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House of Lords

Tuesday, 17 May 2011.

2.30 pm

Prayers-read by the Lord Bishop of Winchester.

Death of a Member: The Earl of Onslow


2.37 pm

The Lord Speaker (Baroness Hayman): My Lords, it is with very deep regret that I have to inform the House of the death on 14 May of the noble Earl, Lord Onslow. On behalf of the whole House, I extend our condolences to the noble Earl's family and friends.

BBC World Service


2.37 pm

Asked by Lord Fowler

The Minister of State, Foreign and Commonwealth Office (Lord Howell of Guildford): My Lords, we have regular discussions with the BBC World Service. We are aware that the BBC World Service has already reprioritised resources to minimise the effect of the cuts to the BBC Arabic service. We are also looking at ways that we can work with the BBC Arabic service and the BBC World Service Trust on specific projects under the Arab Partnership Initiative. We have also been in discussion with the BBC Trust, the BBC World Service and the Department for Culture, Media, and Sport over an amendment to the BBC agreement that will include setting out the role of the Foreign Secretary once the funding of the World Service transfers to the licence fee in 2014-15.

Lord Fowler: My Lords, I thank my noble friend for that reply, but perhaps I may raise specifically the cuts being planned in news reporting on the Arabic service, which, incidentally, will be unaffected by any resources from DfID through the World Service Trust. Does he not agree that this is a crucial time in the Arab world and the Middle East-so important that other television stations are expanding their reporting and Sky is soon to introduce an entirely new service there? Given that the World Service is already well established, respected and cost-effective, should not our aim be to develop the Arabic service, not to cut it back?

Lord Howell of Guildford: Of course that is absolutely right and my noble friend is extremely well informed on these matters. In fact, I really wanted to say to him that when he spoke about these matters the other day, I said that he was "misinformed". On reflection,

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I think that that is too strong a word, and I apologise to him for it. He was correctly drawing on the BBC World Service circular, but that did not quite present the whole picture about the fact that the 24-hour service is being maintained in one form or another-although it is perfectly true that live broadcasts have been curtailed.

Nevertheless, as I mentioned in my Answer, we are working on specific projects under the Arab Partnership Initiative, and we hope that that initiative will be expanded and, therefore, that opportunities for more support for the service will expand. I should add that if one looks at the totality of the projection of our soft power communication with the Arab world, since between November last year and February there has been a 263 per cent increase in online BBC Arabic usage, a 949 per cent increase in requests for Arabic TV online streaming from the BBC, and a 559 per cent increase in online video requests. No one can say that we are backward in promoting the British message, persuading, using influence and communicating in a highly effective way with the turbulent Arab world.

Lord Soley: Has the noble Lord taken into account the very important fact that not just in the Middle East but in Iran as well television coverage is particularly important and that it is much more expensive than radio coverage? Will he give the House an undertaking that, in looking at these figures, the Government will take into account the additional cost of TV coverage to the Middle East and Iran to make sure that we do not undermine this crucial part of our soft power?

Lord Howell of Guildford: The noble Lord is quite right. As I indicated in the figures that I gave, although radio remains immensely important, the trend is towards television becoming the dominant leader. We can see from the enormous rise in the influence of Al-Jazeera just how powerful it is and how important it is to promote our own TV services. Therefore, although I cannot give precise undertakings on precise figures, that is clearly a high priority.

Baroness Coussins: My Lords, following the reprieve of the Hindi service, are any of the other foreign language services that have been cut likely to be able to benefit from a similar rescue package, possibly including commercial partnerships?

Lord Howell of Guildford: My right honourable friend the Foreign Secretary gave permission for five foreign language services to be cut, mainly because their usage had fallen dramatically. However, the allocation of resources for maintaining foreign language services and the possibilities of bringing in commercial support are matters for the BBC World Service and, after 2014, for the BBC. The Department for International Development is discussing ways in which it can work in a more strategically joined-up manner with the BBC World Service Trust, which itself produces the prospect of more support for the services we want to keep and are effective and fit into the modern technological pattern.

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Baroness Trumpington: My Lords, I hope that this is not irrelevant. If, as the noble Lord said, the BBC is cutting back, why do I have to listen at 3 am to the most ghastly children's programme for the under-fives when that time could surely be put to use for foreign broadcasts somewhere in the world where it is not 3 am?

Lord Howell of Guildford: I have a feeling that the slightly cop-out answer is that that really is a matter for the programmers and directors of the BBC World Service and not for me at 3 am in the morning. Nevertheless, although the World Service and many other aspects of government and government agencies have had to trim their sails in line with the general austerity measures, for reasons which we all know about, in general great strides are being made in expanding the communication network in these areas and in reorganising BBC programmes in a way that, I hope, will not disturb my noble friend quite so challengingly.

Baroness Bonham-Carter of Yarnbury: My Lords, I suspect that many noble Lords saw the photograph of a young man protesting in Deraa, Syria, holding up a placard on which was written "Thank you BBC". I think that that says it all. Can the Minister persuade his friends at DfID that the World Service is regarded by the recipients of our aid as priceless and ask them to look up exactly what that means?

Lord Howell of Guildford: I think that my honourable friends and colleagues in DfID are well aware of that. It is a very important element in the deployment of soft power by this nation and it makes an important contribution to the overall soft-power communication message. No one doubts that for a moment. The budget is still substantial. It has had to take a cut proportionate with the huge cut that the Foreign Office had to take at the time of the exchange rate farrago. That had a huge impact on the Foreign Office. All the agencies concerned have had to take a proportionate share of that, but no more than proportionate compared with 2008.

Lord Corbett of Castle Vale: When the BBC accepts financial responsibility for the World Service, who has the final word on to which countries and to what extent the BBC broadcasts: the Foreign Secretary or those who pay the piper, the BBC?

Lord Howell of Guildford: The finality and responsibility will be very carefully defined. A new broadcasting agreement is now being worked out between the Department for Culture, Media and Sport and the BBC that will define exactly the rights and responsibilities of the Foreign Secretary. However, at present, the final word is with the Foreign Secretary and it was he who sanctioned and approved the cuts in, I think, five of the foreign language services. Beyond that, it has been a matter for the BBC World Service itself to work out how best to use its resources.

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Asylum Seekers: Democratic Republicof Congo


2.46 pm

Asked by The Lord Bishop of Winchester

The Minister of State, Home Office (Baroness Browning): My Lords, failed asylum seekers are returned to the Democratic Republic of Congo only when we and the courts are satisfied that it is safe to do so. The Court of Appeal in December 2008 upheld the finding of the immigration and asylum Upper Tribunal that failed asylum seekers returning to the Democratic Republic of Congo were not at risk of persecution merely because of their involuntary return. Furthermore, inquiries made by the Foreign Office in Kinshasa have found no evidence that the returnees removed from the UK to the DRC have been mistreated. Nevertheless, each case will be considered on its individual merits.

The Lord Bishop of Winchester: My Lords, I declare an interest as patron of the Southampton and Winchester Visitors Group and welcome the Minister to her new responsibilities. This is the third time I have asked this question. Each time I have had the same ostrich-like unsatisfactory answer from two different Governments and three different Ministers. It is a real puzzle to me that the noble Baroness can give me these assurances if the Government and the Border Agency undertake no follow-up and rely for their information on those with whom those who return will not talk in the face of the information that they give to those with whom they have talked. Is the noble Baroness really up to speed with the number and consistency of reports of ill-treatment that constantly come back to this country and tally with the material about abuse and other things in the very country-of-information material of the Home Office itself?

Baroness Browning: My Lords, I am concerned to hear what the right reverend Prelate has said about his previous attempts to shine some light on this problem. Certainly, if through him or any organisation he puts the Home Office in contact with, there is evidence that needs to be examined or even re-examined, he has my personal assurance that that will be done.

Lord Avebury: Is there a policy of refusing DRC asylum seekers on the grounds that, although they might be at risk in certain areas of the country, they should internally migrate to somewhere else where they would be free of persecution? Can the noble Baroness remind us what the courts have had to say about this policy of internal migration?

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Baroness Browning: My Lords, I cannot give my noble friend a factual account today of what the courts have said about internal migration because I have focused on what happens to returnees, and it was in that context that I responded to the right reverend Prelate. However, I give the noble Lord this opportunity, if he would like to take it. If he has evidence of a matter that we should be looking at as a Government, I will have it examined. I should add that I have had briefings that show that third parties, NGOs and others have brought cases to our attention but there has been no follow through yet in asking for specific evidence that we can investigate.

Lord Dholakia: How much emphasis does the Minister place on matters relating to in-country reports, particularly those produced by Amnesty International? Is there systematic monitoring of the cases of the returned asylum seekers?

Baroness Browning: I can assure my noble friend that in respect of the Democratic Republic of Congo, we have no recent reports, from NGOs, the UNHCR or other such bodies, that remain to be investigated. Yet again, if there are internal reports that we should be made aware of, I would be interested to receive them because my understanding is that there is very thorough communication within the Democratic Republic of Congo and through our advice received in this country, and as yet I have seen no evidence of individual cases or trends that need to be looked at. I should add that a new report is coming forward this summer. It will be a year since we saw the last consolidated report, and it would be very helpful if that information was available to incorporate into the new report.

The Earl of Sandwich: Will the Home Office strengthen its links with the International Organisation for Migration, which has the responsibility for following up these people?

Baroness Browning: I am very happy to agree to that, and I will ask officials to look specifically at what the noble Earl has suggested.

The Lord Bishop of Exeter:My Lords, this is Christian Aid week, and up and down the country large numbers of people are raising funds to alleviate poverty in the most needy parts of the world, including the Democratic Republic of Congo. Is it not unfortunate in this of all weeks that any Minister should suggest a weakening of the commitment in the coalition agreement to enshrine spending 0.7 per cent of national income on overseas development aid? Is the Minister in a position to affirm that that commitment remains intact?

Baroness Browning: I am most grateful to the right reverend Prelate, who I am very pleased to say I was able to work with on occasion in another place. I am able to give that guarantee on behalf of the coalition Government. That is the Government's stated position, and that is the policy we shall pursue.

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Lord Foulkes of Cumnock: My Lords, why are the children of failed asylum seekers still held in detention in spite of Mr Nick Clegg's promise that the coalition would end it?

Baroness Browning: My Lords, we take very seriously the question of children. It is a matter that, coming new to this brief, I particularly wish to focus on. We will do all we can because we realise that the wider family, and children in particular, are particularly affected, and it is very important that while we carry out the procedures that are necessary to assess asylum seekers' status, we take a humanitarian approach to the younger children.

Education: English Baccalaureate


2.53 pm

Asked by Baroness Bonham-Carter of Yarnbury

The Parliamentary Under-Secretary of State for Schools (Lord Hill of Oareford): The English Baccalaureate reflects vital subjects-maths, English and science-where pupils should have the option to take exams leading to A-level, and history, geography and languages, which have been in decline. However, these are not the only valuable or rigorous subjects. We are also making detailed performance information available so that the public can look at schools' results in any combination of subjects.

Baroness Bonham-Carter of Yarnbury: I thank the Minister for that Answer. Does he not share my concern over a recent survey in which 60 per cent of the schools that responded said that they would no longer be teaching art and design at GCSE as a result of the introduction of the English baccalaureate as they have to concentrate on the subjects that it encompasses? The qualifications that count towards the current EBacc provide limited scope for the development of creative skills. Does the Minister not agree with me that, considering how important the creative industries are to the present and future prosperity of this country, that is really rather short-sighted?

Lord Hill of Oareford: My Lords, I agree with my noble friend about the importance of the creative subjects in terms of the contribution they can make to the creative industries, as she says, and as a good in themselves. It is right and good for children to learn about these subjects for the benefit of education, not just for some gradgrindian economic benefit. I agree with her very strongly on that. The thinking behind the EBacc is not in any way to undermine or diminish the value of other subjects that are not in the EBacc. The starting point is that all of us in this House are keen to encourage social mobility. The fact is that children, particularly from poor backgrounds, have

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not been having the opportunity to study the kind of academic subjects that will enable them to progress to higher education in the numbers that one would like. We are all keen for children from poor backgrounds to become doctors in the way that those from more affluent backgrounds do, yet only 4 per cent of children on free school meals take physics or chemistry. Any further measure we take will not help those children become doctors. We hope the EBacc will give children who want it the opportunity to study academic subjects. Children, however, come in all shapes and sizes and vocational, arts and creative subjects are equally important.

Baroness McIntosh of Hudnall: My Lords, I do not think that anybody in this House would doubt the Minister's personal belief in the value of the subjects to which the noble Baroness, Lady Bonham-Carter, referred. Can he say how the Government will ensure that schools do not reduce the resources that they make available for the teaching of those subjects in order to boost their potential league table performance by concentrating only on baccalaureate subjects? Is it not the case that universities and employers look for young people who are not only good at passing exams in academic subjects, but are also well rounded human beings?

Lord Hill of Oareford: I agree with the underlying point. That is, of course, what employers are looking for. As the noble Baroness will know, one of the thrusts of our school reforms is to try to give head teachers greater discretion and autonomy to teach the subjects they think are appropriate for the pupils in their care. It is not for us to tell them what to do the whole time. If we can strip back the national curriculum, freeing up more unprescribed time to study some of these other subjects, I hope that will help. Ultimately, it is our view that it is for schools to decide and for pupils and parents to make their views known. The more information that we can publish so that parents and others can see what choices schools are offering, the more it will help to make sure that children are able to study the subjects that are right for them and are not driven by perverse incentives in league tables. This is where I agree with the noble Baroness. We have to be very careful that we do not end up with children studying subjects that are not suitable so that schools can do better in league tables.

Lord Phillips of Sudbury: My Lords, I preface my question by saying that for many years I was a parent governor of what was then the only comprehensive school in England doing the baccalaureate as an alternative to A-levels. Would the Minister agree that the baccalaureate has a big advantage in not pressing pupils into a science/arts split, in the way that A-levels tend to, and that it encourages a creative way of thinking and writing in depth at A-level standards?

Lord Hill of Oareford: My Lords, the international baccalaureate to which my noble friend refers, has many merits. I am not sure I would have benefited from it, because I was never very good at the science and maths bit, which it entails. I agree with him,

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however, that for many children it is suitable; it has many strong advocates. We are freeing up the system so that schools that want to offer the IB in the maintained sector are able to do so and that pupils can choose to study it.

Baroness Jones of Whitchurch: My Lords, the Minister made great play of the fact that schools should not simply staff up to cover the English baccalaureate subjects, but there is already anecdotal evidence that that is happening. What is the department doing to monitor whether that is the case and what is happening on the ground now that the English baccalaureate league tables are being sought by so many schools? And what steps will the department take where that is identified as happening in schools to discourage them from doing it in the future?

Lord Hill of Oareford: My Lords, in some ways, if one of the consequences was that schools needed to employ more teachers to teach modern foreign languages or sciences, it would not be a development that I would deplore. I think that many of us in this House would welcome it. If more people were employed to teach those academic subjects, I would not see it as regrettable. The noble Baroness is right that we need to monitor what is happening to make sure that the provision of teachers in STEM subjects and other subjects is sufficient. We have had a long-term problem in ensuring that we have enough and we need to try to address that. We need to monitor that. The normal statistical returns which are produced each year and inform the department's recruitment of teachers and trainee teachers will track that, enabling us to see what is going on.

Child Poverty


3.01 pm

Asked by Baroness Lister of Burtersett

The Parliamentary Under-Secretary of State, Department for Work and Pensions (Lord Freud): My Lords, I welcome the reduction in child poverty from 2.8 million to 2.6 million children, but despite £150 billion spent on tax credits since 2003-04, largely aimed at families, that figure is a long way off the previous Government's aim of halving child poverty by 2010. Noble Lords will be aware that the Government published their child poverty strategy on 5 April, showing how our radical reform programme will help to transform people's lives and break cycles of disadvantage.

Baroness Lister of Burtersett: My Lords, I thank the Minister and I welcome the Government's commitment to the eradication of child poverty. However, given that improved financial support for children

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played a key role in the previous Government's achievement in reducing child poverty to its lowest level since 1985, will he comment on the Institute for Fiscal Studies' prediction that cuts in such support could contribute to an increase in child poverty? Will he also explain why the child poverty strategy contains no specific, quantified targets for the period that it covers?

Lord Freud: My Lords, that is a complicated question. As noble Lords know, fundamentally, child poverty has been stuck at the same level since around 2004-05. We have seen a statistically significant reduction this year, but it is very much the same figure as it was five years ago. The IFS, as the noble Baroness pointed out, predicts an increase of 200,000 in the number of children in poverty in two or three years' time. That may or may not be true, but our fundamental reforms, particularly of the universal credit, will start to drive that figure down. We are predicting, as has already been announced, 350,000 fewer children in poverty as a result of the universal credit when it is introduced and 300,000 fewer workless families.

Baroness Walmsley: Does the Minister agree that the nutrition of children in poverty is a very important element? Now that the School Food Trust is a charity and has moved out of the department as an agency of government, do the Government intend to ensure that it has the wherewithal to do the research into the nutrition of children in poverty that is necessary to inform government policy?

Lord Freud: My Lords, we have made quite a substantial change in approach to tackling child poverty. With our proposal to change the Child Poverty Commission into the Social Mobility and Child Poverty Commission, which went into Committee in the other place today, we are reinforcing some other measures beyond just income changes. We are using a series of other indicators to look at life chances as well as poverty in order to make sure that children have a better start and greater well-being.

Lord Martin of Springburn: My Lords, talking of a better start, the Minister will know that, unfortunately, where there is alcohol and drug abuse in a home, children often go hungry. I know that it is difficult, but can Her Majesty's Government take steps to ensure that every child, or as many children as possible, is able to get a breakfast before they go to their school in the morning?

Lord Freud: My Lords, that is micromanagement on some scale. We are trying with our welfare reforms to treat families as responsible units and for them to take the decisions that they need to take. However, we acknowledge that there are groups of families who cannot handle that responsibility. In moving the whole system to transfer responsibility to most families who can take responsibility, we are concerned about the people who cannot and what are the right ways of helping them. That is something to which we are paying active attention.

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Baroness Sherlock: My Lords, returning to the matter of targets, even if the Government are correct, as the Minister said, and 350,000 children are lifted out of poverty by the welfare reforms, the IFS has said that that will be wiped out by the numbers falling into poverty before reforms even take place. I am sure that everyone in the House wants to build on the achievements in raising children out of poverty. Would targets not be the best way to do that?

Lord Freud: My Lords, it is important to look at what the figures have shown us. Last year we put an enormous amount of money into tax credits and the benefits system. The amount increased by 6.7 per cent and is the sole reason that we had income growth in this country in that year. It is not sustainable to do this by income transfers. Our aim is to try to transform the lives of people, and that must mean a renewed emphasis on getting people back into work, making them independent and leading their own lives. That is our strategy and that is how we have reformulated our poverty policy.

Baroness Wheatcroft: My Lords, any reduction in child poverty is to be applauded but, on the day those statistics were released, it was also revealed that the difference between the rich and the poor in this country had remained at the record levels of last year that it reached under the previous Administration. Does the Minister share my concern about the dangers that are inherent in that?

Lord Freud: Yes, my Lords. One of the peculiar things about what happened under the previous Government was that the Gini coefficient went up to an all-time record. It has moved slightly in the past year but not in any meaningful way. It is important that we address that as part of the context of looking at our poverty approaches but, as noble Lords opposite will know, this is not an easy thing to do.

Lord McKenzie of Luton: My Lords, the Minister referred to the importance of getting people back into work and I agree with that. Will he cast his mind back three or four years to a document that he wrote when the previous Government were in office? He wrote:

"The Government"-

that is a Labour Government-

Does the Minister still hold to that view?

Lord Freud: I used the expression "in some respects" and I stand by that. In some respects there was a great deal of success. Under the previous Government we discovered that active labour market policies worked, and when they were introduced-they were actually introduced by the previous Government-and pushed in they had a one-off effect. However, we are left with

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a huge problem of people on inactive benefits which the previous Government did nothing to solve. We are now trying to do that.

Arrangement of Business


3.09 pm

Baroness Anelay of St Johns: My Lords, at a convenient point after 3.30 pm, the Leader of the House will repeat a Statement about House of Lords reform. The usual channels have agreed that the House may wish to hear from the Convenor of the Cross-Bench Peers, and also from the Bishops' Bench, in Front-Bench time and that the time for Back-Bench questions and answers on the Statement should be extended from 20 minutes to 40 minutes. Immediately thereafter my noble friend Lord Marland will repeat a Statement on the fourth carbon budget.

Hybrid Instruments Committee

Membership Motion

3.09 pm

Moved by The Chairman of Committees

Motion agreed.

Postal Services Bill

Report (2nd Day)

3.10 pm

Clause 27 : General authorisation to provide postal services

Amendment 58

Moved by Baroness Wilcox

58: Clause 27, page 15, line 34, at end insert-

"(ca) a notification condition (see section (Notification condition)),"

The Parliamentary Under-Secretary of State, Department for Business, Innovation and Skills (Baroness Wilcox): My Lords, I shall also speak to Amendments 68 and 72 standing in my name. During our discussions, many of your Lordships, who are leaving the House quietly, have raised concerns about the prospect of other operators cherry picking profitable parts of Royal Mail's delivery business. We have listened to these concerns and, as indicated in Committee, we have looked again at the Bill to check that there is sufficient protection in place. While we are confident that Ofcom has the necessary tools to ensure fair and effective competition in the market, we have come to the conclusion that there may be occasions when Ofcom will need to

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build in greater time to inform its use of these tools. These amendments therefore give Ofcom the power to require operators to pre-notify it of a planned commencement or expansion of a letter delivery operation on a specified scale.

This notification mechanism will ensure that Ofcom has the necessary time to evaluate the potential impact on the universal service of such an operation before the operation has commenced and before any potential damage has been done to the universal service. The detail of exactly how Ofcom will calculate what constitutes a significant service will need to be determined, but the policy intention is for only significant letter delivery operations to be caught. As such it will not impose any additional burden on, for example, current access competitors, courier services or parcel delivery businesses.

This is a light-touch, narrowly focused regulatory safeguard that will help Ofcom address an issue that has concerned many of your Lordships. I hope therefore that your Lordships will be able to support Amendments 58, 68 and 72 and I beg to move.

Lord Young of Norwood Green: My Lords, Amendments 58, 68 and 72 constitute a welcome and positive strengthening of regulation of the postal sector. By abolishing the licence system the Bill carries potential dangers of destabilising universal service provision by deregulating the provision of competition. The proposed new clause goes some way to averting this danger and will allow Ofcom, whether directed by the Secretary of State or not, to impose notice of condition on anyone intending to introduce a delivery of letters within the scope of the universal service beyond a specified level, so we welcome this set of amendments.

The objective of Amendment 67B is that in setting prices Ofcom should not exclusively focus on the cost of providing the network, which would satisfy the current requirement under Clause 37(6), but should take account of the true cost incurred by Royal Mail in providing the universal service itself. It is important to be clear-this amendment would not require Ofcom to ensure the cross-subsidy of the universal service from access products. It would ensure that Ofcom considers the true cost of the USO to Royal Mail in setting these prices. I look forward to a brief response from the Minister.

Baroness Wilcox: My Lords, Amendment 67B seeks to ensure that, when imposing prices to access the network of the universal service provider, Ofcom must have regard to the costs associated with meeting the universal service. I agree with the noble Lord on this issue and that is why we have tabled Amendment 61, which is in another group but is entirely relevant to this debate. Amendment 61 will ensure that when carrying out its functions, including when imposing access conditions, Ofcom must have regard to,

While I agree with the intention behind Amendment 67B, I hope that I have explained that government Amendment 61 in the next group and the government amendments in this group will fulfil the

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same objective. Therefore I hope that the noble Lord will consider withdrawing Amendment 67B and support government Amendments 58, 68 and 72.

3.15 pm

Lord Young of Norwood Green: My Lords, in the light of what the Minister has said, I beg leave to withdraw my amendment.

The Lord Speaker (Baroness Hayman): The noble Lord has not moved his amendment and he cannot withdraw it. We are still on Amendment 58. I think the Question is whether Amendment 58 be agreed to.

Amendment 58 agreed.

Clause 28 : Duty to secure provision of universal postal service

Amendment 59

Moved by Baroness Wilcox

59: Clause 28, page 16, line 10, at end insert "before the end of a reasonable period and for its provision to continue to be efficient at all subsequent times"

Baroness Wilcox: My Lords, I beg to move Amendment 59 and in doing so speak to Amendments 61 and 62 in my name.

We must strike the right balance between promoting competition and protecting the universal service, and I thank your Lordships for the many important contributions on this issue. However, the Bill by itself will not secure the future of the universal postal service or Royal Mail. To achieve that, Royal Mail needs to become financially self-sustaining. Therefore there needs to be certainty that, just as has been done in other sectors, Ofcom will have regard to the need for the provision of the universal service to be financially sustainable in establishing the regulatory framework.

Amendment 61 adds flesh to this requirement, specifically that "financially sustainable" should include,

The intention of this amendment is to allow the company the opportunity to earn a reasonable return on all expenditure incurred in providing the universal postal service and any regulated access services, in so far as they make use of the universal postal service network. The term "reasonable commercial return" in the amendment is intended to mean simply that in applying this duty Ofcom could, among other things, and when it deems it appropriate, take into account private sector international operators in the postal market, their respective levels of efficiency and the different markets they are operating in, as well as regulated commercial companies in other regulated sectors.

To be clear, it would be for Ofcom to determine exactly what to take into account when considering what constitutes a reasonable commercial return. This requirement is in the context of the need to ensure that

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provision of the universal service is, and remains, efficient after a reasonable period. Obviously, it is not within the gift of the regulator to determine precisely what returns Royal Mail can make; that should depend on the market and the company's performance. However, it is essential that the regulatory framework should provide the space and incentives for Royal Mail to be successful, to make the necessary efficiency improvements and to allow for good performance to be rewarded, without regulation eroding the effect of increased efficiency.

The Government believe that, in the long term, the universal service should be both financially sustainable and efficient, and that this will be possible if Royal Mail continues with the good progress it has made in modernising. But of course this takes time. We have therefore tabled two other amendments to Clause 28 to specify that the requirement for efficiency should be,

to give Royal Mail time to continue its vital modernisation.

The amendments to Clause 28 constitute a major strengthening of the Bill. They provide even greater security for the universal service. I hope your Lordships will be able to support them.

Lord Young of Norwood Green: My Lords, we welcome government Amendments 59 and 62, which would allow Ofcom to establish the timescale for the universal service provider to achieve the levels of efficiency which it is reasonable to expect. This is a recognition that Royal Mail is going through the difficult process of modernisation. The amendment acknowledges this process, which is entirely welcome. Government Amendment 61, which is also most welcome, recognises the universal service provider is entitled to achieve a reasonable commercial rate of return in the provision of the universal postal service, as indicated by the noble Baroness.

Amendment 60 seeks to prevent unnecessary regulatory intervention in areas of the market where effective competition exists. According to the regulator Postcomm, Royal Mail has complained of considerable overregulation since 2006, with approximately 80 per cent of Royal Mail letters revenue subject to price controls. A range of changes introduced in April this year has reduced this figure by just 5 percentage points. For example, Postcomm had previously proposed to remove regulation from pre-sorted bulk packets and parcels of more than 500 grams, but when Postcomm reached its final decision, it deregulated only for items above 1 kilogram. This was despite Royal Mail evidence suggesting that there was significant competition in the market for items weighing less than 1 kilogram. Preventing overregulation is seemingly a shared aspiration, and therefore I hope that Amendment 60 will find favour. The current regulator is clear that it would rather not regulate where Royal Mail faces competition; our Amendment 60 will make it imperative that Ofcom does not do so.

Viscount Eccles: My Lords, I am a bit bothered about the amendment that the noble Lord, Lord Young, spoke to because of the great difficulty for anybody to define "effective competition" in a statutory way.

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The competitive market for communications is very complicated. Ofcom is a very big and well established regulator that no doubt understands that market better than Postcomm did, but Ofcom still has to determine the regulatory framework that it is to follow. Work is going on in the last days of Postcomm that will not be completed until next year.

That is not the only point. Effective competition includes digital competition. Many other means of communication have been developed that have superseded the forked stick, and I think that this amendment is a step too far. I cannot support it.

Baroness Wilcox: My Lords, Amendment 60 would place a new duty on Ofcom to have regard to the need to avoid regulation where market forces and effective competition allow. I understand the rationale behind this amendment. Indeed, the Government firmly believe that the regulatory regime going forward needs to be as light touch as possible. This was made clear by the Secretary of State for Business, Innovation and Skills who, in a recent letter on the subject to the chairs of Ofcom and Postcomm, stated:

"Given the seriousness of the problems facing Royal Mail, I believe that a comprehensive reassessment of the regulatory regime is required in the light of developments in the postal and communications sectors to ... look again at where regulation is needed",


While sharing the view that regulation must be as light touch as possible, we believe that a duty such as the one imposed by Amendment 60 goes too far and could have some very undesirable consequences. These undesirable consequences could come about because there may be real reasons why it might not always be possible for the universal service provider to be allowed to respond to market dynamics, as my noble friend Lord Eccles has said. For example, there is the requirement to provide the universal service at an affordable and uniform price. However competitive the market may be, it is by no means certain that market dynamics would force the universal service provider to meet those requirements. As such, Ofcom may need to regulate to some degree to ensure that these requirements are met even if there were a fully competitive market across the full range of postal services.

Finally, I would like to remind your Lordships that Ofcom is already under a duty to keep regulatory burdens to a minimum under Section 6 of the Communications Act 2003. I hope that this will reassure the noble Lord, Lord Young, and that he will feel able to withdraw this amendment at the appropriate time and to support the government amendment in this group. I beg to move.

Earl Ferrers: I just want to ask my noble friend whether, in referring to the chair of Ofcom, she really meant the chairman of Ofcom.

Baroness Wilcox: Yes, of course.

Amendment 59 agreed.

Amendment 60 not moved.

17 May 2011 : Column 1266

Amendments 61 and 62

Moved by Baroness Wilcox

61: Clause 28, page 16, line 10, at end insert-

"( ) The reference in subsection (3)(a) to the need for a provision of a universal postal service to be financially sustainable includes the need for a reasonable commercial rate of return for any universal service provider on any expenditure incurred by it for the purpose of, or in connection with, the provision by it of a universal postal service."

62: Clause 28, page 16, line 10, at end insert-

"( ) In subsection (3)(b) "a reasonable period" means such period beginning with the day on which the provisions of this Part come generally into force as OFCOM consider, in all the circumstances, to be reasonable."

Amendments 61 and 62 agreed.

Amendment 63

Moved by Baroness Wilcox

63: Clause 28, page 16, line 14, at end insert-

"( ) The Secretary of State may direct OFCOM to take, or refrain from taking, specified action for the purpose of securing that, in the opinion of the Secretary of State, sufficient access points are provided throughout the United Kingdom to meet the interests of the public.

( ) The duty imposed on OFCOM as a result of subsection (4) is subject to any direction given under this section.

( ) The action that may be specified in a direction under this section includes the imposition of a regulatory condition consisting of or including provision specified in the direction.

( ) Before giving a direction under this section, the Secretary of State must consult OFCOM."

Baroness Wilcox: My Lords, I shall also speak to Amendments 71 and 73, which stand in my name. I will also say a few words, if I may, on Amendment 63A in the name of the noble Lord, Lord Young, which seeks to amend my Amendment 63. I believe that these amendments will address concerns raised in this House about access to postal services in rural areas or by vulnerable groups. They also address questions raised in the other place about access by consumers to Royal Mail's services.

The central concern of those who have raised such issues is: how can we ensure that people right across the country and from all walks of life continue to receive the high standard of postal service that they depend upon? It is with this in mind that we should look at Clause 28(4) of the Bill, which specifies that Ofcom's duties include ensuring that there is,

An access point here encompasses pillar boxes, post offices and,

so Amendment 63A, in the name of the noble Lord, Lord Young, is not needed because "access points" in this instance includes post offices.

17 May 2011 : Column 1267

In determining the "reasonable needs of users", Ofcom will conduct thorough research and analysis, and will naturally consult users in order to take their views into account. Ofcom will also be bound by its duties, which I have just set out. I am confident that this will mean that Ofcom's requirements on the distribution of access points across the country will continue to ensure that all users can post their letters, packets and parcels in a convenient way. However, while we are clear that the reasonable needs of users is the right test-it flows from the EU directive and is the duty that we have placed upon Ofcom-it is conceivable that in some cases the Government may wish to apply different considerations. For example, we may have wider public policy objectives to consider, perhaps in relation to rural policy or small business support. Such broader public policy goals are quite rightly a matter for the Government, not for an independent sector regulator.

I therefore hope that your Lordships will welcome this amendment, which allows the Secretary of State to step in and require Ofcom to ensure sufficient access points throughout the United Kingdom to meet the interests of the public. The term "interests of the public" is not defined but would allow the Secretary of State to take a broad approach and ensure that the Government could intervene for a range of reasons, some of which I have just described. This is not an amendment that we would ever expect to use. Its inclusion simply serves as a failsafe to address the legitimate, albeit unlikely, concerns expressed by noble Lords. Given Ofcom's wider duties under this Bill, for example on the financial sustainability of the universal postal service, this amendment also requires the Secretary of State to consult with Ofcom before making such a direction, in order to determine the consequences of such an action.

Amendments 71 and 73 clarify the procedure for making, varying or revoking this direction and any others that may be made by the Secretary of State under Part 3. Amendment 71 does not make a material change to Clause 60. The amendments to the general procedural provisions in Clause 63 simply mean that an express provision is no longer needed in Clause 60. I hope that your Lordships feel able to support these amendments. I beg to move Amendment 63.

3.30 pm

Amendment 63A (to Amendment 63)

Moved by Lord Young of Norwood Green

63A: Clause 28, line 4, after "points" insert "and post office outlets"

Lord Young of Norwood Green: My Lords, we welcome government Amendments 71 and 73, which are welcome improvements. Amendment 63 would empower the Secretary of State-not simply Ofcom, as currently set out in Clause 28-to direct Ofcom to take appropriate action for ensuring an adequate number of access points. That is a welcome improvement on accountability. I also welcome the Minister's assurance about access points including post offices, which is the subject of our Amendment 63A.

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Baroness Wilcox: My Lords, I have every sympathy with the intention of Amendment 63A, which seeks to refine Amendment 63, so I am grateful for the noble Lord's comments. We want to ensure that there is a post office within reasonable access of everyone in the country. That is absolutely this Government's policy. As I said earlier, I can reassure noble Lords that access points in this instance include post offices. The amendment is therefore not needed, as the noble Lord has acknowledged, so I hope that he feels that he has sufficient reassurances to withdraw the amendment.

Amendment 63A (to Amendment 63) withdrawn.

Amendment 63 agreed.

House of Lords Reform Bill


3.32 pm

The Chancellor of the Duchy of Lancaster (Lord Strathclyde): My Lords, I sense that this might be a convenient moment in the proceedings for me to repeat a Statement made in another place by the Deputy Prime Minister. These are his words on a subject that interests all Members of this House, namely House of Lords reform. The Statement is as follows:

"With permission, Mr Speaker, I wish to make a Statement about the Government's plans to reform the other place. At the last general election each major party committed to a democratically elected second Chamber. The coalition agreement set out very clearly the Government's intention to deliver this, but the roots of these changes can be traced back much further. A century ago the Government, led by Herbert Asquith, promised to create a second Chamber,

There has been progress in the intervening years; the majority of hereditary Peers have gone, and the other place is now predominantly made up of life Peers. We should see ourselves now as completing that work. People have a right to choose their representatives. That is the most basic feature of a modern democracy. Our second Chamber, known for its wisdom and expertise, is none the less undermined by the fact it is not directly accountable to the British people. So today I am publishing a draft Bill, and accompanying White Paper, which sets out proposals for reform.

In the programme for government we undertook,

I chaired that cross-party committee and we reached agreement on many of the most important issues, although not all, but good progress was made, and those deliberations have greatly shaped the proposals published today. I would like to pay tribute to all the Members, particularly from the Benches opposite, who engaged with us in an open and collaborative fashion.

Let me also thank those individuals whose past work on Lords reform has laid the foundations for what we are doing today, particularly the right honourable Member for Blackburn and the noble

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Lord, Lord Wakeham. Rather than start anew, the Government have benefitted from their previous endeavours. Today's proposals represent a genuine collective effort over time. The draft Bill and White Paper will now be scrutinised by a Joint Committee composed of 13 Peers and 13 Members of this House. It will report early next year and a government Bill will then be introduced.

The Prime Minister and I are clear; we want the first elections to the reformed upper Chamber to take place in 2015. While we know what we want to achieve, we are open-minded about how we get there. Clearly our fixed goal is greater democratic legitimacy for the other place, but we will be pragmatic in order to achieve it. So, we propose an upper House made up of 300 Members, each eligible for a single term of three Parliaments. Three hundred is the number we judge to be right, but this is an art and not a science. In the vast majority of bicameral systems, the second Chamber is significantly smaller. That arrangement helps maintain a clear distinction between the two Houses. We are confident that 300 full-time Members can cover the work comfortably. We are, however, open to alternative views on this.

The coalition agreement committed the Government to producing proposals for a wholly or mainly elected Chamber. That debate is reflected in what we are publishing today. The Bill makes provision for 80 per cent of Members to be elected, with the remaining 20 per cent appointed independently. The 60 appointed Members would sit as Cross-Benchers, not as representatives of political parties. In addition, bishops of the Church of England would continue to sit in the other place, reduced in number from 26 to 12.

The White Paper includes the case for 100 per cent elected. The 80/20 split is the more complicated option, and so has been put into the draft Bill to illustrate it in legislative terms. The 100 per cent option would be easy to substitute into the draft Bill, should that be where we end up. There are people on all sides of this House who support a fully elected Chamber, believing that an elected House of Lords should be just that. Others, again on all sides, take a different view, and support having a non-elected component to retain an element of non-party expertise, as well as to keep greater distinction between the two Houses. Personally I have always supported 100 per cent elected, but the key thing is not to make the best the enemy of the good. That approach has stymied Lords reform for too long. Surely we can all agree that 80 per cent is better than 0 per cent.

Elections to the new reformed House will be staggered. At each general election a third of Members will be elected, or a combination of elected and appointed. That is to prevent the other place becoming a mirror image of this House. In the Bill we set out how those elections could be conducted using the single transferable vote. The coalition agreement specifies only that the system must be proportional, and what is most important is that it is different from whatever we use in the Commons. That is so the two Chambers have distinct mandates; one should not seek to emulate the other. STV allows for that, and would give the upper Chamber greater independence from party control. Votes are

17 May 2011 : Column 1270

cast for individuals rather than parties, putting the emphasis on the expertise and experience that candidates offer, rather than the colour of the rosette they wear.

We want to preserve the independence of spirit that has long distinguished that House from this one. I know some Members prefer a party list system, including opposition Members of the cross-party committee I chaired. We are willing to have this debate, and have not ruled out a list-based system in the White Paper. The Commons will retain ultimate say over legislation through the Parliament Acts. It will continue to have a decisive right over the vote of supply. In order for a Government to remain in office, they will need to secure the confidence of MPs.

The other place will continue to be a revising Chamber, providing scrutiny and expertise. Its size, electoral cycle, voting system and terms will all help keep it distinct from the Commons-a place that remains one step removed from the day-to-day party politics that, quite rightly, animates this House. What will be different is that our second Chamber will finally have a democratic mandate. It will be much more accountable as a result. Clearly, the transition must be carefully managed. We propose to phase the reform over three electoral cycles. In 2015, a third of Members will be elected, or a combination of elected and appointed. The number of sitting Peers will be reduced by a third-we are not prescribing the process for that. It will be up to the parties in the other place to decide. In 2020, a further third will come in under the new system, and then again in 2025. There are other ways of staging the transition; the White Paper sets out two of them.

To conclude, history teaches us that completing the unfinished business of Lords reform is not without challenges. Our proposals are careful and balanced. They represent evolution, not revolution, a typically British change. I hope that Members from all sides of this House, and the other place, will help us get them right. The Government are ready to listen, we are prepared to adapt, but we are determined in the end to act. I commend this Statement to the House".

My Lords, that concludes the Statement.

3.42 pm

Baroness Royall of Blaisdon: My Lords, I thank the noble Lord the Leader of the House for repeating the Statement made in the other place by the Deputy Prime Minister. As I understand it, although the Deputy Prime Minister is the prime mover behind the proposals in front of your Lordships' House today, he apparently feels the need to distance himself from them. Indeed, he is passing the torch of toxicity to the Leader of this House, in which case I offer my commiserations to the noble Lord.

I suspect that for many Members of your Lordships' House these proposals have a ring of familiarity about them. That is partly because the Government started leaking them in detail pretty early on. We have seen repeated leaks in recent weeks, culminating in a virtually line-by-line account in last week's Guardian of such detail that the Leader of the House was forced to disavow in this House yesterday, in advance of today's publication, one of the whizz-bang new ideas-that Peers could be removed from this House by lottery.

17 May 2011 : Column 1271

The Times tells us this morning that the Deputy Prime Minister has been busy over the past few days watering down his own proposals, while other media outlets report that the Deputy Prime Minister is to argue today for a 100 per cent elected House of Lords, so in effect, at the very moment he is promoting his new policy, he is taking the opportunity to argue against it. While this juvenile japery is entirely proper for party political conferences, fundamental reform of the constitution of this country, the Parliament of this country and the politics of this country is simply too important to be left to this clowning about.

It is, by the way, a discourtesy to this House for proposals for further reform of your Lordships' House to have been given to any and every journalist who asked to be told about them before they have been placed before this House itself. However, these proposals are not only familiar because they have been so comprehensively leaked by the coalition. They are familiar because most aspects of the history, argument and practice of reform of your Lordships' House are familiar; few areas of the argument over reform have not been exceptionally well trodden over the past 100 years. That is not to say that the issues involved in further reform of this House are resolved. They are certainly not resolved by the proposals that have been published today, and they were certainly not resolved by the group established by the Deputy Prime Minister to consider these issues. I took part in that group, along with opposition colleagues from the other place. The purpose of the group was to produce a draft Bill, and I have to tell the House today that it did not do so. Indeed, I can inform the House that the group has not met since November-six months ago.

I saw the Bill for the first time when I came into the Chamber this afternoon. Make no mistake, this is a government Bill. Indeed, the glum faces on the Conservative Benches suggest that this is not even a coalition Bill. This is a Liberal Democrat Bill-if it is a Bill at all. We were promised a Bill; we were in fact promised a draft Motion "by December 2010", according to the coalition agreement. A little while ago that started to be transformed into a Bill and into a White Paper. Now what we have before us today is a White Paper-a very green White Paper, at that, with green ink on the cover-at the back of which is tucked a little draft example of what legislation could look like, with the real legislation to come later.

What a difference a year makes. You start off roaring like a mountain lion about the greatest programme of constitutional change since the Great Reform Act 1832, and 12 months later you bring forward the little mouse that the Deputy Prime Minister has published today. Constitutional reform is indeed a difficult subject, and reform of your Lordships' House is one of the most difficult aspects of all. It can be done, it must be done, but it must be done carefully, and it must be done by consensus, bringing as many people along with it as possible.

I pay tribute to perhaps the most significant reform of your Lordships' House achieved over the last century-the introduction of life Peers, which transformed this House from a failing, moribund institution to something that, as the Government felt last week over the Police

17 May 2011 : Column 1272

Bill, can have a real impact on the Government of the day. That reform, of course, was brought by a Conservative Government, and I pay tribute to the clear and apparent reforming zeal of the Conservative Benches in both this House and the other place for further House of Lords reform. Indeed, let me quote the noble Earl, Lord Ferrers, who, as well as having a good week with his book serialisation, was quoted in the Times this morning as follows:

"They can have a three-line whip but we don't have to go along with it. If they tell us we have got to vote for this elected Lords, the majority of Tory peers would say we're not going to. People might start causing trouble on other Bills. The Lib Dems made us have the AV referendum and got a complete drubbing; now they're going to start wrecking the House of Lords. It's mad".

With support like that on the government Benches, the Leader of the House is clearly going to have the easiest of times getting this legislation through this Chamber. It will be a complete breeze. The real roadblock to reform of this place will be the Deputy Prime Minister's coalition partners on the Benches opposite. The Conservative Party was the only party at the last election not to commit to a fully elected House of Lords in its manifesto. I know that the Leader of the House is himself utterly committed to Lords reform; 100 per cent committed. Perhaps today he is 80 per cent committed-I am not too sure. I do not for a single second believe that for him and Lords reform, his favourite part of the garden is the long grass. I wonder whether the Leader can confirm that there will not only be a debate in this House on these proposals, but that sufficient time will be provided for that debate-two days, perhaps even three, because these are serious matters. My own experience of the group led by the Deputy Prime Minister was that there was a whole range of issues that were so difficult that not only was agreement difficult but there was no serious or substantive discussion on some of the most difficult issues. So there was no detailed discussion in the group about the powers of this House in relation to the other place. Can the Leader, therefore, indicate what powers the Government actually want a reformed House of Lords to have?

We on these Benches welcome the proposal to establish a Joint Committee of both Houses to consider these issues in detail. The Government must avoid the rushed and piecemeal approach that has characterised their constitutional reform agenda so far. It is essential in considering these proposals that proper agreement is reached on the relationship between the two Houses and on the powers and privileges of each House. The Joint Committee will be essential for that. I have said many times that I thought that the group chaired by the Deputy Prime Minister should have included a representative of the Cross Benches. I commend the Government for their proposal that the Joint Committee should include representatives of both the Cross Benches and the Bishops' Benches when it is established.

Can the Leader confirm that the Joint Committee will include as part of its remit the provisions of the previous Joint Committee on Conventions, chaired by my noble friend Lord Cunningham of Felling, and that in the light of the publication of these proposals the conventions will indeed have to be looked at again?

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Do the Government believe that the relationship between the two Houses, as set out in the conventions, and the powers and functions of both, should be codified? In terms of timing, can the Leader confirm that it would be inappropriate constitutionally for the Executive to suggest any limit on the time that a Joint Committee of both Houses of Parliament should take in considering these views? Can the noble Lord confirm that he wants these reforms to be on the statute book by the next election? Will he confirm whether the Government would use the Parliament Act in relation to these proposals?

Constitutional reform is difficult to get right. I believe that the last Labour Government got a lot of it right with a new Parliament for Scotland, a new Assembly for Wales and devolution for Northern Ireland. I am proud to proclaim our record on reform of your Lordships' House-the removal of the majority of hereditary Peers, an elected Speaker, the separation of powers with the creation of a new Supreme Court in place of the Appellate Committee here, and the creation of independent Peers through the independent House of Lords Appointments Commission.

In terms of the Government's Statement today, the country two weeks ago comprehensively rejected the AV system. Is the Leader seriously suggesting that his Government should impose a system of PR for the second Chamber without consulting the electorate? If indeed no Peers would be forced to leave the Chamber until 2025, what does he predict the maximum size of the second Chamber to be in the interim, and what will be the financial cost? Will the Government continue to appoint large numbers of new Peers to this House in line with the provisions in the coalition agreement? What do the Government believe is the role of Bishops in a reformed second Chamber?

These and similar questions are difficult and complex issues that have vexed the minds of many constitutional reformers over the past 100 years. In that light, I look forward to the response from the Leader. At a time of austerity and cuts, constitutional reform is understandably not an issue on most people's minds. However, constitutional reform is about how power is exercised in modern Britain, so it is vital that we get it right.

The Deputy Prime Minister declares himself in his Statement, as repeated by the Leader of this House, to be "ready to listen" and "prepared to adapt", but to be,

Determination to act is a very fine thing, but a determination to get it right is finer still. We on these Benches are committed to the reform of your Lordships' House, but we do not believe in reform for reform's sake. We want the right reform, and we want to get that reform right. That is why we believe, for example, in putting the substantial reform of this House to the people in a referendum-not today, not now, but when we have real reform before us; not today's damp squib, not today's little mouse, but reform, like Labour's constitutional reforms since 1997, that improves the politics of this country, improves the governance of this country, and improves what we, as politicians, are here to do.

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3.52 pm

Baroness D'Souza: My Lords, I, too, thank the Leader of the House for repeating the Statement and, indeed, for the courtesy of briefing me before it was made first in the other place.

At a recent meeting of Cross Benchers when, not surprisingly, House of Lords reform was discussed, three phrases came up time and again. They were: independence is good for democracy; form follows function; and it is perhaps too rigid to equate democracy with elections alone, or elections alone with democracy. There are other forms of representation that could be considered to be democratic.

We now have the long-awaited White Paper with draft proposals, and the first thing to say is that the Cross Benchers, on whose behalf I am sure I am speaking, very much welcome the proposed 20 per cent independent element. We cannot but be happy about that and, indeed, about the fact that there is to be a statutory appointments commission. However, it is fair to say that there is concern about the elected way forward for this Chamber. If we agree-and perhaps most of your Lordships do-that the major function of the House of Lords is to revise and scrutinise legislation, an obvious response to the question of how best we can do that is by having available those who have relevant and current expertise in a wide range of areas. This, to my mind, necessarily means a part-time House packed with Members from the arts, sciences and humanities, with writers, film producers, IT experts, legal, medical and social welfare experts, distinguished scientists, philosophers and financiers, and those from the more technical professions to deal with increasingly technical legislation.

It would, I suggest, be difficult to achieve that by elections alone. It is more likely that there would be a greater number of politicians from the parties at the expense of the specialists whom I have already outlined. Although I would certainly not go as far as the late Michael Foot in describing a fully elected second Chamber as a "seraglio of eunuchs", an elected House would mean more politicians-and, as Sir John Major wisely said, if the answer is more politicians, then the question is wrong.

Surely the outcome of an elected House would be to give it more political power than it currently has, despite what is said in the White Paper. That would be the inevitable result of an elected House or even a partly elected House, and I think that it would eventually result in the power of veto, otherwise why undertake such radical change? What would be the point?

Power is, as we all know, a tricky area and will have to be thoroughly addressed and resolved by the proposed pre-legislative committee. The issue of powers is so fundamental and this is so radical a proposed change that it may be justifiable to rephrase the question of reform to one of whether the House of Lords is in fact necessary at all. What I mean by that-it may not be a view shared by the Cross-Benchers but it is my view-is that I would be much more in favour of abolishing the House of Lords altogether and appointing external scrutiny committees than having an elected Chamber because I cannot be convinced that an elected House would be able to do its work better than the present House.

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That said, there will be time to examine the proposals in far more detail. Once again, I welcome the inclusion of an independent element, which I trust will emerge as a truly independent element and not merely one for the purpose of rewarding the great and the good.

3.56 pm

The Lord Bishop of Winchester: My Lords, I, too, thank the noble Lord the Leader of the House for bringing this Statement to your Lordships' House. As noble Lords would expect, we on these Benches welcome the proposal that, if there is a partly appointed House, a smaller number of Church of England Bishops will remain as full Members, allowing for the smaller number of Peers in general. We stand ready and welcome the proposal that one of our number should be part of the Joint Committee. However, it is amazing to me that, as we have heard, the committee that has brought the Bill forward has not worked out or prescribed, or even suggested, how that lessening of the number is to be achieved. For many Members of your Lordships' House, that will be one of the most crucial questions. How are they to be-I am trying to find a neutral word-excluded? It was very coy of the Statement to make no such suggestions.

Many of your Lordships know that right through this process the Bishops' Benches have spoken about the place of the Bishops only at the end of all the papers that they have been brought forward. That was the case with the paper produced for the Deputy Prime Minister's committee by our convenor, my right reverend friend the Bishop of Leicester, at the end of July last year. Our interest throughout has been, and continues to be, effective government, holding the Executive properly to account, and the proper scrutiny, review and revision of legislation. If those are to remain, the prime focus of this House, alongside ensuring that the House of Commons does not seek to take all power, must be much of what the noble Baroness, Lady D'Souza, has just set out. That is absolutely critical. Those points were made to the committee-albeit, noble Lords will not be surprised to hear, in slightly less trenchant terms-in the submission of my right reverend friend the Bishop of Leicester.

I did not have the opportunity of seeing the material beforehand. However, I did a very brief scrutiny of the document, which says that, were there to be a House of 300, its Members should all be full time. Of course, Bishops will not be full time and nor will the 20 per cent of those who will have made their reputations and gained their expertise outside the world of party politics-if that is to be the number; my belief is that that is far too small a proportion. That seems to be a straight contradiction in the material that is put before us. The information recently noted-that some 40 per cent of the amendments to legislation brought forward in your Lordships' House have been accepted and become law-only underlines the critical importance of having a competent, widely experienced upper House of Parliament, full of a variety of expertise. I am very puzzled to see how that can happen, though it is absolutely necessary if your Lordships' House is to be an excellent body of scrutiny, review and revision, with a sizable proportion made up of those who are not already committed to the party structure.

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The Statement that we have had repeated in this House said very little about the cost. I note the green White Paper-I cannot believe that the noble Baroness is the only one of us who takes as significant the green print on the front. There are pages and pages in it about costs, tax and all sorts of things, which seems a very strange thing to be leading into at this stage in this country's history when so many other things are under such enormous financial pressure. I hope that, as the discussion continues, those on our Benches-of whom I shall not be one because I am soon to retire-will want to contribute very fully on the kinds of questions that both the noble Baroness, Lady Royall, and, very particularly, the noble Baroness, Lady D'Souza, raised. We shall be working very particularly on good and responsible governance and, in the strongest possible sense, on legislation being expertly and carefully scrutinised. I find it difficult to see how even an 80 per cent elected House will be prepared to bring the expertise and to give the time to the hard, line-by-line work that this House undertakes.

Lastly, I shall not use the tough words of the late Michael Foot any more than the noble Baroness, Lady D'Souza, did, but I find it hard to think that there will be people prepared to stand for election for this kind of role when-much though we may regret it-the reputation and standing of elected politicians is so remarkably low. Sheer wishful thinking is coming from all three political parties in so many different areas. The role of the Cross Benches and-dare I say it?-the Bishops over these next many years of discussion will be very important.

Lord Strathclyde: My Lords, on behalf of the whole House, I pay tribute to the right reverend Prelate who, after 15 years as a Member of this House, will retire at the end of this month. Although he will be remembered for many great speeches, I am sure that his last contribution will be quoted on many occasions. The right reverend Prelate raised some very important issues on the full-time role of Members of this House once elected, on the rationale behind the proposals to have an elected House and on whether it would continue its scrutiny role. I see around me in this House many Members who have stood for election in another place and in other elected Parliaments and Assemblies, and they have the skills of scrutiny, so there is no reason why we should not be able to elect people to sit in this House who would have similar skills.

The question about full-time politicians is also important. What is intended by this is the expectation that those who stood for election would have the time available to devote themselves full-time to this House while the House is sitting; namely, around 150 days a year. It would not be a full-time job in the same way as being a Member of the House of Commons is a full-time job, with all the coalface representative functions of constituencies on the ground.

I also welcome the words of the Convenor of the Cross-Bench Peers in welcoming the 20 per cent option, continuing the role of the Cross-Benchers and the appointed element with a statutory Appointments Commission. Of course I understand her concerns about the role of an elected House, and many others around the House will make that point.

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There is a rationale for an elected House: it is to give legislators in this House the authority of the people who would elect them, to make the powers of this House stronger and to make this House more assertive when it has that authority and the mandate of the people. The noble Baroness said that it would have more political power, and I think that is right. It is one of the essentials of doing this. All of us who are in favour of an elected House should recognise this.

That is why I was so disappointed by the Leader of the Opposition, the noble Baroness, Lady Royall, and underwhelmed by her contribution. The reason why this White Paper is presented today is because there is a political consensus right across the parties-the Labour Party, the Liberal Democrats and the Conservative Party-all of whose elected representatives stood on a manifesto in favour of a democratically elected second Chamber, but you had to strain your ears to hear that from the Leader of the Opposition this afternoon. Indeed, the noble Baroness did not tell us that the Labour Party's position is now to have a 100 per cent elected House. She did not tell us, nor did she explain, why she and her party see no role whatever for the Cross-Benchers in this House and believe that they should be removed immediately, nor any role for the right reverend Prelate and his colleagues. "No Bishops", says the Labour Party sitting opposite. I am glad that the noble Baroness is now nodding in agreement. I wish she had said that in her statement.

The noble Baroness did ask several questions, which I am very happy to answer. Today is a day to deal with the Statement and the immediate questions. There will, of course, be a requirement for debate, and it is one which the Government are very happy to agree to. A one-day debate-two days, if required-will be made available, probably within the next four or five weeks, and an early announcement will be made.

The Joint Committee of both Houses will be set up fairly soon so that it has an opportunity to meet before the Summer Recess and decide on its work programme. As I said in the Statement, it will be made up of 26 individuals. From the House of Lords, it will include Members of the Cross Benches and a Bishop in order not only to represent their views but to share their experience, knowledge and undoubted wisdom.

The noble Baroness, Lady Royall, asked about the powers. It is an important assumption that underlies the White Paper that the powers of the existing House should not be changed it if it were to be elected or partly elected. There is one very good reason for that. If I were to propose that an elected Chamber should have less power than an appointed House, that would begin to look ridiculous. Of course, over time, the relationship between the two Houses may change. It already has changed over the course of the last 20 or 30 years. There is no reason why it should not do so in the future.

The noble Baroness, Lady Royall, asked whether the Joint Committee would be able to examine the report of the noble Lord, Lord Cunningham. Of course, it will be entirely up to the Joint Committee to decide. While it is in accordance with precedent for the Government to invite the Joint Committee to produce

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its report by the middle of February of next year, it would be entirely up to the Joint Committee to take a view as to whether that was possible. I hope that this House and another place will co-operate in setting up a Joint Committee to look at the proposals in a sensible way and give it the kind of expertise in pre-legislative scrutiny that I know so many noble Lords are keen that we should demonstrate.

The noble Baroness also asked about the Parliament Act. The Parliament Act is a process that comes into effect when the two Houses are in disagreement with each other. At this stage, there is no Bill before Parliament and there is no disagreement between the two Houses. It is therefore impossible to tell whether the Parliament Act would be used. If, or indeed when, the Government come forward with legislation, which I hope will be supported by the noble Baroness and her party, as with all government legislation, the Parliament Act is always a fallback.

Finally, the noble Baroness asked about the system of proportional representation. It was a bit odd for her to suggest that if it were to be PR, there should be a referendum on it as one of the proposals for PR was proposed by her party-namely, a list system which means that you vote for a party as opposed to individuals.

I hope that I have covered the ground reasonably well as regards those who have spoken. There will now be 40 minutes for me to reply to individual Peers, which, as you can all imagine, I am looking forward to immensely.

4.13 pm

Lord Dholakia: My Lords-

Lord Cormack: My Lords-

Lord Cunningham of Felling: My Lords-

The Minister of State, Ministry of Justice (Lord McNally): We have got 40 minutes. Let us show ourselves on our best behaviour. I suggest that the noble Lord, Lord Cunningham, asks first, and then perhaps we can hear from the Liberal Democrat Benches.

Lord Cunningham of Felling: I am grateful to the noble Lord. Can I remind the Leader of the House that the Conventions of the UK Parliament report was unanimously approved by the committee, unanimously approved by your Lordships' House and then unanimously approved in the other place-a unique record for any such report? That report, inter alia, said that if this House, or part of it, were to be elected, and people had a mandate, it would be bound to call into question the relationship and the conventions operating between the two Houses. Indeed, the report went further and said in paragraph 61,

That was a decision of both Houses of Parliament. Does the Leader of the House not recognise that all the evidence underwrites these conclusions of the committee, and not only in our country, if we look at

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the relationship between the House of Representatives and the Senate in the United States of America or between the Japan Diet's House of Representatives and House of Councillors? They moved to change their powers in the relationships just as this House with an elected mandate would seek to do, with the most profound consequences for the governance and the constitution of our country.

Lord Strathclyde: My Lords, I entirely agree with the noble Lord. His report was extremely useful, was well received in both Houses and is a testament to his skill as a chairman. I dare say that he will be called upon again to examine many of these issues. It will be up to the Joint Committee whether it wishes to examine that precise aspect of his report on conventions. During the transitional period between the wholly appointed House and an elected House, over 10 or 15 years, I fully expect the conventions and agreements between the Houses to change, to evolve and to adapt to different circumstances; it would be very strange if they did not do so. I also think that both Houses will be able to develop a mature relationship so as to retain the best of what we have now, but, as I said earlier, it would mean a more assertive House with the authority of the people and an elected mandate.

Lord Dholakia: My Lords, I thank the noble Lord for repeating the Statement made earlier in the Commons by my right honourable friend the Deputy Prime Minister, Nick Clegg. The Statement gives us an opportunity for the first time to focus attention on some of the key issues that this House has debated from time to time. I detect much amusement, but let us not forget that there are some very serious matters on which there is a general consensus in this House; for example, matters relating to the statutory Appointments Commission and the preservation of an independent element among its membership. The key point that we cannot forget is that this is a draft Bill accompanied by a White Paper. It is evolutionary and consultative in its content; it addresses the manifesto commitments, whether we like it or not, of all three parties; and it removes the suspicion and hype that have arisen from misrepresentation in some recent press articles.

The Statement rightly emphasises the options that exist for the political composition of the House and its elected elements. It offers options for the method of election and the numbers required effectively to carry out Lords functions. Let us not forget that it is not simply for this House to determine what it wants. The other House, too, has an interest in how this matter can be taken forward. Will the noble Lord ensure that the terms of reference of the Joint Committee provide for Members of both the House of Lords and the Commons to be consulted, so that it can take a constructive approach in reaching its final conclusions?

Lord Strathclyde: My Lords, I readily agree with my noble friend, most particularly that these are serious matters on which a great deal of debate has been expended over the years and that there is a good deal of consensus on the way forward. I also agree with him about the Joint Committee; it is important that it

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should work and consider these matters, bringing together all the knowledge and experience that senior parliamentarians would have and with an aim of trying to improve on the draft Bill and some of the options outlined in the White Paper.

Lord Howarth of Newport: My Lords-

Lord Barnett: My Lords-

Lord Cormack: My Lords-

Lord Wakeham: My Lords, my noble friend has given a great account of the Deputy Prime Minister's proposals for the House of Lords, which we will all of course study very carefully. However, a very important issue is the effect of the weakening of the House of Commons resulting from these proposals. Does my noble friend consider that to be a proper subject for the Joint Committee to consider in the work that it will shortly undertake?

Lord Strathclyde: My Lords, my noble friend has had years of interest in this issue-not only in Parliament but on the royal commission, which completed its work just over 10 years ago.

I have long believed that giving this House an electoral mandate would make it stronger, more independent of party and more assertive. That would obviously have an impact on the Executive and on another place, but whether it would be weakening or strengthening I am not sure. Many people argue that the House of Commons and the Executive have become too strong and that this could be one way of changing that balance. I believe that the Joint Committee should examine the issue.

Many commentators believe that the question of the reform of the House of Lords affects only this House. It does not. It affects both sides of the building and I am sure that Members of another place will take a great deal of interest in the announcement that has been made today.

Lord Barnett: My Lords, I noted with interest that the noble Lord, Lord Strathclyde, emphasised that the Statement he was repeating belonged to the Deputy Prime Minister; he did not imply that he agreed with it.

Can the noble Lord confirm that no senior Member of your Lordships' House will be compelled to waste their time on a Joint Committee-including, perhaps, himself as a senior Member? When he is considering this issue, will he be careful not to take it for granted that any leader in either House can speak for all the Back-Benchers in this House?

The noble Lord emphasised the accountability and democracy of an elected House. Does he accept that the difference might be marginal when under the list system-STV or whatever-candidates are selected initially by political parties? How different will that be from the current situation where Members are appointed by leaders of political parties and/or an independent commission? What difference does he see between the two? Will he at some time have it in mind to let your

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Lordships into the secret of how during the transition the membership of the House will come down to the 300 that he has in mind?

Lord Strathclyde: My Lords, when the noble Lord reads the White Paper he will certainly find the answer to his question on transition. It proposes one option and provides for two alternatives which the Joint Committee and the noble Lord will wish to examine.

I can confirm that no one will be compelled to sit on the Joint Committee. However, there is a great deal of interest. If the noble Lord wished to sit on the Joint Committee-I am sure he would be an eminent member-he should address himself to the leader of his party.

Of course I recognise that political party leaders do not necessarily speak for their Back-Benchers in this matter-not only in this House but also in another place. One of the hallmarks of this debate has for many years been the divisions within parties rather than between parties. Sometimes it leads our leaders to believe that because they can reach a consensus between themselves, everyone else will sign up to it. I do not believe that and I am well aware of the divisions that exist. That is why I hope that when the Joint Committee is selected it will show a balance of views and interests across the House and between the parties because that is how we can best use the knowledge in this House.

I agree with the noble Lord on the list system. One of the reasons I would oppose a list system is because it is simply appointment by party by another name and I am not sure that it would be worth going through that process. We are, however, as a coalition committed to a system of proportional representation, on which I am not an expert. However, the Deputy Prime Minister-who is-is very keen on STV.

Lord St John of Fawsley: Does my noble friend not realise that the inevitable effect of following these proposals and having two elected Chambers will be to introduce into this country the worst features of the American constitution without the mediating powers of the President, which can resolve conflict between them? Secondly, as this is a matter for both Houses and is of supreme constitutional importance, throughout the proceedings on these proposals and any other proposals connected with them, will there be a free vote of both Houses of Parliament on the merits of them?

Lord Strathclyde: My Lords, my noble friend is entirely entitled to his view and the comparison he makes between the Senate and the House in the United States. However, there are many examples around the world of bicameral systems with two elected bodies which manage to sort out their differences, and I am sure that it would not be beyond the wit and wisdom of these two Houses to be able to find a way through that. If a Bill came forward it would be a government Bill and would be treated as such, but no final decision has yet been taken as to whether there should be a free vote and it would not be taken until we proposed a Bill.

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Lord Howarth of Newport: My Lords, how would an elected second Chamber improve the performance of Parliament? Why would an elected, or a predominantly elected, second Chamber be better than this House-at debate, scrutiny and revision, and holding the Executive to account?

Lord Strathclyde: My Lords, that is a central question in this debate. The leadership of the noble Lord's party and mine and the Liberal Democrats are so keen on an elected House because they believe philosophically and rationally that at this stage, 100 years after it was first mooted, it is time to move on to a House selected on a political basis. Why? Because political authority, which we wield in this House, should only be wielded with a clear mandate of the people. Whether it would make things better is a good philosophical question which is very hard to answer. I dare say some things might be better; some things might be worse. But overall, when a second Chamber took a decision with the backing of the electorate it would be more authoritative and would have greater impact on another place and on the Government of the day.

Baroness Knight of Collingtree: My Lords, if the determination to follow and ensure democracy in this country is the aim of the Government and of us all, why is this suggestion now before us as a serious move when not one indication of public demand for this change has been made? In the many years I was a Member of the other place, I got not one request for this, either in a surgery or in thousands and thousands of letters. There are no marches; there are no banners waving about it. Where did it come from?

Lord Strathclyde: My Lords, 100 years ago the Parliament Act was passed, which certainly recommended that we should move forward on a popular basis. It is true that in the last 10 or 15 years there has been increased interest in electing a second Chamber; indeed the previous Government had numerous Joint Committees and White Papers on it. For those of us who argue for an elected Chamber, it is also true that it is very difficult to do so in the light of the fact that this House, currently constituted, does the job it is asked to do extremely well and effectively. Therefore I rely on the answer I gave the noble Lord, Lord Howarth: that it is ultimately about authority of the mandate and giving us the ability to wield that authority more effectively.

Lord Campbell-Savours: Can I make it clear that I am in favour of a 100 per cent elected House? Does the White Paper make reference to an indirectly elected House? Does it rule it out? Does the Leader of the House have a view on the question of an indirectly elected House?

Lord Strathclyde: My Lords, the White Paper does not rule it out because it does not mention it. I am not quite sure what the noble Lord intends by it; there are so many different models for indirect election, but the White Paper is very much in favour of giving a direct vote to elect Members of this House.

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Lord Howe of Aberavon: My Lords, my noble friend has dealt with one matter very clearly in his answer to the noble Lord, Lord Howarth. The transformation by increasing the electoral component here will certainly not lead to an improvement in the ability of this House to do the functions that it has done so well for many years. He has also conceded without any hesitation that movement in that direction would increase the liability of this House demanding the right to impose its will more strongly than it has in the past. Those two together fundamentally transform the structure.

You could even compare it for a moment with the structure in our criminal courts, where there is no doubt that it is the judge who determines the technicalities, the detail and the framework within which most expert guidance can be given, but it is the jury who have the last word. In those circumstances, the judge as he comes to the end says, "It is entirely a matter for you, members of the jury". That is precisely the structure that we have in the relations between the two Houses at the moment; we would not dream of challenging the final verdict-after ping-pong-of the other place. That is the essential difference; they have the last word, and they must retain it as a power of that kind, while we make the contributions of the kind that we traditionally make in that context. Any change from that cannot and has not yet been justified by any rational argument.

Lord Strathclyde: My Lords, I have heard my noble and learned friend speak on many occasions on plans for reform of this House. He has done so always with integrity and very much in favour of the powers and composition of the House as it is. Even I am deeply impressed to hear him speak today and, in doing so, bring forward an entirely original analogy that he has not used before in describing the relationship between the two Houses. It is an eminently good one-I do not wish to argue about that-which is why I say that with an elected Chamber the relationship between the two Houses would change. It is up to Members of this House but also, most importantly, Members of another place to decide whether they wish to make that change.

The Lord Bishop of Chester: My Lords, I wonder whether I could ask the Leader of the House to address more directly what I took to be the central point made by the noble Baroness, Lady D'Souza, and echoed by my right reverend friend the Bishop of Winchester. It was that a House of 300 full-timers would simply not have the expertise in the scrutiny of particular subjects that is afforded by the present composition of the House. In that case, how could this new House do its work as effectively as I believe this House does?

Lord Strathclyde: My Lords, there is no magic about the figure of 300, any more than there was magic about the 600 figure for the House of Commons. Many argue that the existing House is far too big, but nobody has a view as to what the exact figure should be. There are many examples around the world of second Chambers being smaller-and sometimes

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substantially smaller-than the primary Chamber. I think that we ought to be able to manage with 300 full- time Members if they were elected.

Baroness Symons of Vernham Dean: My Lords, the Statement says very clearly that people have a right to choose their representatives. If this House is to become a House of representatives, it will have to have the real powers to represent. The Leader of the House has spoken about the mandate of the people. In answer to the points raised by the noble Lord, Lord Wakeham, and the noble and learned Lord, Lord Howe, he said, "Yes indeed, the powers of the House would have to change if there were to be an elected House, or an 80 per cent elected House". Can he explain how his commitment on that sits alongside paragraph 7 of the White Paper, which states:

Surely those things cannot be true. This House cannot have more powers to do the job as a House of representatives and the relationship between the two Houses remain the same. The two are completely inconsistent, and I would be grateful if the noble Lord would explain it.

Lord Strathclyde: My Lords, paragraph 7 is in the context of the powers of the House not changing. I made that plain in the original Statement, and I make it plain again. However, the relationship between the two Houses would evolve over time. I see no difficulty in that. It has already evolved over the last 20 years and I think it would continue. The only basis for having an elected House would be to give this House greater authority to use its powers more assertively and effectively.

Lord Steel of Aikwood: My Lords, I wonder whether my noble friend has read the report published last week from the House of Commons Political and Constitutional Reform Committee, which said,

Does that not echo the recommendation about retirement in the report of the committee that his noble friend Lord Hunt reported on a few weeks ago? Since my Bill deals with these issues, has already had a Second Reading and is just awaiting Committee stage, why do the Government not take it over and get on with it?

Lord Strathclyde: I hope that my noble friend is pleased that the Procedure Committee will very soon, I hope, bring forward a proposal for permanent voluntary retirement from this House. The White Paper also lays out a statutory appointments commission if we should still have appointed Members. If we are to go forward on this, it is likely that we would spend many days and weeks on it. Therefore I wonder whether my noble friend really feels the need to progress with his own Bill.

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Lord Cormack: My Lords-

Noble Lords: Cross Bench!

Lord Williamson of Horton: My Lords, obviously what we are dealing with is an important constitutional issue. That is what we need to concentrate on. I want to put two specific points to the Leader of the House, because while I do not care too much about the new elected Members, I care about my friends who are here now.

My first point is that, when we come to the first election, the draft Bill proposes in Schedule 6 that two-thirds of the existing Members would be considered transitional Members. Accordingly, one-third of my friends-I cannot see which ones-will not be here any more. I really think it is essential to be clear how it is going to be achieved. The Leader said that that is dealt with in the document but I cannot find it, even though I read very fast.

My second point is that this document sets out the membership of the House and includes the transitional Members. Again, in Clause 59, the draft Bill says that all Members listed at the beginning are to receive a salary. Accordingly, I assume that all my friends here who have not been slung out because they are not in the two-thirds will receive a salary. Would the noble Lord confirm that?

Lord Strathclyde: The noble Lord, Lord Williamson, is not only a fast reader; he reads in a very exacting way. I will deal with the second point first. Newly elected Members in the new regime would receive a salary, which would be decided by IPSA.

Noble Lords: Oh!

Lord Strathclyde: My Lords, it is likely that the salary would be set slightly lower than that of a Member of Parliament, but slightly higher than Members of the devolved Assemblies and Parliaments. It may be that the White Paper says what the noble Lord says, in which case it is an error. Transitional Members would continue on the same basis as currently-namely, they would receive the daily allowance.

On the question of transition, the draft Bill proposes that, with each third of elected Members coming in, a third of the House would depart. My noble friend Lord Steel has consistently said that there is a large number of Peers waiting to retire, so I suspect that a number of Peers would take the opportunity of the elections not to remain behind. Of those who did, if there were insufficient retirees then within the parties and the Cross Benches a decision would have to be taken. We have a precedent for that in 1999, when elections took place to reduce the numbers of Peers. There is no reason why that should not happen again.

Lord Dubs: My Lords, in supporting the move towards a democratically elected House, may I put two concerns to the Leader of the House? First, if we are to be elected once for 15 years there seems to me to be a singular lack of accountability. The point of

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being elected is that the voters should be able to throw one out and during those 15 years they will have no chance to do that. My second concern is that, if we are to have very large constituencies, who will determine the candidates? It will be not the ordinary people but the party machines. Could I urge on him that the constituencies should be small and that one should have to be re-elected to have proper democratic accountability?

Lord Strathclyde: My Lords, on the first point regarding accountability, what is envisaged here is to try and preserve the independence of party that is such a hallmark of this current House, but also to have the power and authority given by an elected mandate. While the noble Lord may be strictly right that there is no accountability if you cannot go back for re-election, those who would stand would make commitments to their electorate as to what they intended to do when they got here. I have some sympathy with what the noble Lord says about the size of constituencies and about creating the link between the elector and the elected Member but that is a matter which, quite rightly, the Joint Committee will wish to look at in detail before coming up with its own proposals.

Lord Cormack: My Lords, my noble friend's recent replies-I feel very sorry for him-make me want to quote PG Wodehouse. This is not a half-baked scheme; it has not even been in the oven. Would he address the point that was just raised by the noble Lord, Lord Dubs? The abolition of this House and its replacement by an elected House, with people elected for 15 years by proportional representation but with no accountability, will immediately challenge the other place and will completely distort the balance within our constitution. The only comfort we can take this afternoon is that Clegg is no Cromwell.

Lord Strathclyde: My Lords, I have dealt with the question about accountability and 15 years. If the White Paper had proposed a first-past-the-post system, my noble friend could quite legitimately say that two Houses elected on a similar mandate could well clash far more than those elected on different mandates. It is up to my noble friend but I am sure that he does not think that PR is a more legitimate system than first past the post.

Lord Elystan-Morgan: My Lords, may I-

Lord Reid of Cardowan: My Lords-

Lord McNally: We will hear from the noble Lord, Lord Reid, and then from the Cross Benches.

Lord Reid of Cardowan: First, I thank the noble Lord for his elucidation of the thoughts of the Deputy Prime Minister, which I am sure he has done to the best of his ability, but could he help us further? Since the Executive under our constitution-the Government -are so by virtue of their ability to command a majority in the House under the democratically elected system, and since it is obvious that the Deputy Prime

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Minister considers that the electoral system of proportional representation with which this House would be elected better represents the common will, why, under the reform programmes would the Executive-that is, the Government-be chosen on the basis of a majority under first past the post in the House of Commons rather than under a majority under proportional representation in this House? Was he briefed on the Deputy Prime Minister's thoughts on this?

Lord Strathclyde: My Lords, that is a clever argument, but it will not wash. There is no intention at all to change the primacy of another place or of the Government being able to govern by commanding a majority in another place. In fact, PR would preserve the system that we have here, whereby the Government do not have a majority.

Lord Elystan-Morgan: May I warmly congratulate the noble Lord the Leader of the House, on the consummate skill with which he side-stepped the question of the possible invocation of the Parliament Act, were this House to afford a total challenge to the other place? Does he appreciate that, in the fox hunting case of some years ago, learned Lords expressed the gravest doubts whether a fundamental constitutional change could possibly be brought about by such a machinery? In the circumstances, may I suggest to him that that is a matter to be decided now, not when the cameral battle begins? Will he say whether the Government have taken legal advice on this matter, and if so, what that legal advice was?

Lord Strathclyde: My Lords, I cannot say whether or not the Government have taken legal advice on this specifically, but my reading of that judgment and my understanding of the constitutional position is that the Parliament Act would apply to a Bill brought similarly along the lines of the draft Bill published today.

Lord Tomlinson: My Lords, will the noble Lord accept that the part of his Statement in which he referred to Mr Clegg's committee and that-as I think my noble friend the Leader of the Opposition said-it last met in November, is little short of scandalous, given that it purports to be representing different points of view? Based on the number of options that we have, what has Mr Clegg been doing since November -working out permutations of possibility?

Lord Strathclyde: My Lords, the Joint Committee-on which the noble Baroness sat and was such a distinguished and senior member-met, I think, on seven occasions. I cannot remember whether the last time was in November or December, but it is true that there has been a gap of several months before we have been able to publish this today. There is nothing in the White Paper with which the leadership of the Labour Party, the shadow Cabinet or indeed the noble Baroness would seriously disagree. It is a pretty good distillation of the consensus or, in some instances, the lack of consensus that was reached in that Joint Committee.

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Lord Tyler: My Lords, can my noble friend confirm that there are many features of the current White Paper that simply repeat the features of the White Paper produced by Mr Jack Straw in the last Government? Can he also reassure the House that he has been told by the Official Opposition that they intend to conduct pre-legislative scrutiny with all the constructive contributions that we in this House take such pride in? Would it not be ridiculous if Members on the other side-or indeed any side of this House-attempted to obstruct or filibuster when at the same time they take such pride in saying that the other House should retain primacy? Can we be assured that the Government have been given an indication that they are all signed up to using this exercise, in the best traditions of this House, to undertake proper, constructive pre-legislative scrutiny of these proposals?

Lord Strathclyde: My Lords, I am sure the whole House will have heard my noble friend. I can confirm that it is my understanding that not only the Opposition but also the Cross Benches and everybody else who wishes to play a part in the Joint Committee will wish to do so most constructively to try to reach a good solution that would suit not just this House or the other place, but also the nation.

Lord Lea of Crondall: My Lords, is the Leader of the House aware that in the House of Commons this afternoon, in response to questions on this very matter, Ministers prayed in aid the fact that the present House of Lords is unsustainable on the grounds that its membership is approaching 800 and will go beyond that? Does he not agree that it is the present Government who are doing the majority of the appointing? The White Paper states that a statutory appointments commission should be available to deal with 20 per cent of Members, if they are appointed. Why can we not go forward with the Steel Bill and say that the present appointments, which would include a formula between the parties on a ceiling, should not go forward? The Government claim-even though we will obviously be here for some years yet-that it is unsustainable to have the present growth stampede, led by the Government, in changing the composition of the House.

Lord Strathclyde: My Lords, I do not know how long the noble Lord will be here, but there is no need to go forward with the Steel Bill if the intention is to have elected Members by 2015. We will spend probably the next Session and maybe even the Session after that on passing the House of Lords reform Bill.

Lord Forsyth of Drumlean: My Lords-

Lord Kakkar: My Lords-

Lord McNally: Can we hear from the noble Lord, Lord Forsyth, and then from the Cross Benches?

Lord Forsyth of Drumlean: My Lords, I congratulate my noble friend on how he has dealt with this matter today. May I press him on the answer he gave to the noble Baroness, Lady Symons? Throughout the Statement,

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he has been at pains to say that of course elected Members would change the relationship with the House of Commons. I have got only as far as page 7 of the White Paper, which says:

"We propose no change to the constitutional powers and privileges of the House once it is reformed, nor to the fundamental relationship with the House of Commons".

Who should we believe? Should we believe what it says in the White Paper or what my noble friend has been telling us this afternoon?

Lord Strathclyde: My Lords, there is no tension between the two. All I say is what is obvious: in a House that is entirely elected, over time there will be evolution, as there already has been over the past 10 or 20 years. That is entirely natural and entirely in accordance with what is said in the White Paper.

Lord Kakkar: My Lords, the noble Lord the Leader of the House has emphasised the statement in the White Paper that the intention is that the other place will remain the primary House in this Parliament. If the Joint Committee on Scrutiny concluded that it would be impossible to secure the primacy of the other place if your Lordships' House were abolished and replaced by an elected Chamber, would the noble Lord consider it appropriate to proceed with the Bill?

Lord Strathclyde: My Lords, that is a very clever question-one that would allow me to indulge in much philosophical debate about the primacy of the House of Commons and the workings of the Joint Committee. The Government hope that the Joint Committee, when it is set up, will give the White Paper and the draft Bill serious scrutiny and examination. Of course it will want to look at peripheral matters, such as the role of the Parliament Act, that of the Cunningham committee, many other things and various alternatives. In the end, it will have to focus on whether this House is to be elected; if so, how it is to be elected; what it will be called; transition and so on. It will then put proposals to the Government. I hope it will do so in a most realistic way. Everything that I have heard this afternoon leads me to believe that the Joint Committee will have plenty of work to do.

Energy: Fourth Carbon Report


4.54 pm

The Parliamentary Under-Secretary of State, Department of Energy and Climate Change (Lord Marland): My Lords, with the leave of the House, I shall now repeat a Statement made in another place by my right honourable friend the Secretary of State for Energy and Climate Change. The Statement is as follows:

"Today, I am announcing that the Government propose to set an ambitious target in law to reduce greenhouse gas emissions in line with advice from the independent Committee on Climate Change. Signing up to an ambitious fourth carbon budget will result in

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no additional costs to the consumer during this Parliament. We will undertake a review of progress early in 2014 to ensure that our own carbon targets are in line with the EU's, and we are working up a package of measures to be announced by the end of the year to help energy-intensive industries adjust to the low-carbon industrial transformation while remaining competitive.

By agreeing to the Committee on Climate Change's proposed level, we are demonstrating our desire to drive the changes needed to turn the UK into a dynamic, low-carbon economy that is attractive to investors in the new and growing low-carbon sectors. We are also sending a clear signal to the international community that the UK is committed to the low-carbon economy. This will help us reach agreement in Europe on moving to a 30 per cent emissions reduction target, and build momentum towards a legally binding global climate change deal.

The Climate Change Act 2008 sets a target to reduce greenhouse gas emissions in the UK by at least 80 per cent from 1990 levels by 2050. The Act also requires the Government to set carbon budgets, which are limits on greenhouse gas emissions in the UK, for consecutive five-year periods. These carbon budgets must be set at least three budget periods in advance. They are designed to put emission reductions on an appropriate and cost-effective pathway to our 2050 target.

The first three carbon budgets were set in 2009, following advice from the independent Committee on Climate Change. The fourth carbon budget-the limit on emissions for the five-year period from 2023 to 2027-has to be set in law by the end of June this year. As advised by the Committee on Climate Change, the level we propose setting in law would mean that net emissions over the fourth carbon budget period should not exceed 1,950 million tonnes of carbon dioxide equivalent-a 50 per cent reduction from 1990 levels. As required by the Climate Change Act, once the fourth carbon budget has been set in law, we will publish a report setting out the policies and proposals required in the medium-long term to meet the budget, building on the strong foundation provided by our existing policies. This will take the form of the revised government carbon plan later this year, following the publication of the interim version in March.

The Committee on Climate Change advised that we should aim to meet the budget through emissions reductions in the UK rather than relying on carbon trading, such as under the EU Emissions Trading System or the purchase of international credits from projects abroad. We will aim to reduce emissions domestically as far as is practical and affordable, but we also intend to keep our trading options open to maintain maximum flexibility and minimise costs in the medium-long term. Given the uncertainty of looking so far ahead, this is a pragmatic approach.

Under the Climate Change Act, emissions reductions by the UK's industrial and power sectors are determined by the UK's share of the EU Emissions Trading System cap. This protects UK industrial and power sectors from exceeding EU requirements. However, if the EU ETS cap is insufficiently ambitious, this could mean placing disproportionate strain on other sectors

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outside the EU ETS, such as transport. To overcome this and to provide clearer signals for businesses and investors, Government will review progress towards the EU emissions goal in early 2014. If at that point our domestic commitments place us on a different emissions trajectory from the emissions trading system trajectory agreed by the EU, we will, as appropriate, revise up our budget to align it with the actual EU trajectory. In line with the coalition agreement, the Government will continue to argue for an EU move to a 30 per cent target for 2020 and ambitious action in the 2020s.

As part of the transition to a low-carbon economy, we need to ensure that energy-intensive industries remain competitive and that we send a clear message that the UK is open for business. Before the end of the year we will be announcing a package of measures for energy-intensive businesses whose international competitiveness is most affected by our energy and climate change policies. Rising electricity costs pose a risk to these sectors which are critical to our growth agenda. We will therefore take steps to reduce the impact of government policy on the cost of electricity for these businesses, allowing them to continue to play their part in delivering our green industrial transformation. In this way, we will ensure that that these sectors remain internationally competitive and that we send a clear message that the UK is open for business.

It is important to stress that the UK's existing policies already put us on track to meet the first three carbon budgets. They also provide a strong foundation for the fourth carbon budget, implying no additional near-term costs. We are reforming the electricity market, making homes and businesses more energy efficient through the green deal, ensuring that new homes are built to a high energy-efficiency standard, encouraging the uptake of ultra-low-carbon cars, and setting up a green investment bank. Meeting the 1,950 million tonnes target we are proposing for the 2023-27 period is ambitious but achievable. By providing long-term clarity for investors, the fourth carbon budget places the UK at the leading edge of the global low-carbon industrial transformation. It will set Britain on the path to green growth. It will establish our competitive advantage in the most rapidly growing sectors of the world economy, generate jobs and export opportunities in these sectors, maintain energy security and protect our economy from oil price volatility. It is a framework not just for action on climate but for growth and prosperity".

My Lords, that concludes the Statement.

5.02 pm

Baroness Smith of Basildon: My Lords, I thank the Minister for repeating the Statement and for his customary courtesy and co-operative approach to the issues. I know that he will understand how concerned we were that an issue of this magnitude could have been presented to Parliament as a Written Statement. I am very pleased that there was no hint of reluctance on his part to repeat the Statement to your Lordships' House today.

Tackling the environmental impact of energy production and use, and energy security, are issues that concern and affect us all, whatever our politics.

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We broadly share similar objectives and commitments, although we may have differences in how to achieve them. The objective to reduce emissions of greenhouse gases by 80 per cent to 1990 levels with targets along the way to assure energy security for the future are crucial to the well-being and economic prosperity of this country. I welcome the fact that this Government have been prepared to continue the work started by the Labour Government when they set up the Committee on Climate Change, and I thank the Minister for his recognition-indeed his appreciation-of that.

I also thank the Committee on Climate Change for the work that it has done, not just on this fourth budget for the period 2023-27, but on its work to date, which has been of enormous importance. It is not an easy task to balance national and international environmental interests with the needs of the economy, and at the same time recommend environmental changes. As we have found, not everyone will welcome the changes that are recommended. They are challenging and can be difficult to achieve, but the Committee on Climate Change does not act in a vacuum and it makes it clear that it gives advice,

As the Minister indicated, this legislation for the current budgets has to be in place by the end of next month. I have three specific points for him, but first I would like some clarification on the review. If I understand him correctly-I am happy to be wrong on this-this report has only been accepted conditional on a review in 2014 that seeks to ensure that our own carbon targets are in line with those of the EU. I know that the Minister understands the need for certainty for business and for investors who will support the Government's objectives, but is he aware of the sense that the Government lack such certainty? We have seen changes to the feed-in tariffs, the ending of the commitment to zero-carbon homes, delays and bickering about the green investment bank and, even worse, delays and bickering about this very report. I do not for a second doubt the noble Lord's commitment-he has been very clear with this House-but I am sure that he will privately share some of the despair we feel about the lack of clarity on a number of issues.

If the review that is to take place in 2014 does not show that the EU is coming into line with the UK, does that mean that there is more than just wriggle room for the UK and that the entirety of the Government's carbon budgets could be thrown out? That is our concern. Could that review completely change the results of the Government's announcement today? Any enlightenment that the Minister can offer on this issue would be greatly appreciated.

I wish to raise three specific issues. First, we welcome the Minister's indication of support for the energy-intensive industries. All of us understand their concerns, and they face the greatest potential competitive impact. Action to support those businesses is essential. It is clear that they are willing to and want to reduce their energy use. As well as contributing to our national emissions reduction targets it also reduces their costs. Any further information that the Minister can give on the package that will come forward would be helpful-

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when it is likely to come forward, and what discussions and consultation with the industry there will be. We would be keen to be kept involved as that matter progresses.

My second point is on transport. This weighty report of more than 400 pages highlights the significant impact that more fuel-efficient cars are having on government income from fuel duty and vehicle excise duty. It estimates a potential loss of up to £10 billion by 2030. The report then highlights the fact that this will create the need for fiscal rebalancing and suggests that because road congestion is likely to increase, road pricing is an option that the report says will have environmental, economic and fiscal benefits. However, the report also adds that this should be in addition to fuel duty, not instead of it. When the report was published back in December, the average price per litre of a gallon of unleaded petrol was 13 or 14 pence less than it is today-partly, but not just, as a result of the Government's increase in VAT. In their acceptance of the report, are the Government really considering that the motorist should pay to use the roads as well as paying fuel duty and vehicle excise duty?

Will the noble Lord look at this issue again? If the car industry and the motorist play their part, and their actions have a real impact in reducing emissions, and as a consequence that reduces their contributions to the Treasury, it seems grossly unfair that they should be penalised for doing so through widespread road charging in order to raise the money lost to the Treasury through the actions we have demanded of them. That would create a disincentive to the motor industry and to the motorist. I am sure that that is not what the Government intend, but it could well be the consequence. We know that the car industry wants to play its part-there are new hybrid and electric cars for example. The survey by Road Pilot indicated that 46 per cent of motorists claim to have reduced their speed to save petrol and save money. We should not penalise them for doing so.

The third and final issue I wish to raise with the Minister is fuel poverty. The committee recognises that since its 2008 report rising fuel prices have significantly increased the number of people living in fuel poverty. The report predicts that gas and electricity prices are likely to increase even further and that household income growth will be slower than the previous committee report indicated. The current report recommends that this issue can and should be addressed through energy-efficiency improvements and other measures such as social tariffs, and arrangements such as winter fuel payments, which unfortunately were reduced in the Budget-after the committee's report.

I appreciate that in the Energy Bill the Government are bringing forward the Green Deal and other energy-efficient measures. We have already considered the Bill in this House. As the Minister knows, we welcome the concept, but consider the Bill to be too weak in its ambition and scope, and too light on detail. I assure the Minister, your Lordships' House and Members of the other place that we will work with all colleagues and with the Government to get the improvements this Bill needs.

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I highlight the need to improve the provisions for the private rented sector, where fuel poverty and emissions are very serious matters. Therefore, I ask the Minister and his colleagues to consider the changes to the Bill that we have proposed to bring about energy-efficiency improvements for the private rented sector and to set minimum levels of energy efficiency for those properties in order to reduce emissions.

Written Answers that I received today from the Minister confirm that in the past year 127,930 households have been assisted by the Warm Front scheme, yet over the next two years, due to government cuts, this number will fall dramatically to around 47,000 and 45,000 respectively. Given that fuel poverty was specifically raised in the committee's report, I ask the Minister to look at this matter again. In the light of the report that the Government have accepted, I seek an assurance that there will be no further reductions in winter fuel payments for pensioners.

My initial enthusiasm when I heard about the Government's acceptance of the report has been somewhat dampened. I hope that the Minister can address some of the points that I have raised today, and I look forward to welcoming the Government's response with great enthusiasm.

5.11 pm

Lord Marland: My Lords, I thank the noble Baroness for her excellent résumé of matters and, as always, for posing some very incisive questions. Of course, much of this builds on work carried out by the former Labour Government, and I applaud that. I also add my thanks to the Committee on Climate Change for its excellent fourth report.

The noble Baroness asked four questions. The first one concerned the review in 2014. As this Government intend to be the greenest Government ever, it is incumbent on them to lead by example. We know that Europe does not always follow our leadership but we will try to lead by example in every possible way and encourage it to adopt a 30 per cent target. For the sake of the prosperity of this country, it would be totally wrong if we ended up not agreeing to a 30 per cent target and having some of Europe marching out of line. The review gives us a fallback position if Europe agrees to, for example, a 25 or 35 per cent target. However, the intent is there in our desire to strive for greater carbon reductions and to show leadership, as indeed the previous Government did. I see in his place the noble Lord, Lord Prescott-one of the leading advocates in that area. The noble Baroness need not fear-I do not despair. I feel that we are marching forward very co-operatively and that things are going well.

The noble Baroness asked about transport. We have an issue with the Committee on Climate Change over moving to electric hybrid targets. The committee's target is set at roughly 60 per cent by 2030. We think that it will be difficult to achieve that target. It has to be balanced fiscally, which of course is an issue for the Treasury. We are looking at that very closely in our review of the committee's reports, and we are quantifying its suggestions, as one would expect. We do not necessarily disagree with the committee but we have come up with different figures, which we will look at and bring into

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law when we have had discussions with the committee. I should add that there are very few differences between us and the Committee on Climate Change, but it would be rare if there were no differences.

Fuel poverty is a fundamental issue, as we have discussed before. If the noble Baroness will forgive me, I will not get into a debate on the Energy Bill and go over the marvellous things that we discussed for hours on end, although we can doubtless look at them again at another point. The first, second and third carbon budgets had no effect on fuel poverty, although the fourth budget should have an effect with all the new measures that we are bringing in. The noble Baroness shakes her head. I know that she has read the document. I cannot remember the exact page but there is a paragraph on fuel poverty which I am happy to point out to her.

Finally, as the noble Baroness quite rightly says, we have to take into consideration the effect on the energy-intensive industries. They are very substantial employers. They fulfil great needs and are a requirement for this country. I listened to the views of a group of energy-intensive industries when they came to visit us in the House, which quite rightly they enunciated extremely well. I agreed that we would look at the matter as appropriate and report back on our commitment to them in October.

5.15 pm

Lord Prescott: My Lords, I welcome the Statement. As someone who was a negotiator at Kyoto, I fully recognise the legal framework and commitment to targets. I recognise that the Government are accepting the Committee on Climate Change's recommendation of 50 per cent to 80 per cent change by 2050. That is clearly a very ambitious target. It concerns me that the Government were committed to a legal framework that collapsed at Copenhagen. I worry that they are setting themselves a target for which they might be cheered at the moment but, when they do not achieve it, they will face derision from the NGOs and others. Is the Minister aware that the committee pointed out in its report that it had made such a recommendation to avoid the ups and downs in the global negotiations concerning climate change? It is more than an up and down. What took place at Copenhagen-and was confirmed at Cancun-is a complete reversal. There is no longer a legal framework that will be agreed to for at least a decade; it is now a voluntary one with voluntary targets. What worries me-and I see that the Minister has left the back door open-is that if Europe does not confirm its 30 per cent target, and I do not believe for a moment that it will, we will be faced with changing our position and face derision rather than cheers, which tends to undermine confidence in global negotiations.

Lord Marland: There is no one more experienced on this issue than the noble Lord, Lord Prescott. He adds great value on the subject in this House. Describing the past is extremely interesting because I was at neither Copenhagen nor Cancun. The reality is, as he knows, that we have to set an example-as he did himself-and an aspirational target. We have been accused of not leading the way in Europe; now we will

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lead the way. We cannot have it both ways. We will put our aspirations down on the table as we did in Cancun. I pay great tribute to the Secretary of State, the right honourable Chris Huhne, for the way in which he brought the climate change issues back on to the agenda at Cancun, which, as the noble Lord rightly said, fell apart. Clearly, our fallback position is 20 per cent. We are comfortably going towards that 20 per cent. We feel that we can up the ante and show Europe how to do so, and 2014 gives us the fallback if we cannot achieve it. Those are our aspirations. I think that he would, broadly speaking, applaud them given the position that he tried to lead us to.

Lord Teverson: My Lords, this is certainly the announcement that we wanted to hear. I congratulate the Government on agreeing this target, which is important in terms of our leadership, as the Minister has so rightly said, but also in terms of keeping faith with the Committee on Climate Change, which is such a central part of the architecture. Having said that-and as a parliamentarian-it should not be taken for granted that the Government would accept every recommendation within the Committee on Climate Change's report. This is the headline; this is the one that is important. However, all recommendations of such reports should be applied to the democratic process and decided on by Parliament rather than by the committee itself. However, I very much welcome the broad thrust of the Government's agreement.

One of the ways to possibly change how things work that has been discussed and is in the Statement is carbon trading. Although the noble Baroness, Lady Smith of Basildon, seemed somewhat equivocal about it, I remind her that the way that this accounting should work was written in specifically by the last Government and was strongly resisted by certain parts of this House. However, I accept that under certain circumstances it can be the right way to go, and maybe it provides the flexibility.

I also welcome the fact that the Government are still angling after a 30 per cent reduction by 2020, although even I admit that this should not be just blind adherence to that target. I would be interested to hear from the Minister how those negotiations with Europe are proceeding, certainly within the international context that the noble Lord, Lord Prescott, mentioned.

I want to return to the point about energy-intensive industries. We clearly value those industries in this country and do not want to see them be offshored because all that will do is mean that carbon emissions worldwide stay the same while ours perhaps decrease, hence some of the problems over carbon production accounting. Will the Government ensure that the trade-offs for those extra costs still leave the incentives for those industries to reduce their energy and their carbon emissions while helping them in other areas of their profit and loss account?

Lord Marland: The noble Lord, Lord Teverson, gives me reason not to despair, because him agreeing with so much of what we are doing shows that the coalition is alive and well.

A noble Lord: Eighty per cent.

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Lord Marland: Thank you very much indeed. I make no comment on that.

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