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Grand Committee

Thursday, 13 December 2012

2 pm

Public Bodies (Water Supply and Water Quality Fees) Order 2012

Public Bodies (Water Supply and Water Quality Fees) Order 2012 9th Report from the Joint Committee on Statutory13th Report from the Secondary Legislation Scrutiny Committee

Considered in Grand Committee

Moved by Lord De Mauley

That the Grand Committee do report to the House that it has considered the Public Bodies (Water Supply and Water Quality Fees) Order 2012.

Relevant documents: 9th Report from the Joint Committee on Statutory Instruments, 13th Report from the Secondary Legislation Scrutiny Committee

The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Lord De Mauley): My Lords, the order is made under the Public Bodies Act 2011 to modify the funding arrangements for the Drinking Water Inspectorate. The order will enable the inspectorate to charge water companies for the regulatory activity from which these companies benefit.

The Drinking Water Inspectorate is the drinking water quality regulator for the water industry, providing independent assurance that water supplies in England and Wales are safe and that drinking water quality is acceptable to consumers.

The inspectorate is currently funded entirely by Defra, with the costs of its operation falling to the taxpayer. However, a significant proportion of the inspectorate’s activity relates to scrutinising the way in which water companies meet their regulatory requirements through technical audits and inspections.

The proposal to introduce a charging scheme was first raised in the consultation on the Flood and Water Management Bill in 2009. The proposals were not included in the Act. The charging scheme will enable the inspectorate to recover the cost of its regulatory activities from water companies. This is considered to be a much fairer way of recovering costs. It will make the inspectorate consistent with other related water regulators such as Ofwat, the Environment Agency and the Consumer Council for Water, all of which charge for their regulatory activities.

The scheme will not enable the inspectorate to recover all its costs from industry: it will not cover the costs of prosecutions and court-related activity associated with enforcement orders and other sanctions.

Defra will continue to fund the inspectorate for this work and the inspectorate will seek to recover these costs through the court system. Defra will also continue to fund the activity to support drinking water policy such as the advice the inspectorate provides to Defra on scientific and technical matters.

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The water industry in England and Wales values the activities of the Drinking Water Inspectorate very highly and companies are supportive of this proposal. The inspectorate has consulted with water companies to seek their views on how a charging scheme could identify the cost of regulatory activities. The outcome is a charging scheme that will be based on two elements: part of the fee will be based on the number of sample results checked and the other part based on the time taken in auditing water supply arrangements, investigating incidents and investigating consumer complaints.

I consider this approach to provide a fair means to allocate the costs while keeping the charging scheme reasonably simple to administer. The rates to be applied to determine the annual fee for water companies will be fixed by the chief inspector and subject to approval by Ministers.

The order will introduce charges for water companies which supply wholly or mainly in England. A similar order has been approved under the Public Bodies Act 2011 by the Welsh Government, which will apply to water companies that supply wholly or mainly in Wales.

The benefits of this scheme are twofold. Allowing the inspectorate to charge the water industry for its regulatory work will save the public purse around £2 million per annum. The introduction of a charging scheme will also provide an incentive for water companies to review their procedures for water safety management.

In its consideration of the order, the Secondary Legislation Scrutiny Committee cleared the draft order but requested clarification of the way the order promoted effectiveness and economy in the delivery of the inspectorate’s regulatory functions. I am happy to provide that clarification now.

The order will enable the inspectorate to assess and improve its effectiveness by providing transparency in the cost of the regulatory functions it delivers. This will enable direct comparison of the effectiveness of the inspectorate compared with other water regulators.

The order will also assist the promotion of economy by providing an incentive for water companies to consider the value of the regulatory activity provided by the inspectorate against other options for the management of quality assurance. An example of this is where water companies now attain accreditation from UKAS which undertakes technical audits of laboratories. The inspectorate has an agreement with UKAS which means that it does not routinely inspect laboratories which have UKAS accreditation. Transparency of costs will allow water companies to compare the services provided by the inspectorate with other accreditation bodies which offer audit and quality assurance services.

I hope that the Committee will agree that the introduction of a charging scheme will provide transparency of the cost of regulatory activities and will assist in the long-term effectiveness and economy of activity to safeguard drinking water. I beg to move.

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Lord Grantchester: I thank the Minister for his introduction and explanation of the order. I will not detain the Committee for long, as it seems largely straightforward.

The issue is the switch of payments for the regulatory function of the Drinking Water Inspectorate, which will be made in future by customers rather than by the taxpayer, and how this will work. The Minister has explained that the Public Bodies Act 2011 enables him to change the funding arrangements to reflect the fact that if an industry needs regulation in undertaking an activity that could cause adverse effects in others, then the industry should face the regulatory cost. There is no more important product than safe, clean, hygienic drinking water. The change will comply with the Hampton review recommendations for better regulation and with the Defra charging handbook strategy aims. It will bring funding into line with that for other water regulators, such as Ofwat and the Environment Agency.

The new system will ensure that regulatory costs are recovered in proportion to the individual relative regulatory burden, serving as an indicator of the relative efficiency and effectiveness of each water company or supplier. Furthermore, only one of the 21 responses from the 33 key stakeholders consulted did not support this policy change. I note the proposed charging system will apply to all water companies and that none is classified as a micro-business, with the result that there are no discriminatory burdens that will weigh disproportionately.

The cost of the regulatory function of the inspectorate is in the round rather small, and the Minister may well say this is a tidy-up exercise, with the modest cost to consumers judged to be more than outweighed by the non-monetarised benefits already highlighted. Nevertheless, I would like the Minister to expand where he can on some of the potential implications and the public information for customers.

The Explanatory Memorandum explains that the total charge being transferred from taxpayers to customers amounts to £1.9 million, less than a 0.1% increase to most individual bills, or around 15p per annum. The 13th report from the Secondary Legislation Scrutiny Committee updates this figure to include unmetered and metered households to produce an estimate of 9p or 10p per annum. While noble Lords will not be expecting front page exposure in the Daily Mail of “the thin end of the wedge” even if charges were to increase, can the Minister say what would trigger concern and action on any report to Ofwat? Will Ofwat’s approval be required for all and any increases? Will it be looking at cost control and cost-cutting measures if it is to address the Secondary Legislation Scrutiny Committee’s concern that the change in the charging system does not appear to promote economy in the inspectorate’s delivery. The scrutiny committee had asked for more clarity on how the charging structure will promote this effectiveness and economy, and I thank the Minister for his further explanation in his introduction of the order.

In the Minister’s officials’ meeting with the industry has any discussion taken place on how water companies will spread the charge across their customer base?

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Will the charge be made per customer bill, or will it be volume related, a question especially pertinent to metered supplies and high-volume commercial operations? Will there be consistency across the regions, will intercompany performances be monitored and published, and will this include Wales?

Will the Minister indicate whether the water companies will be highlighting the admittedly small charge with a separate line on the face of customers’ bills, even if only annually, and therefore fulfilling the very reason to make the charging change? No doubt this will require public information arrangements to be made for customers.

Finally, water affordability is becoming an ever increasing concern to more and more households. While the Minister may be reluctant to go into detail today on the proposed social tariff scheme, will he at least confirm by stating the commitment that this fee will qualify to be included under the social tariff umbrella?

I have no intention not to agree with this order. But if the Minister could indicate any understanding on how this change will be implemented, it will be of great interest to consumers.

Lord De Mauley: My Lords, the Government are committed to everyone in England and Wales having access to clean, wholesome drinking water and keeping water bills at an affordable level. Approval of this order will enable the Drinking Water Inspectorate to recover the cost of regulatory activities from the water companies which benefit from them. This change in funding will result in a saving, as I said earlier, of about £2 million to the taxpayer each year and may increase the average annual customer bill by about 10p, as the noble Lord, Lord Grantchester, mentioned. He asked about the way in which the charge will be passed on. Explicitly in answer to his question, Ofwat must approve any passing on of charges. Therefore, if water companies propose an inappropriate means of passing on charges, it would have the chance to object.

The noble Lord, Lord Grantchester, asked about the consistency of how charges will be passed on. For instance, will it be a separate line on the bill? On the one hand, that is up to the companies to put forward a proposal but, on the other hand, how it is dealt with is subject to Ofwat approval. It will be included in the social tariff scheme.

To the extent that I have not answered the noble Lord’s questions, perhaps I may write to him.

Lord Grantchester: My Lords, the Minister has done very well in answering all the questions but one, which was regarding Ofwat having to agree to any changes and increases in the charges from year to year.

Lord De Mauley: My Lords, the cost will not be subject to Ofwat control but will require approval by Ministers. I hope that that satisfies the noble Lord.

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On the basis of that, I thank the noble Lord for his questions and I ask the Committee to agree the order.

Motion agreed.

2.12 pm

Sitting suspended.

Animals (Scientific Procedures) Act 1986 Amendment Regulations 2012

Animals (Scientific Procedures) Act 1986 Amendment Regulations 201212th Report from the Joint Committee on Statutory Instruments,14th Report from the Secondary Legislation Scrutiny Committee

Considered in Grand Committee

2.20 pm

Moved By Lord Taylor of Holbeach

That the Grand Committee do report to the House that it has considered the Animals (Scientific Procedures) Act 1986 Amendment Regulations 2012

Relevant documents: 12th Report from the Joint Committee on Statutory Instruments, 14th Report from the Secondary Legislation Scrutiny Committee

The Parliamentary Under-Secretary of State, Home Office (Lord Taylor of Holbeach): My Lords, the draft regulations amend the Animals (Scientific Procedures) Act 1986 to transpose European directive 2010/63/EU on the protection of animals used for scientific purposes. The new directive was adopted in September 2010 and came into force on 9 November 2010. It replaces directive 86/609/EEC, which is transposed into current UK legislation by the Animals (Scientific Procedures) Act 1986.

National legislation transposing the new directive must be implemented from 1 January 2013. The new directive has three main objectives: first, to rectify wide variations in the implementation of the previous directive by member states; secondly, to strengthen the protection of animals used in scientific procedures; and thirdly to promote the three Rs: strategies which replace, reduce and refine the use of animals in scientific procedures. It provides a practical framework for the regulation of animal research and testing in Europe and sets a benchmark for the rest of the world.

Many of the provisions of the new directive are similar to current UK legislation and practice. For example, the directive places a strong emphasis on minimising the use of animals and includes the promotion of the three Rs. We welcome the development of the directive because it will ensure that the framework in the European Union will reflect the structures that have worked well in the UK for the past 25 years, and should bring the rest of the European Union into line with those standards.

Some of its provisions are new or go further than current UK legislation. For example, the new directive extends protection to some invertebrate species—all cephalopods, including octopuses, squid and cuttlefish—and to animals bred primarily so that their tissues and organs can be used in scientific research. The new directive also requires member states to apply mandatory

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minimum standards of care and accommodation. There is a requirement for formal retrospective review of some types of project.

Other provisions are potentially less stringent than current UK requirements. For example, the 1986 Act, which we are amending, provides special protection for non-human primates, cats, dogs and horses. The directive extends special protection only to non-human primates.

Article 2 of the new directive allows member states to retain national provisions in force on 9 November 2010 that give more extensive protection to animals than those set out in the new directive so long as they are not used to inhibit the free market. We are making full use of this provision, as I will explain shortly.

A public consultation on the options for transposing the new directive was launched on 13 June 2011 and closed on 5 September 2011. Responses were received from more than 13,000 individuals and 98 organisations. The majority of responses supported the retention of current United Kingdom animal welfare requirements where these are stricter than those set out in the directive. Other responses suggested that we should use transposition to streamline regulation where this would not harm animal welfare.

The Government’s response to the public consultation was published on 17 May this year. It explained that we would retain most of our current, stricter, United Kingdom standards. These include: special protection for cats, dogs and horses; protection for immature forms of birds and reptiles; larger enclosure and cage sizes for dogs and a number of other species; and methods of killing animals that are more humane. We have also placed absolute bans on the use of great apes and stray animals of domestic species in the legislation. We believe that including and retaining these other stricter standards in the regulations is necessary and justified on animal welfare grounds and in order to maintain public confidence that animals used in experiments and testing will continue to be properly protected.

At the same time, we explained in the government response that we would simplify our system of personal licences, which authorise individuals to apply procedures to animals. We believe that a system of personal licensing is essential to ensure that procedures causing pain and suffering are applied to animals only by individuals who are properly trained and competent. At the same time, we accept that the system should not be overly bureaucratic. We have therefore made some small but important changes, through the regulations, to allow us to simplify the detail required in personal licences and the way we process applications for them.

Another important change transposed in the regulations is the requirement placed on member states to collect and publish statistical information on the severity of the procedures applied to the animals. Publication of information about the actual experience of the animals will be a major step forward in terms of transparency and, combined with the mandatory requirement to publish non-technical summaries of authorised projects, will help inform the debate on the use of animals in research and testing.

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On the issue of severity classification, although the directive requires procedures to be classified by their severity, there is no requirement to ensure that these classifications are subsequently adhered to. Under current UK arrangements, licence holders are required to inform the Home Office if a severity limit is breached or likely to be breached. We intend to continue this requirement by retaining the existing condition on the project licence that sets a clear obligation to adhere to the severity limit and to notify the Secretary of State if the severity limit appears to have been, or is likely to be, breached. I can, therefore, assure noble Lords that we are not weakening the current requirement for project licence holders to ensure compliance with severity limits.

I will also give noble Lords an assurance as to how we will review the operation of the new legislation and, in particular, in relation to the application of the three Rs. Article 58 of the directive requires the Commission to carry out periodic, thematic reviews of the three Rs in consultation with member states. Although the obligation to carry out reviews is on the Commission, and does not require transposition in the draft regulations, we believe that similar reviews can play an important part in ensuring the effective operation of our national legislation. We therefore propose to carry out our own thematic reviews and to consult practitioners and other interest groups in due course on suitable topics. We will also encourage the Commission to ensure that Europe-wide thematic reviews become a reality.

Regarding implementation of the amended legislation, although we have not quite achieved the target date for transposition—we were looking at a November date—we are already working with current licence and certificate holders to ensure a seamless transition to the new arrangements. We have already issued a guide identifying a number of actions that need to be completed before 1 January. We also plan to issue a “quick start” guide to the main requirements of the amended legislation and the care and accommodation standards before Christmas. A full draft guidance note and revised code of practice will be published in January 2013 for consultation.

The transposition of the new directive has provided a valuable and timely opportunity to review and strengthen our legislation. We believe that the draft regulations provide a sound basis for the regulation of animal research and testing. I commend the regulations to the Committee.

2.30 pm

Lord Winston: My Lords, first, I declare an interest as animal licence-holder for more than 40 years; I think I am almost the longest holder of a licence in London. I work at Imperial College where animal research is conducted. I am a member of a research council which from time to time may need to support the use of animal research for specific validation in engineering, and I am also chairman of a spin-out biotech company, although I do not take any income from that company. Clearly all companies are aiming eventually to make a profit, although I doubt that this one will, but it is still exploring various patents that involve techniques that will be tested on animals.

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I am grateful for the clarity of the Minister’s assessment of the directive, which was very helpful. I want to add a personal note of thanks to the Home Office, which has been exemplary in the way it has helped me from time to time with licence applications. In recent years, we have seen a much greater recognition of the need to collaborate and care for the way that we ensure that the law is properly enforced, and I feel very confident in the officials with whom I have dealt.

With that preamble, I express some concerns about this directive and about how we might go ahead. In particular, I am concerned about the three Rs. The three Rs have been around for a very long time. When they were first considered, nobody appreciated where the limitations of the reductions or replacements might be. For example, when the three Rs were first proposed, nobody considered that cell culture is a very limited model for many needs in medicine. Cells in culture do not always perform or behave in the same way as cells do inside an intact organ or, even more importantly, an intact total person or being. A rodent that is alive and well, in which the cells are functioning without changes altering how the genes express or how the cells are growing normally in that organ, is fundamental to medicine. To some extent replacement, reduction and refinement are a bit of problem in cell culture.

When one looks at organ culture, human organs unquestionably do not react completely normally. The classic example is the isolated liver. It was hoped that it might replace the liver of people in liver failure, but those livers do not react in the same way. They cannot because they are not subject to all the homeostatic control mechanisms that go on inside an intact organ.

When computer modelling was first envisaged, it was also thought to be a very good way of replacing animals in research. It has become apparent in the past three or four years that computer models fall way short of what is needed. They cannot predict how animals in the intact state would behave. Many of the invertebrate species, in which we can work, are not always ideal models either.

We have to accept that there is going to be a need to continue, particularly in rodents. In my view, there are some reasons for considering that not only should that work continue but it may need some degree of amplification. The reason why I say that is as follows. First, I am very concerned about the issue of the backbone of British science, which, as every research council will tell you, is the PhD student. That is the person who does the mainstream experimental work that we hope will lead to our understanding of medicine and our improvements of treatment, and of course contributes to the British economy with novel and innovative ideas. There is no question, from my experience and that of many other people, that PhD students are increasingly reluctant to go into important areas of medicine and biology where animal research is being used, not because they disapprove of that research but because they are concerned increasingly about the delay, when they have a finite time—now rigidly defined because of fees and so on—of three years to complete their PhD. For a PhD student to delay starting experimental work is a massive problem.

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Many PhD students do not see this work as anything other than laudable. It is worth bearing in mind, since we sometimes forget, that most scientists are actually very altruistic people; they go into an area of work because they believe that they are going to do some good. They certainly do not want to harm animals, or indeed people. However, there is concern. I have one person in my own lab who refused an area of research because she felt that it was seen publicly as being disreputable; it was felt to be not very acceptable to the public as it involved mice. That individual ended up doing work, which was actually very good science, in a different area of biology that did not involve animals, but it took a long time. That was a typical switch that we often see in young scientists, and I am a bit concerned about that.

Further, as noble Lords will appreciate well, there is the issue of the fear among experimentalists about their risk of being attacked. Unfortunately, not enough of the community are prepared to put their head above the parapet, and we need to do more to encourage my colleagues to stand up and be accountable.

The second issue, apart from the PhD students, is the real issue that it is an important aspect of our economy. I have no doubt that we have to be stringent and careful about how we use animals, and we have to be utterly humane. That is an essential component of any work; certainly, as a doctor, I feel that that is important, just as it would be in treating a patient. As I think my noble friend on this side will say, we in Britain feel that our regulations are probably more stringent than most of Europe, and we are probably far further down the road of being sure that we are running a proper shop in our universities and other laboratories. However, 11% of our GDP comes from manufacturing. Although we are losing some of our great pharmaceutical companies, big pharma and biotech is an important area where we still lead the world, and those companies need animal work. It is fair to say that there is hardly a single drug that any of this in this Room have taken that does not depend on some animal research. The exception would be aspirin and, I think, digitalis, but I cannot think of any others; all the rest will at some stage have had animal research to prove their efficacy, their safety and that their long-term effects were not a problem.

That is one reason why this has to continue, and another is vaccinology. People may say that with modern genetics, reverse vaccinology, where you tailor a vaccine descending on the genome of what you are trying to combat, is the answer, but the modern techniques of making vaccines all use intact animals at some stage, so that also needs to be factored in.

I do not want to go on for too long because it would be wrong to do so, but I just want to draw attention to a couple of other points. First, one of the great areas of medicine which is really advancing and offers hope for better treatment is genetics. There, the greatest single model probably is the modified mouse. That has been a massive advance in the past few years—of course, since the three Rs. Increasingly, we are needing to look at mice whose genes are not working in the way that they would normally work because of cancer or other issues. They are absolutely essential to animal

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research. While we have to make certain that these animals do not suffer undue pain and are humanely treated, it would be unthinkable to allow more patients to die because we are not prepared to look for new drugs that might combat a condition which will kill one-third of the human population of the United Kingdom eventually.

On transplantable organs, I note the directive and its issue on transplantation but we also have to bear it in mind that every 15 minutes around the world someone is put on a transplant list. Most people on a transplant list will not get an organ. For every one person put on a list, there are probably five others who do not even get there. One of the great hopes is still xenotransplantation. The idea that we might not be able to engineer pigs for their organs when they are killed absolutely humanely, and much more humanely than, for example, in farming, is something we need to bear in mind.

We need to be clear in Europe as regards this technology, in which we lead in this country and may want to continue to produce. I have to admit that my company is involved in that technology, so I have a vested interest. I am not speaking because of that vested interest: I believe passionately that it is worth doing.

Let me conclude by arguing that one of the things that we need to do is to get a sense of reality about the three Rs. We need to recognise, for example, that every research university is doing animal research and that we need to have more people putting their heads above the parapet. It would be really helpful if the Government could encourage more public engagement. We note that they had many responses from the public but I suspect that even those came from people with a very narrow view of animal research—either very pro or very opposed to it.

From various polls, including a fairly recent MORI poll, it is clear that most people still do not really understand, first, how stringent and well conducted our regulations are and, secondly, the value of the research that is going on. We should be trying to focus more of our attention on that.

Lord Alton of Liverpool: My Lords, as the noble Lord, Lord Taylor of Holbeach, has told us, these draft regulations are intended to tighten the regulations on the use of animals in scientific research in the less well regulated European Union countries, particularly to improve animal welfare. I declare an interest as I serve on my university’s ethics committee, which oversees any Home Office licences required for such research, which, I might add, is undertaken for all the ethical reasons described by the noble Lord, Lord Winston.

Let me begin by welcoming the tightening of animal welfare legislation that the EU directive requires. I also welcome the instances of more stringent protection of animals in these regulations than is required by the EU directive, particularly the retention of the UK special protection for cats, dogs and horses; I find it surprising that that is not required in the directive.

Before turning to my concerns, perhaps I may pick up on a point mentioned by the Minister when he talked about three Rs—replace, reduce and refine.

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Perhaps when he comes to respond, he will amplify slightly on the question of replacement and to tell us what it is that he thinks that animals, such as the rodents described by the noble Lord, Lord Winston, should be replaced with. The Committee will not be surprised to know that I am particularly concerned about the use of human embryos.

However, during the proceedings on the Human Fertilisation and Embryology Act 2008, the noble Lord, Lord Hunt of Kings Heath, who spoke several times during those proceedings, made abundantly clear what became known almost in shorthand as the Hunt test. If alternatives existed to the use of human embryos, they should always be used. There is potential here for conflict: if they were to be used for replacement for animals, how does that accord with the so-called Hunt test that was used during those proceedings.

My concerns in this legislation to improve animal welfare centre on the importance of ensuring that other areas of legislation therefore do not suffer. There are a number of major concerns about this on which I will ask the Minister for reassurance. I return to some of the questions raised during the passage of the HFE Act, and in subsequent Questions I asked of the noble Earl, Lord Howe, on 20 July 2011. In a Written Answer he confirmed that some 3.1 million human embryos had been created since the passage of the 1990 legislation, and that 1.4 million of those had been discarded. To put it another way, for every baby born by IVF, 30 human embryos are destroyed. In a further reply that day, the noble Earl said that 150 animal/human hybrids had been created over the three years up to July 2011; that is obviously the question that I will centre on in my remarks today. I will also partly focus on replacement, which I referred to. I hope that as he comes to reply today, the noble Lord, Lord Taylor of Holbeach, will be able to tell us what the numbers of animal/human hybrids created in the United Kingdom have been since that was authorised; and also the total number of human embryos that have been destroyed or experimented upon since the passage of the 1990 legislation.

2.45 pm

When the directive which it is the purpose of the legislation before us today to transpose into UK law was passing through the European institutions, serious concerns were expressed that the effect of the directive would be to create an imperative for researchers to conduct experiments on human embryos or human embryonic stems cells rather than animals. I would be grateful if the Minister could therefore provide me with an absolute assurance that this will not be the effect of these regulations. If this were the case, it would constitute a huge departure from the current approach outlined by the former Parliamentary Under-Secretary of State for Health, the noble Lord, Lord Hunt of Kings Heath, when he said that it would be illicit to conduct experiments on human embryonic stems cells when alternatives exist. It would raise huge and deeply concerning questions about the nature of our society if it were to afford lesser protection to human embryos and human embryonic stem cells than to animals. I sometimes jest that perhaps when a

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fox arrives at St Stephen’s Entrance holding a placard saying, “Save the human race”, we might wake up to some of the paradoxes in a society where, after all, 800 million people are wracked by starvation or despair, living below any rational definition of human decency. However, there is a link between these questions of what we do to animals and what we do to human beings. CS Lewis writing passionately against vivisection, said:

“If you begin by being cruel to animals, you will end up being cruel to human beings as well”.

I turn to the licensing of research projects involving interspecies animal/human hybrids and chimeras which may be affected by these regulations. The regulations raise serious concerns regarding the ethical oversight and scrutiny of controversial research involving the creation of such hybrids and chimeras, since the regulations appear to unnecessarily remove some of the existing provision for ethical scrutiny in this area.

Before I detail the alternations in the various levels of ethical oversight and scrutiny that will be brought in by these regulations, in order to communicate the seriousness of any reduction in ethnical scrutiny I will briefly explain why there is such a concern. In some cases it will be clear whether a project licence application to the Home Office involving animal/human chimeras should be regulated under the Human Fertilisation and Embryology Act or under the Animal (Scientific Procedures) Act. However, there are many projects involving animal/human chimeras which may need specialist scrutiny to determine whether legally they should be regulated under human legislation or under the far more liberal animal legislation. Provision for this specialist scrutiny and existing ethical review processes has been airbrushed out of the Act by these regulations. The practical implication of this may be that some animal-human chimeric embryos—which should be classified as human admixed embryos and subject to the Human Fertilisation and Embryology Act, and can consequently not be permitted to develop beyond 14 days or to be implanted—could be classified wrongly under the animal legislation and be permitted to develop beyond 14 days and, indeed, to be implanted.

For example, if a chimeric embryo were to be created by a procedure called tetraploid complementation and implanted, it could result in a substantially or entirely human foetus, with an animal placenta, developing in an animal womb. This may seem like science fiction but it has been carried out since the 1990s in animal research and is considered the gold standard test for embryonic stem cells. Indeed, during the passage of the Human Fertilisation and Embryology Bill, on which I spoke on numerous occasions, it was the subject of amendments in both this House and another place. Since such an embryo would have predominantly animal cells at the early embryonic stage, it might seem to fit naturally under regulation by the Animal (Scientific Procedures) Act 1986.

Noble Lords may remember that during the ping-pong stage, the then shadow Health Minister, the noble Earl, Lord Howe, tabled amendments to ensure that such embryos would be classified under the HFE Act and not under animal legislation. My noble friend Lord Walton of Detchant also expressed concern about human-animal embryos created by tetraploid

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complementation and requested assurance that the wording of the Bill specifically covered these chimeric embryos.

The noble Lord, Lord Darzi of Denham, the then Under-Secretary of State for Health, categorically stated that an embryo created by tetraploid complementation would be classified as a “human admixed embryo”, in the catch-all category that the Government added to the Bill, which is now covered in the new Section 4A(6)(e) of the HFE Act 1990. It would therefore be regulated under the HFE Act, would not be permitted to develop beyond 14 days and would not be implanted. As a result of that absolute assurance from the Minister, the amendments tabled by the then shadow Health Minister, the noble Earl, Lord Howe, were withdrawn

However, it appears that the message did not quite get through to the Home Office. In a recent document published on 14 November, in guidelines emanating from the Home Office, the example of tetraploid complementation is given as one where it is “uncertain” whether such an entity should be regulated under the Animal (Scientific Procedures) Act or the Human Fertilisation and Embryology Act. It is not the best example of joined-up government. If this serious error is made with the current level of ethical oversight then it is abundantly clear that project licence applications and decisions under the Animal (Scientific Procedures) Act 1986 need more ethical scrutiny, not less, as appears to be the case in these regulations.

In order to avoid misclassification of animal-human chimeras produced by tetraploid complementation, I hope that the Minister will ensure that the guidelines published on 14 November, Regulations on the Use of Human Material in AnimalsA Brief Note for Investigators, are republished with a correction regarding tetraploid complementation. Will the Minister also ensure that it is communicated to the new committee and bodies set up under these regulations that human-animal chimeric embryos made by tetraploid complementation would require a licence from the HFEA under Section 4A(6)(e) of the Human Fertilisation and Embryology Act, as stated in the final ping-pong stages of the HFE Bill by the then Under-Secretary of State for Health, the noble Lord, Lord Darzi of Denham? I cite Lords Hansard of 29 October 2008, col.1624.

Further examples of animal-human chimeras requiring specialist scrutiny would be those where human embryonic stem cells are inserted into an animal embryo and where the human cells may then produce any cell type in the resulting chimera, if implanted, including human brain cells or human gametes—egg and sperm. Various scientific modifications to such an embryo could result, for example, in a substantially human brain. Other concerns have been raised that chimeras might possibly have developed human gametes and might inadvertently be allowed to mate.

Up to now there have been three different levels at which ethical scrutiny of animal-human chimeric project licence applications could take place. I turn to the alterations in these different levels of ethnical scrutiny that will be brought into effect by the regulations before your Lordships today. First, there is the Animal Procedures Committee, an independent body that was set up under Sections 19 and 20 of the Animal (Scientific

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Procedures) Act 1986, which advises the Home Office on matters relating to the Act. Any project licence application concerning ethically contentious issues such as human-animal chimeras are passed on to it for scrutiny.

Home Office guidance states that project licence applications will be referred to this committee if they are,

“applications of any kind raising novel or contentious issues, or giving rise to serious societal concerns (for example, any application involving the genetic modification of non-human primates or embryo aggregation chimaeras involving dissimilar species)”.

However, this committee will no longer exist after 31 December. The regulations will replace it with the Committee for the Protection of Animals Used for Scientific Purposes, whose statutory ethical remit is limited to animal welfare. Specifically, it says:

“The Committee must provide advice to the Secretary of State and the Animal Welfare and Ethical Review Bodies on such matters relating to the acquisition, breeding, accommodation, care and use of protected animals as the Committee may determine or as may be referred to the Committee by the Secretary of State”.

This is very disturbing, since the Animal Procedures Committee has scrutinised the most controversial project applicants. Moreover, the Home Office expressly acknowledges that this amounts to limiting the scope from the Animal Procedures Committee that went before it. Paragraph 167 of its consultation on options for the transposition of European Directive 2010/63 states:

“These functions are in some respects similar to those of the Animal Procedures Committee (APC) set up under ASPA sections 19 and 20 to advise the Secretary of State on matters relating to ASPA and its implementation. They are, however, more narrowly focused on animal welfare issues than is the case with the APC, which also considers wider ethical issues”.

I should therefore like to ask the Minister, after the regulations come into force, what processes will replace the existing ethical scrutiny of controversial project licence applications involving animal-human chimeras that to date have been provided specifically by the Animal Procedures Committee. Who, or what body, will take over this role, if any? Until now another level of ethical scrutiny has been at the level of local ethical review processes, or ERPs. These ERPs function locally, for example at universities. Their functions include scrutinising project applications before they can be submitted to the Home Office. This pre-authorisation procedure may include commenting on ethically controversial project applications. However, the regulations before us establish new animal welfare and ethical review bodies. Despite being called animal welfare and ethical review bodies, their statutory ethical remit is limited to animal welfare. They will apparently replace the existing local ethical review processes, and I would be grateful if the noble Lord will confirm that. That is despite the Home Office consultation of June 2011, in which paragraph 165 highlights concerns in some quarters that adopting the minimal requirements set out in Articles 26 and 27 of the EU Directive for Animal Welfare bodies might,

“result in less extensive ethical and other consideration of scientific procedures”.

Indeed the Government’s response of May 2012 confirmed:

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“The requirements for local Animal Welfare Bodies are less stringent than those relating to the operation of local ethical review processes in the UK”.

It particularly highlighted that,

“Fewer persons are involved (in theory in some places a minimum of two might suffice)”,

and that,

“there are fewer functions (for example no involvement is required in the pre-authorisation phase of project authorisation)”.

Ethical review processes are currently required to review project applications before they are submitted to the Home Office. This is not a role of the animal welfare body under the new regulations. Thus the additional level of ethical scrutiny that has been in place until now will be abolished by these regulations. I therefore ask the Minister why the Government chose to transpose the minimum requirements into law, resulting in less extensive ethical considerations of scientific procedures than hitherto? Who, or what body, will take over the function that the local ethical review processes have had up until now in providing the additional level of ethical scrutiny of controversial research projects before submission to the Home Office? Will this additional level of ethical scrutiny, as it appears from the regulations, be removed?

The third level of ethical oversight has been the Home Office inspectorate. However, those inspectors, under Home Office guidelines, have referred any ethically controversial project applications involving animal-human chimeras that they receive to the Animal Procedures Committee for detailed scrutiny. Noble Lords will have noticed that, as I described, that committee is being abolished by the regulations and will no longer exist after 31 December this year. It will be replaced by the Committee for the Protection of Animals Used for Scientific Purposes, whose statutory remit does not extend to ethical scrutiny of such projects and which will, by the Home Office’s own admission, have a narrower animal welfare remit.

3 pm

I turn to the question of official guidelines, the need for which has been rendered all the more important because the regulations restrict the ethical remit of the national committee to animal welfare matters. Will the Minister ensure that the department makes a firm commitment to incorporate into official guidelines three things? First, there is the clarification of the boundary between the Human Fertilisation and Embryology Act 2008 and the Animals (Scientific Procedures) Act 1986, as given on 29 October 2008 by the then Under-Secretary of State for Health, the noble Lord, Lord Darzi of Denham. That provides that any embryo that might, even for a short time, be predominantly human, would require a licence from the HFEA. That includes, but is not restricted to, chimeras created by tetraploid complementation; any embryo whose cells might develop, whether fully or partially, a human brain, even though the human cells were less than 50% of the entity; and, thirdly, any other embryo that might develop a predominantly human function.

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Secondly, I hope that the Minister will also take into account categories 2 and 3 of the Academy of Medical Sciences recommendation of June 2011 regarding animals containing human material, calling for specialist scrutiny of certain categories of project application, for example, animal-human chimeras that might have human-like brain functions, that might develop human gametes—eggs and sperm—and for the restriction of the creation of certain animal-human chimeras. Thirdly, I hope that the Government will further consider approving additional recommendations by the Scottish Council on Human Bioethics, which I would be happy to communicate to the Minister, regarding chimeras where human cells could contribute to the germ line or to the brain.

Finally, it is a matter of great urgency that we hear from the noble Lord, Lord Taylor of Holbeach, today what processes will replace the existing ethical scrutiny of controversial project licence applications involving animal-human chimeras which, at this time, have been provided specifically by the Animal Procedures Committee and by the local ethical review processes, but which is not covered by the terms of reference of the new Committee for the Protection of Animals Used for Scientific Purposes and the new animal welfare and ethical review bodies, as set out in the regulations. Moreover, who will decide whether ethically contentious animal-human project applications are granted licences?

It seems odd that in 2012, when there is greater pressure for controversial animal-human projects than was ever the case in 1986, the Government should amend their 1986 legislation, rendering it less capable of robustly dealing with the ethics of this challenge. I know that it has been said that this Government like to adopt a minimalist approach to directive implementation in the interests of preserving our sovereignty, but it seems very odd that we should use the directive as an excuse needlessly to weaken provisions of our sovereignly chosen legislation—legislation that, I might add, was introduced by the Conservative Government.

I hope that the Minister can provide some robust reassurances. If he cannot, I must press him urgently to introduce further amending regulations to ensure that the remits of the Committee for the Protection of Animals Used for Scientific Purposes and animal welfare and ethical review bodies are not narrowly restricted to animal welfare and can properly engage with animal-human combinations, including project applications of any kind raising novel or contentious issues or giving rise to serious societal concerns, including animal embryo aggregation chimeras.

Lord Wills: My Lords, like my noble friend Lord Winston, I am grateful to the Minister for the care and trouble that he took in setting out the Government’s approach to the regulations, which I think will be generally welcomed. I shall ask him about a number of issues which will, in my view, determine how well the regulations work in practice. It is important that they work well because, as we have just heard from the noble Lord, Lord Alton, this area of public policy involving research involving experiments on animals is highly contentious. A wide range of ethical and philosophical considerations are in play. There are

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passionately held beliefs on all sides, and, as we have heard from my noble friend Lord Winston, it applies in fields of scientific research which are developing extremely fast.

We have had a flavour of that today in the speeches that we have just heard from my noble friend Lord Winston and the noble Lord, Lord Alton. The Government hold the ring in balancing all these competing views. That is a critical role because, if the public believe that animals have been cruelly treated or that there is no measurable benefit from the experiments being carried out on them, then their support will be withdrawn from the scientific and medical research that is currently being conducted using animals, and potentially invaluable research will be lost.

In that context, I have a number of questions for the Minister. The work done by Home Office inspectors is essential to maintaining and improving standards of animal welfare in experiments. This is not unnecessary regulation and bureaucracy; it is the vital guarantor of the highest standards of animal welfare in experiments. In that context, I would be grateful if the Minister could confirm whether in the past three years there has been a decline in the number of Home Office inspectors, the number of visits that they make and the number of contact hours. What projections is the Home Office making about any further such declines?

I turn to the question of guidance, which clearly will be crucial to the way in which these regulations are implemented. The Minister mentioned that the guidance is going to be published in January but, as he will be well aware, these regulations come into force on 1 January, so it is obviously important that there is no further slippage in the publication of the guidance. I would be grateful if he could give the Committee reassurance to that effect today.

The directive includes a requirement for a national body to co-ordinate and fulfil various functions. The noble Lord, Lord Alton, has already mentioned the end of the Animal Procedures Committee, which I understand has now met for the last time. So far as I am aware, there is no new national body ready to be put in place, so I add my voice to that of the noble Lord in asking the Minister to give us a few more details about this national committee—when it is going to be in place, what the membership will be and, in particular, its remit.

I want to raise two issues with the Minister that in my view are fundamental to the successful implementation of these regulations and the successful management by the Government of this important area of public policy. Transparency is critical to good governance. As I understand it, the Government have accepted that the directive requires the reconsideration of Section 24 of the Animals (Scientific Procedures) Act 1986. Amending the section so that it does not apply to disclosures in response to requests under the Freedom of Information Act would increase transparency. That would mean, for example, that someone leaking information for commercial gain or to assist extremists would still be committing an offence, but that if an FOI request went to the Home Office, it could release that information so long as other relevant exemptions did not apply. Those exemptions, in my view, should

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be sufficient to protect legitimate interests such as health and safety, the locations of animal experimentation, the privacy of names and addresses of researchers, breach of confidence and any genuinely commercially sensitive information. When I raised this issue in your Lordships’ House a year ago, the Minister’s predecessor said that the Government would,

“consider how we might adapt Section 24 of the 1986 Act—the statutory bar to disclosure—to enable more information to be disclosed, again ensuring that proper safeguards are included”.—[

Official Report

, 24/10/11; col. 632.]

I would be grateful if the Minister could set out today what the outcome of those considerations has been, recognising that the longer that such action is delayed, the more concern is likely to grow about the maintenance and enhancement of standards of inspection and care of laboratory animals, and that is something that no one wants to see.

Beyond the directive and its implementation by these regulations, there remain fundamental questions about the use of non-human primates in experiments. As the Minister will be well aware, this area gives rise to particular public concern, notwithstanding the welcome protection that the Minister has already mentioned for great apes.

The Weatherall report was published in 2006. It argued for a national strategic plan for the use of such animals in experiments. I would be grateful if the Minister will tell the Committee what progress has been made in drawing up such a plan. When I raised this issue in your Lordships’ House a year or so ago, the Minister’s predecessor suggested that there had been no such call in the Weatherall report. He and I then embarked on a long and fruitless wrangle about what the report actually said, which concluded when I drew the Minister’s attention to page 140, in the chapter headed “Conclusions and Recommendations”, that states:

“All the stakeholders involved should work together in formulating a national strategic plan for non-human primate research”.

I hope the Minister will avoid another theological wrangle about what precisely the Weatherall report recommended and just let the Committee know today what progress has been made in the formulation of such a plan and what the Government intend to do to ensure that another six years do not elapse before such a plan is formulated.

I look forward to hearing answers from the Minister to all these questions.

Baroness Smith of Basildon: My Lords, I hope that the Minister takes from this debate that there is a significant welcome for the way he introduced his comments today and the great care he took when going through a number of the issues, some of which have been raised by noble Lords.

These are hugely significant regulations. I say at the outset that the Labour Party welcomes the introduction of the EU directive, although the key to the regulations is in the detail that will come though the codes of practice due to be published in January 2013. Will the Minister give an update on when they will be available because we are very close to January, and we would not want to be in the position we have been in with

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other issues in the Home Office when documents have been delayed? The noble Lord is smiling and nodding his head, which indicates to me that they will be ready in January, but I hope he can confirm that because this guidance and those regulations are crucial.

I am grateful to the RSPCA, FRAME and the BUAV for the information and technical briefing they have provided. As welcome as the directive is, there are some areas of concern, some of which the Minister has already referred to, which was very helpful. The main area is ensuring that the higher standards we have in the UK do not drop as a result of the directive coming into force. Under the rules of directives, higher standards cannot be implemented after a directive comes into force unless they are already within national legislation. There are a number of situations—the use of primates has been mentioned—where we have stronger and better regulations than those in the directive as a whole. I shall come back to some of them in a moment.

The number of animals being used in experiments in Great Britain has been steadily increasing for a number of years. It reached 3,700,000 in 2011, which is higher than at any time in the past 25 years. Despite the concerns of my noble friend Lord Winston, who referred to the three Rs, we support the pledge within the coalition agreement to,

“work to reduce the use of animals in scientific research”.

This revised directive—which many feel to be an improvement on the earlier draft—was published after eight years of discussion throughout Europe. The clear intention is not just to improve standards throughout the EU but to harmonise standards across member states. However, the UK already has a good law in this area: the Animals (Scientific Procedures) Act 1986. The Government and the research community have often commented on how well regulated animal research is in the UK.

3.15 pm

Much of the directive is modelled on our own legislation, which is welcome. If implemented properly, that will result in better provision for laboratory animals in many European countries. However, I still have some concerns, although I appreciate that the Minister did his best to allay them by giving us some specific examples of where we have higher welfare standards in the UK and will maintain them. I shall mention some other examples, and if the Minister can reassure us on them, that would be very welcome.

A comment was made in government that taking advantage of the higher welfare standards in the UK could be seen as “gold-plating” in some circumstances. In some ways that is contradictory, and I hope that perhaps those government comments were a mistake. If maintaining those standards is allowed, then it is allowed and should never be viewed as gold-plating.

Another issue that I will touch on has already been mentioned by my noble friend Lord Wills: the reduction in funding for the Home Office inspectorate and the move towards the decentralisation of controls, transferring more responsibility from the Home Office to the local establishment. There is a lot of concern, particularly from the RSPCA, that the comment about gold-plating—although I hope to get reassurances on that—and

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the reduction in the funding for the inspectorate could mean a serious lowering of the standards of regulation of animal experiments in the UK, which no one wants to see. Will the Minister confirm—actually, I think he has—that, wherever possible, UK standards are and remain higher than those in the directive?

There are often two sides in any debate about animal experimentation, and it is encouraging that calls from both sides in this debate—animal welfare groups, including the RSPCA and the BUAV, and the UK Bioscience Sector Coalition—agree that it is essential that there are clear, robust and unambiguous guidance documents and codes of practice. If the Minister could give some indication of when we are likely to see them, when they will be available and how they will be implemented, that would be extremely helpful.

I have some specific concerns. The Home Office inspectorate has an extremely important role in advising on licence applications and best practice, as we have heard from noble Lords, and participates in expert working groups and conferences, as well as inspecting establishments for compliance, and is held in high regard for doing so. Can the Minister give us an assurance—my noble friend Lord Wills raised this point—that the directive and the budget cuts that we are seeing will not result in any cuts in the type and frequency of inspections? Inspections should remain at a high level because, as the Minister understands, all the regulations and directives in the world are only as good as the inspections that underpin them.

The noble Lord, Lord Alton, referred to the ethical review process. The Minister will be aware that the ethical review process has defined aims, functions and membership, as set out by the Home Office. The ERP has been in existence for more than 10 years and in that time has been shown to raise standards of welfare, science and ethical review and to improve the local culture of care. It is frequently referred to by the Government, major research funders and individual research establishments when answering questions regarding public accountability with regard to the use of animals.

However, as we have heard the directive requires only an animal welfare body. Compared with the ERP that we already have in the UK, that has a more limited remit and a reduced membership. The Home Office has stated that establishments will be able to choose to maintain their ERPs, but it will not be mandatory because that would be considered to be gold-plating. That is at odds with the regulations, which state that we can continue with higher standards if they are already in place, so I do not understand why we have to lose the ERPs. If it is possible but not mandatory, what does the Minister think will happen? Given the widespread support that the ERPs have across the board, including from the research community, removing them would damage animal welfare and research. Not only that but, throughout this debate, we have heard from noble Lords about the importance of public confidence in the system. ERPs are an important part of establishing and maintaining that public confidence. If we are to lose them for a much smaller and reduced body, which does not have the

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same remit, that would be a very serious step for the Government to take and not one that any of us will welcome.

The Minister was very helpful in his opening comments about those areas where the Government will maintain the existing UK standards and not see a reduction to the directive. I am grateful to him for that. However—I hope he will correct me if I am wrong—I think he said “in most areas”, not in all areas. I am trying to get to in which areas the Government are not going to maintain the higher standards, of which the ERP seems to be one. One area pointed out to me by the RSPCA was inhumane killing methods. I understand that there is an annexe to the directive that sets out the approved methods of killing animals. The RSPCA tells me that it is badly thought through and includes techniques that concern the public—they certainly concern me—and cause avoidable suffering. For example, very young puppies and kittens could be killed by a blow to the head and an adult bird the size of a sparrow could be decapitated. I hope that is not being transposed into UK legislation, as it is something on which we would want to maintain higher standards. A UK schedule of methods of humane killing, which has been welcomed and accepted, has been in existence for a number of years. Surely that is the schedule that we should be using. Can the Minister confirm that the annexe is not being transposed but that the UK schedule of approved and humane killing methods is being retained? That would be extremely helpful and very welcome.

Another issue is primate use. I am grateful to the Minister for making it clear that we will maintain our policy on great apes, which is welcome. Can the Minister confirm that the current Home Office policy ban on the use of all non-human primates will continue after the directive? Does his department currently ban the breeding and/or keeping of great apes and, if so, does it intend to maintain such a ban?

Another issue that has been raised is lower standards of care and accommodation. This, again, is in an annexe to the directive, which sets out minimum mandatory standards for animal accommodation and care. The noble Lord did not mention this in his comments, although that may have been an oversight, as I am sure he did not mention everything in the directive. The advance in accommodation and care has been hard fought throughout Europe and has been very welcome. However, in some cases, it is lower than the current UK standards. Cage or pen sizes for dogs, for example, have been revised to reduce the space from 4.5 square metres to 4 square metres per dog, cage height for rats has been reduced, and the essential text that sets the tables in context and provides information on how to provide a good environment for animals in care has not been included. If the Minister can say something about that and assure us that the UK’s higher standards are being maintained, that would be helpful.

The issue of transparency has already been mentioned, in terms of public confidence. The revised directive before this Committee requires projects to include a non-technical lay summary for publication in the public domain, which for many of us would be very welcome.

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A retrospective assessment must be carried out on the actual numbers of animals used, the level of suffering and whether the objectives of the project were achieved. Both aspects are important and will improve transparency, but are subject to quite serious limitations. Member states may waive the requirement for a lay summary for some regulatory toxicology studies and the requirement for a retrospective assessment may be waived for projects that involve procedures classified as mild or non-recovery if they do not include primates. However, those experiments can still involve suffering and a large number of animals—if they did not, they would not be regulated. If the Minister is able to give some reassurance on that, that would be welcome.

My final point is on the Animal Procedures Committee. It is very disappointing to hear that that body has met for the last time. The uncertainty about what is going to replace it gives enormous cause for concern. It is held in high regard and I thought there was some discussion about the APC continuing. If those discussions have not moved forward and the APC is not able to continue—my latest information is that it will not—it would be extremely helpful if there is a body that replicates it and does a similar job, even if it is not the APC itself, which most of us would prefer to see retained. If the Minister could say something about that regulatory system, that would be truly helpful.

I hope that the Minister understands that, although the directive is welcome, there are concerns that we must retain the standards that we currently have in the UK, ensuring that there is no slippage. Perhaps he can double check and tell me today—or, if not, write to me—whether there is any area under the directive where we will not be maintaining our high UK standards, other than the one I mentioned.

Lord Taylor of Holbeach: My Lords, this has been a very productive debate in the sense that I have an enormous amount of paper in front of me. I hope that noble Lords will be patient, because if I can give answers, I will certainly try to do so.

I am very pleased that there has been a general welcome for the transposition. I am the Minister in the Home Office for this subject and also the Home Office Minister for transparency, and I think that there is a link between the two. We all recognise some of the difficulties that the industry and profession of animal experimentation has in communicating ideas to the public. What pleased me about a meeting I had the other day with the Society of Biology was the real willingness of scientists to recognise the need to communicate beyond their peer group, and even beyond those people who have a special interest in this area, to the public at large. I am sure that we all recognise that as being very helpful. It would help us; it would help the cause of animal experimentation; it would help drive the high standards that we have in this country.

It is a delight to hear from the noble Lord, Lord Winston, because no one is more informed than he is about some of these specialties. I am delighted that he was able to attend the debate. He asked me a number of questions, and I will do my best to answer them. I hope that noble Lords will prompt me if they feel that I might be able to communicate a bit more information, if not today, in writing afterwards.

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Our position as a Government is that we understand that it is important to maintain our competitiveness in this important area of science. Science is an important industry in this country. We have centres of excellence which are of global standards and it is quite right that we do not put ourselves at a disadvantage to our competitors. The noble Lord mentioned that some animal experimentation is bound to be necessary, because non-animal models are not always good alternatives. He went into the reasoning behind that. I do not disagree. I think that it is essential to choose the right methods. We do no service if we do not examine that, and the regulations recognise that alternatives must be scientifically sound if they are to be used rather than animal experimentation. There is no point in trying to do it in an alternative way if that does not support the science that we are seeking to explore.

The noble Lord also mentioned the attractiveness of animal use for students and the importance of attracting high-quality PhD students to work in this area. We welcome the scientific community’s recent public commitment to the need for animal research. This will help improve public confidence in the way in which this work is done.

3.30 pm

The noble Lord also asked about xenotransplantation. We agree that there is a place for live animal research to contribute to progress in solving issues for successful transplantation; it is an important area in which the noble Lord himself has considerable experience. We recognise the importance of GM mice in medical research, too, and agree with the noble Lord that the new regulations require severity to be the issue. This will help inform the public that for many of these animals there is little or no suffering and yet the research can be extremely valuable. The severity test and the reporting required on that will be one of the most dramatic changes in informing public opinion over the next few years. I hope that I have been able to reassure the noble Lord that we take his concerns seriously.

The noble Lord, Lord Alton, and I spoke informally before the Committee reassembled. I say to him at the outset that some of the areas on which he is engaging and challenging where we stand are extremely complicated. The boundaries between human embryology and animal procedures blend at a certain point of science, as he rightly pointed out. I would welcome the opportunity of talking to the noble Lord in the company of officials to see where these pinch points are. We clearly have a responsibility across government, with the Department of Health being responsible for human embryology regulation, and we want to make sure that the two regimes work properly together.

The noble Lord asked whether the application of the principle of replacement could result in research on human or human admixed embryos being preferred, or required, in place of research on animal embryos, and whether that might take precedence over the conditions for granting licences under the Human Fertilisation and Embryology Acts. Under the Animals (Scientific Procedures) Act 1986, we cannot license work involving protected animals if there is a non-animal

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alternative. However, there is no power in the 1986 Act to require the work to be carried out under an alternative method. It would be for the HFEA to deal with anything that involved human embryos. There is therefore no risk of that drive occurring.

The noble Lord asked why we had not regulated within the animal regulations to cover this transgenic work involving humans. It would be inappropriate to include such measures in these regulations, which are made under specific powers in Section 2(2) of the European Communities Act. The ECA powers cannot be used to legislate for anything not required by EU obligations. We do not think that there are any outstanding EU obligations relating to the issues that the noble Lord raised that come within this directive. I reiterate that we can investigate this when we have our meeting.

The report by the Academy of Medical Sciences classified admixed embryos. There are three basic categories. Only category 1 experiments are currently being authorised under ASPA. The concern described by the noble Lord might occur only under other categories. If anything occurs outside the scope of HFEA, it must be considered by the Animals in Science Committee created under these draft regulations. Approval will be given only following careful consideration and in consultation with HFEA. I hope that gives the noble Lord some reassurance that there is a proper dialogue between the two ethical committees involved.

The new Animals in Science Committee is being set up. I authorised the advertisements for it only the other day. It will be comparable with the existing committee. Although there is a change, it will broadly cover a similar level of policy. Any novel or contentious project applications will be submitted to the new committee for independent advice on ethical issues.

The noble Lord, Lord Alton, asked about guidance on these issues. The guidance will make clear that the functions of the new animal welfare and ethical review bodies will be similar to those previously performed by the ethical review processes. We envisage the membership being very similar and will expect them to carry out ethical reviews of proposals from a local perspective. The decision on whether projects should be authorised will be taken by the Secretary of State, as is currently the case, with advice, including ethical advice, from inspectors and the new Animals in Science Committee.

The noble Lord, Lord Alton, asked about chimeras with brain, eggs and sperm, and we share his concern about those developments, but they fall into categories 2 and 3, which I mentioned earlier, and would not be permitted without very serious and careful consideration by the Animals in Science Committee in association with HFEA.

The noble Lord, Lord Wills, was very kind in his remarks. He asked, in particular, about the work being done by the inspectorates, and I have an answer. There has been a reduction in the number of inspections, which reflects the fact that there are fewer locations in which this work is being carried out and a greater risk-based approach to managing the inspections. We do not believe that there is any reduction in the efficacy

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of these inspections. In fact, we think that adopting a risk-based approach has produced a better outcome in terms of the quality of inspections.

The noble Lord also asked about guidance. There is already some guidance in place. We anticipated these regulations and have given draft guidance, although it is not the full guidance, which will be available in January. I think I mentioned that in my opening remarks. As a former Minister, he will know that one always takes a risk whenever one mentions a date; but I take that risk, confident that the team that works on this in the Home Office is one of the best teams that the department possesses. I think that anyone who has dealt with it recognises that it is very committed to ensuring that we maintain standards.

The noble Lord, Lord Wills, asked about secrecy. Having said that I am in favour of transparency, I have to say that I am still in favour of maintaining some control over it in this area at this stage. Our consultation revealed no clear consensus on whether the provisions of Section 24 should be repealed and replaced, and we need to give that further thought. Opportunities may exist for some modification of the current provision.

Lord Wills: Would the Minister be prepared to meet me on that one point? Discussion about Section 24 has been going on for a very long time and, in my experience, there are always people opposed to transparency in every area of public life. I would very much welcome the opportunity to have a further exchange of views.

Lord Taylor of Holbeach: Certainly, and I hope that we will be able to arrange that in the new year. I think that that is realistic; we have few days left this year; but I am happy to do that. We might also discuss the Weatherall report and the primates strategy. We agree that it is important that the use of primates in research is appropriately monitored. We have made that clear in everything that we have said. We keep the Weatherall report under consideration at all times, but I cannot give a progress report. Perhaps by the time we meet, I might know the answer to the question about page 140. I will try to find it.

I move on to the comments made by the noble Baroness, Lady Smith. They joined up with the points made by the noble Lord, Lord Wills. I made it clear that the Animal Sciences Committee is being set up. It will be very similar to the previous committee, but we wanted to create a new committee and the directive requires us to have such a committee. As I said, we have recently advertised for a chair and members, including a member with expertise in ethics.

I have dealt with the question of timing. I have dealt with the guide. The noble Baroness, Lady Smith, was particularly interested in knowing in which particular areas standards have not been maintained or transposed. We are retaining all the higher UK standards in every case where it will ensure better animal welfare. If she feels that that is not the case in particular instances, I should be very grateful if she would let me know. That is certainly the objective.

Baroness Smith of Basildon: That is extremely helpful; I am grateful to the noble Lord. One of the specific instances I mentioned in my comments was about

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annexes to the directive on humane killing. I do not expect him to answer that today. I take the point that he has made, but if he could write to me on that, that would be helpful.

Lord Taylor of Holbeach: I can answer it today, because I have the answer here, I hope. We are not transposing Annexe 4 as it stands. We are amending our current ASPA Schedule 1 to retain more humane methods. There is no question of clubbing kittens or chopping the heads off sparrows. I can assure the noble Baroness that we will maintain those higher standards.

There is a clear commitment to prohibit the use of great apes; I think that I made that clear at the beginning, and that continues. We also agree that the current high cage and enclosure sizes are good for welfare, which is why we have maintained all those standards in the transposed regulations.

3.45 pm

Lord Alton of Liverpool: Just before the Minister completes his remarks and sits down, I thank him for the offer of a meeting to discuss issues such as tetraploid complementarity and the other complex questions that he alluded to. Before that meeting takes place, would it be possible for his officials to prepare a note answering some of the specific questions that I put to him? For example, I raised the number of animal/human hybrid embryos that have been created; there were over 150 when I last tabled a Parliamentary Question about them. That kind of information would be very helpful in advance of the meeting that we are to have.

Lord Taylor of Holbeach: If I understand the noble Lord correctly, he indeed asked a question about actual numbers. I do not have them to hand but I am sure that they are available, and if we do not have them we will see if the Department of Health does. We will do our best to inform the discussion that we are going to have with a certain amount of preparatory work on the questions that he has raised.

Baroness Warnock: Before the Minister finally sits down, I would like to raise a question about the numbers that were just mentioned. Does the Minister think it possible to persuade the Home Office to classify the numbers that are published under headings not just of severity but of the purpose of the experiment? We are constantly told that the number of experiments is rising but the document admits that many of them cause no pain at all and are to do with breeding rather than experiments in the normal sense. In the days of the pre-1986 committee, repeated efforts were made to get the publication classified by purpose as well as severity, and I do not know whether that is still a possibility.

Lord Taylor of Holbeach: That is certainly something that we are considering. One of the advantages of being able to assess severity as well as numbers is that there are new opportunities for presenting the figures as well as in overall number terms. I do not think that that was quite the question that the noble Lord, Lord Alton, was asking, but I am grateful for the noble

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Baroness’s question because it has given me the chance to say that the way in which we present the numbers is something that we are looking at.

I am sorry that this has taken quite a long time, but it is an important aspect of an important issue and public interest is considerable. I hope that I have covered all the points but we will review the debate and see if there are any that I have not. Meanwhile, I commend the regulations to the Committee.

Motion agreed.

Scotland Act 1998 (Modification of Schedule 5) (No. 2) Order 2013

Considered in Grand Committee

3.50 pm

Moved by Lord Wallace of Tankerness

That the Grand Committee do report to the House that it has considered the Scotland Act 1998 (Modification of Schedule 5) (No. 2) Order 2013

Relevant document: 11th Report from the Joint Committee on Statutory Instruments

The Advocate-General for Scotland (Lord Wallace of Tankerness): My Lords, I will provide the Grand Committee with a brief summary of what this order seeks to achieve. The order is made under Section 30(2) and (4) of the Scotland Act 1998; in other words, it is a Section 30 order, like that which seems to have dominated much of the political discourse in Scotland over the past 12 months, but not the same one. Section 30(2) provides a mechanism whereby Schedule 4 or Schedule 5 of the Scotland Act can be modified by an Order in Council, subject to the agreement of both the UK and Scottish Parliaments, while Section 30(4) enables the modification of other enactments where that is considered necessary or expedient in connection with other provision made by the order.

This order will amend Section F1 in Part 2 of Schedule 5 to the Scotland Act 1998, which I shall refer to as the social security reservation. It will also give certain pre-existing devolved enactments—those conferring functions on Scottish Ministers or local authorities—effect as if this new version of the social security reservation had been in place when those enactments were passed or made, rather than the version of the social security reservation that actually existed at that time.

The Welfare Reform Act 2012, which I will refer to as the 2012 Act, contains provision to abolish the discretionary Social Fund. It is the intention of the Department for Work and Pensions to commence Section 70 of the 2012 Act from 1 April 2013, subject to certain savings and transitional provisions. Thus, community care grants and crisis loans for living expenses will be abolished from that date.

Although no provision for any assistance to replace community care grants or crisis loans for living expenses is provided within the 2012 Act, it is the UK Government’s

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policy that the new assistance will be delivered in England using existing powers in the Local Government Act 2000 and that it will be for the Scottish and Welsh Governments to decide on what new assistance will be provided in Scotland and Wales respectively.

However, the social security reservation means that the Social Fund and all its elements are reserved to the UK Parliament. Therefore, new arrangements cannot be legislated for, or indeed provided for, by the Scottish Parliament or Scottish Government within their existing competence.

This Section 30 order will provide a new exception to the social security reservation to widen the legislative competence of the Scottish Parliament so that it can provide newly created assistance to those members of the community in Scotland who might previously have applied for a community care grant or crisis loan for living expenses. Payments made out of the Social Fund will remain reserved, as will other existing social security benefits.

Although in the future the Scottish Government may decide to legislate to provide new assistance to those members of the community through primary legislation, it is the current intention of the Scottish Government that local authorities should provide newly created assistance for an interim period of two years. To provide this assistance, those authorities will use their power under Section 20 of the Local Government in Scotland Act 2003, which is known as their power to advance well-being. However, Section 20 of that Act, as it was enacted by the Scottish Parliament, does not presently give local authorities a power in an area for which the Scottish Parliament could not legislate when the 2003 Act was passed. There may also be other Scottish ministerial or local authority functions that are relevant to the exercise of the new area of devolved competence that similarly need to be expanded. We therefore believe it expedient to modify any relevant devolved enactments made prior to this order to enable the Scottish Ministers and local authorities to use such functions to provide this new assistance. My Lords, this order makes that modification.

I assure noble Lords that funding is being transferred from the Department for Work and Pensions to the Scottish Government to allow that this new assistance be provided. Based on figures provided by the Scottish Government, set-up funding of just over £2 million has been agreed between the two Governments. Agreement in principle has been reached and we expect the transfer of these set-up funds to be completed shortly.

Within the current spending review, the Department for Work and Pensions has been allocated £178.2 million for the discretionary Social Fund. This allocation will form the programme funding for the new provisions in England, Scotland and Wales, with £178.2 million per annum being apportioned nationally. In 2013-14, programme funding of just under £24 million and administrative funding of just over £5 million—which includes funding for processes that may be put in place locally to review individual awards of funding— will be transferred to the Scottish Government. In 2014-15, programme funding of the same amount and administrative funding of just over £4.5 million will be

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transferred. A settlement letter outlining the indicative allocation was issued to the Scottish Government on 6 August 2012.

This Section 30 order is necessary as a result of the 2012 Act and the UK Government’s policy that it is for the Scottish Government to decide what new assistance will be provided in Scotland following the commencement of Section 70 of the 2012 Act on 1 April 2013. This order demonstrates the Government’s continued commitment to work with the Scottish Government to make the devolution settlement work. I hope that the Committee will agree that this order is an appropriate use of the powers in the Scotland Act. This draft order was debated in the House of Commons on 11 December and was subsequently approved on 12 December. The draft order was also debated in the Scottish Parliament on 11 December, where the Welfare Reform Committee resolved to recommend the draft order to the Scottish Parliament. I commend the order to the Committee. I beg to move.

Lord McAvoy: My Lords, once again I thank the Minister and his staff for the admirable help and support that they have given me in looking at this legislation. My admiration for the noble Lord’s organisational abilities is somewhat dented this afternoon because he was not able to get the order higher up the Order Paper. In addition, he does not seem to have arranged heating in this Room. I will move rapidly on.

This order is a result of the Calman commission set up by the Labour Government to look at further areas where devolution could be brought in. The Minister has explained it perfectly well and I have no intention of repeating all that. However, I have a couple of questions; perhaps, as an amateur at the Dispatch Box, I will ask the wrong questions but, as ever, I will try to work it out.

The noble Lord said, if I picked it up right, that £178.2 million was a proportionate share. Is that a Barnett-formula proportionate share? What is the connection to the money that has been spent in Scotland so far? Is there any relation in the Barnett formula calculation to the calculation of how much will be paid out? If there is a difference in one, it would therefore seem to be cash-limited. Is it that every case will be looked at, or that once the money is finished the allocation is finished? Does that mean that no more cases can be looked at?

We are in a rather fluid situation in Scottish political life at the moment because of the forthcoming referendum. Maybe my mother well named me “Thomas”—I do not know—but what guarantees are there that the cash transfer to the Scottish Government will be spent on these matters? In addition, is there any way that the Scottish Government can tamper with the money that has been allocated notionally—and hopefully practically—for local authorities in Scotland and not give them their full allocation? Local authorities in Scotland have quite justified concerns about how the Scottish Government allocate money to them. We dearly need to know whether there is any way, once the money is passed over to the Scottish Government, that we in Westminster have any avenue or platform with which to raise concerns. I may be chasing a hare that is not running, but if the Scottish Government do not

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provide all that money straight to their local authorities for the set-up costs, is there anything that we here can do about it? Were these safeguard issues discussed for the integrity of the money being spent for the purpose that we at Westminster are allocating it? Was there any mention of these two or three questions—on the finance, the proportion and how it is to be monitored, and safeguards to ensure that local authorities get all the money that is meant for them—during these discussions?

4 pm

Lord Wallace of Tankerness: My Lords, I thank the noble Lord, Lord McAvoy. Like me, he may have transport to catch to get back to Scotland. I think that I am just about all right at the moment, but I hear the point that he makes.

The noble Lord’s first question was about funding. I apologise if I did not make it clear but the position is that there has been a total of £178.2 million allocated for the discretionary Social Fund. That allocation for programme funding has been carried forward for the new provisions in England, Scotland and Wales. Therefore, the total for England, Scotland and Wales is £178.2 million and it is being apportioned nationally. The programme funding for Scotland will be £24 million. Clearly, that is higher than my rough calculation of what the Barnett formula will be. I am advised that it is based on what currently is going to Scotland in community care grants and crisis loans by the Department for Work and Pensions.

As I understand it, the fund is currently cash-limited, which will be the case. The Scottish Government and the Convention of Scottish Local Authorities have agreed that funds for the new provision will be ring-fenced for this purpose. Indeed, it is part of the ethos of devolution that, when this money is handed over to the Scottish Government, strings are not attached by the UK Government. Under the devolution settlement, the funds are passed by Westminster to the Scottish Government and are not ring-fenced for a specific purpose.

The Government believe that, even if one could be applied, a ring fence is not the best way to ensure that money reaches vulnerable people; indeed, it could constrain the Scottish Government as it prevents investing in existing services and pooling money with funding from pre-existing services. It may be that they can devise other ways of using that money also to give assistance. That is a matter for the Scottish Government but, as I have also indicated, they have already come to an agreement with CSLA on that, and they have indicated to us their intention to use the funding and to channel it through local authorities. Hence the slightly unusual provision in this order to give, as it were, retrospective effect to the change in the competence so that there is no doubt that local authorities will have the competence under Section 20 of the Local Government (Scotland) Act 2003 to implement and administer the scheme.

I hope that that answers the important points made by the noble Lord, Lord McAvoy. I look forward to the next time we debate a Section 30 order. Perhaps I may say that the devolution settlement is not static and that the Government of which he was a member,

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and the Government now of which I am a member, have, over the years since the Scottish Parliament was established, responded to changing circumstances and have changed the boundaries of devolution, I believe, very much to the benefit of both the United Kingdom and Scotland. I think that it shows that devolution works. Of course, independence would be an end to devolution, so we must take every opportunity to flag up devolution’s success stories. It is very much a living thing, and that is what we are doing today. I therefore commend this order to the Committee.

Motion agreed.

Regulation of the European Parliament and of the Council on the Fund for European Aid to the Most Deprived: EUC Report

Commission proposal for a Regulation of the European Parliament and of the Council on the Fund for European Aid to the Most Deprived

Motion to Take Note

4.04 pm

Moved By Lord Boswell of Aynho

That the Grand Committee takes note of the Report of the European Union Committee on the Commission proposal for a Regulation of the European Parliament and of the Council on the Fund for European Aid to the Most Deprived.

Lord Boswell of Aynho: My Lords, the intention is that after today’s debate a Motion will be moved in the Chamber on Monday inviting the House to agree that a formal reasoned opinion should be issued.

Our report concerns a proposal to create a European Union fund to provide aid to deprived people, which was examined by our Sub-Committee on the Internal Market, Infrastructure and Employment, chaired by the noble Baroness, Lady O’Cathain, whom I am delighted to see in her place today. Before I explain our thinking on this proposal, I will briefly explain the background because the committee has considered earlier versions of the policy twice before.

The European Union’s food distribution programme began as far back as 1987 as a way to make use of agricultural surpluses. As the report explains, in both 2010 and 2011 the committee considered proposals relating to the programme to distribute food products. On both occasions the committee suggested that the House should issue a reasoned opinion under the Lisbon treaty because the proposal was not consistent with the principle of subsidiarity—in other words, that this was something that was better done at member state or regional level—and that no compelling argument had been put forward that the European Union was better placed than member states to ensure a food supply to its most deprived citizens. Our view was not shared by a sufficient number of other national parliaments so no so-called “yellow cards” were triggered, which would have inhibited the scheme that the Commission had put forward in those years, and the current scheme was extended to the end of 2013.

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The proposal before us today is to create a new “Fund for European Aid to the Most Deprived” to operate from 2014 to 2020 in order to address food deprivation, homelessness and the material deprivation of children. The proposed fund would support and co-finance national schemes to provide non-financial assistance to the most deprived persons. I make it clear that we share the Commission’s concerns about EU citizens suffering from deprivation, and that we recognise the very serious impact of the economic crisis. Our report, though, is about whether the European Commission’s proposal is the right way to respond to these important issues.

The Commission has provided little by way of justification that its proposal complies with the principle of subsidiarity. Our committee had to derive some indication of the Commission’s reasoning by looking at the accompanying impact assessment, which argues that European-level action is necessary because of,

“the level and nature of poverty and social exclusion in the Union, further aggravated by the economic crisis, and uncertainty about the ability of all member States to sustain social expenditure and investment at levels sufficient to ensure that social cohesion does not deteriorate further”.

After careful consideration, our committee concluded that such uncertainty could better be met by action through the existing European Union cohesion programmes, from which money would have to be diverted to fund this scheme, without burdening member states with the extra administrative obligations introduced by the proposal. The committee also concluded that the Commission had failed to put forward any convincing argument that the European Union was better placed than member states to undertake this role, and had therefore failed to justify its implied assertion that the proposal meets the principle of subsidiarity.

In summary, this is an issue of concern about process rather than one of substance. We are not seeking to deny that the substantial matter is important and of interest to all Governments—indeed, to all citizens, in our current economic difficulties—but the principle of subsidiarity is a powerful one. It should be complied with, and our view is that it has not been met on this occasion, hence our proposal to issue a reasoned opinion. I beg to move that the Grand Committee take note of the report.

Lord McKenzie of Luton: My Lords, I find myself, somewhat surprisingly, dealing with this for the Opposition, but I think it is because the Secretary of State for Work and Pensions has lead responsibility. I thank the noble Lord, Lord Boswell, for the very clear way in which he introduced the report and its recommendations.

The specific issue before us is the recommendation that support should be given to a reasoned opinion to the effect that the draft regulation does not comply with the principle of subsidiarity. As we have heard, a similar issue was considered two years ago and the same conclusion reached, although that proposed regulation was withdrawn after the European Court of Justice ruling that purchases from the market, rather than use from intervention stocks, could not be

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made under agricultural legislation. This generated an amended proposal a year ago on which the UK took the same position, although that did not, as we heard from the noble Lord, prevent the life of the scheme being extended until 2013.

The proposal considered by the committee was for a new fund for European aid to the most deprived with the fund to address food deprivation, homelessness and material deprivation of children. It would run from 2014 to 2020. It is different from the previous programme, which grew out a need to make use of the then agricultural surpluses. It has the three strands that have been outlined. It is understood that it did not propose any additional overall expenditure, but the cost, which would be some €2.5 billion, would be met from the proposed cohesion policy—structural funds—the budget total for which is some €339 billion, or less than 1% of the total. If adopted, it would to that small extent divert funds from the structural funds.

The Commission’s impact assessment sets out that the EU has the objective of reducing by at least 20 million the number of people at risk of poverty or social exclusion by 2020. However, it reports that poverty and social exclusion are rising in many countries. The explanatory note states that in 2010 nearly a quarter of Europeans were at risk of poverty or social exclusion, which was 2 million up on the previous year, with later figures confirming a worsening trend, and this at a time when the ability of member states to support the disadvantaged is in some cases diminishing. In our own country, we see a rise in homelessness and rough sleeping. The latter is up by 23% in the past year alone. According to the IFS, the number of materially deprived children is increasing, and we have the well publicised growth of food banks, and we are one of the richer countries in the EU.

Paragraph 11 of the committee’s report states that it considers that the uncertainty about cohesion can be met by action through existing EU cohesion programmes. I understand that point, but will the Minister—I am not sure whether I should be addressing the noble Lord, Lord Boswell, the Minister or perhaps both of them—expand a little on that belief? How does it address the comment made in the explanatory note that some of the most vulnerable citizens who suffer from extreme forms of poverty are too far removed from the labour market to benefit from the social inclusion measures of the ESF? Would it propose any changes to the ESF programme?

Will the noble Lord please explain whether there is something inherent in the nature of the expenditure proposed in the programme—food deprivation, homelessness and material deprivation of children— which makes this a social policy matter where member states must act on their own accord or does it depend on the ability in practice of member states to resource appropriate individual country programmes? If the latter, can we hear the evidence base for the assessment that each member state is in a position to do what is necessary for its own people? Indeed, is there any point or any scale of food deprivation, homelessness and materially deprived children where the committee would accept a role for such a fund and an EU dimension?

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I do not ask these questions to be difficult, but to understand the routes to addressing this awful poverty. I think the noble Lord, Lord Boswell, made the point that this is not about the substance but about the mechanisms available to deal with it.

4.15 pm

Baroness Stowell of Beeston: My Lords, I am grateful to the noble Lord, Lord Boswell, and indeed the EU Committee for scrutinising the proposal from the Commission and producing the report that we are debating today. Along with the noble Lord, Lord McKenzie, I am grateful also to the noble Lord, Lord Boswell, for his very clear introduction to this debate. Because he was very comprehensive in going through the history of how we got to the present position, I will not spend any time repeating that history, not least because we are all feeling the chill in this Room and brevity is the key. However, first, it is essential to make the point that the Government share the committee’s view that this Commission proposal is not consistent with the principle of subsidiarity and that we support the Motion put forward today.

In 2011, the Commission sought to extend the existing scheme. It is worth reminding ourselves, as I think the noble Lord, Lord Boswell, already has, that the French and German declaration at that time stated that they considered that the conditions were not met for a proposal for a new programme after 2013—even though they had supported at that time the extension of the existing programme—and that they could not agree with legal and financial proposals by the Commission for such a programme in future. In response, the Commission issued a declaration saying that it,

“takes note of the opinion of a significant group of Member States not to pursue the program beyond 2013”,

and that:

“Without prejudice to its right of initiative under the Treaty, the Commission will take account of this strong opposition to any legal and financial proposal of such a program in the future”.

The Commission has now produced a proposal but it is very difficult to see how the Commission has taken account of this strong opposition that was stated at the time. We have to ask what the main changes are in the new proposal.

First, the new scheme is presented as an instrument to promote social cohesion and to contribute to the European 2020 target on reducing poverty, whereas the current scheme has an agricultural legal base. Secondly, the fund will no longer be financed from the CAP but from the structural and cohesion fund, as has already been mentioned, for the 2014-20 budget. Thirdly, the fund will be used to purchase basic consumer goods for the personal use of homeless people or children, as well as to provide food aid. Fourthly, the new fund will be obligatory—this is a key point—whereas the current scheme is optional. Each member state will receive a financial allocation and be required to set up a single national programme to implement the fund in 2014-20. Fifthly, not only will the fund be obligatory, but member states will be required to provide matched funding of at least 15% of the costs of their national programmes—in other words, on top of the welfare programmes we already have in this country. The fund

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from the European budget will contribute only up to 85% of the costs of the scheme being proposed in most cases. Sixthly, the new fund will be implemented along similar lines to the structural and cohesion funds.

Despite these changes, the Government’s view has not changed. We remain unconvinced as to the merits or appropriateness of this proposal. The principle of subsidiarity, currently enshrined in Article 5 of the Treaty on European Union, states that the EU should act collectively only where the objectives of the proposed action cannot be sufficiently achieved by the member states acting on their own, and that they can therefore be better achieved by action on the part of the Union.

We consider that measures to assist the neediest members of society, as set out in this proposal, can be better and more effectively delivered by individual member states through their own social programmes and not at EU level. The member states and their regional and local authorities are best placed to identify and meet the needs of deprived people in their countries and communities, and to do that in ways that are administratively simple and efficient. We will therefore oppose this proposal on the grounds that social measures of this sort are a matter for individual member states.

We are also concerned that the proposal does not represent value for money and would be burdensome to administer. Using EU structural and cohesion fund processes to deliver this instrument would lead to heavy and costly administrative burdens on member states and partner organisations, without adding value to existing arrangements in member states.

Not only is this fund inconsistent with subsidiarity, it will use resources that would be better deployed at national or local level. It is worth pointing out that if this fund were removed from the proposals, the UK could argue for an equivalent reduction of €2.5 billion from the EU budget over the seven years of the multiannual financial framework.

I underline that the Government strongly support measures to tackle poverty and social exclusion and certainly agree with the points made by the noble Lord, Lord Boswell. In the UK, we have a full range of social security benefits and tax credits in place to cover financial needs for those who are both in and out of work. We are investing £400 million in the current spending review period to help local authorities prevent and tackle homelessness. We are committed to eradicating child poverty and are taking a new approach to tackling the root causes, including worklessness, educational failure and family breakdown.

On food aid, the Healthy Start scheme provides a nutritional safety net in the form of vouchers for basic healthy foods and free vitamin supplements for pregnant women and children aged under four in disadvantaged and low-income families. Initiatives such as FareShare and FoodCycle are good examples of the essential work that charities are doing to support communities to relieve food poverty.

The noble Lord, Lord McKenzie, asked a couple of questions. I know that he directed them to the noble Lord, Lord Boswell, but it is perhaps worth me responding to them. He asked whether each member state provides

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for the three issues that the new fund would cover. Obviously, I will allow the noble Lord, Lord Boswell, to respond as he sees appropriate on behalf of the committee. From the Government’s perspective, it is clearly not for us to comment on other member states’ ability. Our approach is to tackle the root causes of poverty, as I just said. Any future proposal will have to be considered on its merits and in the circumstances at the time. If an alternative proposal were put forward by the Commission, we would want to consider it rather than set out our views now on whatever alternative might be proposed.

Lord McKenzie of Luton: Just to pick up on that point, a moment ago the Minister said that it is accepted that the EU can act where objectives cannot be sufficiently achieved by member states acting on their own. Does that imply some understanding of the resources that are available to individual member states? Is that part of the judgment about whether, acting on their own, they can deal with the issue?

Baroness Stowell of Beeston: The principle of subsidiarity is clear. I set that out clearly in my previous remarks and the noble Lord, Lord Boswell, has done the same. It is not for this Government to comment on whether other individual member states feel that they are in a position to be able to fulfil the objectives of the proposed fund.

Lord McKenzie of Luton: I am sorry to interrupt, but who can therefore make that judgment and how? If the judgment is about whether it can be sufficiently achieved by member states acting on their own—that is what the Minister has just said—who makes that judgment and on what basis? If we are saying that each individual member state has to ignore what the resources are and what the position is in each other member state on this issue, how on earth does that make sense of trying to make that evaluation, which she says is important?

Baroness Stowell of Beeston: The Commission itself, in bringing forward a proposal, has no doubt made a judgment in order to inform its decision to put forward this proposal to fund the scheme. I am saying that it is not for us as a member nation to comment on the ability of other member nations as to whether they can meet the objectives that the fund is there to meet. It is our view, from the position of a member state, that we are can provide for our citizens in the way that we are. We think that the issues to be addressed are better addressed by nation states and by local communities or regional bodies within those nation states because of the nature of the issue. That is the point that I am seeking to make.

I conclude by saying that we agree with the committee that the Commission has provided no convincing argument that its proposal meets the principle of subsidiarity. I restate that I thank the committee for its report and all its members who have contributed to this debate. I repeat that the Government support the Motion on the reasoned opinion.

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Lord Boswell of Aynho: My Lords, in responding briefly, I join the Minister in thanking all noble Lords who have participated in or attended this debate. I was not sure whether she was going to make a separate contribution but I thank the noble Baroness, Lady O’Cathain, and the members of her sub-committee for the detailed consideration that they gave to this matter, as they always do. We are grateful to them and to the staff of our committees when they look at it.

I also thank the noble Lord, Lord McKenzie. It is rather nice to be debating with him again, as it were, because I am very used to doing so in a social security context and he always asks very penetrating questions, but I did not anticipate finding myself in the position of necessarily having to respond to them. He has touched on one of what we might call the constitutional procedural issues, which is central to this debate, just as much as the real world issues about whether there is poverty and deprivation and how to meet it.

The position is that our committee can consider only those proposals emanating from the Commission that are actually received by the committee, and we will then form a judgment on them in relation to European Union legislation. We cannot, as the Government might be able to at certain stages, negotiate with the Commission or suggest alternatives; it is up to us to look at what it has produced. The central point about this debate on the procedural side is that it is entirely for the Commission to justify how a proposal that it is making at that time meets the principles of subsidiarity. It is the judgment of our committee that it failed to do that convincingly on this occasion—indeed, not for the first time but for the third.

If we begin to touch on some of the points of substance, it is interesting that all this had its genesis in a move to dispose of agricultural surpluses—nearly two and a half decades ago now—and yet it is now being presented as some kind of all-singing, all-dancing fund for the relief of deprivation and social hardship. I make no comment on that, other than to record it and then at least ask what is the best way of dealing with it. That, in a sense, is part of the argument about subsidiarity.

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I bring two points to the attention of the Committee. First, the Commission’s proposal does not by itself help to evaluate the social problems of the most deprived in any particular member state, because those are logged, perceived and, to be honest, administered or dealt with at the levels of the national or even local government administrations within those member states. The Commission is not, as it were, adding value, because it is dependent on the member state producing the assessment.

There is an underlying issue there. I take the most extreme case, which we have seen on the television, of Greece—although it is of course not the only country in social difficulties and noble Lords have been quite right to refer to the difficulties in our own country; I am not denying those. If the implied suggestion of the Commission is that Greece has not got the money even to meet the extreme relief programmes because it has no money in its Treasury—or, possibly more sophisticatedly, it is dependent on some other member state donor or other putting it there—our argument would be that it would be more appropriate to consider a wider appraisal through the cohesion fund to see whether the money could be found rather than creating a special vehicle for this purpose. I think that somebody has the idea that a special vehicle is appropriate, but it is still our firm contention that that case has not been made. Rather, it is just moving money around and would of course cost more, as the Minister said in her remarks, to move that money around.

We all know that there is a social problem; it is hardly possible to overlook it. It is certainly a common view that we would be distressed by it. However, the Commission has to be aware, and the treaty requires us to be able to evaluate and come to our conclusions on, whether its proposals meet the obligation of subsidiarity. It remains our contention that they do not. In that spirit, I beg to move.

Motion agreed.

Committee adjourned at 4.32 pm.