide-ranging subject of smart meters. A principal consideration has been a strategy for consumer benefits. We will publish our findings by the end of this month, and I hope that the other place will have the opportunity to debate them.
The Government are sympathetic when it comes to transparency regarding information about and the progress of smart meters. I can assure the noble Lord, Lord Whitty, that we will be developing arrangements for reporting the benefits of smart meters, the progress of the rollout and the delivery resulting from the benefits. That is fundamental not only to the public but to the Government, as we need to know what progress we are making. I hope that I have given the noble Lord confidence that we will take this matter forward in the other place and that he will therefore withdraw the amendment.
Lord Whitty: My Lords, I thank the Minister for that explanation and the other speakers in this debate, particularly my noble friend Lord O'Neill. The noble Lords, Lord Oxburgh and Lord Jenkin, made important points that will need to be borne in mind during the rollout. Technical training in fitting meters and explaining to consumers how to use them will be an important part of the rollout, so customer service training as well as straightforward technical training will be necessary.
With a bit of willpower, these issues can be overcome. When we shifted to requiring A or B boilers a few years ago, the industry threw up its hands in horror
15 Mar 2011 : Column 146
I am particularly pleased to hear that the assessment of consumer reaction, which I was aware the Government were undertaking, will be available to our colleagues in another place before they reach their final conclusions. The Minister will know that Consumer Focus, which I formerly chaired, has conducted a fair amount of research on this issue. It will be regrettable, if the Public Bodies Bill is passed, that it will not be in a position to do so on future occasions. It certainly threw up a number of incipient difficulties which are not insuperable but they are significant.
As noble Lords have said, we have to provide confidence. One problem is that the industry has a fairly low rating among consumers, and trust in energy supply companies, which will have to ensure that smart meters are installed, is pretty low. They have made some significant improvements in recent years but they have a poor history to overcome. I am afraid that that still informs a lot of customers' attitudes towards those companies and causes them to make inferences about the reason for introducing these new machines into their houses. There is some suspicion surrounding the use to which the energy companies may put the data, whereas we can see that the data could be used to provide electricity in a smarter, more intelligent and more cost-effective way. From the other end of the telescope, people are wondering why their supplier needs to know whether they have the kettle on at four o'clock in the afternoon. That is an exaggeration; nevertheless, it is a fear that needs to be addressed in the Bill and in the regulations that come under the Bill, as well as in the way that the Government oversee the whole operation. I think that, from what the Minister has said, our colleagues in another place will have sufficient information on which to base their discussion on this matter. In the light of that, I beg leave to withdraw the amendment.
12: After Clause 78, After section 3 of the Petroleum Act 1998 insert-
"3A Report on compensation for petroleum spills
(1) The Secretary of State must publish a report every five years about the arrangements in place in the United Kingdom for petroleum companies to compensate for any damage caused, or loss suffered, as a result of petroleum being accidentally released during the operation of licences under this Act.
(2) The report must, in particular, include-
(a) the amount of insurance coverage that industry members have agreed should be available in the circumstances outlined in subsection (1);
(b) the Secretary of State's opinion about whether the amounts are adequate to compensate for any damage caused in the circumstances outlined in subsection (1);
(c) the factors that the Secretary of State took into account in reaching the Secretary of State's opinion under paragraph (b); and
15 Mar 2011 : Column 147
(d) the actions that the Secretary of State intends to take, in the event that the Secretary of State considers the amounts to be inadequate."
Baroness Smith of Basildon: My Lords, in replying to the first group of amendments, the Minister expressed regret that, having made very modest but nevertheless welcome amendments, he was not carried aloft from the Chamber in jubilation. Never liking to disappoint the noble Lord, I offer him another opportunity. My foot may not be fully recovered but I might manage to carry him aloft should he want to accept the amendments that we are putting forward today. I reassure the Minister that the only reason that we on this side have put forward any amendments is to seek to improve the Green Deal and to ensure its success, and I assure him that the same applies to this amendment.
The noble Lord will recall that I raised this matter in Committee and on Report. When, on Report, I raised a similar issue about compensation and payments relating to petroleum spills, he assured me that he knew more about this issue, having been involved in insurance himself, and he patiently explained that he would write to me with further information. He has done so and I thank him. It has helped to clarify the situation, and I appreciate his responding in such detail. However, it is that response that has led to our tabling this amendment.
I was seeking assurance in the Minister's response about where the liability would fall in the event of an oil spill, and I referred to Deepwater Horizon, which we had previously discussed in your Lordships' House. He informed me that the Oil Spill Prevention and Response Advisory Group had set up an indemnity insurance group to review the current provisions of the OPOL agreement, as well as the financial and cross-indemnity arrangements behind the current mutual co-operative industry's mechanism on this issue. I understand that, at the department's request, the group has reviewed the modelling based on worst-case scenarios, on which the liability limit is based. It has also commissioned modelling of alternative spill scenarios with the aim of providing a more comprehensive picture of potential oil spill costs, and there will be further discussions on this. The Minister told me that the work is ongoing. However, he also assured me that, if that work indicates that a credible worst-case scenario could result in damage exceeding $250 million, the Government will require higher levels of cover. All that my amendment would do is build on what the Minister said a moment ago when he referred to his commitment to transparency and to monitoring the situation. It would be helpful for Parliament and those who are interested to know that the insurance available to deal with these catastrophes is at the appropriate level. That will happen only if there is a review and transparency.
The amendment requires the Secretary of State to publish a report every five years about the arrangements that are in place and specifies some issues that must be included. I hope that the Minister will look at this amendment. If he is unable to accept it today, perhaps it can be discussed with colleagues in the other place. I welcome the opportunity to carry him aloft from the Chamber should he wish to accept the amendment at this point.
15 Mar 2011 : Column 148
Baroness Northover: My Lords, we are very sympathetic to the concern expressed behind the amendment and we have debated both in Committee and on Report the issue of compensation for oil pollution. The main concern in these debates was that arrangements should be in place to ensure that companies could meet any liability arising from oil pollution during their licensed operations.
We explained in these debates that there are indeed appropriate requirements in the licences and that the industry has in response formed a voluntary liability pool, the Offshore Pollution Liability Association-OPOL. OPOL membership requires operators to demonstrate provision to meet clean-up costs and associated damages of up to $250 million on a basis of strict liability in the event of a pollution incident. OPOL also collectively provides a back-up mechanism that in the event of default by any operator, the other members will meet claims for clean-up and associated damages up to the same financial limits. That liability pool is unique to the North Sea, and we believe that it provides a very solid assurance that all pollution liabilities will in practice be met. I particularly stress the significance of the acceptance of strict liability by OPOL members, which means that anyone who has suffered loss as a result of pollution from an oil installation does not have to show that the operator is at fault. He or she merely has to establish that the damage or loss is a result of the pollution. As I have said, it is unique to the North Sea.
Since Report, my noble friend Lord Marland has written to the noble Baroness, Lady Smith, with further details of this arrangement and I thank her for her very positive response to that correspondence. This amendment, however, addresses a slightly different point from the amendments tabled in Committee and on Report. We made the point that the amendments tabled then were unnecessary as appropriate requirements were already in place. The focus of this amendment is rather that the Secretary of State should publish a report on the arrangements in place, the amount of insurance cover provided, and so on. We are wholly sympathetic to the idea that more public information should be available on these matters. As the noble Baroness notes, further work is ongoing under the auspices of OSPRAG, in which government and industry are working together to review the industry's practices in the light of what has been learnt from the Macondo disaster. One of the OSPRAG working groups is specifically addressing liability and indemnity issues. We are happy to undertake that the Government will make an appropriate statement in the House on the outcome of this work and any changes that may appear necessary or desirable. I hope that that reassures the noble Baroness.
As for future developments, the department is committed to laying an annual statement before the House, and we will, of course, use that to report on any new developments or proposed new measures. In the light of those reassurances, I hope that the noble Baroness will feel able to withdraw her amendment.
Baroness Smith of Basildon:I am grateful to the Minister for her response. It covers a number of the points that I wasseeking to address, mainly transparency
15 Mar 2011 : Column 149
4 pm
Clause 93 : Application of certain provisions ofthe Energy Act 2004 in relation to administration orders
13: Clause 93, page 74, line 31, at end insert-
"(2A) In the application of section 157(2), for paragraph (b) substitute-
"(b) that the company is likely to be unable to pay its debts and that the directors of the company have consented on that basis to the making of the order; or"."
Lord Jenkin of Roding: My Lords, I raised this issue in Grand Committee and briefly on Report when my noble friend Lady Northover was kind enough to say:
"I think the best way to take this forward is by consultation. If he would like to discuss the details with officials, we could see what, if anything, needs to be addressed".-[Official Report, 2/3/11; col. 1163.]
With the help of her officials, I did just that. I had a very interesting telephone conversation and subsequently a paper from a very helpful lady, Dawn Armstrong, in the Department of Energy and Climate Change. Briefly, the issue concerns the power of the Government to put an energy supplier into special administration. It is built on extending the powers in Section 157(2) of the Energy Act 2004 as adapted and applied by Clause 93. Section 157 is headed "Powers of Court" and subsection (2) states:
"The court may make an energy administration order in relation to a company only if it is satisfied- (a) that the company is unable to pay its debts; (b)-
and these are the critical words that I am unhappy with-
Then there is a third ground on which it might be appropriate to wind the company up in the public interest. The Insolvency Act, on which these words were originally based, included the words,
but in those circumstances it was only on an application by the directors of the company. Under Clause 93, it is a power of the Secretary of State, or of Ofgem with the consent of the Secretary of State, to apply to put a company into what is called special administration under this Act.
Ms Armstrong sent me an extremely helpful note, much of which I accept. For the benefit of what I hope will eventually be a debate in another place on this subject, I shall read part of it out. She wrote:
15 Mar 2011 : Column 150
"Administration under the Insolvency Act 1986 is a business rescue procedure, with the survival of the company as its primary objective. If entry to administration were only available to a company that could not pay its debts at the date of commencement, the rescue of viable businesses might be jeopardised. For this reason, administration can also be entered when a company is likely to become unable to pay its debts. The clauses in the Energy Bill on special administration follow these principles. The energy supply company administrator's primary objective is to rescue the company as a going concern. Therefore these provisions apply the same tests for insolvency as the Insolvency Act".
She used the words "the same tests". Yes, they are the same tests, but not by the same process. That is basis of the anxiety. I accept that there is a need for a process. There is no question about that. When you have a large energy supply company supplying millions of customers and it seems unlikely to meet its obligations, obviously the authorities must step in and do something about it.
The second point made in the paper, which I had perhaps not entirely appreciated, was that this applies only to supply companies and would not affect the generating part if it were in a separate company in the group. I am not sure that I wholly understand that because it is difficult to imagine a supply company unable to pay its debts if the company is otherwise solvent, but that point might need to be taken.
The third point made in the paper is that it is a court process and not just a peremptory decision made by the Secretary of State or by Ofgem. It is a decision to take the matter to the court and for the court to decide. I will return to that in a moment. My noble friend Lord Marland wrote to me on this matter. He wrote:
"Of course The Secretary of State and Ofgem would no doubt want to discuss any application for an energy supply company administration order with company directors in advance. And directors will be able to contest the application in court. However, enshrining a duty to consult directors in the legislation could lead to delay and it is important that the Secretary of State has the flexibility to act quickly".
I think that my noble friend might have misunderstood the purport of my amendment. I should thus like to make four points about that, and no doubt my noble friend Lady Northover will be able to reply. First, in my discussion with her official, she made the point that she thought that very few of the energy suppliers were worried about this. Since then I have made inquiries and have been told that the energy suppliers are solidly behind this amendment. I have had letters from two or three of them to confirm that point. It is not true to suggest that this is somehow only a minority concern. The industry's points of opposition to the special administration threshold-because that is what we are talking about-are vigorously maintained.
Secondly, the official's note is a perfectly adequate summary of the principles of the special administration regime. It also properly acknowledges that this regime does not disapply the provisions of existing insolvency law. However, it does not seem to acknowledge that the test for putting an energy supply company into special administration is set at a very low threshold: that is, lower than the threshold at which Ofgem can revoke a company's licence under the licensing provisions. If a licence is revoked, the practical effect is to put the
15 Mar 2011 : Column 151
I made further inquiries about the licence. Is it different or does it cover broadly the same process? Ofgem can revoke an energy supplier's licence on a number of grounds, including if the company has committed an offence while making its original application or if it has failed to comply with a final enforcement order in respect of a breach of a condition or something of that sort.
However, the ground that is relevant to this amendment is that which applies when the company is in financial difficulty. In that event, Ofgem can revoke the company's licence if the company is unable to pay it debts. There is no permission or discretion to revoke the licence if the company is likely to be unable to pay its debts. Why is it necessary, therefore, to put this provision about,
into the administration procedure under this Bill when it does not exist under the licensing provision?
More than that, the licensing provision sets out clearly what the court needs to be satisfied with before it withdraws the licence. The company is not to be deemed to be unable to pay its debts unless at least one written demand by a creditor for a sum of more than £100,000 has remained unpaid for at least three weeks. Nor is the company to be deemed to be unable to pay its debts even if such a written demand is outstanding, provided that the company is contesting it in good faith and with due recourse to all appropriate legal process. That seems to be quite different from what we are being asked to legislate in Clause 93. This power of the Secretary of State to go to the court and apply for a special licence is questionable. The contrast between that power in the Bill and the power to revoke a licence seems very stark. In the power to revoke a licence, there is no reference to the company being unlikely to be able to pay its debts, and the definition of what constitutes an inability to pay its debts is detailed and specific. Neither of these applies to the provision in the Bill. That point was not made during the earlier debates.
The third point, which I did make, was that we have had practical experience of the use of the power to put a company into administration if it is deemed to be unlikely to pay its debts. That happened in the case of Railtrack. There was an accountant's report, which was all that was necessary, to suggest that Railtrack was going to be unable to pay its debts, so off went the Government to the court, and we all know the history after that. This has been widely commented on. It was not, even at the time, entirely bona fide. A political objective was being sought. It is that kind of thing that is causing concern and uncertainty in the industry.
My last point is that my noble friend's letter, which I referred to a moment ago, raises the idea that I am trying to enshrine a statutory duty to consult directors. He says it would cause delay. In the circumstances that we are considering, a week or two's delay does not seem very important. However, my amendment does not impose a duty to consult. It says that the court can make a special administration order only if it is satisfied
15 Mar 2011 : Column 152
I entirely accept, as I said a few moments ago, that the authorities need to have the power to help a company to carry on its business if it is in difficulties for the protection of both the business and its consumers and, as my noble friend said, to spill over into other companies. A rescue package might have to be mounted, but I contend that this must be done in a way that does not sow uncertainty and raise the risks for investors and their suppliers. My evidence that that is the fear that the industry has at the moment is strong. The amendment seeks to enshrine a safeguard in the Bill to avoid that. I beg to move.
4.15 pm
Baroness Northover: My Lords, we are grateful to my noble friend for raising this important issue, which enables us to clarify further and to put the arrangements on the record. We understand that there might be concerns that the tests for insolvency set out in these provisions appear to be rather wide, but they are statutory tests for insolvency as set out in the Insolvency Act 1986. As my noble friend has indicated, it is also a matter of balancing the interests of the companies, consumers and the public interest.
Administration under the Insolvency Act 1986 is a business rescue procedure, with the survival of the company as its primary objective. If entry to administration were available only to a company that could not pay its debts at the date of commencement, the rescue of viable businesses might be jeopardised. For this reason, administration can also be entered when a company is likely to become unable to pay its debts, which was the focus of what my noble friend said.
The clauses on special administration in the Bill follow these principles. When seeking to bring an energy supply company administration to an end, the administrator's primary objective will be to rescue the company as a going concern. Therefore, these provisions apply the same tests for insolvency as the Insolvency Act. My noble friend argued that the process is different. As he has already picked up, the Secretary of State and Ofgem will no doubt want to discuss with the company's directors in advance any application for an energy supply company administration order. However, enshrining in the legislation a duty to consult directors could lead to delay.This is significant; the Secretary of State needs flexibility to act quickly if the company's position poses a threat to the rest of the market. That is extremely important to remember in this case.
The amendment would require the court to apply a stricter test for insolvency when considering applications for energy supply company administration than it does for applications for ordinary administration. It is therefore conceivable that an application by the Secretary
15 Mar 2011 : Column 153
The fact that a court process is required provides an important safeguard for companies, as the directors of the company have the opportunity to contest the order in court. They will no doubt use the kind of material that my noble friend has just mentioned.
My noble friend mentioned Railtrack. In October 2001, the High Court granted a railway administration order in relation to Railtrack. When granting the administration order, Mr Justice Lightman said:
"This is clearly a case where the making of a railway administration order is not only appropriate, but absolutely essential".
If my noble friend would like, I can fill him in at another time on the reason for that judgment being made. The company was put into administration to ensure that the railway network continued to operate and was properly maintained and managed, and that it was done in the public interest.
I make it absolutely clear that it is intended that the Secretary of State would apply for an energy supply company administration order only as a last resort and to prevent the risk of financial failure spreading to other companies. It is important to balance duties to the public with the rights of the companies. Energy supply is vital to the public and to the economy. It is therefore very important that this matter is looked at in the context of the public interest. The balance must be right. What we have seen recently in the banking industry, for example, shows how important it is to be very careful in this area.
I hope, therefore, that I have sufficiently reassured my noble friend and that he will now withdraw his amendment.
Lord Jenkin of Roding: I am extremely grateful to my noble friend Lady Northover for the care with which she has replied to this amendment. I have no doubt whatever that the industry will wish to study very carefully what she has just said. I have entirely accepted the case, and I think the industry accepts the case, that there is a need for the authorities to intervene. Our problem is that that might happen when the companies' assets and liabilities appear to be in balance but someone has thought it unlikely that they will be unable to pay their debts in the future. This seems to me and to others to be an uncertain test. It would behove the Government to try to find some alternative form of words that would allay the undoubted feeling of insecurity and unnecessary risk that the companies are running under the process of the Bill.
However, as I made clear last week to my noble friend Lord Marland, it is not my intention to divide the House on this amendment but to make sure that the arguments are on the record and can be referred to in another place if that appears to Members of another place to be appropriate. Having said that, I beg leave to withdraw the amendment.
15 Mar 2011 : Column 154
14: After Clause 101, insert the following new Clause-
"Compensation where the Secretary of State requests termination of offshore lease or agreement to lease
(1) The Secretary of State shall make a scheme (in this section, an "early termination compensation scheme") to have effect where-
(a) a lease granted or agreement to lease has been made by the Crown Estates for the purpose of construction and operation of a generating station powered by wind, wave or tidal energy, or of equipment for transmission of electricity at a site in United Kingdom territorial waters or the REZ;
(b) that lease or agreement to lease gives the landlord power to determine the lease or agreement where the Secretary of State so requests on the basis that the whole site, or any part of it, is required in connection with oil or gas works or rights; and
(c) the landlord proposes to determine the lease or agreement, as regards the whole site or any part of it, as a result of such a request.
(2) An early termination compensation scheme-
(a) must require the owner of, or person seeking to exploit, the oil or gas works or rights in question to pay compensation to the full extent of the loss which is likely to be incurred including the recovery of any wasted expenditure, loss of profits and any consequential loss suffered as a result of such works, by the lessee or holder of the agreement to lease as a result of the determination;
(b) may, subject to paragraph (a), make such provision as the Secretary of State considers appropriate for the computation of compensation;
(c) must make provision for the procedure applicable to the making and determination of claims, including provision for resolution of matters, in the event of disagreement, by an independent body;
(d) must provide for the Secretary of State, when satisfied that compensation as required by the scheme has been agreed or resolved, so to certify in writing; and
(e) may contain such other provision as the Secretary of State considers appropriate.
(3) The landlord must not determine the lease or agreement to lease until the Secretary of State has certified the determination in accordance with subsection (2)(d).
(4) Subsections (1), (2), (5), (6), (7)(b) and (10) of section 36 apply, with the necessary modifications, to an early termination compensation scheme."
Lord Whitty: I put down a similar amendment at Report which we were unable to debate. I am grateful to the Minister and his staff for talking to my noble friend Lord Grantchester in my absence. That makes me more confident that the Government understand that there is still a problem.
The amendment relates to the situation where a renewable energy enterprise has invested, at least as far as getting a lease from the Crown Estate, in offshore wind energy-it could be tidal or wave energy-and subsequently there is an oil discovery which would interfere with that site. This could result in a direct conflict, so my original attempt was to ensure that the Secretary of State could prevent such an oil licence being given unless the two sides negotiated an agreement. However, the noble Baroness, Lady Northover, persuasively indicated that the Government have this in hand, that there are negotiations going on and that
15 Mar 2011 : Column 155
It was clear from what Baroness Northover said that the Government would not be minded to provide for such an override. In my view, an override would restore the balance between the two sides, but nevertheless the Government were not prepared to go down that road. I have therefore reverted to my third choice. My first choice is to have an agreement, my second choice is that the Government should have the means to prevent the oil or gas development happening unless there was an agreement and my third choice is that, if the oil or gas development goes ahead, compensation should be paid. That should be set out in statute.
One of the reasons why I felt it necessary to return to this is that the noble Baroness, having made some reassuring noises, added another comment, which I did not pick up at the time in Committee, when she said that,
- "if the oil company is not prepared to offer appropriate compensation, there is no question of the Secretary of State intervening to override what is happening there".-[Official Report, 8 February 2011; col. GC52.]
I was not entirely sure what that meant, because it seems to me that where there is no agreement and the Secretary of State, having tried to get the two sides to reach an agreement, judges it to be in the public interest that the oil exploration goes ahead, there ought to be some compensation involved. It is important that we register this as an ongoing concern both for the offshore wind-energy companies and, potentially, for tidal and wave installations. Because the clause in the Crown Estate's lease enables this to happen, some intervention by the state or through the contractual provisions is required to even up the balance between the two sides.
I recognise that this is a complex area and it would be better for all of us if the Government and the two sides could reach agreement, but six years without agreement does not give me huge confidence that we will solve this before the passage of the Bill through both Houses of Parliament. I therefore tabled the amendment to register that with the Government and possibly to persuade colleagues in another place that this is an important issue. If investment in offshore, wind and other renewable technologies could effectively be overridden by a new oil exploration taking place in a site that had already been allocated and for which a lease had been agreed, some compensation is required if we are to encourage investment.
What lies behind this is that making a major investment in offshore wind and other renewable technologies requires significant private capital. For the most part, that will need to be raised from the markets. Although some large companies are investing in alternative technologies, we are mostly looking at finance through the City or the markets in one way or another. As long as potential investors can see not only that an investment could in effect be lost but that there is no legislative provision for compensation, clearly that will deter investment. That is what the offshore wind companies claim and it seems a valid point on which public policy should clearly give an indication.
15 Mar 2011 : Column 156
I hope therefore that the Government will recognise that the third-choice option of providing in statute for some form of compensation is probably the least they can do in the circumstances. I hope that they will accept the amendment. If they cannot do so today, perhaps a similar amendment could be moved in another place and they could accept that. I beg to move.
Lord Oxburgh: My Lords, the amendment certainly addresses an extremely important point. I conclude from the points made by the noble Lord, Lord Whitty, that the issue involves three separate elements: the Government's North Sea renewable strategy; investor confidence; and the behaviour of the Crown Estate. Unless the problem is addressed, we may be dealing with simply a matter of encouraging investment in the North Sea but of making it possible. Now is not a good time to raise money for renewables or anything else, and this could be the last straw when it comes to investment companies looking for where to put their money.
Anyone observing the behaviour of the Crown Estate in recent years cannot be anything other than impressed by the vigour with which it is pursuing the objectives that must have been imposed by its master the Treasury. To describe the Crown Estate as hard-nosed might be an understatement. Indeed, it does not have responsibility for delivering the Government's renewable North Sea strategy. Without some clear statement, ideally in the form of a statutory instrument of some kind as suggested by the noble Lord, Lord Whitty, or some comparably sure investable assurance, we will not see this going ahead.
4.30 pm
Baroness Parminter: I add our support for the noble Lord, Lord Whitty, in raising this important issue about creating a level playing field between the respective players in using the marine environment and the seabed. I also thank him for highlighting again, as he has done so eloquently in the past, the risk that not tackling this issue of the leases that can be rescinded by the Crown Estate will cause huge problems for future investment in renewable energy. While they may have taken six years to potter around on this issue, the Government know-as we in this House all know-that, if they are to meet their targets on renewable energy, this issue has to be resolved very quickly to get the future investment in renewable energy.
My slight concern with this amendment is that it seeks to draw out one particular problem out of the complex number of issues that make up the jigsaw of coexistence between the respective oil and gas companies and those involved in renewable energy. As RenewableUK said,
- "efforts to work together to prevent problems are far more likely to succeed if a fair and clear framework for co-operation is established".
While I support this amendment-because it is right to raise this important issue that leases can be rescinded-I am concerned that it draws out only one particular issue in the jigsaw. If we are to get an equitable solution that all parties can agree to, there is still merit in looking at all those issues together.
15 Mar 2011 : Column 157
Therefore, if the Minister is not minded to accept this amendment, I and other Members of this House would be grateful to know that the ministerial team is working now, with all parties, to agree such a fair and clear framework for co-operation that covers all the issues, not just the-admittedly important-issues around the termination of leases. If that framework can be agreed, which I hope can be achieved during the passage of the Bill as it goes to another place and comes back, that would give Members in this House the confidence that the Government recognise this issue, which has been raised by both sides of the House. The present state of affairs, whereby the leases can be rescinded for offshore wind if oil and gas companies come ahead with proposals, is not satisfactory, will not deliver the Government's objectives for renewable energy and does not create a level playing field.
Lord Grantchester: My Lords, it is important to promote the coexistence of UK oil and gas interests with offshore renewable energy expansion. We all want to maximise the growth of both sectors in the UK and thereby to enable the UK to benefit from sustainable electricity supply, strong oil and gas revenues and job creation in both sectors. As I understand it, there is an imbalance in the rights under the lease, according to whether the lease is in the hands of the oil and gas industry or the renewable wind industry. Where the oil and gas industry has an existing lease from the Crown Estate, the renewable industry can encroach on that territory only through commercial negotiation. Where the renewable industry has the lease, a clause in that lease gives the Secretary of State powers to terminate offshore wind-farm leases in favour of oil and gas and does not specify whether compensation would be due or how that amount would become due. This causes alarm in the renewable offshore wind industry that it could stifle investment in developing sites.
My noble friend brings forward his amendment to resolve the situation through the operation of a compensation scheme to cover the situation where the Secretary of State may be minded to terminate a lease in favour of the oil and gas industry. This scheme would give renewable developers the assurance that they feel they need to overcome reluctance to invest in developing a lease where it could be thought encroachment may happen from oil and gas operations. We understand there has never been-and, indeed, there is unlikely to be-such an occurrence. However, the renewable industry has the perception that the possibility of an early termination is detrimental to its financing and the exploitation of leases. This amendment seeks to end that uncertainty and uneasiness in the investor market.
I am sure the Minister would want to find a way to end the antagonism between the two key developers in the operation of leases. Can he give further assurances today, or even offer to facilitate a meeting with his department, so that the two protagonists could agree and cement a way forward?
Lord Marland: My Lords, I am very grateful to the noble Lord, Lord Whitty, for pointing out this particular area. We find ourselves perhaps in the crossfire between two interested bodies: RenewableUK and Oil & Gas UK, both of which are fighting for their own corners.
15 Mar 2011 : Column 158
I am afraid I am attracted by the second option-I think it was the second option-to carry on the dialogue. We do not believe that the issue has been going on for six years, but I am very grateful for the historical information, which officials had not imparted to me. I think it is attractive for us to carry on the dialogue and, I might say, knock heads together, because it is important that we get these boundaries clearly defined. As the noble Lord, Lord Oxburgh, and the noble Baroness, Lady Parminter, both said, this is a complex thing that cannot be done quickly and needs negotiation. It needs both parties to come to the table to help us find the correct solution. The Government are immensely committed to it because it is important and therefore I am extremely grateful that this matter has been raised, but noble Lords have our assurance that we are pressing on with the negotiation. We intend to have a resolution, particularly as the renewables industry develops, as soon as possible, but we are in earnest.
I want to clarify something from Hansardthat the noble Lord, Lord Whitty, said my noble friend Lady Northover said. Let me read out-another rare event for me-what the statement, in case he hears it incorrectly, should have said: I am happy to repeat the assurances we gave in Committee that where the oil company is not prepared to offer appropriate compensation, the Secretary of State will not intervene, on behalf of oil companies, and therefore the oil and gas development will not be permitted. I hope that clarifies that fundamental point.
With that, I hope the noble Lord will withdraw his amendment.
Lord Whitty: My Lords, I am very grateful to the Minister for clarifying that because that is not the way the original Hansardreport read. As I say, I did not pick that up in Committee itself but only subsequently.
I think we all agree that we need diversity of supply and that we need oil and gas and offshore wind as a part of our energy mix. We also have a public policy objective of a certain level of renewables to which offshore wind will be the major contributor. Therefore there is another incentive for Government to get this right. Clearly, a general coexistence and co-operation agreement between the two sides would be highly desirable, and I am certainly happy to support the Government's attempts to get that. I think he will find that this has been on the agenda for some considerable time. It might be five years and not six, but I think it is six years since I was a Minister and it was on the agenda within the former DTI, which sought comments from my department, which was Defra. So it has gone back that far. It may not have been a continuous negotiation, but the issue needs facing up to.
The renewables industry certainly feels, particularly in the present tight market, as the noble Lord, Lord Oxburgh, indicated, that this is a serious deterrent to getting the kind of funds needed to deliver what are, after all, the Government's own objectives. He is certainly also right that-let us put it kindly-the nature of the legal advice that the Crown Estate appears to be getting does not help the situation either. It is a complex issue.
I am happy for today to accept the Minister's assurance that we will continue to try to get an agreement. I suspect that the timescale of this Bill is not sufficient
15 Mar 2011 : Column 159
The Bill was read a third time. A privilege amendment was made and the Bill was passed and sent to the Commons.
Fixed-term Parliaments Bill
Bill Main Page
Copy of the Bill
Explanatory Notes
Amendments
Supplementary Amendments
10th Report from DPC
8th Report from CC
Committee (1st Day)
Relevant documents: 10th Report from the Delegated Powers Committee and 8th Report from the Constitution Committee.
4.40 pm
Clause 1 : Polling days for parliamentary general elections
1: Clause 1, page 1, line 4, leave out subsection (2) and insert-
"( ) The polling days for the next parliamentary general election after the passing of this Act will be the weekend of 8 to 10 May 2015."
Lord Howarth of Newport: I wonder if I may be permitted to make a general point, briefly, as we move into Committee, before I come to the specific matter of Amendment 1. I tabled this and other amendments after I had seen last Thursday that only eight amendments had been tabled to this Bill in Committee. I began to be worried that we might not conduct a proper scrutiny of the Bill in Committee-the very opposite hazard to that which we faced with the previous major constitutional Bill, the Parliamentary Voting System and Constituencies Bill. I have tabled rather a lot of amendments, but I assure the House that neither I nor my colleagues intend to mount a filibuster on this Bill-nor did we on the previous Bill. We tabled some dozens of amendments, but that was very modest indeed compared for example to the opposition parties in the Assemblée nationale de France in 2006, when in opposition to the Government's measure to reduce the state's shareholding in Gaz de France they tabled 137,449 amendments. That was a real filibuster. Noble Lords will also be aware that the earliest recorded instance of the practice of the filibuster was on the part of Cato the Younger, who talked out proceedings in the Roman senate because he believed that it was important to resist the ambitions of Julius Caesar, flushed with victory, to flout the conventions of the Roman republic. Of course, for Julius Caesar read Nicholas Clegg-and our task has been to resist the Caesarism of Mr Nicholas Clegg.
In all seriousness, I believe that the point at issue in our proceedings on the Parliamentary Voting System and Constituencies Bill, aside from the particular contents of that legislation, was the continuing ability of this House to perform its role as a revising Chamber.
15 Mar 2011 : Column 160
Lord Rennard: My Lords, very briefly, I say that the noble Lord did perhaps invite us to slumber on a number of occasions in the course of that Bill. However, having studied the recent precedence of filibustering in the French Assembly, he must have been unaware of those precedents at the time of the passage of that Act.
4.45 pm
Lord Howarth of Newport: The noble Lord, Lord Rennard, makes an excellent point. However, I am optimistic because we are about to resume proper scrutiny in your Lordships' House.
Lord Tyler: The noble Lord referred to slumbering Members on this side of the House. There is photographic evidence that the only people who actually went to sleep were people listening to his speech on his side of the House.
Lord Howarth of Newport: On the contrary, I myself went to sleep, but not during my own speeches-although I might have done, and indeed the noble Lord might have supposed that I had done. I concede that at certain points.
We are about to resume a proper practice of scrutiny in the best traditions of your Lordships' House. It is particularly important given that there was no Green Paper heralding this legislation, there has been no pre-legislative scrutiny, yet this Bill is of very great constitutional importance in itself and its provisions interact with other constitutional measures. For example, they interact with the provisions for boundary reviews that we just legislated in the Parliamentary Voting System and Constituencies Act. They interact with provisions that we can anticipate in a draft measure for reform of your Lordships' House. They interact with the contents that we can anticipate of a draft parliamentary privileges Bill, which we are led to expect. I think that it would have been better if the Government's proposals in all these respects had been laid out and available for pre-legislative scrutiny rather than that Parliament was required, effectively, to legislate on aspects of the constitution without having the ability to consider the interplay between different reforming measures. However, I am encouraged by what the
15 Mar 2011 : Column 161
"Of course, what matters now is the degree of scrutiny that",
the Fixed-term Parliaments Bill,
- "is subject to as the legislation passes through both Houses. On that we are very clear. We want to make sure that it is subject to the greatest possible scrutiny, which it rightly deserves".
In that spirit, I beg to move Amendment 1 in my name.
The Bill, as drafted, prescribes polling at general elections on a Thursday. It ignores the debate about the case for polling at weekends or other ways in which polling can be facilitated for our citizens. It effectively closes down that debate, which has been proceeding somewhat desultorily for a number of years. However, it is a proper debate and I do not think that it should be instantly closed down. We all have a major concern about how to improve participation in elections in this country. I am indebted to the Library of the House of Commons for a chart that it has provided in one of its notes, which shows a tendency for turnout at general elections to have declined significantly between 1950 and 2010. The bar chart indicates that in 1950 turnout in the general election of that year was of the order of 83 per cent. It fell a little bit at subsequent elections, but in February 1974 it was at or very close to 80 per cent, which is remarkable. Of course, the country was in crisis at that time and it was perceived to be an exceptionally important election. Nevertheless, looking back from where we are now, we would regard it as quite remarkable that turnout was 80 per cent in February weather conditions in 1974.
Lord Cormack: Would the noble Lord recollect that in the election of 1974 there were very few postal votes cast? People actually made their way in inclement weather to the polls because they felt strongly about the issues. Have we not made voting too easy with too many postal votes allowed, and does that not relate to the falling off in the percentage poll that we have seen in recent years?
Lord Howarth of Newport: The noble Lord, Lord Cormack, raises an important point. It was the more remarkable that there should have been an 80 per cent turnout in February 1974, given that it was not an easy thing to secure a postal vote in those days. I wonder whether the ready availability of postal votes in more recent elections has contributed to a decline in participation. It is not immediately obvious to me why that should be so but the noble Lord may have something to say about this a little later. Whatever may be the truth there, what we have seen in elections subsequent to that of February 1974 has been a pretty dismal trend of declining participation in general elections, reaching a low point in the 2001 election, where I think it was probably under 60 per cent, and rising slightly since then so that in the 2010 general election the turnout was 65.1 per cent. All of us must worry about the implications of that.
All sorts of explanations are offered for declining participation: dissolving class structures, since people in this country do not so completely identify themselves
15 Mar 2011 : Column 162
There is one explanation which is germane to this Bill and which the Government ought to take seriously: that voting arrangements are inconvenient. There is the requirement to turn up to vote-you can get a postal vote, as the noble Lord reminded us but the normal practice is still for people to turn up and vote in person-on a Thursday within certain hours. There have been experiments in trying to facilitate participation in elections. There has been an extension of postal voting and there have been trial schemes for advance voting in supervised polling stations, so that people could cast their vote ahead of the formal polling day. Thought has been given to whether people should be able to vote in supermarkets and so forth. Most significantly, it has been proposed that polling should be shifted from the conventional, traditional Thursday to weekends when it can be supposed that it would be much easier for more people to make it to the polling booth.
We had a note from the Electoral Commission, which came in only late this morning. Admittedly, it had not had very long to prepare its briefing but it is always helpful if people who want to advise us can get their briefing in to us a little earlier than that. It comments on Amendment 1:
"While the Commission is not in principle opposed to polling day being moved to the weekend, we have stressed that any such change should only be made if there is clear evidence that it would be of significant benefit to electors. At present, we do not believe that there is sufficient evidence on which to reach a definitive conclusion".
That must be an entirely sensible point of view. In the absence of sufficient evidence, it would not be sensible to make that change but the question is whether more evidence might be obtainable and whether it should be considered by the Government before they legislate, as proposed in the Bill, to establish definitively and for ever and a day that polling will take place on Thursdays.
The note from the Electoral Commission goes on:
"The Commission has ... evaluated a number of local pilot schemes involving advance voting-where electors would be able to vote in a supervised polling station within their local electoral area between one and seven days before the principal polling day-and has concluded that such facilities could help to enhance the accessibility and convenience of the electoral process. We have called on the Government to consider introducing advance voting as part of a comprehensive electoral modernisation strategy".
15 Mar 2011 : Column 163
Have the Government considered the experience of this pilot scheme and are they thinking, as the Electoral Commission would have them do, about a comprehensive electoral modernisation strategy? Did Ministers consider whether it would be appropriate to allow voters the opportunity to vote at weekends instead of on a Thursday before they wrote Thursdays into the Bill? If they did not do so before they published the Bill, will they now consider it?
Lord Rennard: I support Amendment 2 and the amendments in my name and the names of my noble friends Lord Marks and Lord Tyler.
Many noble Lords will know that I have long been an advocate of voting at weekends. They will also know how frustrated I feel that, among the many models piloted by the previous Labour Government to try to explore different ways of increasing turnout in local elections, only one pilot of weekend voting was ever undertaken-in one place, at one weekend-and that was of limited value. The idea of voting at weekends is not new; it has been floated and discussed in some form, but never properly debated in Parliament in such a way as to enable Parliament to decide the issue.
The Home Affairs Select Committee considered the issue in 1997; a Home Office working party looked at it in 1999; it was the subject of some limited debate when we permitted pilots as a result of the Representation of the People Act in 2000; the then Office of the Deputy Prime Minister further considered the matter in a consultation paper in 2002; the then new Electoral Commission published a report on election timetables in June 2003 and again in 2007; that year, weekend voting was again floated as part of the Government's Governance of Britain Green Paper; and a separate consultation paper was then published specifically on this issue in 2008.That was supposed to feed into a citizens' summit, which would recommend whether or not to go ahead with weekend voting later in 2008. That summit never happened. We have never had a proper debate in Parliament to determine the issue.
The principle of weekend voting is simple: more people are at home and free to vote for more of the day at a weekend than they are on a weekday. One possibility is to give people two days over the weekend on which to vote. This would avoid potential problems with religious observance and give people more than twice as much opportunity to participate. Many noble Lords have participated in elections and those who have campaigned will know the frustration of trying to contact voters among the working population of a constituency, in the few hours before the polls close at 10 pm, in order to remind them to vote. They will also have had extensive experience of trudging the streets during the day on polling day and vainly knocking on the doors of people who are out at work. We try to encourage them to vote but know that they cannot.
All those involved in elections know that people who are contacted on polling day and reminded by parties to vote are significantly more likely to vote than those who are not. It stands to reason that if people are contacted during the weekend when they are at home and reminded to vote, they are significantly more likely to participate. All good democrats should
15 Mar 2011 : Column 164
Lord Grocott: I know that the noble Lord favours different electoral systems and is passionate about increased participation in elections. Does he acknowledge that there is no evidence whatever in this country that changing an electoral system increases participation? In fact, we know that the various election systems that he supports lead to far more spoilt ballot papers, which, surely, is a further illustration of weakening participation in elections.
5 pm
Lord Rennard: My Lords, I anticipated that it would not be long before the noble Lord, Lord Grocott, found an opportunity to digress from the issue of participation in elections at weekends and encouraging people to participate. It is a source of regret to me, if not to many others, that the debate the noble Lord proposed to have about the relative turnout resulting from different electoral systems was not held in this House. Of course, he tends to compare declining turnout in European elections with declining turnout in general elections. The truth is that turnout is declining in many levels of elections, particularly in European elections. People may see the European Parliament as even more remote and they make a protest by spoiling their ballot paper. We have to recognise that. But if the noble Lord wishes to study the evidence on this properly and looks at the preference vote using the 1,2,3 system, he will see that in the Scottish local elections in 2007, notwithstanding the fact that there were other elections for the Scottish Parliament on the same day which used a different proportional system, there were very few spoilt ballot papers.
The principle of weekend voting deserves serious and considered debate. It is most unfortunate that the Bill as it stands enshrines Thursday as the day on which general elections should be held, even though that is an accidental precedent. It is not widely known that there is no statutory basis at present for polling day to be on a Thursday; indeed, many council by-elections are held on a Wednesday or a Tuesday when, for some good reason, they cannot be held on a Thursday.
We should think about voting on a Saturday or a Sunday or a Saturday and a Sunday. Our amendments provide the Government with what some noble Lords will now understand as being a Lord Rooker-type famous lifeboat. They do not actually say that things should change; they merely invite the Government to consider the possibility of a change on the assumption that there could be proper consultation, perhaps piloting and serious debate, and then the decision can be made at a later point. We can look at the arguments and consider them properly but because, as I said earlier, the issue has simply been allowed to drift so often, our amendments set a deadline for determination of the issue. That deadline is, sensibly, 1 October 2013, which coincides with the deadline for the publication of reports by the Boundary Commissions.
I hope very much, therefore, that the Government will keep an open mind on weekend voting. If there is a clear promise that we will consider this issue properly
15 Mar 2011 : Column 165
Lord Pannick: Before the noble Lord sits down, does he accept that to mandate Saturday as the exclusive day for voting would effectively disfranchise Orthodox Jews? There may also be difficulties about observant members of the Christian community who would not wish to vote on a Sunday. Therefore, does the noble Lord accept that if there is to be weekend voting, it would have to be over the whole of the weekend?
Lord Rennard: The noble Lord, Lord Pannick, makes a very good point, which I made when we discussed the issue in general without being able to decide the precise terms. I have always thought that weekends are probably better for voting than weekdays. I accept that it would be a problem in principle if some people felt that either Saturday or Sunday was an objectionable day when it came to them going out to vote. It would be rather good to say that a Saturday or a Sunday could be polling day-that is, two days. However, the hours could be more limited, as I do not think that polling would need to last from 7 am until 10 pm. I think that this should be the subject of proper debate and scrutiny. It may be that polling hours of 9 am to 6 pm will be very suitable on a Saturday and Sunday. The only objection to this that has been raised in the past is rather absurd and it has come from the electoral administrators. They said that there would be problems with security at the ballot boxes over a Saturday night into a Sunday. However, in the European elections we vote on a Thursday. The ballot boxes are sealed on the Thursday night and counted on the Sunday evening. Therefore, I do not believe that that is a significant problem. Indeed, I believe that many people who work in the electoral administration process would welcome the opportunity to work on a Saturday or a Sunday.
Lady Saltoun of Abernethy: My Lords, I do not know but I would not be at all surprised if it turned out that people much preferred to vote on a weekday, possibly taking a bit of time off work or arriving later for work, than have their football or whatever interfered with on a Saturday or a Sunday.
Lord Rennard: My Lords, few football matches last for nine hours on a Saturday and nine hours on a Sunday. I think that there would be plenty of opportunity to vote over a weekend. Some people may be in the privileged position of being able to take time off work on polling day but I do not think that many employers would take kindly to people saying, "I'd rather go and vote than work for you". I think that that is why so few people among the working-age population vote and why a disproportionate number of retired people vote in elections compared with those of a working age.
15 Mar 2011 : Column 166
Lord Cormack: My Lords, the noble Lords, Lord Howarth and Lord Rennard, have performed a very real service to the Committee in enabling us to debate this issue. When the noble Lord, Lord Howarth, referred to the Electoral Commission and those dreadful words "modernisation" and "strategy", I began to have my doubts but, seriously, it is important that we look at this issue. The noble Lord, Lord Pannick, raised an extremely important point when he talked about Orthodox Jews and many Christians.
I also think that there is a great deal to be said for having "a" polling day. I have always felt that having one day for elections and encouraging people to go to the polls is what it is all about. That is why I have viewed with a degree of concern, as well as scepticism, the increase in the incidence of postal votes. I referred to this briefly in my intervention during the noble Lord's speech. Of course, it is right that people who are incapacitated in any way or whose jobs regularly take them away from home should have postal votes. I was also very much in favour of people who had booked a holiday being allowed to have a postal vote.
I fought every general election from 1964 to 2005- 12 in all, in 10 of which I am glad to say I was successful. I campaigned in many other elections beginning in 1959. Therefore, I think that I have some experience. I remember vividly the election on 28 February 1974, to which the noble Lord, Lord Howarth, referred, when almost 80 per cent of the electorate went to the polls. People were exceptionally concerned about the gravity of the economic crisis. Many of them felt, as I did, that Edward Heath had abdicated in asking "Who governs the country?". The answer of course is that the Government govern the country and it is the Prime Minister's job to lead that Government. I felt-and said at the time-that he was wrong to go to the country. Indeed, he discovered that that was not the best decision of his life.
However, people turned out. I think that people will turn out as long as there is a proper incentive for them to do so and as long as it is not made too easy. That may sound paradoxical, but I think that the introduction of postal votes on demand, which in effect is what exists at the moment, does not encourage people or focus their minds or attention on a specific day.
Lord Howarth of Newport: Since we had our earlier exchange on this subject, I have been reminded that participation is actually higher among people with postal votes. It is over 70 per cent at general elections and not much lower at local elections. That suggests that the ease with which people can have a postal vote and thereby cast their vote is not quite as debilitating as the noble Lord fears.
Lord Cormack: I obviously listened carefully to what the noble Lord said, but there have been some disturbing accounts of the way in which postal voting has been conducted, and he knows that as well as I do. The security of the postal vote does not begin to compare with the security of the personally cast ballot. I am glad to see him nodding assent at that.
15 Mar 2011 : Column 167
When it comes to the day, for the reasons that I indicated earlier, I have great sympathy with the noble Lord, Lord Pannick, and I see no need to depart from Thursday. It is good that we should discuss it and maybe consider experiments with more local elections. I would not be averse to that. However, I believe that Thursday is tried and tested for general elections, and I hope that the Government will stick to that, certainly for the foreseeable future as foreseen in the Bill. I very much hope that they will consider the issue of postal votes and how postal voting is conducted and made more secure. It is important for the House to look at this and for another place to have another chance to look at it. Obviously, it would be quite wrong to press any of the amendments to a Division today, but I hope the Minister will be able to tell us that the Government have taken on board the points that have been made and will truly reflect on them.
Lord Bach: I hope that the Committee will forgive me if I speak from the opposition Front Bench at this stage. I am not for a moment trying to shorten the debate. It is a very important subject and the noble Lord, Lord Rennard, among others, has waited for years for a proper debate on this topic. The last thing I want to do is to stop that debate. The Minister knows, and I have told the Committee, that I have some personal difficulties that require me to leave in fairly short order. I hope that the Committee will forgive me if on this occasion I put the view of the opposition Front Bench very briefly and then leave. Of course the opposition Front Bench will be filled very adequately in my absence.
I say briefly that the Committee should be very grateful for the two opening speeches in this debate-the introduction from my noble friend Lord Howarth and the comments of the noble Lord, Lord Rennard, about weekend voting. At the very least it is necessary for the Government to think very carefully about the advantages-and the disadvantages, which the noble Lords, Lord Cormack and Lord Pannick, have hinted at-of changing from Thursday voting to weekend voting. It is an issue that ought to have been debated in Parliament a long time ago; I agree with the noble Lord, Lord Rennard, exactly about that. It was particularly interesting, sitting where we sit, to hear the language used by the noble Lord, Lord Rennard, in the sense that he was looking not just for a debate that would end in a few fine words but for some kind of decision on this issue. If I heard him right, he thought that this was the appropriate Bill for such an issue to be finally resolved under. Am I wrong about that?
Lord Rennard: For clarification, I was not necessarily suggesting that this Bill should determine the issue but that, if we were assured that it would not close this issue and that we would properly and seriously consider the issue in Parliament in due time before 2015, I would not necessarily want to press the amendments at this stage.
Lord Bach: I understand what the noble Lord has said. He mentioned the magic date of 1 October 2013. My advice to him, if I dare give advice to someone so
15 Mar 2011 : Column 168
It seems to us an attractive idea in principle that we should consider very carefully whether weekend voting is more appropriate and will lead to greater turnout. I do not think that we should assume that it necessarily will. There are people who would not dream of voting at weekends who will vote on a weekday, but I think that more people will be more tempted to vote if they are given a period, such as some part of Saturday and some part of Sunday, to do so. This is a very important issue not just for turnout but for other issues around British elections. The Opposition wish these amendments well. We hope that the debate continues, and we look forward to playing a full part in it.
5.15 pm
Lord Tyler: I am very glad that the noble Lord, Lord Bach, preceded me because it gives me an opportunity to congratulate yet another sinner on repenting when I hear from him the admission that Ministers occasionally give us honeyed words and assure us that action will be taken when, in the 13 years in which he had a very responsible role in government, there was very little action even in discussing this issue, let alone consulting on it.
I shall make two or three quick points in support of the amendments that my noble friend Lord Marks and I have tabled. First, I recall very well indeed the night of 28 February 1974. In an enormous, scattered rural constituency with snow threatened, pouring rain much of the time and a lot of wind on Bodmin moor, we managed a turnout of 83 per cent, but that was in extremely difficult circumstances. This is true of many rural consistencies in which there are big distances to travel from the place of work to get to vote. There are very difficult circumstances in many villages when the only place where you can have a polling station is the village school, so it is closed for the day. That practical point has not yet come up in the debate. It may be true in urban areas too, but I do not have the same experience. There are practical problems about the insistence on Thursday as polling day that we should address.
The other point that I shall address very briefly was raised by the noble Lord, Lord Pannick, and supported by my noble friend Lord Cormack. I am a practising member of the Church of England, by which I mean that I am never going to be perfect but am practising all the time. I recognise that there are people in all the churches who would find it difficult if Sunday were the only day. That is why our amendments specifically refer to the possibility of two days. Of course, it is also true that Saturday is a day for other faiths, as indeed is Friday.
I am chair of the Faith and Civil Society Unit at Goldsmiths College, so I take a particular interest in the way in which we are now a multifaith community.
15 Mar 2011 : Column 169
| Next Section | Back to Table of Contents | Lords Hansard Home Page |