Vol. 757 Monday No. 55 10 November 2014

PARLIAMENTARY DEBATES (HANSARD) HOUSE OF LORDS OFFICIAL REPORT

ORDER OF BUSINESS

List of Government and Principal Officers of the House Introduction: Baroness Janke ...... 1 Questions Asylum Seekers: Mental Health ...... 1 Underoccupancy Charge: Carers ...... 4 Leaseholders ...... 6 Olympics 2016...... 9 Draft Protection of Charities Bill Membership Motion...... 11 Criminal Justice and Courts Bill Third Reading ...... 12 EU Budget Surcharge Statement ...... 27 Infrastructure Bill [HL] Report (3rd Day) ...... 31

Grand Committee

Immigration Act 2014 (Bank Accounts) Regulations 2014 Motion to Consider ...... GC 1 Immigration Act 2014 (Bank Accounts) (Amendment) Order 2014 Motion to Consider ...... GC 6 Immigration Act 2014 (Bank Accounts) (Prohibition on Opening Current Accounts for Disqualified Persons) Order 2014 Motion to Consider ...... GC 6 Statutory Shared Parental Pay (General) Regulations 2014 Motion to Consider ...... GC 7 Maternity and Adoption Leave (Curtailment of Statutory Rights to Leave) Regulations 2014 Motion to Consider ...... GC 14 Shared Parental Leave Regulations 2014 Motion to Consider ...... GC 15 Regulation of Investigatory Powers (Covert Surveillance and Property Interference: Code of Practice) Order 2014 Motion to Consider ...... GC 15 Regulation of Investigatory Powers (Covert Human Intelligence Sources: Code of Practice) Order 2014 Motion to Consider ...... GC 22

Written Statement...... WS 1 Written Answers...... WA 1

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The first time a Member speaks to a new piece of parliamentary business, the following abbreviations are used to show their party affiliation: Abbreviation Party/Group CB Cross Bench Con Conservative Con Ind Conservative Independent DUP Democratic Unionist Party GP Green Party Ind Lab Independent Labour Ind LD Independent Liberal Democrat Ind SD Independent Social Democrat Lab Labour Lab Ind Labour Independent LD Liberal Democrat LD Ind Liberal Democrat Independent Non-afl Non-affiliated PC Plaid Cymru UKIP UK Independence Party UUP Ulster Unionist Party

No party affiliation is given for Members serving the House in a formal capacity, the Lords spiritual, Members on leave of absence or Members who are otherwise disqualified from sitting in the House. © Parliamentary Copyright House of Lords 2014, this publication may be reproduced under the terms of the Open Parliament licence, which is published at www.parliament.uk/site-information/copyright/. HER MAJESTY’S GOVERNMENT PRINCIPAL OFFICERS OF STATE THE CABINET PRIME MINISTER,FIRST LORD OF THE TREASURY AND MINISTER FOR THE CIVIL SERVICE—The Rt. Hon. David Cameron, MP DEPUTY PRIME MINISTER AND LORD PRESIDENT OF THE COUNCIL—The Rt. Hon. Nick Clegg, MP FIRST SECRETARY OF STATE AND LEADER OF THE HOUSE OF COMMONS—The Rt. Hon. William Hague, MP CHANCELLOR OF THE EXCHEQUER—The Rt. Hon. George Osborne, MP CHIEF SECRETARY TO THE TREASURY—The Rt. Hon. Danny Alexander, MP SECRETARY OF STATE FOR FOREIGN AND COMMONWEALTH AFFAIRS—The Rt. Hon. Philip Hammond, MP SECRETARY OF STATE FOR THE HOME DEPARTMENT—The Rt. Hon. Theresa May, MP SECRETARY OF STATE FOR DEFENCE—The Rt. Hon. Michael Fallon, MP SECRETARY OF STATE FOR BUSINESS,INNOVATION AND SKILLS AND PRESIDENT OF THE BOARD OF TRADE—The Rt. Hon. Vince Cable, MP SECRETARY OF STATE FOR WORK AND PENSIONS—The Rt. Hon. Iain Duncan Smith, MP LORD CHANCELLOR AND SECRETARY OF STATE FOR JUSTICE—The Rt. Hon. Chris Grayling, MP SECRETARY OF STATE FOR EDUCATION AND MINISTER FOR WOMEN AND EQUALITIES—The Rt. Hon. Nicky Morgan, MP SECRETARY OF STATE FOR COMMUNITIES AND LOCAL GOVERNMENT—The Rt. Hon. Eric Pickles, MP SECRETARY OF STATE FOR HEALTH—The Rt. Hon. Jeremy Hunt, MP SECRETARY OF STATE FOR ENVIRONMENT,FOOD AND RURAL AFFAIRS—The Rt. Hon. Elizabeth Truss, MP SECRETARY OF STATE FOR INTERNATIONAL DEVELOPMENT—The Rt. Hon. Justine Greening, MP SECRETARY OF STATE FOR SCOTLAND—The Rt. Hon. Alistair Carmichael, MP SECRETARY OF STATE FOR ENERGY AND CLIMATE CHANGE—The Rt. Hon. Edward Davey, MP SECRETARY OF STATE FOR TRANSPORT—The Rt. Hon. Patrick McLoughlin, MP SECRETARY OF STATE FOR CULTURE,MEDIA AND SPORT—The Rt. Hon. Sajid Javid, MP SECRETARY OF STATE FOR NORTHERN IRELAND—The Rt. Hon. Theresa Villiers, MP SECRETARY OF STATE FOR WALES—The Rt. Hon. Stephen Crabb, MP

DEPARTMENTS OF STATE AND MINISTERS

Business, Innovation and Skills— SECRETARY OF STATE AND PRESIDENT OF THE BOARD OF TRADE—The Rt. Hon. Vince Cable, MP MINISTERS OF STATE— The Rt. Hon. Greg Clark, MP (Minister for Universities, Science and Cities) Nick Boles, MP (Minister for Skills and Equalities) The Rt. Hon. Matthew Hancock, MP (Minister for Business and Enterprise) Edward Vaizey, MP (Minister for Culture and the Digital Economy) Lord Livingston of Parkhead (Minister for Trade and Investment) PARLIAMENTARY UNDER-SECRETARIES OF STATE— George Freeman, MP Jo Swinson, MP Baroness Neville-Rolfe, DBE, CMG

Cabinet Office— MINISTER FOR THE CABINET OFFICE AND PAYMASTER-GENERAL—The Rt. Hon. Francis Maude, MP MINISTER FOR GOVERNMENT POLICY AND CHANCELLOR OF THE DUCHY OF LANCASTER—The Rt. Hon. Oliver Letwin, MP MINISTERS OF STATE— The Rt. Hon. David Laws, MP The Rt. Hon. Greg Clark, MP Joseph Johnson, MP PARLIAMENTARY SECRETARY— Sam Gyimah, MP Rob Wilson, MP (Minister for Civil Society) MINISTER WITHOUT PORTFOLIO—The Rt. Hon. Grant Shapps, MP

Communities and Local Government— SECRETARY OF STATE—The Rt. Hon. Eric Pickles, MP MINISTER OF STATE—Brandon Lewis, MP PARLIAMENTARY UNDER-SECRETARIES OF STATE— Stephen Williams, MP Kris Hopkins, MP Penny Mordaunt, MP Lord Ahmad of Wimbledon ii

Culture, Media and Sport—

SECRETARY OF STATE—The Rt. Hon. Sajid Javid, MP

MINISTER FOR CULTURE AND THE DIGITAL ECONOMY—Edward Vaizey, MP

PARLIAMENTARY UNDER-SECRETARY OF STATE—Helen Grant, MP

Defence—

SECRETARY OF STATE—The Rt. Hon. Michael Fallon, MP

MINISTERS OF STATE— The Rt. Hon. Mark Francois, MP (Minister for the Armed Forces) Anna Soubry, MP

PARLIAMENTARY UNDER-SECRETARIES OF STATE— Philip Dunne, MP Julian Brazier, MP Lord Astor of Hever, DL

Education—

SECRETARY OF STATE AND MINISTER FOR WOMEN AND EQUALITIES—The Rt. Hon. Nicky Morgan, MP

MINISTERS OF STATE— The Rt. Hon. David Laws, MP (Minister for Schools) Nick Gibb, MP Nick Boles, MP (Minister for Skills and Equalities)

PARLIAMENTARY UNDER-SECRETARIES OF STATE— Edward Timpson, MP Sam Gyimah, MP Lord Nash

PARLIAMENTARY UNDER-SECRETARY OF STATE FOR WOMEN AND EQUALITIES—Jo Swinson, MP

Energy and Climate Change—

SECRETARY OF STATE—The Rt. Hon. Edward Davey, MP

MINISTER OF STATE—The Rt. Hon. Matthew Hancock, MP

PARLIAMENTARY UNDER-SECRETARIES OF STATE— Amber Rudd, MP Baroness Verma

Environment, Food and Rural Affairs—

SECRETARY OF STATE—The Rt. Hon. Elizabeth Truss, MP

PARLIAMENTARY UNDER-SECRETARIES OF STATE— George Eustice, MP Dan Rogerson, MP Lord De Mauley, TD

Foreign and Commonwealth Office—

SECRETARY OF STATE—The Rt. Hon. Philip Hammond, MP

MINISTERS OF STATE— The Rt. Hon. David Lidington, MP (Minister for Europe) The Rt. Hon. Hugo Swire, MP The Rt. Hon. Baroness Anelay of St Johns, DBE Lord Livingston of Parkhead

PARLIAMENTARY UNDER-SECRETARIES OF STATE— Tobias Ellwood, MP James Duddridge, MP

Health—

SECRETARY OF STATE—The Rt. Hon. Jeremy Hunt, MP

MINISTER OF STATE— The Rt. Hon. Norman Lamb, MP

PARLIAMENTARY UNDER-SECRETARIES OF STATE— Daniel Poulter, MP George Freeman Jane Ellison, MP The Rt. Hon. Earl Howe iii

Home Office— SECRETARY OF STATE—The Rt. Hon. Theresa May, MP MINISTERS OF STATE— James Brokenshire, MP (Minister for Security and Immigration) The Rt. Hon. Mike Penning, MP (Minister for Policing, Criminal Justice and Victims) The Rt. Hon Lynne Featherstone, MP (Minister for Crime Prevention) PARLIAMENTARY UNDER-SECRETARIES OF STATE— Karen Bradley, MP Lord Bates

International Development— SECRETARY OF STATE—The Rt. Hon. Justine Greening, MP MINISTER OF STATE—The Rt. Hon. Desmond Swayne, MP PARLIAMENTARY UNDER-SECRETARY OF STATE—Baroness Northover

Justice— LORD CHANCELLOR AND SECRETARY OF STATE—The Rt. Hon. Chris Grayling, MP MINISTERS OF STATE— The Rt. Hon. Simon Hughes, MP The Rt. Hon. Mike Penning, MP (Minister for Policing, Criminal Justice and Victims) Lord Faulks PARLIAMENTARY UNDER-SECRETARIES OF STATE— Shailesh Vara, MP Andrew Selous, MP

Law Officers— ATTORNEY-GENERAL—The Rt. Hon. Jeremy Wright, MP SOLICITOR-GENERAL—Robert Buckland, MP ADVOCATE-GENERAL FOR SCOTLAND—The Rt. Hon. Lord Wallace of Tankerness, QC

Leader of the House of Commons— FIRST SECRETARY OF STATE AND LEADER OF THE HOUSE OF COMMONS—The Rt. Hon. William Hague, MP DEPUTY LEADER OF THE HOUSE OF COMMONS—The Rt. Hon. Tom Brake, MP

Leader of the House of Lords— LEADER OF THE HOUSE OF LORDS AND LORD PRIVY SEAL—The Rt. Hon. Baroness Stowell of Beeston, MBE DEPUTY LEADER OF THE HOUSE OF LORDS—The Rt. Hon. Lord Wallace of Tankerness, QC

Northern Ireland— SECRETARY OF STATE—The Rt. Hon. Theresa Villiers, MP PARLIAMENTARY UNDER-SECRETARY OF STATE—Andrew Murrison, MP

Privy Council Office— DEPUTY PRIME MINISTER AND LORD PRESIDENT OF THE COUNCIL—The Rt. Hon. Nick Clegg, MP

Scotland Office— SECRETARY OF STATE—The Rt. Hon. Alistair Carmichael, MP PARLIAMENTARY UNDER-SECRETARY OF STATE—The Rt. Hon. David Mundell, MP

Transport— SECRETARY OF STATE—The Rt. Hon. Patrick McLoughlin, MP MINISTERS OF STATE— Baroness Kramer The Rt. Hon. John Hayes, MP PARLIAMENTARY UNDER-SECRETARIES OF STATE— Robert Goodwill, MP Claire Perry, MP

Treasury— PRIME MINISTER,FIRST LORD OF THE TREASURY AND MINISTER FOR THE CIVIL SERVICE—The Rt. Hon. David Cameron, MP CHANCELLOR OF THE EXCHEQUER—The Rt. Hon. George Osborne, MP CHIEF SECRETARY—The Rt. Hon. Danny Alexander, MP FINANCIAL SECRETARY—David Gauke, MP iv

EXCHEQUER SECRETARY—Priti Patel, MP ECONOMIC SECRETARY—Andrea Leadsom, MP COMMERCIAL SECRETARY—Lord Deighton, KBE PARLIAMENTARY SECRETARY (CHIEF WHIP)—The Rt. Hon. Michael Gove, MP LORDS COMMISSIONERS (GOVERNMENT WHIPS)— Mark Lancaster, MP David Evennett, MP John Penrose, MP Gavin Barwell, MP Harriett Baldwin, MP Alun Cairns, MP ASSISTANT GOVERNMENT WHIPS— Andrew Selous, MP Thérèse Coffey, MP Mel Stride, MP Ben Wallace, MP Damian Hinds, MP The Rt. Hon. Tom Brake, MP Lorely Burt, MP

Wales Office— SECRETARY OF STATE—The Rt. Hon. Stephen Crabb, MP PARLIAMENTARY UNDER-SECRETARIES OF STATE— Alun Cairns, MP Baroness Randerson

Work and Pensions— SECRETARY OF STATE—The Rt. Hon. Iain Duncan Smith, MP MINISTERS OF STATE— The Rt. Hon. Esther McVey, MP (Minister for Employment) The Rt. Hon. Steve Webb, MP (Minister for Pensions) Mark Harper, MP PARLIAMENTARY UNDER-SECRETARY OF STATE— Lord Freud

Her Majesty’s Household— LORD CHAMBERLAIN—The Rt. Hon. Earl Peel, GCVO, DL LORD STEWARD—The Earl of Dalhousie MASTER OF THE HORSE—Lord Vestey, KCVO LORDS IN WAITING— Viscount Brookeborough, DL Lord Faringdon TREASURER—The Rt. Hon. Greg Hands, MP COMPTROLLER—The Rt. Hon. Don Foster, MP VICE-CHAMBERLAIN—Anne Milton, MP

Government Whips, House of Lords— CAPTAIN OF THE HONOURABLE CORPS OF GENTLEMEN-AT-ARMS (CHIEF WHIP)—Lord Taylor of Holbeach, CBE CAPTAIN OF THE QUEEN’S BODYGUARD OF THE YEOMEN OF THE GUARD (DEPUTY CHIEF WHIP)—The Rt. Hon. Lord Newby, OBE BARONESSES IN WAITING— Baroness Jolly Baroness Williams of Trafford Baroness Garden of Frognal LORDS IN WAITING— Lord Ashton of Hyde Lord Bourne of Aberystwyth Lord Gardiner of Kimble Lord Popat The Rt. Hon. Lord Wallace of Saltaire HOUSE OF LORDS

PRINCIPAL OFFICE HOLDERS AND SENIOR STAFF LORD SPEAKER—The Rt. Hon. Baroness D’Souza, CMG CHAIRMAN OF COMMITTEES—Lord Sewel, CBE PRINCIPAL DEPUTY CHAIRMAN OF COMMITTEES—Lord Boswell of Aynho CLERK OF THE PARLIAMENTS—D. R. Beamish, LL.M CLERK ASSISTANT—E. C. Ollard READING CLERK AND CLERK OF THE OVERSEAS OFFICE—S. P. Burton GENTLEMAN USHER OF THE BLACK ROD AND SERJEANT-AT-ARMS—Lieutenant General David Leakey, CMG, CBE COMMISSIONER FOR STANDARDS—P. R. Kernaghan, CBE, QPM COUNSEL TO THE CHAIRMAN OF COMMITTEES—P. Milledge; P. Hardy REGISTRAR OF LORDS’INTERESTS—B. P. Keith CLERK OF COMMITTEES—Dr F. P. Tudor LEGAL ADVISER TO THE HUMAN RIGHTS COMMITTEE—M. R. Hunt DIRECTOR OF INFORMATION SERVICES AND LIBRARIAN—Dr E. Hallam Smith DIRECTOR OF FACILITIES—C. V. Woodall FINANCE DIRECTOR—A. Makower DIRECTOR OF PARLIAMENTARY ICT SERVICE—M. Taylor (acting) DIRECTOR OF HUMAN RESOURCES—T. V. Mohan CLERK OF LEGISLATION—J. Vaughan PRINCIPAL CLERK OF SELECT COMMITTEES—C. Johnson, DPhil

10 November 2014

THE PARLIAMENTARY DEBATES (HANSARD)

IN THE FOURTH SESSION OF THE FIFTY-FIFTH PARLIAMENT OF THE UNITED KINGDOM OF GREAT BRITAIN AND NORTHERN IRELAND COMMENCING ON THE EIGHTEENTH DAY OF MAY IN THE FIFTY-NINTH YEAR OF THE REIGN OF

HER MAJESTY QUEEN ELIZABETH II

FIFTH SERIES VOLUME DCCLVII

FOURTH VOLUME OF SESSION 2014-15

for a job for 12 months, face stress even worse than House of Lords that faced by others? We know that there have been cases of suicide because of the prohibition against Monday, 10 November 2014. allowing them to work for that first 12 months. Would 2.30 pm it not be a humanitarian gesture for us to reduce that 12 months to six months, so that asylum seekers have Prayers—read by the Lord Bishop of Coventry. less time to wait until they can apply for work?

Introduction: Baroness Janke Lord Bates: It is a very difficult situation. Of course, we have every sympathy with the people who come 2.38 pm here. However, the reality is that, if they are allowed to work while they are not here legally, we are saying that Barbara Lilian Janke, having been created Baroness they are able to compete in the labour market with Janke, of Clifton in the City and County of Bristol, was people who are here legally. That would be unfair. It is introduced and took the oath, supported by Lord Tope not the case that they cannot work; they are able to and Baroness Maddock, and signed an undertaking to volunteer in the community and they are getting support, abide by the Code of Conduct. with all their accommodation covered and access to education and health care, including mental health Asylum Seekers: Mental Health care if they need it. Question

2.42 pm Baroness Lister of Burtersett (Lab): My Lords, the denial of the right to paid work, as well as the inadequate Asked by Lord Roberts of Llandudno asylum support system, can lead to severe poverty or To ask Her Majesty’s Government what is their even destitution. Last week, the Joint Committee on assessment of the mental health of asylum seekers Human Rights heard evidence that women, many of who have had to wait 12 months or longer before whom have fled violence, are thereby made vulnerable being allowed to apply for work. to further violence and sexual exploitation. What steps are the Government taking to prevent this as part of The Parliamentary Under-Secretary of State, Home their strategy to end violence against women and girls? Office (Lord Bates) (Con): My Lords, asylum seekers may apply for permission to work if their claim has Lord Bates: I accept the point that the noble Baroness is been outstanding for 12 months. The Government making about the importance of providing that protection. have had no cause to assess the impact of this policy Of course, asylum seekers have accommodation with on the mental health of asylum seekers. However, we all utility bills and council tax paid, access to legal aid, are always open to discussing any welfare concerns safety and protection and a liaison officer allocated to with voluntary sector and refugee groups. them. However, in providing the care, we need to reach a decision on their asylum claims as quickly as possible Lord Roberts of Llandudno (LD): I am grateful to so that they can get on and rebuild their lives. the Minister for his Answer. However, does he not agree that we are all very much aware of the stress and tension that are caused when someone cannot find a Lord Dubs (Lab): My Lords, of course one wants job, which sometimes lead to suicide? Will he consider quick decisions because it is not fair to keep people that asylum seekers, who are not allowed even to apply hanging on month after month after month. However, 3 Asylum Seekers: Mental Health[LORDS] Underoccupancy Charge: Carers 4

[LORD DUBS] Baroness Smith of Basildon (Lab): My Lords, it is does the Minister accept that it is humiliating and very hard for any of us to imagine the tragedy and fear frustrating to want to work and not to be allowed to? that drive somebody to leave their home and travel Would it save the country money if these people were many miles—thousands of miles in many cases—to allowed to work and contribute more to our society? seek sanctuary and asylum. They have often suffered considerably. The Minister said that he is concerned about mental health issues. May I ask him two questions? Lord Bates: The six-month period applies broadly What measures do the Government take to assess across Europe. We have arrived at the figure of 12 months someone’s mental health while they are seeking asylum? but the key is to speed up the decision-making process. He also said that it is important to speed up the However, during that time we encourage people to asylum application process. What evidence does he undertake volunteering, learn the English language have that the Government have speeded up that process? and take IT courses. They can get support with those types of initiative. Lord Bates: The process is genuinely speeding up. We have given a commitment that everybody who Baroness Hamwee (LD): My Lords, I have heard applied before 2012 will have their case decided by the concerns expressed by the BMA and others about the end of this calendar year. Seventy per cent of applications desperate need to train doctors and other workers who are decided within six months, and 35% of those deal with people in immigration detention, including, people are given the right to stay, so there is speed in particularly, to train them in awareness of post-traumatic the system. We have recruited extra people to help. As stress disorder and other conditions from which asylum for mental health needs, that is clearly a clinical decision. seekers and some other immigrants are likely to suffer. When someone is registered with a GP and in contact Is there better training provision outside detention? with the NHS, their condition can be assessed.

Lord Bates: The numbers going into detention on Lord Morris of Aberavon (Lab): My Lords, will the what is called a fast-track process are relatively small— Minister answer the noble Baroness who raised a about 15% of the total. We contract with Migrant question a few minutes ago? Help, which does excellent work in providing advice to asylum seekers during their application process—for Lord Bates: Judging by the general murmurings, I example, helping them register with a GP or getting think that I may have misheard the noble Baroness. I their children enrolled in school. Progress is being thought the question was about whether asylum seekers made but I accept that we are talking about very would be able to work if they were doctors, but I vulnerable people. gather that it must have been about something else—in which case I apologise, and I will be happy to write and clarify the matter. Baroness Hussein-Ece (LD): My Lords, will my noble friend clarify what he said in reply to my noble friend Lord Roberts? I thought I heard him refer to Underoccupancy Charge: Carers people who are here illegally. However, the Question is Question about asylum seekers who are here perfectly legally, waiting for their case to be heard and a decision to be 2.50 pm made, which, as he will know, sometimes takes years. In the mean time, they are not allowed to work. Will Asked by Baroness Pitkeathley he clarify what he said earlier about illegality? To ask Her Majesty’s Government what consideration they have given to exempting unpaid Lord Bates: Absolutely; I am happy to clarify that. carers from the underoccupancy charge. I was talking about people who had a legal right to seek employment in this country. They should be The Parliamentary Under-Secretary of State, Department protected and be able to apply for jobs in the first for Work and Pensions (Lord Freud) (Con): An unpaid instance. resident carer is allocated a bedroom, unless they are the partner of the housing benefit claimant, in which case they will share a bedroom. A non-resident unpaid Baroness Finlay of Llandaff (CB): The Government carer who regularly undertakes overnight care in respect have to date not allowed retired NHS doctors who of the claimant or their partner is also provided with a volunteer to work with asylum seekers to set against bedroom. tax the cost of their General Medical Council and defence union payments. Will the Government undertake to look at this again? These doctors are acting as Baroness Pitkeathley (Lab): Does the Minister really volunteers to meet the health needs of this group but think it justifiable to make carers who are providing are incurring huge expense in so doing. round-the-clock care apply repeatedly for a discretionary housing payment in order to remain in their own homes—a process which, by the way, is lengthy and Lord Bates: I am very happy to look at this but bureaucratic, and very uncertain in terms of getting doctors are in one of the shortage occupations and the discretionary payment? Is this really a fair way to would be eligible to apply for work after the 12-month treat people who are providing vast amounts of care period. and saving the state vast amounts of money—often at 5 Underoccupancy Charge: Carers[10 NOVEMBER 2014] Leaseholders 6 great personal cost, as the Minister knows? I ask him and that is why this system, which has gone through again: will he consider an exemption for carers from the courts in quite some detail, has been found to this pernicious tax? supply support where necessary.

Lord Freud: We clearly value carers greatly, and we Baroness Hollis of Heigham (Lab): My Lords, if, as have put support into the system at different levels for the Minister suggests, disabled families with family them. In this case we have given local authorities some carers are effectively covered by DHPs, why not simply guidance to make it absolutely clear that they can exempt them? If he is wrong—which I suspect he make longer-term determinations of discretionary housing is—why are we, quite knowingly, making lives that are payments. We have also made it clear that DHPs will already hard even harder, perhaps thus ensuring that be paid next year as well as this year. the family carers will themselves become disabled?

Lord German (LD): My Lords, the Government’s own review of the spare room subsidy shows that Lord Freud: The courts have gone through this in discretionary housing payments are inconsistent, short- some detail now and found that it is reasonable for the term and temporary. Indeed, the evidence is that most Secretary of State to take the view that it is not of the applications for those payments are made by practicable to provide a further exemption for an the very groups who should be exempt—carers and imprecise class of persons, and that the flexibility of those who have had adaptations made to their homes. the DHP scheme can be relied upon to provide the Many local authorities are now means-testing the additional help. disability benefits of people in receipt of those allowances. Regardless of what may happen to this policy next Lord Cormack (Con): Does my noble friend not year, is it not now time for the Government to fully accept that this policy, which appears to be insensitively exempt people in those groups, such as carers and applied, does not sit happily with Conservative philosophy? those with adapted homes, so that they are not subject to this inconsistent approach to government funding and can get certainty in their lives? Lord Freud: We have aimed to get rid of some of the areas where people are just not taking part in the economic life of the country. One of the things that Lord Freud: As I said, we have made sure that has been happening is that the proportion of people long-term discretionary housing payments can be made. who have been outside the labour market and in social We have also provided guidance to make it clear that housing has dropped dramatically from a peak of where claimants are using their disability payments for 49% at the beginning of this Parliament to 41% now—the needs caused by their disability, such as paying for lowest-ever level. We need to look to help all people care or Motability schemes, those would not be included that we possibly can to take a full part in the economic in the calculation. life of this country.

Lord Christopher (Lab): My Lords, is it not the case Lord Bradley (Lab): My Lords, the Minister’s that it is not just outrageous but downright cruel to department claims that the focus and scope of the require a partner—presumably a wife or a husband— family test is on strong and stable family relationships, whose day may be appalling anyway, to sleep in the with particular focus on extended families, particularly same room as the disabled person? I find that statement when they are playing a role in raising children or utterly outrageous. caring for older or disabled family members. Can the Minister explain to the House how the bedroom tax Lord Freud: About 40,000 couples in which one is passes this test? looking after the other were covered by the spare room policy when it was introduced. That is about 6% of the total. The discretionary housing payment system was Lord Freud: The removal of the spare room subsidy set up precisely to look at circumstances in which the is designed, at its heart, to save money—it saves couple could not share a room—because, of course, £500 million a year—and make sure that housing is many of them could, even though there was a disability. allocated more efficiently. There are signs of that policy now working. Baroness Greengross (CB): My Lords, a lot of people are looking after severely disabled children, or older adults with long-term conditions—particularly dementia. Leaseholders In order to get some sleep, they have to chop and Question change, and need additional carers such as other members of the family coming in. They desperately need the 2.58 pm extra room. Can those sort of carers usually get an Asked by Baroness Gardner of Parkes exception to the rule and be allowed to have an additional bedroom? To ask Her Majesty’s Government where the public can obtain the details of their rights under Lord Freud: This is precisely the kind of circumstance Section 83 of the Enterprise and Regulatory Reform for which the discretionary housing payment is designed. Act 2013 regarding the rights of leaseholders to It has not been found possible to have a general rule, seek redress against managing agents. 7 Leaseholders[LORDS] Leaseholders 8

Baroness Gardner of Parkes (Con): My Lords, I beg that all leaseholders have appropriate avenues for resolving leave to ask the Question standing in my name on the disputes. I will write to the noble Lord on the specific Order Paper and declare my interest as a leaseholder. issue of the EU directive.

Lord Lloyd of Berwick (CB): My Lords, in an area The Parliamentary Under-Secretary of State, Department of the law where there is much existing legislation, as for Communities and Local Government (Lord Ahmad is I think accepted, does the Minister agree that the of Wimbledon) (Con): My Lords, the schemes themselves only way in which the leaseholder could find out his are primarily responsible for publicising their service rights would be if the law were consolidated from time to leaseholders. My department has issued a number to time? Consolidation is a boring thing to do, as I of press releases on the government and LEASE websites, know from experience, but it is important. Will he and included information about the redress schemes in please give it a boost on this issue in particular? I ask the recently published How to Rent guide. Additionally, the question as a former chairman of the consolidation we will be sending information to 30,000 leaseholders committee. via the LEASE mailing list. Lord Ahmad of Wimbledon: All attempts to bring Baroness Gardner of Parkes: I thank the Minister laws together across the field are welcome. The for that reply. Can he tell me whether the ombudsman, Government are making serious efforts on the issue of to whom one will now have the right to apply for leasehold and the sharing of information. As I already redress, will have the powers under that scheme to rule alluded to in my original Answer, we have taken that if the head lessee or freeholder is found to be at various steps to ensure that leaseholders are able to fault, they cannot charge the costs back to the very access information about the redress scheme and people who made the complaint and were justified in information about the First-tier Tribunal. There are doing so? This has now become a most unfortunate also other efforts we are making, such as the model practice. tenancy agreement, as a way of ensuring higher standards in this particularly important sector. Lord Ahmad of Wimbledon: My Lords, first, I draw the attention of the House to my entry in the Lords Lord Stoneham of Droxford (LD): I draw attention register as a leaseholder and pay tribute to my noble to my housing interests given in the register of interests. friend’s consistent efforts in ensuring that the subject I do not want to minimise the problems of leaseholders, of leasehold remains on the Government’s agenda. In but every year 300,000 tenants are evicted after making terms of the ombudsman, the chamber of the First-tier a complaint to their landlord about the state of their Tribunal stays, will continue to determine a wide range home. Would my noble friend the Minister agree that of residential leasehold disputes and will not be affected the sooner the tenancy Bill that is currently going by the new requirement for managing agents to belong through the Commons, proposed by my friend Sarah to redress schemes. For example, leaseholders and Teather, is put through this House, then the sooner freeholders will still be able to ask the tribunal to tenants will be better protected against retaliatory decide whether a service charge demand is reasonable. eviction? Where the lease requires the freeholder to recover administration charges, the tribunal will still be able to Lord Ahmad of Wimbledon: My noble friend makes issue orders to redress this. an important point. The Government are supportive of Sarah Teather’s Bill. I think I already mentioned the steps we have taken, such as the model tenancy Lord McKenzie of Luton (Lab): My Lords, I draw agreement, which safeguards the rights of tenants attention to my entry in the register of interests. As and, indeed, encourages much more long-term tenancies, well as the redress and complaints schemes arising which is I think to be welcomed by the elderly population under the 2013 Act, the Minister will be familiar with and young families with children. the EU alternative dispute resolution directive. The Government have 24 months after the directive enters Baroness Howarth of Breckland (CB): My Lords, into force to transpose it into national legislation. tenants and leaseholders find it extraordinarily difficult, That will be in mid-2015, so the clock is ticking. Can as we have already heard, to find their way through the the Minister confirm the Government’s continued support complexities of the regulations and the present law. for that measure and say what progress has been made Could the Minister tell me what it would cost for a to date? In particular, can he say which pieces of leaseholder, having got through that, to take action domestic legislation have been identified for the and make an application under the redress scheme transposition? regulations?

Lord Ahmad of Wimbledon: The noble Lord raises Lord Ahmad of Wimbledon: Each company is required the issue of reform of leasehold legislation. The to register under one redress scheme. If the scheme Government are aware of a number of concerns in the makes a decision, it will be for the company to pay. leasehold sector and have welcomed suggestions of There are three different schemes and each has specific how resolutions on leasehold can be improved, but at criteria. Without detailing each one, one costs £95 a the moment they are not persuaded of the need for year, but that is done on a case-by-case basis. Another wholesale reform. The Government want to ensure costs £199, which is an all-inclusive cost. In the interests 9 Leaseholders[10 NOVEMBER 2014] Olympics 2016 10 of time, I will write to the noble Baroness on the the causes favoured by so many of your Lordships details of the three redress schemes, and share that have been transformed because of what was done with information with the House. the National Lottery. Looking at Sochi, where the no-compromise principles were adhered to for the first Lord Best (CB): My Lords, I declare my interest as time, and the great successes at the Olympics and chairman of the Property Ombudsman Council. It is Paralympics, what my noble friend says has a lot of an important point that the ombudsman redress services merit. are free to the tenant or leaseholder and that they are paid for by the freeholder, the landlord or the agent Lord Wigley (PC): My Lords, what mechanisms are and not by the person making the complaint. Does he in place to ensure that all the home nations have been agree that, if one has a complaint and needs redress, proactively engaged in the decision-making around the best way to find out what to do next is to use the allocation of UK Sport’s investment for the GB Mr Google or AN Other and to put the words “property” Olympic and Paralympic squads for Rio 2016 and and “ombudsman” together? In doing that, we hope, a Tokyo 2020? lot of one’s problems will be solved.

Lord Ahmad of Wimbledon: The noble Lord speaks Lord Gardiner of Kimble: My Lords, UK Sport with great experience in the sector and he is absolutely works very closely with all the national sports bodies, right. To clarify, when I said, “the company”, I meant including Sport England, Sport Wales, Sport Northern the scheme rather than the person to whom the complaint Ireland and Sport Scotland, precisely to ensure that is made. He is correct to say that there is no cost to the the allocation is correctly placed. It is trying to ensure leaseholder. In addition to Google, perhaps I may that the best athletes come forward and are supported. mention www.gov.uk as a source of information, as well as the LEASE website. We are also working Baroness Armstrong of Hill Top (Lab): My Lords, closely with LEASE, which provides good information what will be the effect on this programme of a decline in this respect. in lottery receipts?

Olympics 2016 Lord Gardiner of Kimble: My Lords, I very much Question hope that there will not be a decline in lottery receipts 3.06 pm generally and that people will play the National Lottery. I believe that there are many good causes. Clearly, if Asked by Lord Holmes of Richmond that happened, we would have to look at these matters To ask Her Majesty’s Government what assessment across the piece. they have made of the effectiveness of the allocation of resources for the Great Britain Olympic and Lord Addington (LD): My Lords, does my noble Paralympic teams due to compete in Rio de Janeiro friend agree that, although the problems we had were in 2016. solved by developing the lottery for the Olympics, we must go on and look at the funding of team games to Lord Gardiner of Kimble (Con): My Lords, through give ourselves a broader base to encourage participation? UK Sport, the Government are investing £355 million into summer Olympic and Paralympic sports during the Rio 2016 cycle, which is an increase from London Lord Gardiner of Kimble: My Lords, my noble of 7% into Olympic sports and 45% into Paralympic friend raises the issue of team sports and clearly we sports. Our ambitions for Rio are to be even more want all sports to have as many opportunities as successful than London in both the Olympics and possible—my noble friend may be thinking of basketball Paralympics, which no host nation in history has in particular. That has enormous potential to reach achieved. With record investment, UK Sport believes young people and we want it to grow in the country. that this is attainable. That is why Sport England in particular is investing a great deal of money. Over the funding cycle about Lord Holmes of Richmond (Con): My Lords, Olympic £10 million will go into basketball. We want teams to and Paralympic sport is fair set for Rio, underpinned succeed but they need to be in a position to win by unprecedented UK sport funding. Does the Minister Olympic medals, which basketball is not at the moment. agree that, post-Rio, there should be no compromise While it is not in a position to win medals it is not in to the UK Sport no-compromise funding model? Does the Rio funding scheme. he also agree that we all owe a tremendous debt to the father of the lottery, Sir John Major, whose vision, Lord Stevenson of Balmacara (Lab): My Lords, the drive and determination transformed the sporting and no-compromise approach has winners and has done cultural framework of our nation for the better for very well but it also has losers. Basketball has had its ever? £7 million grant from UK Sport cancelled and yet, as the Minister said, it is hugely popular, with 70% of Lord Gardiner of Kimble: My Lords, as one of our participants aged under 25 and more than 50% of greatest Paralympians and the only Briton to win six those who play the game coming from BME communities. gold medals at a single Games, my noble friend comes What can they do now? The Minister mentioned Sport to these matters with exceptional experience. I entirely England but its contribution is £1.2 million, hardly agree with him about Sir John Major and that many of making up the gap to £7 million. 11 Olympics 2016[LORDS] Criminal Justice and Courts Bill 12

Lord Gardiner of Kimble: My Lords, as I said, the That the Committee have power to appoint specialist total funding to basketball is nearly £10 million over advisers; the cycle to 2017. In fact, there is investment through That the Committee have leave to report from time Sport England and also the youth and community to time; scheme. Some £1 billion has gone from that scheme That the Committee have power to adjourn from into precisely the sports and activities that the noble place to place within the United Kingdom; Lord was referring to, such as basketball. That the reports of the Committee from time to time shall be printed, regardless of any adjournment Lord Brooke of Sutton Mandeville (Con): My Lords, of the House; and is my noble friend aware that in the year 1808 Rio de Janeiro was the capital of Portugal? Does he agree That the evidence taken by the Committee shall, if that the allocation by the British of resources behind the Committee so wishes, be published. the lines of Torres Vedras during the same period is a very good long-distance omen for the British teams Motion agreed, and a message was sent to the Commons. competing in 2016? Criminal Justice and Courts Bill Lord Gardiner of Kimble: That is a most intriguing Third Reading question and I am not sure how best to answer it other than to say that I am sure that all your Lordships wish 3.14 pm all the athletes, wherever they come from and whichever discipline they are participating in, enormous success. Clause 8: Recall adjudicators Baroness McIntosh of Hudnall (Lab): My Lords, going back to the question from my noble friend Lady Amendment 1 Armstrong, can the Minister say what the trend is on spending on the lottery? I do not mean spending of Moved by Lord Woolf the lottery funds but spending by people who buy 1: Clause 8, page 8, line 13, at end insert— lottery tickets and whether therefore it is likely that the “(4) Before this section comes into force, the Secretary of State long-term sustainability of funding to both culture shall lay a report before Parliament describing— and sport will remain constant. (a) the recruitment process for recall adjudicators; (b) the qualifications, experience and competences which Lord Gardiner of Kimble: My Lords, I do not have will be required of recall adjudicators; the precise figures in front of me. I will look at the (c) the training which will be provided for recall adjudicators; projection for National Lottery proceeds and come and back to the noble Baroness. As I said, this is something (d) the anticipated costs of establishing a system of recall that we will need to look at and I very much hope that adjudicators in comparison with the costs of recruiting the National Lottery will continue to be the enormous an increased number of Parole Board members and case success it has been. managers.”

Lord Woolf (CB): My Lords, I can be brief because Draft Protection of Charities Bill I hope, and have reason to believe, that the Minister Membership Motion will indicate that he can give me the comfort I am seeking and which this amendment is designed to 3.12 pm achieve. Noble Lords will recall that the Minister tabled a government amendment on Report that was Moved by The Chairman of Committees designed to introduce a new figure into the criminal That the Commons message of 6 November be justice scene. He is to be the recall adjudicator and he considered and that a Committee of six Lords be will take over the responsibilities of the Parole Board appointed to join with the Committee appointed by in respect of reviewing those who have been released the Commons to consider and report on the draft on licence but are being recalled for reasons such as Protection of Charities Bill presented to both Houses their committing another offence. This could be of on 22 October 2014 (Cm 8954) and that the Committee serious importance both to the public and, of course, should report on the draft Bill by 28 February 2015; to the offender who is being returned to prison. His liberty is at stake. That, as proposed by the Committee of Selection, the following members be appointed to the Committee: When the Minister introduced the amendment, he was not in a position to provide any details that would B Barker, L Hodgson of Astley Abbotts, L Hope of enable the quality of what was being proposed to be Craighead, B Warwick of Undercliffe, L Watson of assessed. The noble Lord, Lord Beecham, who I am Invergowrie, V Younger of Leckie; pleased to see in his seat, described it—I suggest That the Committee have power to agree with the accurately—as seeking a “blank cheque”. As we all Committee appointed by the Commons in the know, it is never wise even to give Governments a appointment of a Chairman; blank cheque because you may find that it is not used That the Committee have power to send for persons, in precisely the way that was intended. The noble Lord papers and records; sought those details and, while giving the proposal a 13 Criminal Justice and Courts Bill[10 NOVEMBER 2014] Criminal Justice and Courts Bill 14 general welcome and hoping it would be successful, source of potential recruitment for those who would sought to impose both a sunrise clause and a sunset undertake this responsibility. The matter has aroused clause to cover the situation being created by the some concern. Obviously I am not asking the Minister amendment. to give an indication finally one way or the other, but I The Government had acted on this so late in the take it that he would confirm at least that that is not day because of a decision of the Supreme Court in a the only possibility that will be looked at—in which case which was discussed on Report, and which indicated case we will await the Government’s response in due that it would be possible to have a body that was not course with keen anticipation. necessarily created as a proper judicial body to perform this function—a sort of quasi-judicial body. The The Minister of State, Ministry of Justice (Lord interpretation by the Supreme Court of Article 5 of Faulks) (Con): My Lords, I thank the noble and learned the European Convention on Human Rights indicated Lord, Lord Woolf, for his helpful explanation of the that what was determinative was the original court amendment to Clause 8 in his name, and for helpfully sentencing, not the body reviewing the recall. setting out the concerns that lie behind it. I understand The matter was left at that, but I suggested on them, and why the noble and learned Lord seeks to Report that the position was unsatisfactory and expressed make sure that Parliament is given the opportunity to the hope that the Government would consider the consider a report by the Secretary of State about how situation further. However, in case they did not do so, the recall adjudicator model will operate before the I tabled the amendment in question. It sets out what I provisions can be brought into force. I have no objection would suggest is the minimum amount of information to the principle of what his amendment is seeking to that needs to be provided before the new body is achieve and am happy to make a commitment that created. It would give those who are concerned about before the recall adjudicator provisions are brought saving money in the hard-pressed criminal justice system into force, the Government will produce a report for information about cost and would seek information Parliament on matters such as the recruitment process, about the quality of those who are to be the new qualifications, training and costs. adjudicators on recall applications. The amendment of the noble and learned Lord is Before the new system is introduced it is important quite specific on some aspects of what the report must that Parliament should be given information that would contain. I bear in mind what he said, namely that this enable it to use its powers to scrutinise what is proposed. should be a minimum, as he saw it; we do not indeed The Minister accepted that there was an obligation for anticipate that it would be restricted entirely to those fairness in that situation, notwithstanding the decision matters. In particular he is specific about the anticipated of the Supreme Court in the Whiston case, 1914, costs of the recall adjudicator system compared to the UKSC39. That made it clear that he was thinking costs of recruiting more Parole Board members and along the same lines as those who, like me, were case managers. concerned about what the quality of this new body While the Government would be happy to provide would be. an analysis of the respective costs and benefits of the If the Minister is prepared to give an undertaking new model—and indeed we will be publishing a further that he would arrange for a report to be made to impact assessment on this—we would not wish to be Parliament, setting out enough information to enable tied to including in the report such a direct comparison what was proposed to be evaluated, I need not detain of the sort prescribed in the amendment. This is a the House further. In order to give the Minister an constantly evolving area of work, with the Parole indication of whether what I have been told is correct, Board itself driving forward changes to its process, I propose to say no more, but at this stage formally to and new operating models, and we would want our move my amendment. cost-benefit analysis to have the flexibility to take account of those developments rather than tying ourselves Lord Beecham (Lab): My Lords, I understand that in the legislation to making this very specific cost the Minister may accept the amendment of the noble comparison. But we will provide information as to and learned Lord, Lord Woolf, and in that case the costs. noble and learned Lord will have entered the fold, but However, I accept the point and agree that our this time it is the ministerial sheep who will emerge report should set out the respective costs of the new wearing the Woolf’s clothing—and for that I am sure process and systems compared to carrying on with the the House will be grateful. Parole Board model. The Government’s position is The noble and learned Lord identified some of the that we would have no objection to providing a report potential problems that need clarifying and we look on the sort of information that the noble and learned forward to receiving that clarification. I would like to Lord asks for, but until we have had more time to add another issue that was raised in the debate on consider exactly what that report should contain and Report, and that is the possible availability of legal aid how best to present the information, we would not for such applications. I dare say that the Minister will wish to be constrained by the exact requirements of confirm that that will at least be considered and that the noble and learned Lord’s amendment. any reference to it will be contained in such a report in When the Government introduced the recall due course. adjudicator provisions, I explained that the aim was to One other matter to touch on is no doubt encompassed introduce greater flexibility in the way that determinate within the terms of the amendment. There was an recall sentences are reviewed and to allow the Parole indication at an earlier stage that the Government Board to concentrate its resources on indeterminate would possibly be looking to the magistracy as a sentence prisoners. There is a great deal of further 15 Criminal Justice and Courts Bill[LORDS] Criminal Justice and Courts Bill 16

[LORD FAULKS] Returning to the final point of the amendment work to be done on the detail. The noble and learned tabled by the noble and learned Lord, which was Lord was quite right to identify the case of Whiston about costs, he will understand that we are committed and the decision of the Supreme Court, which enabled to ensuring that the new model is as cost-effective and the Government to bring forward this amendment, efficient as possible. There is no question that we will albeit on Report—but we would not have been able to have to achieve overall savings and benefits in the bring it forward before then because the decision had criminal justice system as a whole. It will do this not been reached. I think that inadvertently the noble primarily by diverting determinate recall cases away and learned Lord suggested that the decision had been from the Parole Board, processing them in a quicker reached in 1914. It was a little more recent than and less resource-intensive way, and by allowing the that—2014, to be precise—but I am sure nobody board to focus on making inroads into the backlog of misunderstood that. The Government move a little indeterminate sentence cases, thereby avoiding delays faster than that. in hearings and release decisions, which in turn has an impact on prison numbers. A noble Lord: Sometimes. We will, therefore, carry out a careful analysis of Lord Faulks: We will operate an analysis of how it the costs and benefits of the new process as part of the will deliver the benefits we envisage in the most cost- development of the model and plan to publish a effective way. We are committed to undertaking this further impact assessment when that work has been further development work in a collaborative and open done. The Government are willing to share that way. It will be vital to get the new model right and to analysis as the model is developed, and I have already ensure that those with an interest in how this will undertaken to consult the Parole Board as we go work, including Parliament, are kept informed and along and to provide a report for Parliament. I hope have an opportunity to offer views on what is being therefore that with the assurance I have given about proposed. the Government’s commitment to ensuring that adequate The fact that the Bill is silent on the precise workings safeguards are in place, to working closely with the of the recall adjudicator does not mean that the process Parole Board and to providing Parliament with a will be devoid of safeguards. The Bill already makes report, I can persuade the noble and learned Lord to provision for the Secretary of State to make rules withdraw his amendment. regarding the way in which the recall adjudicators work. These rules will be made by statutory instrument, allowing for further parliamentary scrutiny. Ultimately, 3.30 pm the protection of the public remains at the heart of Lord Woolf: I thank the Minister for giving those any decision to release—or not to release—a prisoner assurances, which meet my expectations as to what he from custody. That is why we will ensure that there is a would say. Perhaps I may be excused if I point out that robust system of selection and appointment of recall the point he makes about the rules of procedure is adjudicators. I have already indicated that it is our helpful but by no means meets the concerns that I was intention that such appointments would be filled by indicating because, of course, the rules committee people with significant criminal justice experience. cannot—by rules—ensure that the right people are In answer to the noble Lord, Lord Beecham, we doing the job. What the Minister says should achieve have certainly not ruled out the possibility of using that; the only possible caveat I would have is with magistrates. The feasibility of using magistrates is very regard to his comments about magistrates. I should much a matter for consideration. Of course, they will disclose I was a former president of the Magistrates’ be magistrates with significant and appropriate experience Association. I say former president because in criminal justice—not every magistrate—and they unfortunately I belong to a club which was not to the would be given rigorous and appropriate training before liking of the Magistrates’ Association because it has being allowed to perform the role of recall adjudicator. no female members, and in consequence they have But there is in the magistracy a great deal of experience, suggested that I am no longer president. That is a view and it would be unwise to rule out the possibility of to which they are entitled but I fear may not necessarily using appropriately experienced and trained magistrates influence the members of the club concerned to the for that purpose. A solid foundation of knowledge extent that some would like. That is a fact I have to and experience will be complemented by this training, bear. as well as by guidance and oversight by the chief recall Despite that, magistrates concentrate on criminal adjudicator. cases of a rather different level than those which will The noble Lord, Lord Beecham, also asked about come before this new body. Some of the persons who legal aid. He effectively asked whether recalled offenders will have to be considered by this new body have would be denied legal aid under these proposals. The serious criminal records, and it is important that the answer is that legal aid will still be available. For once, persons concerned should have the proper capacity to I can give a satisfactory answer, I think, to the noble deal with that. I would not rule out magistrates but I Lord, Lord Beecham. think that that is something to borne in mind. Finally, The Government are absolutely determined to ensure I am conscious, having disclosed my position as a that all the necessary safeguards are in place before we former president of the Magistrates’ Association, that implement these changes. I hope that this demonstrates I should have indicated—and I apologise for not doing to the noble and learned Lord our commitment to so—that I am, as I declared on Report, chairman of ensuring a fair, impartial and robust process for prisoners the Prison Reform Trust. The submission I made at that does not put the public at risk. the time, and would have made in more detail but for 17 Criminal Justice and Courts Bill[10 NOVEMBER 2014] Criminal Justice and Courts Bill 18 the intimation kindly given to me by the Minister’s There has been much movement forward. Almost team, was based on help that I received from the 30,000 people have signed a petition requesting that Prison Reform Trust and Justice. I beg leave to withdraw today be the day that this law is changed. I look the amendment. forward to the Minister’s response and beg to move.

Amendment 1 withdrawn. Lord Ponsonby of Shulbrede (Lab): My Lords, I have given the Minister’s office notice of the point that Amendment 2 I am about to raise. It is to do with youth anonymity, which is a slightly different point from that made by Moved by The Earl of Listowel the noble Earl. 2: After Clause 41, insert the following new Clause— On Report, the Government introduced amendments “Duties of custody officer after charge: arrested juveniles which are now Clause 77 of the Bill. Those amendments In section 37(15) of the Police and Criminal Evidence gave lifetime reporting restrictions in criminal proceedings Act 1984 (definitions for the purposes of provisions for witnesses and victims under 18. The amendments about detention in Part 4 of that Act), in the definition clearly give the judge discretion to give lifetime anonymity of “arrested juvenile”, for “under the age to witnesses and victims. It is also clear from the of 17” substitute “under the age of 18”.” Government’s amendments that that discretion of the judge does not extend to the accused. What I would like to know—as I said, I have given The Earl of Listowel (CB): My Lords, Amendment 2 notice of my question to the noble Lord’s office—is rectifies an ongoing anomaly in the way 17 year-old what the status would be of somebody if they had children are treated by the police. While all other been found not guilty at trial. Clearly, after they have children detained by the police are entitled to a local been found not guilty, they are no longer accused, but authority bed, 17 year-olds are not. This means they they may well still be a witness. Would that discretion must be held in a police station. This is one of the of the judge extend to those found not guilty at trial? remaining areas where 17 year-olds are excluded from the protections available to other children, and it needs to change. I tabled amendments on this matter Lord Beecham: My Lords, I commend and congratulate in Committee and on Report and I will not repeat all the noble Earl, Lord Listowel, on the progress that he the arguments made then, but I would like remind the appears to have been able to promote, and look forward House briefly why this matter is so important. to hearing the Minister confirm what the noble Earl has said after citing those very poignant cases. It Since 2010, three 17 year-old children have taken seems that a mistake in the system can now be corrected. their own lives after being treated as adults by the For that, although it has come late for the families to police. They were Kesia Leatherbarrow, Eddie Thornber whom the noble Earl referred, I think everybody will and Joe Lawton. It is worth taking a moment to think be grateful. I congratulate the Minister in anticipation about what it means for a child to die in this way, the of his confirming that the Government have accepted terrible waste and the pain that it causes those they that point. It is entirely to their credit that they have leave behind. These children are much loved and deeply listened to the very strong representations made on missed, and I should like to take a moment to read out that matter. some brief words of remembrance about each of them. Nick Lawton said of his son, Joe: As to the point raised by my noble friend Lord Ponsonby, again, I hope that the Minister will be able “He was a beautiful boy, everyone agreed. Joe was a happy, successful 17 year-old studying for his A-levels. He is missed every to offer him some clarification of the situation along moment of every day”. the lines that he has suggested. Eddie Thornber’s mum, Ann, says: “Eddie was head boy of his school, looking forward to studying Baroness Williams of Crosby (LD): My Lords, I will in America. We would do anything to make sure Eddie was still make a brief intervention. I very much commend the with us”. amendment of the noble Earl, Lord Listowel. Quite Martina Brincat Baines, Kesia’s mother, said: simply, the position of 17 year-olds has changed radically “Kesia was my only daughter. She was beautiful. A funny, since 1984. The proportion of young people staying lively girl who, despite her mental health issues, was loving and on in education to 18 or beyond has almost doubled in great company, she was so hugely loved and is so hugely missed”. that time, and many young people continue within In Committee and on Report, the Minister their family structures until the age of 18, which was explained that a review was looking at the treatment of not so much the case in 1984. So it is important that 17 year-olds in police custody and that the Government the Government look at this. Schools continue to have wanted to receive and digest its recommendations responsibility for young people who are at school until before acting. However, things have moved on since the age of 18. It would therefore be rather bitter if that then. The review has recommended that the law be responsibility was recognised as continuing while people changed; the Home Office has committed to do so as are at school, but then ending when they cease to be at soon as possible; and recently the All-Party Parliamentary school. Group for Children published the report of its inquiry There is some very disturbing information about on children and the police, and recommended that this the number of young people who commit self-harm change take place. I pay tribute to the chair of that when in detention, as a result, for example, of very group, the noble Baroness, Lady Massey of Darwen, serious mental health problems. Without detaining the for the work of that important inquiry. House of Lords further, it is worth looking at whether 19 Criminal Justice and Courts Bill[LORDS] Criminal Justice and Courts Bill 20

[BARONESS WILLIAMS OF CROSBY] I must point out that this is a very complex area and the age of 18 is not a more natural bridge to a young the Home Office review was very wide-ranging—more person becoming a fully responsible adult than the so than the amendment that has been tabled today. present age of 17. It might do something to reduce the This means that the amendment only partially affects suffering that some of these young people undergo in the change in relation to the treatment of 17 year-olds. detention. However, in the limited time available, this amendment makes the most substantial change, that relating to the Lord Faulks: My Lords, both in Committee and on overnight detention of children charged and denied Report, there was agreement around the House that bail. The effect of the amendment would be that this amendment had a great deal to recommend it. It 17 year-olds, as with 12 to 16 year-old children, must follows the tragic cases of three 17 year-olds who be transferred to suitable local authority accommodation committed suicide following their encounters with the overnight in these circumstances. The amendment police, to which the noble Earl, Lord Listowel, has has the full backing of the police. The Home Office referred this afternoon. Their families are determined will work with forces to help them prepare for that no other parents should suffer such a loss, and implementation. want to see a change in the law so that 17 year-olds are The noble Lord, Lord Ponsonby, asked a question treated as children. I pay particular tribute to the that is perhaps not entirely related to this amendment noble Earl for his continued commitment to improving but he was kind enough to give the Government the welfare of young people, and for helping to keep notice of it. As I understand it, it concerns those this important issue at the top of the Government’s acquitted after a trial, whereas the focus of the amendment agenda. to which he referred is victims and witnesses. Indeed, a Despite recognising the merit of this amendment, number of statutory protections within the criminal the Government resisted it both in Committee and on justice system are applicable only to victims and Report as they were still reviewing all the remaining witnesses. The position with an acquitted defendant is pieces of primary legislation which treat 17 year-olds that the court retains its inherent powers to order as adults. That review was proactively launched following reporting restrictions in the case of defendants where the High Court’s decision in the case of Hughes that is necessary to ensure that the administration of Cousins-Chang. That the review was launched is justice would not be seriously affected. It has that testament to the commitment of the Government to right. Of course, up to the age of 18 defendants will ensuring that young people are protected and treated continue to be subject to the youth reporting restrictions appropriately while in police custody, ensuring that that apply automatically in the youth court and may 17 year-olds have the protection to which they are be applied in other court proceedings. That is the entitled. My noble friend Lady Williams makes an position. important point about how 17 year-olds have changed Returning to this amendment and in conclusion, in many ways. this Government share all noble Lords’ desire to ensure Seventeen year-olds who come into contact with that children are always treated appropriately, including the police are afforded important safeguards by Section 11 where they are suspected of wrongdoing. If how we of the Children Act 2004. This places the police under treat our prisoners is a measure of how civilised a an obligation to make arrangements to safeguard and society is, this must surely apply to how we treat our promote the welfare of children when exercising their children when they are in trouble and at their most functions, and means that the police have to make vulnerable. Therefore, I trust that I have noble Lords’ arrangements to safeguard and promote the welfare of support in the Government’s decision to seize the 17 year-olds. Additionally, following the amendments opportunity afforded by the Bill and accept the noble to PACE codes of practice C and H as a result of the Earl’s amendment. Hughes Cousins-Chang ruling, children aged under 18 have access to appropriate adults at the police station, 3.45 pm whose function is to support them throughout interviews and during procedures such as the taking of fingerprints The Earl of Listowel: My Lords, I am most grateful and samples. A parent or legal guardian must also be to the Minister for his acceptance of this amendment, informed of their detention. Indeed, it is common for for his kind words to me and for the eloquent way in a parent to perform the role of appropriate adult for which he put the case for this particular change. It their child. must have taken a great deal of effort on his part, and On Report, the noble Earl welcomed the news of on that of the Bill team and many others, to move this the internal review. He directly asked the Government forward so expeditiously. I thank the Minister, the if something could be done in this area by Third Home Secretary, the Bill team and the local government Reading, although he caveated that by saying, effectively, officials who must have worked with them on this that he realised that such a change would be unlikely. issue. However I am pleased to inform the House that the Great tribute must go to Martina and Matt Baines, Government have listened to his plea and the passionate the mother and stepfather of Kesia Leatherbarrow. collective voice of the families of loved ones who are Despite their terrible and at times overwhelming grief, tragically no longer with us. The Government have they threw themselves into campaigning for what they now concluded their review and have arrived at a very think of as Kesia’s law. I also pay tribute to Jane and clear conclusion: the provisions in PACE that relate to Nick Lawton, parents of Joe, and to Ann and Adrian the treatment of 17 year-olds should be amended as Thornber, parents of Eddie. They, too, have fought for soon as possible so that they are treated as children. changes to the way that 17 year-olds are treated at the 21 Criminal Justice and Courts Bill[10 NOVEMBER 2014] Criminal Justice and Courts Bill 22 police station after the tragic deaths of their sons. Without the commitment of these extraordinary parents Motion in their time of enormous loss, I do not think that the changes would have been made today. Moved by Lord Faulks I also express thanks to the charity Just for Kids That the Bill do now pass. Law for its hard work, commitment and support for the campaign, and to the Standing Committee for Youth Justice and the National Appropriate Adult Lord Ramsbotham (CB): I apologise to the Minister Network. Finally, thanks, too, to the public law teams for not raising the point that I am now going to at Doughty Street Chambers, who provided free legal mention. However, as it is based on a report that was help throughout. I am so grateful to the Minister for published only last week, I have only very recently moving on this at the unexpected point of Third become aware of the position that I wish to raise. Reading, accepting the amendment and making this When I was the newly appointed Chief Inspector of change that will protect future 17 year-olds from the Prisons, I found that the treatment of and conditions harms that these young people experienced. for women prisoners in Holloway was a national disgrace. I was frustrated to learn that current practice Amendment 2 agreed. for handling inspection reports offered no hope of immediate remedial action, so I fell back on army Clause 94: Commencement practice and suspended my inspection for six months, during which period I expected defined Amendment 3 action to be taken. I feel the same frustration about the proposal for a secure college contained in Part 2 of Moved by Lord Ashton of Hyde the Bill, having learnt that the rules of the House do 3: Clause 94, page 89, line 30, leave out “and (3)” and insert not allow me to bring forward a Third Reading “to (4)” amendment based on a report that was published only last week, which I believe changes the whole nature of Lord Ashton of Hyde (Con): My Lords, Amendment 3 the proposal. relates to the mutual recognition of driving disqualifications between the UK and the Republic of Before the Bill leaves the House, therefore, because Ireland. As I set out on Report, the convention ceases the treatment of children is a matter of national to apply in the UK on 1 December 2014 and we are in importance, I feel that I must make one last appeal the process of negotiating a new bilateral treaty with to the Government. Before doing so I assure the the Republic of Ireland along similar lines to the Minister that nothing I am going to say reflects on the convention. This amendment will correct a minor way that he has taken the Bill through the House—during typographical error in Clause 94 concerning the which, all noble Lords, while not necessarily agreeing commencement of transitional provisions. As the with him, have admired the skill with which he, as a convention ceases to apply on 1 December, these renowned advocate, has defended his brief, and been transitional provisions need to take effect on this date assiduous in briefing us, both verbally and in writing, and we therefore need the provisions to come into on that brief. However, unlike the noble Lord, Lord force on the day the Act is passed. Nash, during the passage of the recent education Bill, who was able to accept the case for inclusion of young Amendment 4 is a minor and technical amendment offenders with special educational needs among those in respect of reporting restrictions applying to under-18s for whom education, health and care delivery must be and online content. It removes an inaccurate and provided, the noble Lord’s position in regard to any unnecessary reference to the definition of publication reasoned suggestion of change to the Secretary of in the new Schedule 2A to the Youth Justice and State’s pet plan, appears akin to that of the tank Criminal Evidence Act 1999. The definition of publication commander with whom the Chinese student tried to is in fact set out in Section 63(1) of the 1999 Act and reason in Tiananmen Square. applies to all sections of Part 2 of that Act. The Section 63 definition will apply to the new Schedule 2A Last Tuesday, I took part in the launch of a British because the schedule is enlivened by new Section 45A, Medical Association report, entitled Young Lives Behind and new Section 45A is being inserted into Part 2 of Bars: the Health and Human Rights of Children and the Youth Justice and Criminal Evidence Act 1999 by Young People Detained in the Criminal Justice System. a previous government amendment also tabled on Welcoming it, Norman Lamb MP, Minister of State Report in the Lords. I beg to move. for Care and Support, wrote: “The newly established Children and Young People’s Mental Amendment 3 agreed. Health and Well-Being Taskforce, includes a specific working group on vulnerable children and young people, including young people in contact with the Youth Justice system and will focus on Schedule 15: Reporting restrictions: providers of how services can best meet their needs”. information society services In her foreword, Juliet Lyon, director of the Prison Reform Trust, who has considerable experience of Amendment 4 working with young offenders, wrote: Moved by Lord Faulks “This timely, authoritative report presents an overview of the complex reasons why children and young people offend, their 4: Schedule 15, page 167, leave out line 32 multiple needs and the challenges they present. It enables practitioners and policy makers to reflect on their work with young people in Amendment 4 agreed. trouble”. 23 Criminal Justice and Courts Bill[LORDS] Criminal Justice and Courts Bill 24

[LORD RAMSBOTHAM] strategically placed health unit. NHS England tell me She went on to say: that it is pressing for healthcare, particularly mental “An almost 60 percent reduction in child imprisonment over health care, to be embedded in the culture of the the last seven years … offers a tremendous opportunity for health proposal, requiring confirmed resources, particularly and justice professionals to focus on the most vulnerable children of appropriately trained staff, without whom healthcare, and help them to get out of trouble”. adequately tailored or otherwise, cannot be delivered. I quote two of the report’s recommendations: But, as the Minister knows, there is an acute shortage “Practitioners should consider how best to encourage involvement of appropriately trained staff in the country, let alone and interaction with healthcare services, in a manner that is in the middle of Leicestershire. appropriate to the needs and concerns of children and young people in custody”, So the situation appears to be this. On the one and: hand, we have the Secretary of State for Justice who, “Health and wellbeing of children and young people should without any evidence and in apparent defiance of be seen as concerns for all those working in the secure estate, not government strategy as well as vast amounts of expert just healthcare professionals. To this end, all staff working in the advice, insists on pressing ahead with his claim that his, secure estate must be adequately trained and supported in identifying “new form of youth detention accommodation with”, and reporting health concerns”. as yet unspecified, I said on Report that the House is being asked to “innovative education provision at its core … will equip young rubberstamp a pet project of the Secretary of State for offenders with the skills, qualifications and self-discipline they Justice, without the known agreement of the Cabinet need to turn away from crime”, committee appointed to ensure that all departments and believes that, drive forward the aims of the government’s social “it is right to focus on the educational outcomes that the establishment justice strategy, key indicator number 3 of which is a achieves rather than the staff it employs”. reduction in the number of young offenders who go On the other hand, we have the cross-government on to reoffend. In addition to ignoring proven national social justice strategy, a specific working party of the and international good practice, as well as the advice NHS children and young people’s mental health and and pleas of countless people with experience of working well-being task force, and the declared opposition of with young offenders, I now understand that the Secretary countless experts who know from practical experience of State has ignored the advice of paid consultants how essential trained professional staff are to the such as Deloitte, which recommended smaller development and future well-being of this damaged establishments on the lines of Diagrama in Spain—the and vulnerable cohort of children. subject of a fascinating article in the Guardian on I said in Committee that the changed nature of the Saturday entitled “Tough Love”—and current practice detained children population, resulting from the Youth in America. Justice Board’s success, gave the Secretary of State I admit that this is the first I have heard of the ample justification for rethinking this proposal. I fully children and young people’s mental health and well-being accept that I failed to persuade the House to vote that taskforce working group, charged with focusing on the he should be required to obtain the approval of both needs of the very children whom the Secretary of Houses before proceeding with his proposal or to test State is proposing to detain in his secure college. Far the opinion of the House on a rethinking amendment. from being children for whom normal education and However, I submit that the evidence now available, security provision might be appropriate, these have a thanks to the BMA report and the recent involvement multiplicity of mental health and behavioural needs, of NHS England and the mental health and well-being and their reaction to any regime, let alone one based task force, exposes serious flaws in the well intentioned, on the education that almost all have rejected or from education-based secure college proposal, which clearly which they have been excluded, will be conditioned by is not tailored to the characteristics, capabilities and the complexity of their problems. Furthermore, the needs of its suggested population. majority are to be uprooted from their family and I realise that that is not something that either the local social or healthcare workers, whose involvement Minister or the Secretary of State can resolve, because in their post-release rehabilitation is crucial. A recent of the involvement of the NHS and a Cabinet committee. conversation with NHS England has caused me to I therefore ask the Minister that it be referred to the look again at two remarks made about healthcare by Prime Minister himself, who, I hope, will make a the Minister on Report: statement in the other place on whether, having examined “We also have been working closely with NHS England… to all the available evidence, he authorises that the proposal test our designs for the secure college pathfinder”,—[Official Report, 22/10/14; col. 660.] should go ahead or that it should be put on hold until and, it has been rethought. “a … health unit placed strategically in the middle of the design … will be the best way of delivering healthcare uniquely tailored 4pm to those individuals”.—[Official Report, 22/10/14; col. 663.] Lord Beecham: My Lords, I certainly endorse the True, a health unit is now placed strategically in the remarks of the noble Lord, who has consistently middle of the design, but it was not there when the questioned the detail of the Government’s proposals Minister briefed us in July, suggesting that working in respect of secure colleges. I must agree with him closely with NHS England is a comparatively recent that the BMA report, published only last Tuesday, occurrence. What is more, as I am sure he realises, makes for sombre reading. The report emphasises the adequate tailoring of the delivery of healthcare appropriate need for the state, to meet the multiple and complex needs of 320 damaged “to ensure that detained children and young people have access to and vulnerable children requires more than just a healthcare that is appropriate for their age and health needs”— 25 Criminal Justice and Courts Bill[10 NOVEMBER 2014] Criminal Justice and Courts Bill 26 which the EHRC has identified as a critical human within a year of leaving custody, the Government have rights challenge—given that, taken the view that it is clear that things must change. “Custodial detention is the most extreme form of social As the House knows, secure colleges will put high-quality exclusion that can be imposed by the state”. education at the centre of efforts to rehabilitate young That need is likely to be enhanced in the secure offenders. These provisions in the Bill provide the college context by the very nature of the institution framework for this approach. and its physical remoteness from the family and As the noble Lord was good enough to say, the community whence the offenders have come and to Government have gone to great lengths to engage which they will return. After all, the report refers to Peers, stakeholders, practitioners and experts—and, the average time that offenders will be housed in the indeed, young offenders themselves—on our plans. college as 85 days, which is not a long period. Clearly, Indeed, we are currently consulting on our approach after they move on, there will be a concomitant need to secure college rules and, in response to concerns for the provision of adequate healthcare and, indeed, voiced in this House, we have amended the Bill to educational provision. make these rules subject to the affirmative procedure It appears, then, that NHS England will have to do to the extent that they authorise force, which was an more than simply commission healthcare provision area of particular concern. within the college. It is welcome that there will be such The noble Lord described my position as being a physical provision, although the noble Lord has rather like that of a tank commander. I am not sure pointed out that, of itself, that will not be enough. whether that was a compliment or the opposite. Be NHS England will have to ensure that appropriate that as it may, it would be wrong to suggest that the provision will be made when the offender returns Government are frozen in a rigid posture in responding home, quite conceivably in a different NHS region. to any new knowledge or learning that is available on How will that work? Will NHS England assume the best way to treat these particularly vulnerable responsibility in a different region, or will it be involved young people. The report from the BMA published from the outset? How will the commissioning process last Tuesday will inform the Government’s approach work, both for the period during which the offender is to this issue and, indeed, to all issues. in the college and afterwards? Of course, the noble Lord is quite right, as was the What will be the role of the relevant local authorities? noble Lord, Lord Beecham, to focus on the health Leicestershire, in the first instance, will be the site of needs of this cohort. The Government have worked the first college. Will the home authority deal with closely with NHS England since the inception of the educational and childcare provision on the offender’s proposal, and I assure the noble Lord and the House return home or return to residential care in the case of that we have a very constructive and well established looked-after children? Have there been any discussions relationship with the Department of Health and NHS with local authorities—with Leicestershire in the first England on youth justice. I should remind the House instance, which presumably will be able to provide that NHS England commissions healthcare for young educational and other provision if the project goes people in custody. During the debates, I attempted to ahead within its boundaries—and with the Local indicate to the House how the provision of healthcare Government Association on behalf of other local within the secure college should enable its better delivery authorities generally, in respect of the need to follow to these young people—better, we hope, than in the up when the offender returns home? current youth custody estate. The noble Lord has made a robust critique of the As I say, we continue to develop these plans. We proposals this afternoon and throughout the debates will, of course, bear in mind all advice from whatever on this Bill. When the Bill returns to the House of source, particularly any new learning that is available. Commons, it is important that the other place should However, we continue to believe that these secure have a response to the questions that he has raised, the colleges—whatever anxiety may reasonably be expressed suggestions he has made and those which I have about them—will provide an appropriate means of added. giving education to young people who, sadly, have However, at this stage, I join the noble Lord in often lacked any continuity in their education and, at expressing our thanks to the Minister who has, as ever, the same time, help them to rehabilitate and to emerge argued the Government’s case with great skill and at the end of their sentence with a much better chance perhaps conviction—but certainly with great skill. We of leading useful lives. I hope that I have gone some are grateful to him and to the Bill team for the assistance way to reassure the noble Lord and ask the House to that they have given. In some respects, the Bill has pass the Bill. been improved, but this area remains extremely problematic. I hope that the Minister will be able to Lord Beecham: My Lords, before the Minister sits persuade his colleagues to look again at the questions down, I would be grateful if he would comment on the and issues that have been raised, in which case he will role of local authorities through their children’s services be entitled to even more gratitude than that which I departments, in addition to the health aspect. The two and others now extend to him. cannot be divided.

Lord Faulks: My Lords, I am, of course, disappointed Lord Faulks: They cannot—but I am not going to that the noble Lord, Lord Ramsbotham, remains comment in detail from the Dispatch Box on those concerned about the provisions in the Bill to create precise roles. Of course, as the noble Lord will be secure colleges. With 68% of young people reoffending aware, local authorities have statutory functions in 27 Criminal Justice and Courts Bill[LORDS] EU Budget Surcharge 28

[LORD FAULKS] No one in this House suggested we would. Indeed, it relation to all young people in their local authority was only confirmed to us by Vice-President Georgieva area. Those duties will continue, depending on the on 6 November—last Thursday evening. It means that geographical position of the young person—and of Britain’s payments have been halved from £1.7 billion course the NHS has its own obligations, wherever that to around £850 million. individual may be. If I have any further information to Finally, all member states agreed with us that this elaborate upon my answer to that question, I will do entire episode was unacceptable. A deal was reached so in writing. to make a permanent change in European law so it Bill passed and returned to the Commons with never happens like this again. In the face of this amendments. budget challenge we have far exceeded the expectations or predictions made by those before Friday’s meeting. We have achieved a real result for Britain. But this is EU Budget Surcharge only the first step of the reform we need in Europe— Statement reform that we on this side of the House believe should be put to a vote of the people of Britain”. 4.10 pm 4.14 pm The Commercial Secretary to the Treasury (Lord Lord Davies of Oldham (Lab): My Lords, I genuinely Deighton) (Con): My Lords, I shall now repeat in the feel sorry for the noble Lord opposite. In 10 years or form of a Statement the Answer given by my right so of speaking from that Dispatch Box, I now and honourable friend the Chancellor of the Exchequer to again had awkward cases to argue but I never had a an Urgent Question earlier this afternoon in the House completely bankrupt one, such as the case that the of Commons. The Statement is as follows. noble Lord is trying to put forward. If the Chancellor “Last month the previous European Commission had got such a good deal, why did he not go to the presented Britain with a bill for £1.7 billion, which it other place and make a Statement today instead of insisted had to be paid by 1 December. The Prime being dragged there by my right honourable friend the Minister spoke for taxpayers when he said that was shadow Chancellor in order to answer some questions completely unacceptable, and we set out to get a better that have arisen around this issue? deal. After intensive discussion with the new Commission Is it not clear that the Chancellor failed to reduce and at the ECOFIN last week, we have achieved that. the UK’s net contribution by a single penny? The I can tell the House that we have halved the bill, analogy that has been used widely is “smoke and delayed the bill, will pay no interest on the bill—and mirrors”. I cannot see much through smoke and at the have changed the rules of the EU so this unacceptable age of 75 I do not much like what I see in the mirror. I behaviour never happens again. Let me briefly give the certainly do not like the Government’s smoke and details. mirrors on such a significant issue as this sum. What it At the European Council last month, the Prime all revolved around is the fact which the Government Minister made it clear to the Barroso Commission seek continually to deny—that they had omitted to that, while annual adjustments to contributions were a identify the rebate to which we were entitled, a rebate regular part of EU membership, a sudden and that the Commission has made abundantly clear was unprecedented demand for a £1.7 billion payment on never in the slightest doubt. On all sides, it has been 1 December was unacceptable. He got agreement of made absolutely clear that Britain was going to get the all 28 Heads of Government that it should be discussed rebate, and the saving that the Chancellor has made by the Finance Ministers urgently. was achieved by subtracting from the bill he was That meeting took place last Friday, and followed presented with the rebate to which we were entitled. two weeks of intensive and constructive discussion What a story. with the new Budget Commissioner—Vice-President Lord Deighton: I should just like to point out that Georgieva—and other member states. As a result of what we have seen in the past few days is complete those discussions, we achieved unanimous agreement clarification of a situation. The reality is that the net that, first, expecting payment on 1 December was payment is £850 million. Noble Lords may understand indeed unacceptable. Therefore, the budget rules will the situation better than me but until that point everyone be rewritten to allow for a delay in any payments, and assumed that the payment was £1.7 billion. The rebate in Britain’s case that means we will pay nothing this was not at all clear. What officials spent the past two year, and instead make payments in two instalments in weeks doing was clarifying that the rebate would be July and September, in the second half of next year. available in a size that has effectively halved our payments. Secondly, the suggestion that we might have to pay There are also no smoke and mirrors about the fact interest charges was rejected. It was unanimously agreed that the payment has now been delayed—it is in two that there would be no interest charged on these stages. We have brought the rebate forward so that it delayed payments. offsets the notional second half of the payment. What Thirdly, in our discussion with the new European we have introduced in the past few days is complete Commission, it was agreed that a full rebate would and utter clarity on the arrangement in hand. apply to the British payment, and that this rebate would be specific, extra to any other rebate we might 4.16 pm expect next year, and, for the first time ever, be paid Baroness Ludford (LD): My Lords, can the Minister simultaneously with any money owed. It was not clear confirm that the policy of constructive engagement we would receive a rebate, let alone such a large one. and alliance that has brought this happy result will be 29 EU Budget Surcharge[10 NOVEMBER 2014] EU Budget Surcharge 30 pursued across the whole spectrum of EU policy, recognise that such technical adjustments, as I think instead of one of hubris, bluster, threat and brinkmanship the Chancellor said in his Statement, are an endemic about repatriation of powers, as that is the way to get a part of the EU budget process, from which the UK good result? Can he also confirm that while of course sometimes benefits and sometimes loses? In future, it the UK must always drive a hard bargain to get the might be better to handle it all a little more calmly. best value, given that control of EU spending is vital, our UK contributions to the EU, which give us access Lord Deighton: I thank the noble Lord for pointing to the world’s biggest single market and trade agreements out that these are, in practice, technical adjustments. with 50 countries, are less than a quarter of our Of course, it was a very large technical adjustment annual national debt payments? Finally, can he also delivered with very short notice, which is why the clarify the exact way in which the final bill has been Prime Minister reacted in the way that he did, and calculated and whether the rebate is being applied to why, as part of the negotiations over the past couple of all 18 years—1995 to 2013—covered by the £1.7 billion weeks, we have determined that the process will not GNI recalculation? What is the effect on the rebate in work quite that way again. In summary, I agree with the next and subsequent years? the noble Lord that there is a better way to handle these things. Lord Deighton: I thank my noble friend for the questions; there is quite a list there. My right honourable Lord Brabazon of Tara (Con): My Lords, would my friend the Chancellor has demonstrated how effective noble friend not agree that, when the announcement his constructive engagement has been in producing was first made that we had to pay £1.7 billion—it is this outcome. I would expect the same result from the pounds, not euros—we were told by the Commission, Prime Minister’s constructive engagement on the reform other member states and, no doubt, the party opposite programme that we will put to the British people in that it had to be paid by 1 December, or else we would 2017. It is absolutely right that we drive a hard bargain have to pay interest? We have now reached a situation and get better value for money. If one looks at the EU where it does not have to be paid by 1 December; half budget, my right honourable friend the Prime Minister of it has to be paid over a period next year. By the way, has been the first to achieve a real-terms cut for the there was no mention of the rebate whatever at the multi-year financial facility, through to 2020, which beginning of this conversation. If this is smoke and has thereby capped the amount spent. The weakest mirrors, can we please have more of them? part of our performance of the past few years in that negotiation was, frankly, the poor rebate deal that the Lord Deighton: I thank my noble friend for putting, previous Government gave away, which put us in a with force and eloquence, precisely the points I have much weaker position. That was by far the most been trying to make in response to the last three ineffectual piece of negotiation. It is a complicated questions. calculation to work out these rebates, but the rebate side of the calculation does not go back for the same Lord Tomlinson (Lab): My Lords, can the noble full period as the GNI calculation. Lord explain exactly what the Treasury had been up to—it had been involved in all the calculations—and Lord Richard (Lab): My Lords, the original demand how it was that, after three months of negotiations, from the Commission was for ¤1.7 billion. Its demand the Chancellor did not understand what it had been is still ¤1.7 billion, against which a British rebate of doing? The Chancellor also did not advise the Prime approximately half that sum has to be offset. If that is Minister before he went to Brussels, which is why the right, and I think it is, it does not seem to me that the Prime Minister was caught on the hop. If we have not Government have reduced the amount of the demand got just what we were going to get back in any case, by one penny—certainly not by one euro. What they can the Minister assure us that we are still going to get have done, through some creative mathematics, is bring the rebate in 2015 and 2016, and that we have not in a rebate that we were going to get anyway and then merely already received it back as an advance? pretend that they have reduced the ¤1.7 billion, which they have not. Lord Deighton: I can assure the noble Lord that the Lord Deighton: My Lords, I am afraid that I can rebate that we are discussing with respect to halving only repeat the position. It was far from clear that the this payment is applied specifically to this payment. It rebate would be applied. That is the point at issue is independent of other arrangements for the rebate. between us. We can continue to have that discussion, but it was far from clear that the rebate would be Lord Cormack (Con): My Lords— applied. That is what was accomplished in the last two weeks. The other things that have been accomplished Lord Stoddart of Swindon (Ind Lab): My Lords, is are a deferment of the payment and that there will be the Minister aware—it was these Benches’ turn. no interest on those payments. We have also changed the rules so that we cannot get ambushed like this again. Lord Ashton of Hyde (Con): Actually, my Lords, we have had one question from each. Lord Hannay of Chiswick (CB): My Lords, would the Minister accept a welcome for the elegant and Lord Cormack: My Lords, I was saying to my noble timely decisions reached in the Council last Friday, friend: is this not the most skilful manoeuvre we have while recognising that the clarifications relate to the seen since Disraeli caught the Whigs bathing and ran timing of payments, not to their scale? Will he also away with their clothes? 31 EU Budget Surcharge[LORDS] Infrastructure Bill [HL] 32

Lord Deighton: It is hard for me to put it in historical We have two projects under consideration: in perspective, but as always, the Prime Minister and my Peterhead in Scotland, and the White Rose project in right honourable friend the Chancellor have done an the north of England. Both could help to establish a excellent job representing the interests of this country. considerable infrastructure that would help CCS to be deployed in other sectors and at other power stations. Lord Stoddart of Swindon: There is a minute, so I In the creation of this infrastructure it is likely that have just made it. The country was treated to a lot of we will see enhanced oil recovery playing a part, sound and bluster from the Prime Minister stating particularly in the Scottish project. The purpose of that he was not going to pay a penny. Today, by smoke these amendments is to probe the Government on the and mirrors, the Chancellor has reduced that amount degree to which CCS and enhanced oil recovery will to £850 million. However, is the Minister aware that be incorporated in this new approach to getting people think that that is a lot of money, which is to be economic advantage and economic development in added to the £11 billion we shall be making in the North Sea. We understand that the Government contributions? have tabled amendments with a view to establishing a new regulatory body, following on from the Lord Deighton: I agree with the noble Lord that recommendations of the Wood review, which mentioned £850 million is a lot of money. We will expect value for CCS and EOR specifically. Recommendation 4 money for that kind of investment. I should make states: clear that the Prime Minister said that we would not “The new Regulator should work with Industry to develop be paying £1.7 billion on 1 December. In fact, we will and implement strategies”, pay nothing on 1 December. We will pay £850 million which include looking at CCS and enhanced oil recovery. in two payments next year. Unfortunately, as tabled, there is no explicit reference to those strategies in the clauses that we are here to Infrastructure Bill [HL] debate this afternoon. My two amendments seek to Report (3rd Day) address that. I look forward to the response of the noble Baroness. I beg to move. 4.25 pm

Clause 30: Maximising economic recovery of UK 4.30 pm petroleum Lord Jenkin of Roding (Con): My Lords, I have some sympathy with the noble Baroness’s amendment. Amendment 113A It has always seemed to me that if you are to have an Moved by Baroness Worthington effective carbon capture and storage policy, and if it is to be developed from the two projects which the 113A: Clause 30, page 31, line 8, after “petroleum” insert “and Government are currently financing, it would make the co-ordination of the transportation and storage of CO2” sense eventually to have what one might call a grid for Baroness Worthington (Lab): MyLords,itisa the CO2 that would be separated as a result of the pleasure to speak to the energy parts of the Infrastructure technology. Each individual power station developing Bill on Report. We hope that these amendments will its own method of disposing of its CO2 would not introduce a level of co-ordination into government seem to me to be sensible. policy, specifically with regard to the use of enhanced However, we are at a very early stage in developing oil recovery for the furtherance of extraction of oil this technology. Yes, there have been other examples of and gas reserves from the North Sea—and, in doing a technology being worked in other countries. A number so, will join up with a policy on carbon capture and of noble Lords were in a party that I joined a year or storage and the pursuit of carbon capture and storage. two back when we went down to see the BP research We on these Benches are clear that we must pursue a establishment at Sunbury. We were given what I found range of technologies if we are to meet our challenging a completely fascinating account of how carbon capture greenhouse gas targets and, more specifically, if we are and storage has been operated in a large BP gas field to decarbonise both our power sector and, importantly, in Algeria, with gas deposits spread over about 20 miles our industrial sector. When we look at the industrial or more coming up to the collection point and the sector, it seems clear that CCS will have to play a carbon capture and storage technology being applied considerable role. and the CO2 going straight back down to the deposits Unfortunately, we have not yet seen the ground from which the gas had been extracted. The gas, now being broken on any CCS projects in the UK. We have free of CO2, was piped to the coast where it was seen CCS start to operate on a commercial scale in delivered to markets. Canada and we will see a plant opening in the US. We I completely understand that that is a unique situation, are also told that commercial-scale projects are expected but there are other examples in other parts of the to be commissioned in China. Therefore, we have world where the technology is working, and one hopes slightly fallen behind the curve in terms of leadership that this will be possible. If we are going to have to rely on this. Nevertheless, our geographic advantages in on fossil fuels—as I believe we will—for at least the the UK are such that we can be a very fast follower. next three decades or perhaps more, it seems desirable, We can take the great learnings that we are seeing in if we can, to develop an economic method of carbon other parts of the world and apply them here to capture and storage so that it can be done without become a leader in Europe in the application of carbon necessarily increasing the carbon that has to be discharged capture and storage. into the atmosphere. 33 Infrastructure Bill [HL][10 NOVEMBER 2014] Infrastructure Bill [HL] 34

I say this with some hesitation as the noble Lord, I reassure noble Lords that the UK has one of the Lord Oxburgh, is sitting opposite and knows, I suspect, most comprehensive programmes on CCS anywhere 10 times more about this than most of the rest of us. in the world in order to support the commercialisation Nevertheless, the Government’s policy of having pilot of the technology and develop the industry. The projects and supporting them with the support of the programme includes a competition with up to £1 billion industry is the right way ahead. It may well be that if capital plus operational support for large CCS projects this can be developed it will be necessary at the same and a £125 million research, development and innovation time to develop a coherent system for disposing of the programme. In addition, the Government set out how CO2 that is discharged from the plant. I shall be we are supporting the carbon capture and storage interested to hear from my noble friend on the Front industry in a policy scoping document published in Bench about whether this needs a change in the law. It August. The document sought evidence and views seems to me that something along these lines may from experts and stakeholders on a range of issues eventually be necessary, and I hope that perhaps the affecting the CCS industry going forward, including Government will recognise that in due course. CCS with enhanced oil recovery. The deadline for submitting those views passed just over two weeks The Lord Bishop of Chester: My Lords, can I ask ago. Given that we are analysing the responses we have the Minister when she responds to comment on two received and are in discussions with HM Treasury points? First, if we are now to be committed in this over its review of the fiscal regime for oil and gas, it legally strengthened way to the maximum economic would seem premature to make provision in primary exploration of our oil and gas reserves, how do the legislation at this time. Government see that to be compatible with the The Government recognise that captured carbon commitment under the Climate Change Act to reduce dioxide could play a role in enhanced oil recovery, and our emissions to only 20% of the 1990 level by 2050 likewise that enhanced oil recovery could play a role in without also having a strategy for carbon capture and the UK’s carbon capture and storage industry going storage, which I think lies behind the amendment? forward, but the extent of any interaction between the Secondly, the amendment refers to the economic CCS industry and the concept of maximising economic extraction of our hydrocarbons—I have never yet recovery of petroleum is not yet clear. Carbon dioxide heard any reliable estimate of what the additional cost transport and permanent geological storage is a nascent will be of having carbon capture and storage on a industry, so although it is important to promote the typical power station, be it a coal station or a gas industry where possible it would be wrong to be too station. What level of increase per kilowatt hour—in a prescriptive now. That point was made eloquently by unit that can be easily understood—is anticipated if my noble friends Lord Jenkin and Lord Caithness. carbon capture and storage is required on such stations? Further discussions with industry and the relevant That impacts on what is economically recoverable. trade associations are needed before we can say with certainty how the MER UK principle should apply to areas such as CCS. The Earl of Caithness (Con): My Lords, I have a The Oil and Gas Authority will have a significant question for my noble friend on the Front Bench function in considering the role of CCS when determining arising from my work not long ago on carbon capture whether companies are operating in line with the and storage. It concluded that every situation would maximising economic recovery strategy. The OGA be different and that it would depend not only on the will issue carbon dioxide storage site licences and oil wells but on the businesses trying to do this work. approve carbon dioxide storage permit applications. It Some businesses might be able to pool their resources, will also have responsibility to ensure that CCS is and while it might be possible to set up a grid in a considered as part of a proposed decommissioning certain area, it might not be in another. Would not the plan and will take into account the viability of utilising amendments as proposed make that much more difficult? captured carbon dioxide in enhanced oil recovery As my noble friend Lord Jenkin has reminded us, we projects. In addition, the transfer and storage of carbon are at a very early stage in CCS and the technology is dioxide is an important technology, which is why it is not yet fully proven. An awful lot of work still has to likely to form a key element of the technology and be done, so to put something like this on to an industry decommissioning sector strategies that will be developed which is in its infancy will surely cause more problems by the OGA, in consultation with industry. These than it will solve. strategies will help to underpin the overarching strategy related to maximising economic recovery. The Parliamentary Under-Secretary of State, Department The right reverend Prelate the Bishop of Chester of Energy and Climate Change (Baroness Verma): My asked how this would help us to meet our emissions Lords, I thank the noble Baroness, Lady Worthington, reduction aims as set out in the Climate Change for proposing these amendments and all noble Lords Act 2008. Implementing recommendations contained who have contributed to the debate. It gives me the in the Wood review will be done in a way compatible opportunity to respond in full to both amendments in with the legally binding climate change targets. Our the group. They seek to extend the maximising economic overarching energy strategy seeks to underpin secure principle objective to include, and diverse energy supplies, including renewable, nuclear “co-ordination of the transportation and storage of CO2”, and indigenous resources. The carbon plan has shown and would require, that Britain will still need significant oil and gas “the establishment of a strategic vision for the permanent storage supplies over the next decades while we decarbonise of CO2 in depleted fields”. our economy and make a transition to a low-carbon 35 Infrastructure Bill [HL][LORDS] Infrastructure Bill [HL] 36

[BARONESS VERMA] review, collaboration between licence holders, operators one; projections show that in 2030 oil and gas will still and infrastructure owners will be a key requirement to be a vital part of the energy mix, providing around meet the challenge of maximising economic recovery 70% of the UK’s primary energy requirements as we from the UKCS. seek that transition. Clause 30 provides for this and makes collaboration The right reverend Prelate also asked about the a central part of the principle of maximising the costs of carbon capture. If he and noble Lords would economic recovery of UK petroleum. However, the allow it I would like to write to him and ensure that the Government recognise the legitimate concerns that Committee gets sight of the letter. industry has raised about the way in which commercial Having given those reassurances and demonstrated arrangements are dealt with in the clause. The industry that the Government see that carbon capture storage is concerned that it may have an adverse impact on will be a part of our strategy in the future, though we investment in the UK continental shelf, and we take are still at an early stage, I hope that the noble Baroness those concerns seriously. It is not in anyone’s interests can be persuaded to withdraw her amendment. to undermine investment in the UKCS at such an important time. Baroness Worthington: I thank the Minister for her We have just launched a call for evidence to discuss response and for the comments of noble Lords. I am in further detail with interested parties the best way in encouraged to hear these explicit references to the which to implement the recommendations contained work of the OGA in relation to CCS and EMR. It is in the Wood review. We will use this opportunity to not unnecessarily prescriptive to add it to this part of discuss how the maximising economic recovery strategy the Bill. As we go forward and if the Government should apply to commercial arrangements without come forward with other legislation to transfer the creating any unforeseen circumstances. OGA from an executive to a private company, we may Amendment 131A is minor and technical in nature. have a chance to revisit this. We are in a world where Clauses 30 and 31 and Schedule 6 come into force on CCS is being taken seriously and EMR is often associated such days as the Secretary of State appoints by regulations. with that. We are also in a world where offshore oil The purpose of the amendment to Clause 41(7) is that and gas fields are running down. If CCS can achieve regulations bringing into force those provisions may the double aim of reducing our carbon emissions and appoint different days for different purposes. It is for helping to maximise economic recovery, that should these reasons that I propose these amendments and I certainly be pursued. I do not see why it cannot be beg to move. explicitly stated, as it seems such an obvious win-win, but I am happy to withdraw my amendment. 4.45 pm

Amendment 113A withdrawn. Lord Davies of Oldham (Lab): My Lords, the House will know that we have been supportive of this new regulator and have very much welcomed its creation. Amendment 113B not moved. Of course, the Wood review suggested that the measures within it would increase, as the Minister has indicated, Amendment 113C the production of oil and gas from the North Sea by a third—and in doing so produce an additional 3 billion Moved by Baroness Verma to 4 billion barrels, with a wholesale value of around 113C: Clause 30, page 31, line 22, leave out from beginning to £200 billion over the next 20 years. Those are significant end of line 39 numbers and anything that helps to produce figures of that kind to the advantage of our people and our Baroness Verma: My Lords, the UK oil and gas economy is, of course, greatly to be welcomed. industry is of national importance. It makes a substantial This measure was welcomed by the industry although contribution to the economy and supports around there were concerns about the power of the regulator 450,000 jobs. Oil and gas will continue to be a vital to interfere with commercial arrangements. These part of the energy mix as we transition to a low-carbon amendments would remove the ability of the regulator economy, still meeting around 70% of our energy to alter commercial arrangements. Therefore, I must demand in 2030. Therefore it is vital that we maximise say, they appear to water down its powers. We understand our indigenous supply, to put downward pressure on the anxiety about the commercial arrangements but if prices, support jobs and maintain secure supplies. The this change is necessary to ensure that investment is Government commissioned Sir Ian Wood in June not deterred, we need to hear from the Minister the 2013 to review UK offshore oil and gas recovery and extent to which it can be said to have substantially its regulation, and we have been making good progress altered the regulator’s power. If it has not made any in implementing the recommendations. significant change, what is the rationale behind these Amendments 113C to 113F seek to remove from amendments? Clause 30 all references to commercial arrangements. Did the Government consult Sir Ian Wood before This issue is clearly of the utmost importance, since a developing these amendments and, if so, what was his great deal of what industry does in its efforts to response? Obviously, it is important that we have his maximise the recovery of offshore oil and gas is affected views if these amendments represent a significant through oil and gas’s commercial arrangements with change to the regulator, which we as the Opposition one another. Never in the history of the UKCS has have fears that they do. The fundamental question this been more true than today. As set out in the Wood prompted by this change is whether the regulator still 37 Infrastructure Bill [HL][10 NOVEMBER 2014] Infrastructure Bill [HL] 38 has the required authority to encourage greater understands very clearly that we must not be undermining co-operation and asset-sharing, and, following on from investment at this time. It is not our intent that the that, whether the Government see the regulator as a OGA has the ability to directly interfere with new or facilitator or as someone who can insist on co-operation. existing commercial arrangements. We will ensure that I hope the Minister will recognise that our anxieties the strategy deals with commercial arrangements in a that the amendments might represent a weakening of sensible and proportionate way. the power of the regulator need to be allayed. We have listened very carefully to all concerns from industry and other stakeholders but, as my noble Lord Jenkin of Roding: My Lords, it needs to be friend Lord Jenkin has rightly said, this is a tripartite remembered—indeed, the noble Lord, Lord Davies, understanding of investment within the UKCS, and has acknowledged—that the industry very much therefore I hope that the noble Lord, Lord Davies, is welcomed the report of Sir Ian Wood. content with my descriptions of why the amendments Noble Lords will remember that perhaps the most are important. important recommendation that Sir Ian Wood made was that in future if we are to maximise the economic Amendment 113C agreed. recovery of oil and gas, there needs to be a tripartite partnership of the Government, the industry and the regulator. The industry signed up to that. That has Amendments 113D to 113F been the basis of the substantial amendments which Moved by Baroness Verma were moved in Committee with the intention of implementing the Wood review, and I am on record as 113D: Clause 30, page 32, line 20, leave out from “holder” to having welcomed them very warmly. end of line 23 I am aware of the concerns which have been voiced 113E: Clause 30, page 32, line 27, leave out from “licence” to by the industry—to which the noble Lord, Lord Davies, end of line 30 has referred—but I take much comfort in the recent 113F: Clause 30, page 32, line 36, leave out from “infrastructure)” appointment of Andy Samuel as the chief executive to end of line 39 officer of the Oil and Gas Authority. As my right Amendments 113D to 113F agreed. honourable friend Mr Davey announced in the Statement last week: “This is a significant milestone in the establishment of the Amendment 113G OGA and demonstrates our commitment to the UK’s oil and gas industry and implementing Sir Ian’s recommendations”.—[Official Moved by Baroness Worthington Report, Commons, 6/11/14; col. 53WS.] 113G: Before Clause 32, insert the following new Clause— It has to be remembered that Andy Samuel has a very “Underground access: environmental protection long background in the industry. He will understand (1) All sites extracting petroleum under the provisions of as well as anybody the problems of getting industry section 32 must— members— hitherto seen as competing with each other (a) carry out an Environmental Impact Assessment, all the time—to work together in this tripartite arrangement. Therefore, while I understand the concerns, (b) ensure that independent inspections are carried out of the integrity of wells used, I do not share the problem of the noble Lord, Lord Davies, because I think the industry is well placed to (c) publicly disclose the chemicals used for the extraction process, and the proportions in which they are used on a take this forward and achieve the very substantial well-by-well basis, advantages of additional production and national revenue (d) consult with the relevant water company, and that were outlined. I think these amendments are probably necessary to reassure the industry but I believe (e) carry out monitoring over the previous 12 month period. the industry is firmly committed to the tripartite partition (2) The Secretary of State must by regulation specify what for which Sir Ian called. data shall be required under paragraph (e). (3) Regulations under subsection (2) must specify as required data the levels of methane in the groundwater and ecological Baroness Verma: My Lords, I am extremely grateful studies, that data shall include but is not limited to levels of to my noble friend for his intervention and contribution, methane in the groundwater and ecological studies. because he lays out very clearly our position. In responding (4) Regulations under subsection (2) must be made by statutory again to the concerns of the noble Lord, Lord Davies, instrument and may not be made unless a draft of the instrument we are committed to ensuring that the regulator is as has been laid before and approved by a resolution of each House strong, competent and influential as a regulator should of Parliament.” be. However, it is important to ensure that the powers are practical and effective and do not create unintended Baroness Worthington: My Lords, I shall speak also consequences, as I stated earlier. to Amendment 115A. These two amendments have It is also important that we do not undermine been tabled to address what I think will prove a major investment in the UKCS at such an important time. As oversight on the part of the Government. They would part of the call for evidence we will engage with ensure that hydraulic fracturing for oil and gas in the interested parties to discuss how the strategy for UK could get off to a good start with the confidence maximising economic recovery should apply to of the general public. The oversight that I refer to is commercial arrangements. The noble Lord, Lord Davies, that there has been no word from the Government on asked if Sir Ian Wood was content with our amendments; the need for regulations to enhance environmental the understanding is that he is content, but he also protection in light of this new activity. 39 Infrastructure Bill [HL][LORDS] Infrastructure Bill [HL] 40

[BARONESS WORTHINGTON] data. It would be a shame not to put in place the Obviously, we have been used to extracting oil and adequate protections so that we can have access to gas from offshore in the UK for many years. However, those data and can refute such claims, and to show the advent of fracking, as has been seen in the US, that fugitive emissions do not undermine the brings with it a unique set of circumstances and a environmental case for fracking. unique set of potential risks. It seems odd that the As I said in my comments previously on CCS, on Government have not seen fit to come forward with a our side we are committed to bringing forward a comprehensive review of the current environmental whole range of low-carbon technologies and fuels to regulations that would apply to this industry and have enable us to decarbonise our economy. Shale gas can sought only to introduce a limited set of clauses to the play an important role in that. I would far rather that Bill, which we will come on to debate, relating to we use homegrown gas than imported Russian coal. trespass laws. For that reason you will see that we are, in general, As I have said, fracking is a novel process which supportive of the Government’s moves to change the contains a number of different stages all of which will laws and the legal loopholes that we will debate today. be subject to some forms of environmental regulation—let However, we have tabled this amendment because this us be clear about that. However, the Economic Affairs is a very serious issue. We need to get public support Committee of the noble Lord, Lord MacGregor, in its and public confidence and ensure that our regulators thorough and detailed inquiry and recent report, clearly have every possible chance to ensure that this industry highlighted the need for a review of the existing regulations gets off to a good start. not only to simplify and clarify but to ensure that any potential loopholes are closed. Two in particular were 5pm mentioned by the noble Lords who were the authors of that report, one being the need for genuine I am sure that the Minister will claim that the independence of inspectors and the other—here, they experts say that it is all okay and we have all the cited a recommendation of Professor David MacKay—the environmental regulations we need, but that does not need for baseline and ongoing monitoring of fugitive appear to be the case. I have been approached by emissions. Our amendment puts forward those someone who mentioned to me that the regulatory requirements as part of new regulations. We have also structure is really not good enough, both in its complexity included two or three other issues. and its lack of oversight in terms of some of the issues I have just mentioned. I would very much like to hear We propose our amendments not out of any desire from the Minister what her response is to the question to see fracking held back or delayed but to give it the of independent inspection. best possible chance of moving forward on the right foot from the outset. Just last week, a town in Texas, Equally, in our debate on Tuesday, a number of Denton, voted against allowing fracking to continue noble Lords made specific reference to the issue of within the confines of the town. This is right in the fugitive emissions—here I refer to our Amendment 115A. heart of the oil and gas boom that has been brought Unfortunately, the Minister was not forthcoming in about by shale gas in the US. The reason cited for her response to either myself or the noble Lords, Lord passing the ban was that people had become tired of Shipley and Lord MacGregor, who also raised questions industry trying to work around environmental protections about fugitive emissions. I hope that the Minister will and environmental regulations. use the opportunity today to put on record the Government’s approach to fugitive emissions, the baseline Our aim in tabling the amendments is to ensure that monitoring for those, the ongoing monitoring and we do not have that outcome here in the UK. We who should pay for that and resource it. should take the time now to introduce a proper regulatory framework that enables the industry to get off to the I apologise to noble Lords if I am even more right start and to learn from some of the mistakes that rambling than normal. I am not feeling 100% today, we have seen in the US, where patchy regulation has but I am here because this is an incredibly important led to a number of pernicious scare stories being in the aspect of this Bill. It is in our interest, and also that of public mind when it comes to fracking. Once such industry and the economy, that we get fracking right. I stories have seen the light of day, they are very hard to do not believe that the Government have paid sufficient root out. It is our contention that the Government attention or listened carefully enough to the concerns have not done enough to go forward with a sensible from those in the environmental sector, pondering on and balanced approach to fracking in the UK—hence what we think about the potential impact of this these amendments. technology. I look forward to hearing the response of the noble Baroness. I beg to move. As I have said, in thinking about amendments, we read with great care the recommendations of noble Lords on the Economic Affairs Committee. I am Lord Jenkin of Roding: My Lords I understand the pleased to say that we have taken forward the two case that has been made by the noble Baroness, Lady recommendations that I mentioned, on independence Worthington. I started my consideration of the details of inspectors and in relation to the monitoring that is of this with the hugely important joint report of the needed to establish a baseline. We can have a discussion Royal Society and the Royal Academy of Engineering about how that baseline should be established, but it back in June 2012. Indeed, I had substantial discussions would be in the interests of the industry to have with the chairman of the Committee that produced baseline monitoring because what we do not want is the report, Sir Robert Mair, whom I had known for stories to keep abounding about shale gas having previously. Perhaps the most important statement in higher emissions than coal simply because we lack the that report—and it had a great deal of detail backing 41 Infrastructure Bill [HL][10 NOVEMBER 2014] Infrastructure Bill [HL] 42 it up—was that they had reviewed the scientific and of time it deems suitable for each given site. We engineering evidence on risks associated with UK discussed this in Grand Committee. I was certainly shale gas development and concluded that those risks, there arguing that baseline monitoring is hugely important. “can be managed effectively in the UK as long as operational If there is to be any question of contamination, you best practices are implemented and enforced through regulation”. have to know what you are starting with. That is what That has been at the heart of my continuing support it means and we do that in this country already. I have for the development of the shale gas industry in this never heard it suggested that it is anything other than country. fully effective. My second point—and no doubt my noble friend I am not sure that we need the additional provisions will be able to elaborate on this—is that the regulation in the noble Baroness’s amendments. I have great faith system that we have in this country, in general under in the ability of our existing monitors. They have these the authority of the Environment Agency, is quite powers and the duties imposed on them. They do not different from that in the United States. I am in no need to be told in detail by Parliament what to do and doubt that some of the regulation there has been quite how to do their jobs, so this is probably unnecessary. I seriously defective. That has given rise to accidents understand the motives behind the amendments, but that have been reported, and to the lack of support the issue should be dealt with effectively by proper that one is aware of here and that the noble Baroness information programmes to counter the mischievous has referred to. Of course, you only have to read the rumours that one reads in the press every day. I shall media to realise that every accident that happens there be interested to hear my noble friend’s response from is greatly magnified through the media—with a trumpet, the Front Bench, but I do not think that these amendments as it were. If noble Lords studied the various blogs actually add anything to what we have already. that come out on this every day, I am sure they would Baroness Young of Old Scone (Non-Afl): My Lords, realise what an unbalanced argument it has become I rise to support Amendment 113G. I declare a past because of the way in which all these things are interest, having been chief executive of the Environment presented here in this country. Agency for eight years. This is a technology that is I have been critical in the past of both the industry deeply distrusted by the public. Certainly, my experience and the Government for failing to realise the extent to of regulation in the environmental field is that if a which they need to fight the case for the development degree of certainty can be given to both sides—the of a shale gas industry. To be fair to the industry, it has industry and the public—that is hugely beneficial in now started a considerable programme called “Let’s removing tension, distrust and suspicion. Industry talk about shale”. Briefly, the leaflet I have been sent used to tell me time and again that it would prefer to speaks of the very considerable activities that the see clear, unequivocal regulation, which it could then industry is now taking—primarily in the areas of fit its business around and make sure that it was the Bowland shale deposits, because that is where the compliant with, so that there was no doubt about the main arguments come from at the moment, but of requirements that would be laid upon it. This was the course that can eventually be spread nationwide. That most successful way of developing a degree of trust on is a welcome development, if perhaps a bit belated, hotly contested issues that could have an environmental but at least it is now happening. impact. The one point where I agree with the noble Baroness Therefore, I urge the Minister to think seriously is that the Government have to match that as well, and about placing in the Bill an environmental impact take these scare stories seriously and counteract them. assessment and some of the other associated requirements Indeed, when I talked to the head of the trade association here. Some of these exist elsewhere in legislation, but UK Onshore Oil and Gas, I said, “Learn the lesson of there is no harm in making the point that whether they instant rebuttal”. We learnt that from a previous are implemented is not the decision of the Environment Government. If they wanted to scotch a rumour, it Agency but a requirement because this technology is had to be the subject of an instant rebuttal. I see very so distrusted by the public. I think it should cover little sign in the media that either the industry or the exploration as well as extraction. It should also be Government are yet engaging effectively in the instant associated, if I may say so slightly in advance, with the rebuttal of scare stories. two amendments—or at least one of them—that I have put down, which we will be debating later. Certainly Having said that, I will perhaps anticipate what my in the initial stages of this hotly contested area, we noble friend will say. We now have the most effective need belt and braces, not just belt. system of regulation in the world for our oil and gas resources. It is of a very high standard and admired Lord Wigley (PC): My Lords, I am content to across the world. There is absolutely no suggestion support Amendment 113G as far as it goes but, to my that the existing powers of the Environment Agency mind, it does not go anything like far enough. I regret and other bodies involved in this need reinforcing by that I will be introducing rather a disconsonant note additional statutory provisions, as in these amendments. to the debate. I will outline my opposition to hydraulic I read the amendments and thought, “For goodness fracking, lock, stock and two poisoned barrels, in the sake, all this is happening already”. The noble Baroness debate on a later amendment in my name—here’s to mentioned baseline monitoring. The Environment Agency knocking these diabolical fracking provisions out of has the powers—as have the Scottish Environment the Bill. These amendments give a modicum of increased Protection Agency and Natural Resources Wales—to environmental protection, and I welcome the reference require baseline monitoring of those environmental to the levels of methane in underground water, to indicators it considers appropriate and for the lengths which I shall certainly be returning in a later bank of 43 Infrastructure Bill [HL][LORDS] Infrastructure Bill [HL] 44

[LORD WIGLEY] effectively protected. The report in 2012 by the Royal amendments. I seek some clarification from the mover Society and the Royal Academy of Engineering, already of the amendment on whether either the Scottish referred to by the noble Lord, Lord Jenkin, came to Parliament or the National Assembly for Wales has exactly the same conclusion. any role in the consideration of these draft instruments. We heard from many witnesses that the current regulation of offshore and onshore gas and oil drilling Lord Teverson (LD): My Lords, when one reads the in the UK is widely regarded as best in class. Four of amendment, one is clearly very favourable to it because the proposals in Amendment 113G are already covered it tries to do certain things and convey a message, by existing regulations or industry guidelines, and which the noble Baroness is quite right about, in terms there is no need to gold-plate them and include them in of public confidence in the fracking industry. However, the Bill. We on the committee endorsed the sometimes in this debate we forget the amount of recommendation in Professor MacKay’s report that regulation and control that is already there. For a fugitive methane should be measured when shale gas start, we must have the permission of the surface extraction begins. The industry agreed to this. To impose land owner. We need planning permission from local a requirement to monitor over the previous 12-month authorities. We need a licence from DECC from a period is quite unnecessary, and only extends an already series of auctions or allocations of those licenses and far too long 16-month timetable to get permission to areas for that. We need the Environment Agency to drill. approve and we need health and safety to give the We also recommended in our report, as my noble go-ahead as well. That is quite substantial. When I friend has mentioned, that wellhead inspections should be look through the amendment a little more, I certainly carried out by independent inspectors. The Environment agree with independent inspections and disclosure of Agency and the Health and Safety Executive will chemicals. I am far from sure about a 12-month period indeed conduct job inspections but the well examiners for a previous record of monitoring. From discussions will be employed by the companies. This was raised in on this in Committee, this is not particularly seasonal the debate by the Minister last week, and she pointed and 12 months is a long time—certainly, in terms of out that the companies would provide these. One of fugitive gases, methane in particular, that is extremely the important things about regulation is that not only important. must it be independent but it must be seen to be However, I am not sure that the Bill is the right independent. So why not ask the companies to foot place to ask the Committee on Climate Change to do the bill—if resources are a concern, and I suppose something. In fact, I am sure the Minister could speak they are—for one of the agencies to carry out these to the chairman of the Committee on Climate Change independent inspections? quite easily—maybe even after the debate—and come Our report identified that the tortuous and bureaucratic to an agreement on whether that was needed. I agree process to approve exploratory drilling is the major that maybe a report is required. It could, of course, impediment to finding out whether or not the UK’s really look only at foreign experience, while perhaps shale deposits are economically exploitable. It is regrettable UK experience becomes far more important. We clearly that amendments were not tabled to address this serious cannot do that until after at least some of the exploration problem, which has the merit of being supported by stage, and maybe some of the production stage, has the facts and which would have commanded cross-party happened. However, I agree that we need the regulation support. If passed, these amendments would add further of this technology to be comprehensive, and we have a complexity to an already devilishly complex and good track record in general in this area. Perhaps we bureaucratic approval process, and will potentially need that regulation to be in one place comprehensively extend the timetable by a further 12 months. Having so that not only the industry but we as parliamentarians lost the argument on the facts of the case, delay is now can understand it and, more importantly, the public the main weapon of choice for those who oppose can see how this all works. fracking. To add further delay to the exploration of So while I do not really support this amendment in shale gas would be a misstep. its current form, I hope that the Government are Shale gas and shale oil could be a major boost to working on this anyway and will bring forward, perhaps our economy; create jobs and preserve them; boost later in the Bill or in secondary legislation, a comprehensive public and local finances; and halve emissions by summary and description of exactly how all these replacing coal, which currently generates 40% of our levels of regulation will work within the industry. electricity. For these reasons, I will not be supporting this amendment. 5.15 pm Lord Hollick (Lab): My Lords, I was chair of the Lord Deben (Con): My Lords, I declare an interest Economic Affairs Committee of your Lordships’ House as the chairman of the Committee on Climate Change. during the inquiry into shale gas and oil. The committee It is true that the Minister and I easily could have a wanted to be fully satisfied that the regulatory regime conversation, but I wanted to put into context where was equal to the task of protecting people and the the Committee on Climate Change stands on the basis environment. We took extensive evidence from regulators, of this amendment. Our view is that it would be quite academics, local communities, NGOs and exploration wrong to depart from the science here, when we spend companies. We concluded that the regulations and the so much time in asking that small group of people mandatory industry guidelines gave the regulators all who still do not think that climate change is happening, the powers needed to ensure that the environment and to look at the science there. In other words, we have the health and welfare of local communities could be a responsibility to keep to the science. The science is 45 Infrastructure Bill [HL][10 NOVEMBER 2014] Infrastructure Bill [HL] 46 very clear that there is no fundamental reason why we I would like the Government to oppose this amendment should not frack and produce gas. Indeed, there is no but to say publicly that they will do three things. One argument scientifically opposed to it. The royal societies is to make it much clearer to everybody in a simple have done us a great deal of good in their work, form how the regulations will work and how they will because we are able to state that as clearly as any fact be enforced. The second is to make it absolutely clear can be stated. Of course, no scientific fact remains fact that where the Select Committee of this House has for ever; it can always be altered by new information. recommended that independent checking is necessary, That is why all scientists are properly referred to as the Government will find a way of insisting that that is questioning. That is why I believe that we should start done. That is important not just because the House of with those facts and say that we should go ahead and Lords has suggested it but, frankly, because no one see whether fracking can give another way of providing believes any business if it is doing its own checking. the energy we need. It does not matter how good or how bad the business is, we all believe that checking should be done It is very important to say to those who do not want independently—the business can pay for it but it ought to frack that there is always somebody who does not to be done independently. We ought to promise that want to do any of these things—people who think that and state it. neither onshore nor offshore wind is acceptable, or people who do not like tidal power. I am fed up with The third thing is, I am afraid, even more important— people who have their favourite bits and dislike every namely, the Government have to give a real undertaking other means of generation. The climate change committee that, when the moment comes, there will be no question has said, rightly, that we want to have a range of of a shortage of funds for any of the institutions that means whereby we can meet our future needs. Fracking are responsible for protecting the public. The public could, or should, be part of that because we have are very suspicious that it is all too easy to say, “We already said that we will need gas into the 2030s. I would have done it but we couldn’t because it was all thank the Government again for confirming the fourth too long so we did some random checks”. If this carbon budget. Following those budgets, we still will measure is to go ahead, we have to know now that need gas. Surely it would be better coming from our there is no question of there being any shortage of own resources than being brought in from somewhere funds for the necessary checking, and that it will be else, particularly given that we do not always have the done independently. Those of us who believe in the confidence in many of those places “somewhere else” market believe that the cost should fall, as always, on that we have in our own resources. the people who are proposing the fracking. I end with one simple comment. I am finding it That is the background. However, I warn the more and more difficult to deal with those who talk Government that there is always a chance of snatching about the free market but do not believe in it. They defeat from victory. I am afraid that the Government talk about the free market but mean the managed and are not always aware of that, so I want to encourage biased market that we happen to have and which is them not to get into that position. I think that the convenient for them. I do believe in a free market but amendment is unnecessary. However, it seems to me that means that the costs of the production of this gas that the reason it has been tabled is that there is so should be placed fairly and squarely on the shoulders much misunderstanding outside. It is terribly important of the producers and therefore also on the shoulders for the Government to underline the very significant of the consumers. Given that, I do not think that we difference between the way in which we deal with need these amendments. The Government are right to environmental questions here and the way in which proceed on the basis that part of our means of generating they are dealt with in the United States. First, we deal for the future will be our home-produced gas. with them on a national basis, whereas the United States deals with them on a state basis; secondly, there is no doubt that the United States system is lacking Baroness Farrington of Ribbleton (Lab): My Lords, very considerably. There are some really disgraceful I declare an interest: I live in Lancashire, which is a examples of failure to insist upon basic environmental beautiful, well populated and much loved county, in protections in the United States. I do not want us to case anybody has any doubts. I have listened very have to fight the public, who are misinformed, not carefully to the points made in this debate and have about what happens in the United Kingdom but about read the proceedings on other stages of the Bill when I what has happened in certain states in the United have been elsewhere in the House and unable to be States. Nor do I want the public to take the rather present. I would like to concentrate on one issue raised ridiculous view that because it happens in the United by my noble friend Lord Hollick and other noble States we can do it here, that it is the answer to Lords. If it is managed and controlled carefully, I everything, and there is no need to think about anything believe that a benefit to Lancashire and the north-west else. Both ends of that spectrum are wrong. Those can be gained from the production of shale gas—and who think that fracking will be the answer to everything it is an area of the country which has much need of and that there will be lower prices are clearly wrong. I investment, regeneration and growth. say to the noble Lord that to say that it is unacceptable However, I happened to be in bed when the earthquake or that it is a sin against the Holy Ghost is also occurred in the Irish Sea and I have never been able to fundamentally wrong and unscientific. We ought not find out whether the integrity of the relevant well was to go back into that same area of the dark ages, which a factor in that, as alleged in some of the local media. I we are invited to do by those who do not believe in am not asking the noble Baroness to tell me now climate change. We have to have a sensible, central whether she knows more about that but I would position, which the Government have. appreciate a letter. 47 Infrastructure Bill [HL][LORDS] Infrastructure Bill [HL] 48

[BARONESS FARRINGTON OF RIBBLETON] by the regulators and reported on, so that is unlikely I want to concentrate on public confidence. I am to be a major issue. Civil servants could spend their not a Luddite. I am not one of those who says, time far more productively than producing such a “Never”. However, given all the people who have report. spoken and written to me, I am very well aware of the grave concerns that people have, some of them for the Baroness Jones of Moulsecoomb (GP): I support reason that the noble Lords, Lord Jenkin and Lord Labour’s amendments. They attempt to improve the Deben, referred to—that is, the scare stories. Those regulatory framework but they do not go far enough. I are felt to be real by the people in the communities hope that other amendments will be pushed through. most affected in Lancashire—and they are felt and We need a complete rejection of fracking. The things feared very strongly. that have been said so far are not borne out by the facts and it would be very interesting to see future 5.30 pm examples of just where fracking has gone very badly When I go back to Lancashire, having stated my wrong. position, I want to be able to say that there is absolutely We need to see a reprioritisation of renewables and no doubt that the companies themselves will neither energy efficiency. That would reduce our overall energy choose nor be responsible for the independent monitoring demand and make us much more able to fulfil our of the integrity of the wells. That is the least we can do agreement under the Climate Change Act. Energy for the people who are frightened, and to allay the efficiency and renewables are already delivering jobs. fears of those who are tempted to believe—or do They are very good at supplying employment and will believe—the scare stories that emerge. Therefore I do much more for energy security, lower bills and need the Minister to say that the companies will reduced emissions than an unacceptably risky shale neither choose nor be responsible in any way for gas industry can ever do. the process whereby, for example, the integrity of the The Bill contains some very worrying new measures wells is judged. I am not interested in an assurance that will, if given the green light by Parliament, threaten that they will be given rules about choosing who does the UK’s wildlife. No one seems to take that into the monitoring. That will not satisfy the people in account. It will also promote the unfettered extraction Lancashire. of unconventional fossil fuels, which will undermine As the noble Lord, Lord Deben, said, one of the the Climate Change Act and our ability to avoid, as problems is that different rules apply in different states one nation among many nations, dangerous climate in America. We have a strong set of rules in this change. country, but people need to know that those who The coalition talks endlessly about its supposed judge, for example, the integrity of the wells, have no concern for future generations when it comes to reducing link, other than being funded by them, with the companies the budget but the same level of commitment is, involved. I hope that the Minister will be able to assure surprisingly, absent when it comes to the environment me that the Government have taken that on board. I and handing on a planet fit to live on. The next understand the point about the free market, but, as my generation will be given a very degraded natural world noble friend Lord Hollick said, people need to know if we do not understand the sort of damage that that it is not those with an interest in the business who fracking can do. are judging the safety and security of the wells, but If we want any more evidence that this is not the those whose only concern is to report the truth. If the “greenest Government ever”, we need look no further Minister cannot give that rock-solid guarantee, the than Clauses 32 to 37 and the deeply worrying and people of Lancashire who have spoken to me will not hugely unpopular new provisions to give companies be happy. That will delay the process, and nobody the freedom to frack under our homes without letting wants that. us know. The Government have pushed ahead with this change despite recent polling showing that 75% of Lord Borwick (Con): My Lords, I think that the people are against it and the fact that 99% of respondents period for monitoring proposed in Amendment 113G— to the consultation rejected the proposals. I remind the previous 12 months—is unnecessary. The British noble Lords that those people are voters. Geological Survey found that background methane in If we look at just how much we have to do if we are aquifers is generally low. It also concluded that the not to allow the world to heat by more than 2 degrees— majority of sites it studied showed little change in although it is probably already too late to avoid that—it methane levels. That says to me that we should monitor is clear that fracking cannot be part of it. It is not even situations on an individual basis, based purely on risk as though shale gas will bridge the gap that we keep and not on anything else. Extensive monitoring like hearing about between now and a future based on that proposed in the amendment is only going to delay renewables. Shale gas will not be online until about safe projects from going ahead. Once we get a green 2020, or even well into the 2020s, so if the Government light at an extraction site, we should get on with it. stick to our commitments under the Climate Change On Amendment 115A, I do not see a great need for Act and coal is offline by the early 2020s, shale gas will the Government to spend time putting together a not be replacing coal. We will see exactly what we have report on fugitive emissions. Industry will already seen happening in the United States, which is that it is monitor emissions from the site; indeed, all the companies simply able to export more coal when shale gas fills its involved are committed to doing so. Fugitive emissions own energy needs. Shale gas merely displaces fossil occur from leaks and poor-quality construction. In fuels; it does not replace them. Professor Dieter Helm the UK the well design and plans have to be signed off of Oxford University has told us that there is enough 49 Infrastructure Bill [HL][10 NOVEMBER 2014] Infrastructure Bill [HL] 50 gas and coal to fry the planet several times. But of “if there was no threat of global warming in this gas, would you course we cannot use it. It must stay locked up. That is still be against it, or would you say … that if the regulatory the most efficient form of carbon capture: leave it as framework is right, it could be a goer?”. coal. He said: These clauses will also allow fracking companies to “We would revise the position accordingly, yes”. undertake activities that have not yet been assessed for In other words, what the environmentalists want is to their environmental safety, including the keeping of stop fracking, and the Trojan horse they use to hide substances within infrastructure on the land with no their armies is more and more regulation, which is in limits on what can be kept or for how long. Injection danger of killing the whole thing. wells could be extremely damaging. They have caused That was the environmentalists and, unfortunately, problems in the United States, particularly in Ohio, they are not heavily represented in this House, so it is where there have been earthquakes. always a delight to hear from the noble Baroness, We know that the existing regulatory framework is Lady Jones. Unfortunately, their philosophy has popped full of gaps. Rather than continue the obsession with up within these amendments. Amendment 113G specifies deregulating fracking and allowing the industry—an a 12-month period for groundwater baseline monitoring. industry that the Chancellor proudly stated has the It pops up in Amendment 115A, which demands a most generous tax regime in the world—to regulate monitoring programme, including on fugitive methane, itself, the Government should see this as an opportunity to report within six months of the passing of the to introduce regulation that is fit for purpose in order Act—not, as the committee did, a report only when to safeguard the climate. Balcombe, which has been extraction begins. The amendment sets up a whole the scene of a lot of interest in the context of fracking, new system designed to ensure that fracking is compatible has now decided to go carbon-neutral. If Balcombe with climate change aims. can do it, the rest of us can do it. Those features make me worry about the position of our Front Bench. It says that it is are not opposed Lord Lipsey (Lab): My Lords, I was a member of to fracking. Indeed, I hope that the noble Baroness the Economic Affairs Committee, whose report, I am will say when she responds to this debate that she is in pleased to say, has received considerable praise today. favour of fracking with the right regulation. However, When we started on our inquiry, I did not know what in practice, it wants to make it more difficult than even fracking was. I would have been hard pressed to your Lordships’ Economic Affairs Committee wanted. distinguish it from another word beginning with “f” We are somehow left trying to ride two horses at and ending with “ing”. However, in the months over once—no doubt, cheers from some environmentalists, which we heard evidence on the subject from every although, in my experience, they are never satisfied by expert from every quarter, we had a clear impression whatever concessions you make to them; not the extreme of where the facts lay. The facts are reflected in a environmentalists. We are saying that we are in favour carefully balanced report, which says, quite clearly, of fracking in principle but want to make it harder in that fracking must be allowed to go ahead for its practice. The noble Lord, Lord Maxton, is not in the enormous economic and social benefits but that we Chamber but his predecessor, Jimmy Maxton, said must have the right regulatory system in place. The that if you could not ride two horses at once you report defines in some detail what that regulatory should not be in the circus. In this particular case, the system should be. trick becomes a little demanding when the horses are That brings me to these innocent-looking amendments. galloping in opposite directions. Are we for fracking If it is the mover’s intention merely to probe the or against it, subject to the right regulation. At the end Government’s intention, then I would go further and of reading these amendments, I was in great doubt. say that they are welcome amendments. In particular, the new clause proposed by Amendment 113G insists that the integrity of wells used should be independently 5.45 pm assessed rather than it being possible for firms to use The energy future of this country is a grave matter their own preferred consultants. I hope that the Minister and may be one of the biggest issues in the years to heard the consensus around this House that that was a come. On the one hand, there is global warming, and sensible recommendation and the disappointment that man’s contribution to it, and Britain’s contribution to the Government have rejected it. man’s contribution. On the other hand—this should We need to set our arguments in a broader context. matter to the party of working people—there is energy In the committee, we heard from the leading environmental security, industrial costs that feed into jobs, and the groups, and I am afraid that the speech just given by amount that people have to pay for their fuel. These the noble Baroness, Lady Jones, confirms that they complex considerations have to be balanced, as the were not really interested in whether the wells were Economic Affairs Committee balanced them. That integral, how much methane should lapse out or whether balance will not be totally upset if these amendments there were any risks of earthquakes. Instead, they are carried. It will not be the end of the world. It will sought to raise every empty canard about fracking and just make it a tad more likely that the next generation treat it as if it were a genuine concern. Their aim was will pay more for its fuel, a tad more likely that our transparent—to surround fracking with regulations industry will be less competitive relative to other nations, and planning constraints to ensure that in practice it and a tad more likely—I put it no higher—that one never happened without having, in theory, to oppose hard winter the lights will go off in the homes of those it. For example, I asked a question of Mr Molho, the who would have liked fracking to take place as well as spokesman for the environmentalists. I said that, in the homes of environmentalists. 51 Infrastructure Bill [HL][LORDS] Infrastructure Bill [HL] 52

[LORD LIPSEY] I made my comment about the noble Baroness, As I say, if they are merely probing amendments, Lady Worthington, because these amendments will it is excellent that we have had this constructive make the whole process much more difficult and time- debate about them and I look forward to the Minister’s consuming. For example, new subsection (1)(a) in reply. However, if our Front Bench was so unwise as to Amendment 113G requires all sites to, press them to a vote, I shall be in the Government’s “carry out an Environmental Impact Assessment”. Lobby. We know that environmental impact assessments are hugely important. They cover a range of other industries. Lord Marland (Con): MyLords,itgivesmegreat However, Europe standards have been agreed on for pleasure to re-engage in this debate. In particular, I fracking. Within those standards are certain exemptions wish the noble Baroness, Lady Worthington, better for the small fields and for some experimental wells, health and applaud her braveness for coming in today. but there are also restrictions. It is not a total blanket; I had the great pleasure of opposing her, or being it is a limited exemption. Why does the Labour Party opposed by her, for quite some time, as Members will want to gold plate what is already in existence and know. There was never anything between us. In fact, covers the whole of Europe? when we took the Energy Bill through the House, When I was on Sub-Committee B and we inquired there was very little between us—and there is not now into energy, what came over abundantly clearly was with these amendments. I am taken by the noble Lord, that the rest of Europe—which has quite a lot of shale Lord Lipsey, who believes that these are probing gas, too, particularly Poland—is looking to Britain for amendments. I, too, believe that they are probing a lead. When Britain does it, the rest of Europe will amendments. get on and do it. We in Europe can all benefit from There is nothing between us because, as the noble that. If we do not take the lead, the others will not do Baroness said in her opening remarks, she was in it by themselves. That is why I support all those who favour of fracking. She also said that it had to be have said that we must get on with it, regulate it and properly regulated. We have heard in the debate, make transparent who is regulating what and why, so particularly from the noble Lords, Lord Teverson that we can give the maximum amount of reassurance and Lord Jenkin, that we have the best regulation in to the public. the world for this part of the industry. To overdo regulation is to kill it. What it will kill is our ability to Lord Young of Norwood Green (Lab): My Lords, in progress economically as a nation, as the two noble taking part in the debate, my only interest is that we Lords on the opposite Benches have said; it will not should make a judgment based on supported enable us to have fuel security, which fracking gives evidence, rather than on allegations. If nothing else, us the opportunity to have; and it will not enable us to the amendment is important because there is a battle have cheap fuel in our homes. For people in this of ideas on fracking that we need to win. Noble country these are the critical things that matter to Lords have said that we are not currently doing so the future of this economy and country. I am well on public opinion. Unfortunately, the scare therefore delighted that the Government have taken stories are believed. There has been an important on the work started four-and-a-half years ago in this event since we debated this in Committee: the field. It is fundamental to us all that we press on with publication of The Economic Impact on UK Energy it. The longer we debate it and get carried away in Policy of Shale Gas and Oil. It is a very important different directions from the core issues, the longer it report. No one has questioned its integrity or the will take to get this country back and going. evidence it contains. I stress that point again and again. The Earl of Caithness: My Lords, I share the concern Like many others, I looked at Amendment 113G. I of the noble Lord, Lord Lipsey, as to where the heart was pleased to hear my noble friend Lady Worthington of the noble Baroness, Lady Worthington, lies on say that she was not opposed to fracking. I fracking. Her heart on this subject is a little closer to suppose the amendment is a bit like the curate’s egg: that of the noble Lord, Lord Wigley, but she is it is good in parts. It is probably better than the putting on a very brave front, because she has to, average curate’s egg because most of the parts are and says she supports fracking. We have been at good. I support an environmental impact assessment—I hydraulic fracking in this country for more than 50 years. agree with the noble Lord, Lord Teverson, that that As so many of your Lordships have said, this is a is something that needs to be done. I support highly regulated industry and Britain is a world leader independent inspections of the integrity of wells in it. It is totally inappropriate to compare our used; I am pretty sure the fracking companies standards and form of regulation with some of the would as well. They are also prepared publicly to scare stories from America. However, it is about disclose the chemicals used for the extraction process. presentation and, at the moment, the industry and the Again, read the report: they are in there. For the most Government are losing the presentation battle, although part they are used in tiny amounts, and for the most that might be beginning to change. As my noble friend part there is no problem with them whatever. Lord Deben will remember only too well, it is fine to It is true that some practices that went on in the say, “I wish the Government would improve their States were not helpful to the process of fracking. PR”. It is difficult to do that in practice because if it is That is not to say that everything that happened in a good news story our press do not want to know the States was bad, because it was not—there are about it. All they want to know about are the bad plenty of good examples from there. We should not news stories. forget that fracking substantially reduced emissions in 53 Infrastructure Bill [HL][10 NOVEMBER 2014] Infrastructure Bill [HL] 54 the States. It did and has created jobs and it has I welcome the amendments because it is important brought industry back to the States. We should not that the House debates this issue and makes clear forget that important aspect. what we expect from regulation. We and the public expect a safe, regulated, transparent and accountable Lord Wigley: The noble Lord quotes the economic process. I look forward to the Minister addressing impact report, which I have with me. Paragraph 269 those concerns. says that the Government, “must also explicitly address the safety issues”. The committee that produced that report was clearly Lord Donoughue (Lab): My Lords, these amendments not entirely happy on that count. are useful as probes, as my noble friend Lord Lipsey said. They also have important political and economic Lord Young of Norwood Green: Of course, we have implications for the whole process of fracking. I will to address the safety issues. I am not seriously saying not explore the political side at this hour; I will point that anybody in the Chamber is recommending that out on another occasion how very unproductive it is we embark on a process of mining or whatever activity for the Labour Party to appear—I stress “appear”—to without addressing safety issues. I listened carefully oppose shale fracking by artificial regulatory delay when both to the noble Lord, Lord Wigley, and to his shale offers the hope of 70,000 new jobs, billions of pounds companion sitting next to him, the noble Baroness, of investment in the regions, lower energy prices, Lady Jones. They both expressed a deep-rooted opposition keeping our energy-intensive industries alive and here, to fracking, which frankly puzzles me. If we do not and providing energy security. That seems to me to have fracking we will still be dependent on LNG, on offer hope, which is still to be fully proved, to millions which I think about 27% of our energy is based. I do of ordinary British people. I do not think that Balcombe not understand the basis of their opposition. I sometimes necessarily represents the majority of them. Public do not understand the green analysis of a number of confidence is a factor that is repeatedly raised. In the issues because it is not always evidence-based. I could polls, 75% of the public either support or, to a greater say the same about GM foods, but that is another extent, do not oppose fracking. issue. Leaving the politics reluctantly on one side, I shall To return to this important subject, I, too, want to focus on the amendments. I support my noble friend hear what the Minister has to say. I heard it once in Lord Hollick in his argument that all these environmental Committee, but it is worthy of repetition. I listened to concerns are apparently covered by existing regulations. and understand the concerns of my noble friend Lady They need to be properly implemented, which I fully Farrington, but I direct her to the report. It said that support. But if there is some need for further gold- when people talk about earthquakes, it might be better plating—my noble friends Lord Hollick and Lord if we talk about tremors. There was one in Wigan in Lipsey mentioned that possibility—that can be pursued Greater Manchester, which was of a 1.5 magnitude. It later. We should not use the very mixed regulatory was about the same as a heavy lorry passing. experience of the United States to go into this bureaucratic jungle to delay fracking for ever. If one reads some of the official reports that have investigated it—I particularly Baroness Farrington of Ribbleton: My Lords, I thought call attention to that of the Geological Society—one it was a bomb, living as we do half way between both will see that these matters put into perspective the the aerospace centres, with planes going over all the statement that our British regulatory regimes are the time. The noble Lord was not in my bedroom. best in the world and that we can rely on them. However, we cannot always rely on local authorities to Lord Young of Norwood Green: That is an indisputable have the resources to pursue them, which is a factor fact and I am glad it has been affirmed. I may not have that should be pursued further. been there when the earth moved for the noble Baroness, I direct my next point especially to my Front Bench. but I am going by the evidence of the recorded seismic It has not been explained to me in prior discussions shock. I again appeal to the House: that is what we why on earth we need a vote today. These excellent must do if we want to win the battle of ideas. It is a probing amendments explore the matters fully but I really important one. do not see the need for a vote. This jungle of bureaucratic Of course we need to get the regulation right, but it regulations, including the existing ones, which I accept needs to be proportionate and evidence-based. We have already given excuses for the delay in extracting have the capacity to do that. If we do not, we will see these precious reserves, mean that we have only one what has happened in Balcombe and in various other well today. We can express our views and Members parts of the country. Instead of fracking being seen as have taken part in an impressive debate on all aspects. a perfectly valid contribution to energy security, the We can explore the matter but such a vote from this cost of energy and the capacity to create a significant side—I am speaking very much as a lifelong Labour number of jobs, those who are opposed to it will man—will send the wrong message. It will send the succeed in creating the view that it is something to be message that Labour wants to delay the great shale gas feared. I do not believe that that is the case. Noble contribution to our economy. Conveying that message, Lords do not need to look just at the evidence of the which is hostile to job creation, lower energy prices report. Durham University, in a totally independent and energy security, could push me, with my noble survey, addressed the issues in a serious way. The friend Lord Lipsey and perhaps others, into the very industry is not financing it; it is totally independent unfamiliar territory of the government Lobby. I trust research. that we will not get to that point. 55 Infrastructure Bill [HL][LORDS] Infrastructure Bill [HL] 56

[LORD DONOUGHUE] England. These reports have considered a wide range The Government should agree tonight to explore of evidence and have looked at the UK regulatory further how genuine concerns about fracking can be system. Their advice has outlined the risks and concluded allayed. I stress again that our concerns are genuine that, overall, as my noble friend Lord Jenkin, pointed and that I am not referring to fictional scaremongering. out, they can be managed or are low if industry meets However, we need to bear in mind that the Green all regulatory requirements. Party’s concerns will never be allayed. I think that we are all grateful to the noble Baroness, Lady Jones, for I will now turn to each of the areas raised by the confirming that tonight. They will never be allayed noble Baroness. First, where there are likely to be because, in reality, however disguised, the Greens want significant effects of a proposed scheme on the to stop shale gas because it threatens their beloved environment, environmental impact assessments are windmills. With great reluctance, I shall vote against prepared by companies at an early stage in the this amendment if, unfortunately, it is pressed to a development of proposals. They have a key role in vote. informing regulators, planning authorities and the public about the likely significant effects of a proposed 6pm scheme on the environment. They enable mitigation measures to be identified to reduce or avoid significant Baroness Verma: My Lords, I am extremely grateful effects. If the significant environmental effects cannot to the noble Baroness for putting forward the amendment be mitigated, planning permission could be refused. and to all noble Lords who have contributed to this very informative debate. We are absolutely clear that The UK has a strong track record in assessing the shale development must be safe and environmentally potential environmental impacts of development and sound. We agree with the Opposition that the issues in ensuring that they are appropriately mitigated. This they raise should be thoroughly addressed but that the is based on more than twenty years’ experience of existing regulatory regime does so in a robust and adopting a proportionate, evidence-based approach to proportionate manner. I am minded to repeat some of the environmental impact assessment. But what is the contributions that have been made already today proposed here misunderstands its purpose. Existing because it is necessary and important to do so. I hope regulations already require the assessment of all that over the next few minutes I am able to allay the proposals which are likely to have significant effects fears of those noble Lords who are supportive of these on the environment. Legislating to force mandatory amendments. environmental impact assessments on all shale sites, As noble Lords have said, we must ensure that the even where significant effects are not considered likely— public are properly informed. I agree with my noble bearing in mind that hydraulic fracturing may not friend Lord Deben that fracking must not be seen as a even be proposed—would be disproportionate and silver bullet. It can offer huge potential to ensure that unnecessary. Not only would it slow down or delay we have a home-grown supply in a diverse range of development for no discernible environmental benefit, energy mixes. It has been pointed out by my noble it would create a damaging precedent for other new friend Lord Deben and others that evidence in the industries in the future, both in the energy sector and United States referencing shale developments has, on beyond. occasion, led to public mistrust. However, it is important to note that the latest evidence continues to show that The proposal to make EIAs mandatory for all shale such cases in the States are due to faulty surface gas activities was discussed during the recent negotiations operations or faulty well construction rather than on the revision of the environmental impact assessment hydraulic fracturing. directive and was roundly rejected by member states, including the United Kingdom. We appreciate the On another issue again rightly raised by most noble importance of building public confidence in the shale Lords today, it is important to emphasise that in the gas sector and the fact that this includes being open UK we have an entirely different regulatory system to about environmental impacts and how they are to be the US. The UK benefits from a comprehensive and addressed. The existing EIA regime is already well stringent set of statutory and non-statutory requirements. suited to meeting these requirements. My noble friend Lord Jenkin and other noble Lords rightly pointed that out. In the US, practice between Changes here would also affect other areas of different states varies considerably and regulation is in development. There is an ongoing issue with planning some respects less stringent. For example, unlike some authorities taking an overly cautious approach to US states, we do not allow open-pit storage of chemicals environmental impact assessment. To gold-plate the or waste fluids and we require independent verification requirements of environmental impact assessment in of the design of the wells. I will respond to the this way could significantly impact upon developments questions raised towards the end of my contribution. such as housing. We are therefore keen to maintain the The UK’s globally recognised expertise in the offshore existing rigorous and consistent approach across all oil and gas industry is well known. Noble Lords, sectors of the economy. We welcome the industry’s including, I think, my noble friend Lord Caithness, public commitment to carry out environmental impact referred to the fact that the UK has more than 50 years’ assessments for all exploration wells that involve hydraulic experience in regulating onshore oil and gas production. fracturing. This commitment has already been seen We are confident that the regulatory system will continue through in the planning applications that have been to provide robust protection for the environment. Our recently submitted by Cuadrilla in Lancashire and we position is backed up by reports from the Royal Society, will support the industry in delivering on this commitment the Royal Academy of Engineering and Public Health over the coming years. 57 Infrastructure Bill [HL][10 NOVEMBER 2014] Infrastructure Bill [HL] 58

The second area concerns well inspections. The to undertake fracking. It would not normally require integrity of the well is critical to ensuring the safety of this where no fracking is proposed, because there is the site and protecting the environment. For this reason no discharge to the environment. Moreover, the the Health and Safety Executive checks the design of environmental regulator has the powers to require all wells and approves them prior to any construction baseline monitoring of those environmental indicators taking place. The HSE also monitors well construction it considers appropriate and for the length of time that based on weekly reports to its well specialists. It is the it deems suitable for each site. well operator’s responsibility to appoint an independent well examiner separate from the immediate line management 6.15 pm of the well operations. This allows a scheme of quality For fracking sites, the precise length of the period assurance and quality control, where an operator’s of monitoring the Environment Agency would require employee is not responsible for verifying their own would depend on its expert assessment of the work. This approach is flexible in that it allows in-house characteristics of that particular site and any risks checks but only where the appropriate safeguards are associated with it. Typically, this would be a minimum in place. In this context, it is the competence of the well of three months, not 12 months, although the regulations examiner that is most important. In reality, due to the afford the agency the flexibility to require a longer size of shale gas operators, the well operator will period of monitoring should this be deemed necessary. generally appoint a company to act as its well examiner. For other indicators, such as surface water and biodiversity, The third area relates to chemical disclosure. One the degree to which these will be relevant and the time of the problems we have seen in parts of the United required to monitor them will vary so much between States is where companies have refused to disclose the sites that any fixed requirement would be inappropriate. chemicals used in their fracking fluid, which raises Setting fixed requirements on monitoring will not safety concerns and alarms the public. In the UK in strengthen these protections; they will simply impose contrast, full disclosure is already required of every unnecessary obligations in cases where environmental chemical the operator proposes to use, ahead of any experts do not believe they are required. fracking being allowed to take place. The environmental The sixth and last area is fugitive emissions reporting. regulator requires this information when companies We already report the UK’s greenhouse gas emissions apply for the relevant permits to assess the safety of annually as part of our international reporting obligations what is proposed and any potential risks to the to the UN Framework Convention on Climate Change environment. The Environment Agency has confirmed and under the EU’s monitoring mechanism regulation. that it will publish the permit with this information, This reporting includes an estimate of fugitive emissions including naming each chemical and the maximum from onshore energy extraction, is done in accordance concentration of each at each well. In addition, the with guidelines produced by the Intergovernmental industry has committed to publish this information Panel on Climate Change and is audited annually by a itself at each well along with the total volume of fluid group of international experts. Our obligations mean used. that we will be required to include emissions from The fourth area concerns water companies. We shale gas exploration and extraction in this reporting recognise the importance of ensuring that water companies once these activities begin in the UK. Fugitive emissions are fully engaged in shale gas development. Their role from conventional onshore oil and gas extraction were underpins the strict controls that are in place to protect estimated at around 0.03% of the total UK greenhouse the quality and availability of water supplies. The gas emissions in 2012. environmental regulator is already required to check The MacKay-Stone report entitled Potential Greenhouse the potential impact on groundwater of any shale gas Gas Emissions Associated with Shale Gas Extraction proposal for which permission is sought and will not and Use responded to a request from the Secretary of grant a permit where our water supplies could be State in 2012 to assess potential greenhouse emissions affected. The Opposition are seeking to ensure that oil associated with shale gas extraction and use. The report and gas operators will consult with the relevant water found that if properly regulated—as the noble Lord, company.However, the water industry and shale operators Lord Young,highlighted—local greenhouse gas emissions have already agreed a memorandum of understanding would represent a small proportion of the carbon to engage early and share plans for water demand and footprint. In April 2014, my department accepted the wastewater management. Making this a legal requirement recommendations in the MacKay-Stone report, four does not add any value to an existing arrangement. of which relate to emissions monitoring, and a research The fifth area is baseline monitoring of environmental project is planned to measure on-site emissions in line indicators, including methane levels in groundwater. with the development of UK shale gas operational Good quality baseline monitoring, prior to operations, activity. The research will address uncertainty relating is essential to enable a rigorous assessment of any to fugitive emissions and inform decision-making on subsequent changes. It also provides local communities future monitoring. As we already have a robust process with information on the current state of their environment, in place for reporting of fugitive emissions, and have potentially preventing those unfounded scare stories plans in place to monitor and report any emissions later. The UK already has a good set of regional from shale gas exploration and extraction once these groundwater data, thanks to the work conducted by activities start in the UK, additional reporting in this the British Geological Survey since early 2012. At the area would be redundant. more local level, the Environment Agency has confirmed I hope that noble Lords have been reassured that that it would typically require baseline monitoring of we have examined closely each of the concerns in groundwater methane for each specific site proposing detail and are confident that these are fully reflected 59 Infrastructure Bill [HL][LORDS] Infrastructure Bill [HL] 60

[BARONESS VERMA] the industry’s own sake and for the economic benefit in the existing regulatory system, which has been of this country, to be absolutely certain that, while we operating well for decades for onshore oil and gas have a world-class regulatory system in place today, development. we will not see it become overwhelmed as the use of The noble Baroness asked how the regulators would this form of extraction of the UK’s natural resources be funded, as did my noble friend Lord Deben. The expands. There is an absolute and clear link between regulators have confirmed that they have sufficient requirements in statute and the resources that are inspectors to deliver the regulatory regime they are made available to meet those legal standards. I think it responsible for during the current shale gas exploratory was the noble Baroness, Lady Young of Old Scone, phase. If large numbers of wells are drilled to produce who pointed out that it is imperative that we have a shale gas, the regulators may need to increase their clear and transparent regulatory system so that we resource accordingly, and they have plans in place to know what is required of everyone and so that adequate review that at relevant times. resources are made available to ensure that, in the The noble Baroness, Lady Farrington, asked how future, fracking has the best chance of proving to its confident we are that fracking will not cause earthquakes, detractors that it can be done safely. It is not correct to although there was a difference in the definition of say that everything is in place for a world-class regulatory whether they would be earthquakes. system today. There are loopholes and, while the noble Baroness has sought to give us some reassurances on Baroness Farrington of Ribbleton: My Lords, I said independent inspection, I do not believe that she has that this was one of the stories that is circulating. I addressed all the questions that have been raised in the asked the Minister for an assurance that the companies debate. On that basis, I will not withdraw the amendment that are drilling and maintaining the wells would not and I seek to test the opinion of the House. appoint the people who will judge their safety, either 6.24 pm while they are being built or when they are being used. Division on Amendment 113G Baroness Verma: My Lords, I am grateful for the correction, and I think I mentioned that issue in my Contents 141; Not-Contents 237. response on independent well operators. Perhaps I may clarify the position as regards the concerns of the Amendment 113G disagreed. noble Baroness. The Health and Safety Executive Division No. 1 scrutinises well design and monitors progress to ensure that the operator is managing risk effectively, and will CONTENTS continue to do so throughout the life cycle of the well. Adams of Craigielea, B. Farrington of Ribbleton, B. An independent well examiner will also review its Alton of Liverpool, L. Faulkner of Worcester, L. design and construction. To date, onshore operators Anderson of Swansea, L. Foster of Bishop Auckland, L. have used separate companies to provide this service; Andrews, B. Gale, B. they have not delivered in-house. Armstrong of Hill Top, B. Grantchester, L. Bach, L. Grocott, L. Bassam of Brighton, L. Hanworth, V. Lord Young of Norwood Green: As I understand it, [Teller] Harris of Haringey, L. seismic monitoring is done on a continuous basis. Beecham, L. Harrison, L. While I cannot remember the exact figures, I think Berkeley, L. Haworth, L. that if a tremor registers 0.5, the operation is stopped. Bhattacharyya, L. Hayter of Kentish Town, B. That is a very low-level seismic shock and reflects a Blood, B. Healy of Primrose Hill, B. Borrie, L. Henig, B. high level of safety precaution. Can the Minister Bradley, L. Hilton of Eggardon, B. confirm that? Brooke of Alverthorpe, L. Hollis of Heigham, B. Campbell-Savours, L. Howarth of Breckland, B. Baroness Verma: I am extremely grateful to the Carter of Coles, L. Howarth of Newport, L. noble Lord, Lord Young. He is absolutely right to Cashman, L. Howells of St Davids, B. Chandos, V. Howie of Troon, L. point out that exploration is immediately stopped Christopher, L. Hughes of Stretford, B. once the level of 0.5 is reached. However, I will clarify Clancarty, E. Hughes of Woodside, L. the point and write to him, and put a copy of the letter Clark of Windermere, L. Hunt of Chesterton, L. in the Library. Clarke of Hampstead, L. Hunt of Kings Heath, L. Clinton-Davis, L. Jones, L. With these reassurances, I hope that I have been Collins of Highbury, L. Jones of Moulsecoomb, B. able to convince the noble Baroness to withdraw her Corston, B. Jones of Whitchurch, B. amendment. Craigavon, V. Judd, L. Crawley, B. Kennedy of Cradley, B. Baroness Worthington: My Lords, I am grateful to Davies of Coity, L. Kennedy of Southwark, L. Davies of Oldham, L. Kennedy of The Shaws, B. the Minister for her comments and to noble Lords on Dean of Thornton-le-Fylde, King of Bow, B. all sides of the House who have spoken in this illuminating B. Kinnock, L. debate. As is characteristic of this place, it has been Desai, L. Kinnock of Holyhead, B. based on fact and has reflected the care and understanding Donaghy, B. Kirkhill, L. that is always applied to these issues. However, having Drake, B. Knight of Weymouth, L. Dubs, L. Lawrence of Clarendon, B. listened to the noble Baroness’s response, I have to say Elder, L. Layard, L. that she has not reassured me that the Government are Elystan-Morgan, L. Lea of Crondall, L. listening on the very important issue of the need, for Evans of Temple Guiting, L. Lennie, L. 61 Infrastructure Bill [HL][10 NOVEMBER 2014] Infrastructure Bill [HL] 62

Liddell of Coatdyke, B. Richard, L. Geddes, L. Morris of Bolton, B. Lister of Burtersett, B. Rosser, L. German, L. Newby, L. [Teller] Low of Dalston, L. Rowlands, L. Glenarthur, L. Newlove, B. Lytton, E. Royall of Blaisdon, B. Goddard of Stockport, L. Noakes, B. McAvoy, L. Sandwich, E. Gold, L. Northbrook, L. McDonagh, B. Sherlock, B. Goodlad, L. Northover, B. McFall of Alcluith, L. Simon, V. Grade of Yarmouth, L. O’Cathain, B. McIntosh of Hudnall, B. Smith of Basildon, B. Greenway, L. O’Loan, B. MacKenzie of Culkein, L. Soley, L. Grender, B. Oppenheim-Barnes, B. Mackenzie of Framwellgate, Stevenson of Balmacara, L. Griffiths of Fforestfach, L. Paddick, L. L. Stone of Blackheath, L. Hamilton of Epsom, L. Palmer of Childs Hill, L. McKenzie of Luton, L. Taylor of Blackburn, L. Hanham, B. Palumbo, L. Masham of Ilton, B. Taylor of Bolton, B. Harris of Peckham, L. Parminter, B. Massey of Darwen, B. Taylor of Warwick, L. Harris of Richmond, B. Patten of Barnes, L. Monks, L. Temple-Morris, L. Heyhoe Flint, B. Perry of Southwark, B. Morgan of Drefelin, B. Thornton, B. Hodgson of Abinger, B. Phillips of Worth Matravers, Morgan of Ely, B. Tomlinson, L. Hodgson of Astley Abbotts, L. Morris of Handsworth, L. Tunnicliffe, L. [Teller] L. Pinnock, B. Morris of Yardley, B. Turner of Camden, B. Holmes of Richmond, L. Plumb, L. O’Neill of Clackmannan, L. Uddin, B. Hooper, B. Purvis of Tweed, L. Parekh, L. Wall of New Barnet, B. Horam, L. Randerson, B. Patel, L. Walpole, L. Howard of Lympne, L. Rawlings, B. Patel of Blackburn, L. Watson of Invergowrie, L. Howard of Rising, L. Razzall, L. Pitkeathley, B. Wheeler, B. Howe, E. Rennard, L. Ponsonby of Shulbrede, L. Whitaker, B. Howe of Aberavon, L. Ribeiro, L. Prashar, B. Whitty, L. Humphreys, B. Ridley, V. Prescott, L. Wigley, L. Hunt of Wirral, L. Risby, L. Prosser, B. Williams of Baglan, L. Hussain, L. Roberts of Llandudno, L. Quin, B. Williams of Elvel, L. Hussein-Ece, B. Rogan, L. Rea, L. Wood of Anfield, L. Hylton, L. Rooker, L. Rebuck, B. Woolmer of Leeds, L. Inglewood, L. Roper, L. Reid of Cardowan, L. Worthington, B. Jenkin of Kennington, B. Rowe-Beddoe, L. Rendell of Babergh, B. Young of Old Scone, B. Jenkin of Roding, L. St John of Bletso, L. Jolly, B. Scott of Needham Market, B. NOT CONTENTS Jones of Birmingham, L. Seccombe, B. Jones of Cheltenham, L. Selborne, E. Aberdare, L. Colwyn, L. Kakkar, L. Selkirk of Douglas, L. Addington, L. Cooper of Windrush, L. Kerr of Kinlochard, L. Selsdon, L. Ahmad of Wimbledon, L. Cormack, L. Kilclooney, L. Sharkey, L. Allan of Hallam, L. Cotter, L. King of Bridgwater, L. Sharples, B. Anelay of St Johns, B. Courtown, E. Kirkham, L. Sheikh, L. Ashton of Hyde, L. Crickhowell, L. Knight of Collingtree, B. Shephard of Northwold, B. Astor, V. Crisp, L. Kramer, B. Sherbourne of Didsbury, L. Astor of Hever, L. Dear, L. Laming, L. Shipley, L. Attlee, E. Deben, L. Lamont of Lerwick, L. Shrewsbury, E. Baker of Dorking, L. Deighton, L. Lang of Monkton, L. Skelmersdale, L. Bakewell of Hardington Denham, L. Lawson of Blaby, L. Smith of Newnham, B. Mandeville, B. Dholakia, L. Leigh of Hurley, L. Spicer, L. Barker, B. Dixon-Smith, L. Lexden, L. Stedman-Scott, B. Bates, L. Dobbs, L. Lichfield, Bp. Steel of Aikwood, L. Benjamin, B. Donoughue, L. Lindsay, E. Stephen, L. Berkeley of Knighton, L. Doocey, B. Lingfield, L. Stoddart of Swindon, L. Berridge, B. Eaton, B. Linklater of Butterstone, Stoneham of Droxford, L. Best, L. Eccles, V. B. Stowell of Beeston, B. Blencathra, L. Eccles of Moulton, B. Lipsey, L. Suri, L. Bonham-Carter of Yarnbury, Eden of Winton, L. Listowel, E. Suttie, B. B. Empey, L. Liverpool, E. Swinfen, L. Borwick, L. Evans of Bowes Park, B. Livingston of Parkhead, L. Taverne, L. Bourne of Aberystwyth, L. Falkland, V. Lothian, M. Taylor of Goss Moor, L. Bowness, L. Farmer, L. Lucas, L. Taylor of Holbeach, L. Brabazon of Tara, L. Faulks, L. Ludford, B. [Teller] Brady, B. Fearn, L. Luke, L. Tebbit, L. Bridgeman, V. Feldman of Elstree, L. Lyell, L. Teverson, L. Broers, L. Fellowes of West Stafford, MacGregor of Pulham Thomas of Gresford, L. Brooke of Sutton Mandeville, L. Market, L. Thomas of Winchester, L. Fink, L. Mackay of Clashfern, L. B. Brougham and Vaux, L. Finkelstein, L. MacLaurin of Knebworth, L. Tonge, B. Browne of Belmont, L. Finlay of Llandaff, B. Maclennan of Rogart, L. Trefgarne, L. Browning, B. Flight, L. McNally, L. Trimble, L. Burnett, L. Fookes, B. Mar and Kellie, E. True, L. Buscombe, B. Forsyth of Drumlean, L. Marks of Henley-on-Thames, Tugendhat, L. Byford, B. Framlingham, L. L. Tyler, L. Caithness, E. Freeman, L. Marland, L. Tyler of Enfield, B. Callanan, L. Freud, L. Marlesford, L. Ullswater, V. Carlile of Berriew, L. Garden of Frognal, B. Mawhinney, L. Verma, B. Carrington of Fulham, L. Gardiner of Kimble, L. Mawson, L. Wakeham, L. Cathcart, E. Gardner of Parkes, B. Mobarik, B. Wallace of Saltaire, L. Chisholm of Owlpen, B. Garel-Jones, L. Moore of Lower Marsh, L. Wallace of Tankerness, L. 63 Infrastructure Bill [HL][LORDS] Infrastructure Bill [HL] 64

Walmsley, B. Wilcox, B. geese but for global conservation. If we expect other Warnock, B. Williams of Trafford, B. countries to look after their biodiversity in order to Wasserman, L. Willoughby de Broke, L. prevent species going extinct, we have to play our role Wheatcroft, B. Younger of Leckie, V. with those species for which we have a huge international responsibility. 6.37 pm That is the whole purpose of some of those protected areas, to ensure that important habitats and important Clause 32: Petroleum and goethermal energy: right to species are not put into jeopardy as a result of other use deep-level land activities. So there are areas where, when push comes to shove, their biodiversity importance has to take Amendment 113H predominance. Less than 12% of the area currently potentially available for shale gas extraction comes Moved by Baroness Young of Old Scone under such designations, so we are not talking about 113H: Clause 32, page 38, line 8, at end insert— huge areas. The amendment is seeking to demonstrate “(c) outside— that we need to make special provisions and avoid (i) Special Areas of Conservation as designated under extraction in those areas or where it would impact on European Council Directive 92/43/EEC; land that is functionally linked to those areas, which (ii) Special Protection Areas as classified under would also create detriment as a result of that linkage. European Council Directive 2009/147/EC; Apart from the biodiversity and conservation (iii) land which is functionally linked to Special Protection importance of the amendment, it is vital to try to put Areas and Special Areas of Conservation; up front what the key requirements are so that the (iv) Sites of Special Scientific Interest; industry is clear about what it needs to steer away (v) National Parks; from. In the very early stages of the offshore wind (vi) the Broads; debate there were a number of sites in the North Sea (vii) Areas of Outstanding Natural Beauty; and that were, quite frankly, barking in terms of their biodiversity impact. To give them their due, organisations (viii) World Heritage Sites.” interested in biodiversity conservation and the industry worked together to identify the areas where it would Baroness Young of Old Scone: My Lords, I am be crazy to try to get offshore wind developed and, slightly nervous about speaking to Amendments 113H therefore, the areas where by default it was a sensible and 115 in my name on the Marshalled List. The idea to press ahead. That good piece of work mood of the House appears to be that if you dare to demonstrated very clearly where the industry could utter a word that strengthens environmental protection get ahead, get licences and start to generate power in a in any way you are immediately regarded as an anti-fracker. way that was not going to be stultified by conflict with In my case, nothing could be further from the truth. I the conservation movement. That is the approach we hope that my track record in having managed a good should be taking with shale gas extraction, to ensure balance between business and the environment for clarity about those areas where it is really not a good many years in the Environment Agency and before idea to be proposing this, so that people can get ahead that is an example of how environmentalists can be and move much more quickly in the areas where there keen on ensuring good levels of protection, while not is not that potential for conflict. then getting in the way of progress or commercial activity. That is Amendment 113H. I know that the Minister is not inclined to accept it but there it is, for what it is. I The two amendments are about the need for am sure the Minister will say that there is the National protection of our most important conservation areas. Planning Policy Framework, which puts in enough Amendment 113H is similar to one about which we controls, and that there is other European-linked legislation talked in Committee but has some significant differences. that will put in other controls, but I believe that it is I thank the Minister for meeting me last week to worth putting it in the Bill, in one place, so that discuss my concerns and to debate the best way forward nobody is in any doubt about the areas that both the in addressing them. The reality is that there are possible Government and the public would like shale gas extraction impacts on nature conservation and biodiversity as a steered away from so that other areas can be much result of fracking. We know about them; in terms of more rapidly exploited. water abstraction and pollution, and habitat damage and disturbance, they have been rehearsed adequately Amendment 115 is a fallback proposition—plan B, here and in another place. as it were—should the Minister not be inclined to I will give an example—which I am sure is absolutely accept the list, which is actually a shorter list than in uppermost in your Lordships’ minds every minute of my original amendment in Committee; I have taken the day—and that is pink-footed geese. The pink-footed out all the local wildlife sites and kept only the nationally geese in this country in the winter comprise about and internationally important sites. If the Minister is 85% of the global population. We are hugely important not too thrilled with Amendment 113H, Amendment 115 for the survival of the species on a global basis. They might be a more practical proposition. are highly dependent on three parts of the UK for There is already precedent. There is planning guidance their wintering grounds and at least one of those, if that the Government, in a very welcome fashion, not more, is a key site for shale gas extraction; that is, have put down with regard to applications for the Bowland area in the north-west. We really have to development within AONBs—areas of outstanding get this one right, not just for us and the pink-footed natural beauty—and national parks. What I am asking 65 Infrastructure Bill [HL][10 NOVEMBER 2014] Infrastructure Bill [HL] 66 for in Amendment 115 is a degree of consistency am very glad indeed that the noble Baroness has across all the landscape and conservation designations, raised the point that what we want to apply to parks with other protected areas being brought into that and areas of outstanding natural beauty should not be planning guidance. If not, there will be a feeling in the exclusively limited to them. industry that if the Government think it is so important to give planning guidance for AONBs and national Lord Jenkin of Roding: My Lords, neither the noble parks, and since they have not thought it as important Baroness who has moved this amendment nor the to give planning guidance for SACs, SPAs, Ramsar noble Lord, Lord Judd, appears to have recognised sites and sites of special scientific interest, there is that what we are talking about in Clause 32 is developing some sort of hierarchy and that the areas of outstanding land 300 metres below the surface. Looking at the list natural beauty and the parks are more to be steered of the various sites in the noble Baroness’s amendment, away from than the other designations because the I cannot of think of one of them which could remotely Government have given additional guidance on them. be affected by horizontal drilling 300 metres below the It would be useful if the Government would acquiesce surface. I am surprised that neither the noble Baroness to Amendment 115 and expand the planning guidance nor the noble Lord seems to have acknowledged this. that has already been given to some protected sites to We are not talking about actually drilling down in a others in order to send a signal that the Government special area of conservation or a site of special scientific believe—and I absolutely accept that they do—that all interest which implies development on the surface. We these protected sites are important. I beg to move. are talking here about horizontal drilling 300 metres below the surface and I just cannot understand how 6.45 pm either the noble Baroness or the noble Lord can think Lord Judd (Lab): My Lords, I thank the noble that this could affect these important sites. Perhaps I Baroness for introducing the amendment. I do not have missed something. need to tell the House that I am a passionate defender of the areas of outstanding natural beauty and the Lord Wigley: My Lords, first, I thank the noble national parks. We have to be vigilant all the time on Baroness, Lady Young of Old Scone, for introducing that. There is no room for complacency because the these important amendments. Perhaps I could immediately pressures against what we believe in are always there pick up the points made by the noble Lord, Lord and we have to beware of erosion. The point she has Jenkin, a moment ago. Yes, there will be drilling made about a wider application of those principles is across—of course there will be—but somewhere they very important. have got to drill down. If he is saying there shall be no As I listened to the previous debate, I felt my blood drilling down at all in these areas, just drilling across pressure rising because it is a travesty to suggest that into them, then at least I would understand what he environmentalists are against economic progress. Of was saying, but he appears to say that there should not course we are in favour of economic progress. We be any rules whatsoever appertaining to these special want to see it effective and driving as hard as it can. areas because the drilling can only come from the side. But we are equally determined, as custodians and Well, it cannot only come from the side, and I would trustees of all that we have inherited in terms of the have thought that that is something that perhaps could environment, scenic beauty, biodiversity and the rest, be addressed later if this amendment was accepted. to keep those issues as equally important. Therefore, it I wholly welcome this amendment— is a matter of rational, strategic decision-making about how you have clear areas for driving ahead, so that people are not worried about constraints of one kind Lord Jenkin of Roding: The noble Baroness had an or another but know that they have got green lights amendment in Grand Committee which addressed the going all the way, and areas where we are saying, “Yes, question of whether there should be downward drilling but there are other considerations to be taken into and whether pads for developing shale gas could be account and if we want a Britain worth living in and if located in any of these places. Although we did not we want our children and grandchildren to inherit a vote in Grand Committee, the argument was perfectly country worth living in, these other issues are crucial”. clear that it would depend on the site. You have got When I listened to the noble Lord, Lord Deben, in planning permission and you have got a whole range the previous debate, my feeling was that, yes, I do of other things. I must confess I have not reread the believe that the market has a key part to play in our noble Baroness’s debate on that occasion, but what we economic affairs, of course it has. I happen to believe, were talking about here is 300 metres below. rather traditionally—and I am not ashamed of that—in a mixed economy. But having said that, I believe in a Baroness Young of Old Scone: Perhaps I may give managed market and I will take the opportunity to say just a couple of examples. Water pollution and the why. The trouble is that the market operates from a impact on aquifers in general could be quite a substantial short-term time perspective and these other issues of issue. We already know that the volume of wastewater the environment, scenic beauty and the inheritance by coming from shale gas extraction sites is substantial. our children of a country worth living in do not have For the most part that will be brought back to base, the same immediacy in play in the market as other but where aquifers are involved we are not absolutely factors of a more essential economic character. Therefore, clear about that. There are a number of issues which one must make sure that those points are on the table, are not just the site-based issues on the surface. They being seen to be taken seriously and being given the are about what is happening in terms of underground muscle to be taken seriously. From that standpoint, I processes as well. 67 Infrastructure Bill [HL][LORDS] Infrastructure Bill [HL] 68

Lord Wigley: As I was saying before such diverse and ducks. Around us there are now eight wind turbine interventions, I welcome these amendments. They exclude farms. This is a huge area—an important one for important parts of these islands from the impact of nature—but the argument was looked at for every fracking. single one of those turbines. More recently, a planning I come back to the experience of the United States—I application was made for four wind turbines to be will be talking more about that in the next group of sited much closer to the SSSI. My house was perhaps amendments. The experience of the United States has one of the nearest that was going to be affected by that been scorned in our previous debates, but it teaches us and I lodged my objection on the grounds of nature to be extremely careful before allowing such developments and what effect the four wind turbines—which are in our more sensitive rural areas. I accept that perhaps considerably bigger than anything we are talking about the rules will be different in the United Kingdom in the fracking process and would be at a higher level compared to the United States. That is one of the for much longer—might have on the flight path of reasons why we need to have rules in the United geese and swans. Kingdom to look after these areas. Most certainly in The planning process worked perfectly and the the United States, to my knowledge, there are areas decision was turned down. It has gone to appeal and I that have suffered not just from the effects underground do not yet know what the result of that is, but my but also very badly on the surface. point is that the existing procedures are there now to Noble Lords will be aware of the classic book Rape protect such sites as these. I used the existing procedures of the Fair Country by Alexander Cordell. We in Wales and the planners looked at the existing procedures and know what such extractive industry can do to our agreed with all of us that had objected to these four beautiful countryside and its effect on all sorts of wind turbines. I believe that what we have got in place wildlife. My only reservation with this amendment is is sufficient and we do not need any more. merely that it does not go far enough and that many sensitive environments are excluded from being governed Lord Judd: Before the noble Lord sits down— by it. Lord Gardiner of Kimble (Con): My Lords, I am Lord Borwick: My Lords, I only wish that I could looking at the Companion in terms of rules of debate agree with the noble Lord, Lord Judd, that it is a on Report. We are getting quite close to contravening short-term exercise to get planning permission for this them and I would just like to say to noble Lords that sort of development. The planning permission process we should be cautious of that. will take many months, probably years, and cost a large amount of money. It is not a short-term exercise, and that is why I think this amendment is unnecessary Lord Judd: Before the noble Lord sits down, would because it will be up to the local council or local he not agree that, whatever the value of the regulations planning authority to grant the planning permission, and the means of implementing them that exist at the with all the pressures put upon them to make the moment, it would be of considerable assistance to decision to protect the environment. With these sites industry and those behind this important and vital listed in this amendment, I do not think they are going initiative for the British economy to see clearly on the to get the planning permission which the noble Baroness face of Bills such as this the areas on which they can fears they will. I really do not think it is going to be and cannot concentrate their attention? possible. 7pm Secondly, I am sorry that—despite trying to listen to it—I am not sure I fully understood the meaning of The Earl of Caithness: My Lords, it is clear now. “functionally linked”. How wide a definition will that Industry does not need further clarity. It works. actually be in practice? I wonder whether the noble Baroness could help in explaining that? Lord Whitty (Lab): My Lords, those who oppose these amendments are missing the point. The amendments The Earl of Caithness: My Lords, I rise to oppose may well be in the wrong place; they may well be too these amendments. I understand the principle behind wide. I did not intervene in the previous debate because them but, as my noble friend Lord Jenkin has reminded I thought that it was becoming far too polarised. us, we are talking about something that is going to Public opinion on the issue of fracking is polarised, happen well below the surface. Having taken that into but public opinion is not polarised in relation to the account, and while I agree with him that the amendment protection of our national parks and our areas of is in the wrong place, I also think that the principle of outstanding natural beauty. Unless the Government the amendment is quite important. However, what the in some way recognise within the overall approach to noble Baroness has totally failed to do, and what the fracking that there are certain sites which have to be noble Lord, Lord Judd, has failed to do, is to explain protected—whatever provision exists elsewhere in terms why the present system of controls is not adequate. of general planning law and so forth—the outcry I do not class myself as an environmentalist; I class against fracking will grow rather than be reduced. myself much more as a countryman. I have a much The Government should at least have the grace to broader range of interest than an environmentalist recognise that that is a reality. In terms of public would have. The house that I used to own very recently acceptability of fracking, protection of our protected up in Caithness was right beside an SSSI, and on that areas is an important element which needs to be in the SSSI there wintered whooper swans and lots of geese regulations and in the Bill. Whether the amendments 69 Infrastructure Bill [HL][10 NOVEMBER 2014] Infrastructure Bill [HL] 70 in the name of the noble Baroness are technically in guidance and a government circular on biodiversity the right place or not, the politics and the PR for and geological conservation all recognise that there fracking need to make that point. If they do not, the are areas designated for natural conservation and 25% of people who fundamentally oppose fracking biodiversity value, including sites of special scientific will grow in number. The Government have the interest, special protection areas, special areas of opportunity to ensure that that does not happen. I conservation and Ramsar sites, and that they should hope that, if not now then in the process of this Bill be given a high level of protection. They are clear that through the Commons, the Government will put that right. protected areas need to be fully and appropriately considered by mineral planning authorities when exercising Baroness Worthington: My Lords, I am grateful to their planning duties, both in preparing local plans noble Lords who have contributed to this debate, and determining planning applications. which has been another interesting exchange of views The planning authorities assess each application on how best to get the fracking industry off on the for shale and geothermal development on a case-by-case right foot and to minimise the degree of public opposition basis. For example, the National Planning Policy that might arise. Framework makes it clear that development should I recently visited the Lake District, which is one my not normally be permitted if, either individually or in favourite parts of the country. I visited a mining combination with other developments, it is likely to museum and, in doing so, I realised that we often see have an adverse effect on a site of special scientific such parts of the country as having a great value now interest. That applies even if the development is outside in terms of tourism, wildlife and appreciation of scenic site of special scientific interest boundaries. beauty, but that they have in previous times been quite The Conservation of Habitats and Species Regulations diversely economically active and been able to 2010, which transpose the EU habitats and wild birds accommodate different activities within the boundaries directives, ensure strict controls on any plan or project of the parks as we know them today. Therefore, I for that might affect European sites such as special protection one am not of the opinion that these special places areas and special areas of conservation. Development need to be preserved in aspic but that it is about cannot occur on or near such protected areas unless it achieving the right level of balance. can be shown to a high degree of scientific certainty That said, it is absolutely clear that, when you have that there will be no adverse impact on the integrity of a Government who say that they are all out for fracking the site. This is a very high bar for securing development and that it will be the silver bullet that solves all our in such areas. In addition, the Natural Environment energy needs, and slightly overhype it, you can see why and Rural Communities Act 2006 and the Nature people get nervous that all due consideration and care Conservation (Scotland) Act 2004 place a duty on all are not being taken. I shall be interested to hear the public authorities, including the Secretary of State for Minister’s responses to the two amendments. The second Energy and Climate Change, when exercising their of them, Amendment 115, points to something of an functions, to have regard to the purpose of conserving inconsistency, with planning guidance having been biodiversity. Public bodies also have comparable duties issued for national parks and AONBs but not for relating to national parks, areas of outstanding natural other nationally significant sites. Such sites, because beauty and sites of special scientific interest. they tend to be smaller, more fragmented and under It is important to note that the regulatory system in considerable pressure from a wide range of economic the UK fully recognises these protections. Before any activities already, arguably deserve even greater levels oil or gas operations can begin, operators must gain a of protection than those larger national parks and permit from the environmental regulator, the Environment AONBs, which I think can accommodate economic Agency or an equivalent agency. The Department for activity within them and generate jobs and economic Environment, Food and Rural Affairs is currently benefits. I look forward to hearing the Minister’s preparing revised guidance on protected wildlife sites response. as part of a wider project to make all the department’s guidance quicker to use and easier to understand—the Baroness Verma: My Lords, I welcome the commitment noble Baroness raised that when we had our meeting of the noble Baroness, Lady Young, to protected areas the other day.This will help ensure that these requirements and was grateful for our meeting prior to today. Such are clearly communicated to developers and regulators. areas are nationally and internationally important in The noble Baroness, Lady Worthington, said that terms of their environment, and all noble Lords who the Government looked on shale as being a silver have contributed today, from whichever perspective, bullet. We have always maintained that we do not see have highlighted their significance. it as a silver bullet but that we see its potential for As the noble Baroness made clear in Committee, ensuring that we have home-grown supply and energy these areas are the jewels of our country and we agree security and for helping drive down costs to the consumer. that they need to be accorded appropriate protection. The debate should be in that context rather than shale While I recognise the intent behind the noble Baroness’s being taken out of context in the wider arena. amendments, which is to ensure the necessary protection In drawing the attention of the noble Baroness, for habitats and species in or near to protected areas, I Lady Young, to the robust regulatory regime that is assure her that such areas are already offered a high already in place and the full recognition that the level of protection derived from EU directives transposed planning system already gives to protected areas, I into domestic policy and through the planning system, hope that she is reassured that such areas are already as noble Lords have alluded to today. The National accorded significant protection and, on that basis, will Planning Policy Framework, the supporting planning withdraw her amendment. 71 Infrastructure Bill [HL][LORDS] Infrastructure Bill [HL] 72

Baroness Young of Old Scone: My Lords, I thank (7) An order under subsection (6) may contain any conditions the Minister for her words, and all noble Lords who which the Assembly deems appropriate.” have contributed to this debate. I am reassured that there is already strong environmental protection for Lord Wigley: My Lords, I shall speak to Amendments these sites, but I am not reassured that it is necessarily 115B, 115C and 123, which also stand in my name and always going to work. are grouped with Amendment 114. First of all, could I There are two dimensions. First, I was interested in say a word about the whole issue of fracking? Noble the experience of the noble Earl, Lord Caithness, and Lords will be aware that when this Bill was given its his wind farms. There was an example where there Second Reading there was no reference to the provision were environmental considerations that should have it now makes in relation to fracking. When we first given a strong signal to the developer that it was not a started in Committee, there was no sign of the sensible place to put a wind farm, but he nevertheless amendments we knew were being prepared. Ostensibly, barrelled on. One assumes that it will go to appeal. So we had to wait until the conclusion of the consultation we are not giving the right signals to potential developers process in August, before amendments were formulated. of sites that it is a waste of their time, effort and But since little notice seems to have been taken of the money to get into disputes in areas where there is a overwhelming opposition to fracking expressed by the very strong case for the protection of the biodiversity general public, this seems to have been little short of a interest, and where it is therefore going to be a struggle charade. It is not good enough to take an arrogant and for them to get permission. We need to give them very disparaging attitude to those who harbour genuine strong signals that it is going to be a lot easier and fears. cheaper for them not to set their hearts on some of Now that we have the amendments in the Bill and these highly protected biodiversity sites. the provision for fracking is likely to be confirmed as We also have a case in Kent at the moment, for a part of it as we move forward from Report, unless we housing development being proposed to the local challenge it rigorously tonight, then the fears that authority. I am earnestly hoping the planning authority people have will be underlined and reinforced. That is will turn it down. It is a proposition for 5,000 houses why I have tabled my amendments. But before I address to be built on 300 hectares of a site of special scientific the detailed wording, I will make it clear why I unreservedly interest. If the development goes ahead it will be the oppose the application of fracking technology to extract largest loss of SSSI land for the last 30 years in this underground gas. I have grave reservations about this country. It will be a complete outrage. But the developer technology. I do not express these doubts and concerns has been barking enough to set themselves on that site. on the basis of a nimby approach. There are no That is an example where the developer is simply not identified areas of potential fracking activities in my reading the signals, so the signals need to be absolutely home county of Gwynedd, nor do I harbour doubts explicit. about any form of modern applied technology. I very much appreciate the point that the noble Lord, Lord Whitty, made. This is an effort to try and 7.15 pm make sure that fracking gets off on the best possible My university degree, many years ago, was in physics, foot, with a really clear commitment linked specifically and I rejoice in the progress of science in making life to shale gas extraction about environmental protection so much better for millions around the world. But being absolutely paramount. We should not just rely science needs to be applied with a degree of the on other pre-existing legislation, but gather together precautionary principle. We all remember the tragedies the real requirements that this industry needs to take of thalidomide, the dangers of radiation exposure, account of, so that we can reassure the public and and the potential disaster which was associated with move ahead. CFCs in the atmosphere. It is just as stupid to blindly I was hoping that the noble Baroness might give me accept the application of science as it is to blindly hope for Amendment 115 at future stages of the Bill, apply a knee-jerk reaction against the wonders of because the situation seems totally anomalous. I would modern science, and what it can bring us. We need a like to understand from her why the Government felt balanced approach, and that means asking awkward it necessary to issue guidance on areas of outstanding questions and challenging glib assumptions. That is beauty and national parks, which have strong what I want to do in regard to our apparent acceptance environmental protection requirements already, but of fracking technology. not on the other nature conservation sites. However, I The dangers associated with fracking can be beg leave to withdraw the amendment and hope the summarised under five headings: first, direct dangers Minister might think more kindly of the amendments to human health and to animal and plant life arising in pushing the Bill to another place. from the chemicals used in the fracking process and the likelihood of them entering our water supply Amendment 113H withdrawn. systems; secondly, the possibility of fracking technology triggering seismic tremors, as we have heard about in earlier debates tonight, and in the extreme, earthquakes, Amendment 114 as apparently happened not so far from Blackpool in Moved by Lord Wigley 2011; thirdly, the implications, by building a cheap gas 114: Clause 32, page 38, line 15, at end insert— economy, of worsening our carbon footprint at the “(6) This section shall not extend to Wales unless an order very time when we should be putting every priority authorising it has been passed by the National Assembly for into reducing our fossil fuel usage and investing in Wales. reducing demand for fuels by insulation and fuel efficiency 73 Infrastructure Bill [HL][10 NOVEMBER 2014] Infrastructure Bill [HL] 74 programmes, and re-orientating our energy systems $3 million damages against the Aruba fracking company into using renewable low-carbon technologies; fourthly, for the pollution of air, water and soil which had the highly questionable principle of giving developers seriously impacted on the family’s health. The following carte blanche to enter people’s property or dig under month, in May, there was a rig blow-out in Morgan their land under a blanket assumed permission to do County, Ohio, with a spillage of 184 barrels of toxic so, undermining the checks and balances which have fracking fluid, which apparently reached the nearby been carefully crafted into our town and country waterway. In Pennsylvania in June, a fracking company planning systems; and fifthly, the environmental squalor was fined almost $200,000 for a toxic hydraulic fracking which fracking has left in its wake in so many of those fluid spill of over 200,000 gallons into the local communities in North America which have been blighted environment that led to the evacuation of local families as a result of the fracking invasion of their countryside, from their homes. In Texas in August, it was reported and now this Bill will allow fracking companies to that in a survey of 100 water wells up to three kilometres walk away from their clapped-out equipment, which away from the fracking locations, over 30% had arsenic they leave under the ground after them. levels above the safety limit. A survey by Dale University said that water sources—again in Pennsylvania—showed We are told of the economic benefits which will an elevated level of methane in locations a kilometre flood into these areas as a result of fracking, but all or more distant from drilled areas. In some instances, experience shows this to be a total nonsense. Only a the methane concentration was so high as to be explosive. handful of jobs are created, and they usually go to migrant workers who move from location to location Britain is much more densely populated than the as the fracked-out wells are exhausted, leaving behind United States, with consequently higher likelihood of them the industrial squalor so often associated with water sources used for human or animal consumption the extractive industries. We are told that there will be being polluted. Given this sort of experience, it is of immense wealth from exploiting these untapped reserves little surprise that states such as Vermont have banned of gas. But that wealth does not go to the communities fracking since 2012. They did so, in the words of the which have suffered the ravages of exploitation; it goes state governor, Peter Shumlin, in order for Vermont to the supranational corporations, which are only too to, ready to respond to the Government’s inducements. “preserve its clean water, its lakes, its rivers and its quality of life”. Of course, the money will go into the Treasury to bail out a near-bankrupt economy, with the danger of I was told graphically when in America in August by being squandered in the same way as has happened to Eluned Jones, Professor of Economics at South Dakota the UK’s North Sea oil reserves. Local families, local State University, that the economic benefit gained in communities and local environment pay the price, and her state by fracking had been attained at an environmental distant pockets bulge with the proceeds. and social price that was a profound disaster. Other parts of America are waking to the dangers of fracking. All these are matters of concern to me. But let me Only last Tuesday, as we heard earlier, the city of concentrate, in the limited time we have available on Denton in Texas—in the heart of fracking country—voted Report, on the dangers of chemicals contaminating in a referendum to ban any new fracking operations. the water systems of those areas where fracking takes Civilised European countries that put the safety of life place. In Wales, we provide water not only for our own and the environment above commercial profiteering communities, but for many English conurbations: in have banned fracking. France has done so since 2011. north-west England, in the Midlands, and in probably Both Germany and the Netherlands have placed a increasing quantities to southern England. The purity moratorium on it. That is what my party, Plaid Cymru, and safety of those water supplies have been taken for has also called for. granted. Let me mention just some of the chemicals used in the fracking process. Each fracking “job” In these amendments I urge the House to take a requires between a million and 8 million gallons of first step towards a moratorium throughout Britain by water, and each such job uses 40,000 gallons of chemicals, refusing to carry forward Clauses 32 and 33. They involving as many as 600 different chemicals, including were inserted in a blind moment in Committee and I carcinogens and toxins such as lead, uranium, mercury, urge the whole House to reject them emphatically. If, ethylene glycol, radium, methanol, hydrochloric acid for whatever reason, I cannot carry the House with and formaldehyde. me—as I suspect may be the case having heard earlier debates—then I implore the House to at the very least In the United States, there have been over 1,000 cases agree Amendment 114. That would allow this clause of contaminated drinking water in locations next to to be applied in Wales only if it was so approved by the areas of gas drilling, and these have led to cases of National Assembly, and allows the National Assembly sensory, respiratory and neurological damage which to impose whatever conditions it deems fit on any have been attributed to ingesting contaminated water. fracking development. My hope would be that, irrespective Less than 50% of the fracturing fluid is recovered; the of what happens in England, it would say no to remainder of the toxic fluid is left in the ground. fracking in Wales. Overwhelmingly, it is not biodegradable. However, there are cross-border issues relating to In the United States, waste fluid is often left in fracking. My parliamentary colleague, Hywel Williams, open-air pits to evaporate, releasing harmful, volatile MP for Arfon, was told in a Written Answer that organic compounds into the atmosphere, creating fracking developments in north-west England may contaminated air, acid rain and ground-level ozone. A well look to Wales for the enormous supplies of water whole plethora of legal cases have arisen in the United they will need for those purposes. As noble Lords will States. In April, the Parr family in Texas were awarded be aware, water is an incendiary substance in Wales. 75 Infrastructure Bill [HL][LORDS] Infrastructure Bill [HL] 76

[LORD WIGLEY] geothermal tests in Alsace, there were seismic events Any suggestion of the drowning of further valleys in and a lot has been learnt from that. There were also Wales to provide water for fracking in England—no events in Blackpool, but as I understand it the industry doubt without any compensatory payment—will generate is able in the right locations to make sure that such a howl of outrage the length and breadth of my matters are very well controlled. nation. Water is to Wales what oil is to Scotland, so let I make the point that fracking can be good. It can there be no misunderstanding whatever that the be good for renewables. I hope that in the longer term exploitation of water resources in Wales, without the fracking will be available for deep geothermal in terms sanction of the National Assembly or adequate payment, of power generation. At the moment, it looks like we is a non-starter and will be fought every step of the will go through a heat revolution with not quite so way. I cannot make it clearer than that. deep geothermal, but in the long term we may get to In many ways, it would be totally perverse not to generate baseload electricity through deep geothermal. devolve to the National Assembly responsibility for I wanted to make that point, because fracking is not allowing, banning or putting conditions on fracking in just around shale gas; it has those other benefits as Wales. The Assembly has responsibility for virtually well. all aspects of town and country planning in Wales, it However, Wales should be able to steer its own has total responsibility for the environment and agriculture, course. and it has responsibility for the healthcare services in Wales. All these are policy portfolios impacted by the effects of fracking. If Wales is to have coherent public Baroness Worthington: My Lords, I rise briefly to policy, then control of fracking must also be devolved. ask the Minister for her comments on the issue of Indeed, the Government have tacitly admitted this in devolution and fracking. I am particularly interested their response to the House of Commons Welsh Affairs in the Scottish question raised by the noble Lord, Committee’s report on energy generation in Wales. Lord Wigley. As I understand it, Holyrood already The committee recommended that the UK and Welsh controls planning permission and the permitting regime, Governments should co-operate on regulatory and so it would not be a huge step to devolve this aspect of planning matters, including the “environmental risks” the control of fracking and rights of access. I just ask associated with hydraulic fracking. The Government’s that question. response was that planning was a devolved matter. I am also grateful to the noble Lord, Lord Teverson, That being so, surely the Government must accept the for drawing the attention of the House to the fact that, thrust of my amendment. when we talk about these provisions and rights of Incidentally, I would be grateful to the Minister if access, they apply to more than just the extraction of we could have some clarification as to whether these petroleum. Indeed, they apply to deep geothermal, draconian provisions will apply to Scotland directly, which arguably needs the loophole to be changed or whether the Scottish Parliament has some control more urgently than in the case of fracking for oil and over their applicability. I suspect that if you were to gas. It may change the view of the noble Lord, Lord tell Mr Salmond that Scotland will have to allow Wigley, on this that you can frack for coal as well. fracking willy-nilly and by Westminster diktat, there Fracking of deep-mine coal might bring a degree of would be such an eruption north of Hadrian’s Wall as economic development back to Wales. I am not saying to re-open the whole relationship between this place that that is the only way that Wales should develop; I and Holyrood. Yet if Westminster were to allow a am much more interested in some of the marine Scottish veto over fracking, then on what earthly basis technologies, biomass and wind in a Welsh context—those is such a provision to be denied Wales? seem to have huge potential. However, I would never My preferred outcome of this debate would be for rule out the idea that deep coal mining could come the Government to withdraw or the House to vote back as an economic activity if done in combination these appalling clauses out of the Bill. In the event of with carbon capture and storage. failure to do this, I implore the Government to either In summary, these clauses potentially relate to more accept my Amendment 114 to allow the National than just oil and gas extraction, and I am interested in Assembly to determine these matters in Wales or the noble Baroness’s response on the Scottish question. undertake to bring forward their own clause in another place for the same purpose. Whichever way they proceed, this issue will not go away. I beg to move. 7.30 pm Baroness Verma: My Lords, I note the clause stand Lord Teverson: My Lords, I do not want in any way part amendments and the amendment proposed by to suggest that Wales should not have its own authority the noble Lord, Lord Wigley, regarding the application over this area. As a citizen of Cornwall, I absolutely of the right to use deep-level land for the purposes of agree with the noble Lord—though I do not know exploiting petroleum or deep geothermal energy in enough about what the relationship is here. Wales. The Government support the development of On the attack on fracking, down in Cornwall our shale gas and oil. Natural gas from shale could play a geology does not support shale gas but it does support crucial role in supporting UK energy security, as well deep geothermal, in which fracking plays an important as an important role as a part of the transition to a part. I think that the noble Lord spoke on the whole low-carbon economy, and that was well debated previously. about fracking in relation to shale gas, but there are The carbon footprint of UK-produced shale gas would issues around fracking for whatever purpose, and seismic likely be significantly less than coal and lower than events are one of those. In one of the early EU-funded imported liquefied natural gas. Domestic shale gas 77 Infrastructure Bill [HL][10 NOVEMBER 2014] Infrastructure Bill [HL] 78 could also benefit the UK in terms of jobs, tax revenues exploitation of deep geothermal resources could not and growth, mitigating some of the falling revenues be considered to have been conferred under any of the from the North Sea. subjects in Schedule 7. However, it has become clear that difficulties in Although deep geothermal and oil and gas activity obtaining underground access pose a barrier to exploring may impact upon conferred subjects such as environmental this new industry. The same problem also applies to protection, that is not what they properly relate to for the deep geothermal industry, which is likewise at an the purposes of the legislative competence test in the early stage of development in the UK. New lateral Government of Wales Act 2006. In addition, the right drilling methods that can cover much larger areas of use clauses are not removing any existing regulatory underground mean that existing processes for obtaining requirements. We therefore see no ground on which underground access can be disproportionately costly this measure would be within the legislative competence and time consuming in relation to the potential benefits. of the Welsh Assembly. On that basis, there is no Currently, companies must negotiate rights of access rationale for requiring approval by the Welsh Assembly with every landowner living above underground drilling. before the section can apply in Wales. If these negotiations fail, an oil and gas operator can It is also worth noting that, while oil and gas are make an application to the Secretary of State, who non-devolved matters, all existing planning authority may refer the matter to the courts. This process gives a procedures and powers will remain in place. As such, single landowner the power to delay a development the different UK planning regimes will continue to significantly and, in the case of geothermal, it is likely regulate shale gas or geothermal developments according to stop the project entirely. to their existing planning procedures. I have reflected on the noble Lord’s amendment and in response to his The right to use deep-level land would help unlock concerns I have offered him a government perspective. exploration for shale gas and deep geothermal as we Therefore, I hope that the noble Lord, Lord Wigley, move towards a low-carbon economy. However, let me will withdraw his amendment. be clear that we are not proposing any changes to the regime for surface access, and the regulatory system that deals with the potential risks associated with Lord Wigley: I am very grateful to those who have drilling and hydraulic fracturing will remain the same. taken part in the debate and to the Minister for her I can reassure noble Lords that a company looking to response. Quite clearly, I would be unlikely to carry develop shale or geothermal would still need to obtain the House on the amendment that the clause should all the necessary permissions, such as planning and not stand part of the Bill. Although my heart would environmental permits. The onshore oil and gas industry want me to go down that road, I suspect that I would has committed to engage with communities at the come to a blind alley. Therefore, I will not press it on early stage of operations, as well as consulting through this occasion because there will be opportunities in the planning application process. Our robust regulation another place. I have no doubt that many Members of will protect residents while allowing this source of all parties in the other place will wish to come back to homegrown energy to develop in a way that is fair to this because there is deep concern outside. communities. Even if one was in favour of fracking in principle, I would have thought that it would be very wise to pay EY has estimated a thriving industry could mean attention and take the maximum possible notice of the 64,500 jobs nationally.Locally, that could mean cementing reservations that exist outside, because these are the contracts, new facilities and jobs for local companies. real fears of real people in real communities, and they Communities that host shale development could see a need to be addressed. Members in all parts of the share of this, which is why we welcome the developers House have expressed that in the series of debates we community benefit package, similar to other technologies have had tonight. such as wind. This will pay communities £100,000 per Turning to the lead amendment in the group, which hydraulically fractured well site at exploratory stage relates to the powers of the National Assembly for and 1% of revenue if it successfully goes into production. Wales, I think that it is ironic that at a little earlier than As with wind farms, wider communities will benefit this time tomorrow—as the noble Lord, Lord Bourne, too, as local councils will also be able to retain 100% of on the Government Front Bench, will be well aware—we the business rates that they collect from productive will consider an amendment that would change the shale gas. Therefore, there are many potentials of this model of devolution for Wales to a reserved-powers industry to communities in Wales if shale production model of the sort that exists for Northern Ireland and takes place. Scotland. This was a recommendation of the Silk Petroleum extraction is a non-devolved matter. As commission, of which the noble Lord, Lord Bourne, such, the proposals for oil and gas will apply across was a member, and which appeared to have all-party England, Wales and Scotland. The proposals on deep support in Committee in this House. The Report stage geothermal energy also cover England, Wales and of that Bill takes place tomorrow. That being so, Scotland, where in Scotland deep geothermal energy unless there was a specific exemption made for these is exploited for the sole, or main purpose of electricity purposes, it would not be enough to rely on the generation. Schedule 7 to the Government of Wales 2006 Act, which the Minister has relied on in the Act 2006 sets out the conferred subjects over which debate tonight. the Welsh Assembly can exercise legislative competence. However, rather than argue technical, legalistic points Oil and gas are clear exemptions from the conferred arising out of legislation, I put this to the Minister in list of economic development and, furthermore, the conclusion. When the National Assembly for Wales 79 Infrastructure Bill [HL][LORDS] Infrastructure Bill [HL] 80

[LORD WIGLEY] We have had a debate about the nature of the has responsibility for the environment, particularly for regulations, whether or not they are effective and town and country planning, transport, and economic whether there are enough resources to enforce them. development within Wales, as well as health proposals, Even if we accept that we have world-class regulations then surely it makes all sense to put the responsibility and regulators in this area, if fracking takes off in the for this area also into its hands—at the very least to way in which its proponents—and, to some extent, make sure that there is a working together. That surely I—hope it will, then there will be hundreds of sites was the intention of the Government when they responded across Britain and, however good the regulatory process, to the Select Committee on Welsh Affairs report. I will however vigilant the regulators themselves and however not quote it again, but it underlined the fact that well motivated those companies that are responsible planning policy is a devolved matter and that planning for those operations, there will be problems. There is is integrally involved in the decisions we are talking no prior form of energy where there have not been about in regard to fracking. some accidents, leakages or effects on the environment, Therefore, I ask the Minister whether she will take on neighbours, on businesses or on the water supply. this away between now and the debates in another The failure of even a fraction of the number of place and give further thought, particularly in the light wells that are being talked about could have a significant of the debate we will have on the Wales Bill tomorrow, impact on the landowner, on the farmer, on the community as to whether there is a mechanism to make sure that close to the fracking site, on individual households or the National Assembly for Wales and the Government indeed on individuals, or it could have an effect on of Wales are totally on board in a dialogue on these other businesses, whether small local businesses or matters so that, in keeping with the principle of giant water companies. We therefore need to have an subsidiarity, the decisions affecting communities can effective liability arrangement that ensures that the be taken as close as possible to those communities—in cost of such damage and its remediation do not fall on this context, decisions affecting Wales can be taken by the public purse. We have historic examples here in the the National Assembly where possible. On that basis, I energy field. Whether you are talking about deep coal beg leave to withdraw the amendment. mining, opencast mining or the nuclear industry and the cost of decommissioning there, the reality has Amendment 114 withdrawn. been that the costs of damage, waste and pollution have been borne almost entirely by the taxpayer. I Amendments 115 to 115B not moved. want to see a provision in the Bill whereby that does not arise in the case of substantial development of the fracking industry. Clause 33: Further provision about the right of use My amendment would therefore deal with the Secretary of State’s obligation to bring forward regulations to Amendment 115C not moved. ensure that any operator within this field, whether in the exploratory or subsequent stages, has sufficient resources to cover any loss arising from the operation, Clause 34: Payment scheme the costs of remediation and the costs incurred by the public authorities in enforcing that. That may require a separate fund within the company or a common Amendment 115D fund. I leave that to the Secretary State in the regulations. Moved by Lord Whitty However, such provision is necessary. 115D: Clause 34, page 39, line 18, at end insert— I am afraid that the Minister’s reply, when I referred “( ) The regulations must require contributions to the contingency to this issue in rather similar form in Committee, fund or funds from relevant energy undertakings which are raised several concerns. It was argued by the Minister sufficient to meet— that companies can be required to remediate the effects (a) any loss caused directly or indirectly by the operation of and prevent further damage from pollution under the oil and gas activity; existing regulations. However, in general, that applies (b) the costs of— only if land itself is contaminated in the strict terms of (i) remediation; those regulations. It is not clear that funds need to be available from the outset to foot the cost of this (ii) enforcement action against the relevant energy undertaking; remediation activity. (iii) other measures taken by a public authority in The Minister made a big point of saying that we respect of, or in consequence of the loss, or the should not treat fracking differently from other industries activity which gave rise to the loss. and that existing law is robust. However, one has only ( ) The regulations must ensure that the contingency fund is to look at one of the examples that I mentioned: protected in the event of the insolvency of a relevant energy opencast mining in Scotland cost £200 million in undertaking which has made payments to the fund.” Scotland alone, and the entire cost fell on the public purse. My amendment also therefore seeks to ensure Lord Whitty: My Lords, I am trying to help the that that would not arise in this case and that a fund Government out here. This is yet another part of the would be provided in advance, as it were, and in effect jigsaw that is necessary to ensure public acceptability would be bankruptcy-proof. of fracking in appropriate circumstances. The amendment The Minister also argued that environment regulators deals with the issue of damage caused by fracking and already have the power, although not the requirement, who is liable for it. to require up-front financial bonds to address the risk 81 Infrastructure Bill [HL][10 NOVEMBER 2014] Infrastructure Bill [HL] 82 wherever they deem that necessary. Article 14 of the to carry out the work and continue to operate any European mining waste directive is relevant here but it shale gas well that it constructs. The papers address is limited; it relates only to the situation where the very specifically the questions that the noble Lord has waste itself is hazardous or is managed at a category A made most of—the decommissioning of plant and site. Neither of those things needs to apply for substantial financial liability if things go wrong. The existing damage to be caused if there is some leakage or other regime provides for the remediation of environmental damage caused by the fracking operations. damage and contaminated land, and that includes water. If we take all the regulations together, if a 7.45 pm company causes damage, harm or pollution to the The amendments are fairly straightforward. They environment, it can be required under the regimes in require anticipating what has happened in other industries force to remediate the effects and prevent further at the same time as we are designing the permitting damage, which is the same approach as applies to system for fracking operations. It would be a substantial other industries. piece of foresight by the Government to introduce Furthermore, the Government appear to have very such requirements and to ensure that the operators in clear powers: they can require financial evidence that this field had sufficient resources to meet such there are resources available to pay for that. UKOOG contingencies. However, probably more importantly, has relieved my anxieties in that regard. Unlike the to outline a point that I made in my brief intervention earlier industries to which the noble Lord, Lord Whitty, earlier, it is also a vital part of ensuring that the public, referred, the approach to this industry, which is still at the businesses, the communities and the landowners a very early stage of its development, as he rightly who are anxious about the effects of fracking are said, has been extremely responsible. I shall be very reassured from the outset that if something goes seriously interested to hear from my noble friend what those wrong, their interests will be respected and it will not measures are. I am satisfied, but I will listen to my be the taxpayer who pays but the operator. The noble noble friend’s reply. Lord, Lord Deben, who is no longer in his place, said at an earlier stage that it should be clear in relation to Lord Judd: My Lords, I have been glad to put my the enforcement of regulations that the polluter pays. name to this amendment, which is very wise and That must be true also in relation to any negative prudent. It has been suggested in recent years that the effects that require action and remediation as a result interpretation of welfare capitalism has changed. The of these operations. original concept was that capitalism had a social This would be a reassurance, and in extremis it responsibility that it should discharge for the well-being might become an absolutely necessary reassurance, so of society as a whole. It seems that quite a lot of that we do not go through the sequence of events that people have come to believe that perhaps welfare followed earlier generations of energy exploitation in capitalism is about ensuring that while wealth generation coal and nuclear power, where no such liability was and profit is privatised, risk is nationalised and is the placed on the operator and where, in fact, the taxpayer responsibility of the taxpayer. The point in the amendment has paid and is continuing to pay. In the case of that is particularly important in this context is what nuclear in particular, the taxpayer will continue to pay happens in the case of insolvency, when all the best for many generations to come. Let us anticipate that predictions can be blown away in the wind in the and at the same time reassure large sections of the chaos that follows. community who may not have any fundamental objections If a scheme is put forward and is being properly of the type that the noble Lord, Lord Wigley, has to costed, the cost of dealing with potential damage, fracking but nevertheless are anxious about their own closure or the consequences of that is an essential interests and the effect that this may have on their own element in the calculations. We are concentrating today businesses and their way of life. I beg to move. on this new and exciting aspect of shale development but we are beginning to see infrastructure across the Lord Jenkin of Roding: My Lords, when I saw the country in connection with power generation and its noble Lord’s amendment, my immediate reaction was distribution that is no longer required. We need to be to say, as he has done, “Look at what’s happened in very careful that we are ensuring that any adverse other industries, notably the nuclear industry, and results of that are not left just for the taxpayer to then look at what has been happening recently in settle, but that they are the responsibility of the people relation to offshore oil and the measures that are now who, while they are operating, are receiving the profits being taken there”. That led me to approach the trade that come from that. association that covers the fracking industry, which was extremely helpful. My noble friend’s department Baroness Worthington: My Lords, I am grateful to has produced a very long paper of financial guidance my noble friend for tabling his amendment and for on the whole question of petroleum licensing. At this continuing the discussion that we started in Committee. hour of the night, when there is further business to I am sympathetic to the intention behind these come, I will not go into that in great detail, but the fact amendments and am particularly interested in the is that, having read that and the paper that has been aspect of liability arising from orphaned sites. We are produced by the trade association, UKOOG, I am talking about a potential new industry that will see a satisfied that the difficulties that the noble Lord, Lord large number of distributed sites developed. We may Whitty, has raised are in fact being addressed very well see smaller companies that perhaps do not have positively. It is not only the question of whether the the assets or deep pockets of more traditional extractive company that will get a licence will have the resources companies, and there would be considerable potential 83 Infrastructure Bill [HL][LORDS] Infrastructure Bill [HL] 84

[BARONESS WORTHINGTON] that can be relied on to minimise risk and any impacts for orphaned sites. I am very interested to hear from associated with oil and gas activities. Those controls the Minister how we would address any liability arising include conditions attached to environmental permits from such orphaned sites. issued under the Environmental Permitting Regulations I think my noble friend Lord Whitty said that he is 2010 in England and Wales and the equivalent regime seeking for the Government to demonstrate foresight. in Scotland, as well as safety scrutiny by the Health It strikes me that the Government are demonstrating and Safety Executive. foresight in some respects of fracking, in imagining The current regime, as it applies to shale gas, includes the future benefits and future economic wealth that the management of mining waste and naturally occurring will come. Over the weekend, we even heard comments radioactive minerals, the scrutiny of well design and about the imagined spending of all this great tax construction, the suitable restoration of sites, the protection revenue. We shall debate that aspect shortly. That of habitats and 10 different EU directives addressing foresight is possible, but perhaps we should apply it in environmental concerns. In addition, the Environmental the slightly more realistic context of learning from Protection Act 1990 and the domestic Environmental previous experiences of extractive industries in trying Damage (Prevention and Remediation) Regulations to plan for what happens if everything does not go 2009 provide for the remediation of contaminated according to plan. I would have thought that companies land and serious environmental damage. This regime, would be able to take out insurance against some of together with the operators’ responsibilities under their these liabilities. Again, I would be interested to hear licences and permits, is sufficiently robust to ensure from the Minister about what type of insurance she that operators are required to remediate any damage might expect companies to undertake and what liabilities or pollution to the environment. would be insured. We are entering uncharted territory If, for any reason, these controls were not enough—we in the types of company, the types of project and their have no reason to think that this would be the case distribution across the country. It is right that we because the UK has a well developed and very strong should proceed with caution. regulatory regime—and if any damage were to occur, There is a lot of merit in the amendments tabled by in accordance with statutory requirements and government my noble friend Lord Whitty. He started by saying policy, remediation of the damage would be dealt with that he was trying to help out the Government. A under the main regimes for dealing with contamination. number of us have tried to help out the Government These regimes are sufficiently robust to ensure that, if during tonight’s debate. However, I suspect that the a company causes damage, harm or pollution to the Government are not listening and do not want to be environment, operators can be required to remediate helped out, but there we are. I look forward to the the effects and prevent further damage or pollution. comments from the Minister in response to this This is the same approach that applies to other industries, amendment. and we believe that the existing law is robust.

Baroness Verma: My Lords, I am always grateful to the noble Lord, Lord Whitty, for trying to help out the 8pm Government. I have listened very carefully and of As noble Lords rightly highlighted, the environmental course I recognise his concerns and those raised by the regulators have powers to require upfront financial noble Lord, Lord Judd. However, as my noble friend guarantees to address this risk in circumstances where Lord Jenkin very eloquently put it, there is already a they deem this necessary. In addition, mineral planning lot in place that addresses the concerns raised by the authorities can require a financial guarantee to cover noble Lord, Lord Whitty. The existing regulatory system restoration and aftercare costs, although this will normally covering onshore oil and gas is robust. We already be justified only in exceptional cases. The Government have more than 50 years’ experience of regulating the have also been working with the industry’s trade body, onshore oil and gas industry. There are controls and UK Onshore Oil and Gas, to ensure the development regulations in place to ensure on-site safety, prevent of a mutual industry scheme that would, where necessary, water contamination, mitigate seismic activity and step in and pay for necessary remedial action in the minimise air emissions. event that the liable company is unable to do so. My While the Government are keen for shale and department has powers that can be exercised to require geothermal exploration to go ahead, shale gas membership of such a scheme, where one exists, or the development must be safe and environmentally sound. provision of equivalent security by other means. This I agree with noble Lords that we need to be sure that range of financial securities, along with the statutory we are responding robustly to the perceived concerns regime for dealing with damage or pollution, provides that the public raise. One of the central aims of the the reassurance that taxpayers or landowners will not current regulatory framework is to ensure that wells be left to foot the bill for liabilities. are appropriately designed and operated, and that when Since the noble Lord, Lord Whitty, raised these operations cease they are properly decommissioned. concerns in Grand Committee last month, I have A petroleum licensee cannot search for, bore for given this issue particular consideration. While I am or get petroleum without a petroleum exploration and confident that we have a strong regulatory system for development licence, the terms of which are in the managing liabilities, I have heard concerns regarding model clauses set out in secondary legislation. All unintended impacts of the right to use deep-level land drilling or production operations, and the abandonment on landowners, specifically, the situation whereby a of any well, require the consent of the Secretary of landowner whose land is accessed through our proposed State. In addition, there are regulators and controls legislation might face claims from third parties for 85 Infrastructure Bill [HL][10 NOVEMBER 2014] Infrastructure Bill [HL] 86 damage done by the operator. I have reflected on that (1) Section 100 of the Energy Act 2008 (renewable heat and intend to bring forward an amendment on that incentives) is amended in accordance with subsections (2) to (4). issue. (2) After subsection (1) insert— I hope I have been clear on other issues that the “(1A) Regulations under this section may confer any function noble Lord has raised. Given the reassurance that we on any person. (1B) Regulations under this section may provide for a function already have a very robust framework in place— conferred on a person to be exercisable on behalf of another person.” Lord Judd: I am sure that my noble friend shares (3) In subsection (2)— my gratitude for the full way in which the Minister is (a) in paragraph (a), for the words before sub-paragraph (i) replying. However, there is just one point she made substitute— which intrigues me. She said that the regulator has “(a) make provision giving any of the following persons powers that he can use in these contexts. However, if entitlements to payments (“RHI payments”) in specified the taxpayer is faced with the possibility of having to circumstances—”; foot the bill, why is it not compulsory to require that (b) in paragraph (b), for “such payments” substitute “RHI these things are covered? payments”; Baroness Verma: My Lords, I hoped that I had (c) after paragraph (b) insert— reassured noble Lords that we do not wish to see the “(ba) make provision about the circumstances in which, and descriptions of persons to whom, the whole or a part of taxpayer foot the bill or any bill, and that there will be an entitlement to an RHI payment may be assigned processes in place to ensure that that is the case. (whether the person has the entitlement by virtue of Having gone through the amendment of the noble regulations under paragraph (a) or regulations under Lord, Lord Whitty, and his concerns, I hope that he this paragraph); will see fit to withdraw it. (bb) authorise or require the Secretary of State, the Authority, designated fossil fuel suppliers, or any person Lord Whitty: My Lords, I am very grateful to the with any other administration function, to make an RHI noble Baroness for her full reply and for the matters payment— that the noble Lord, Lord Jenkin, drew to our attention. (i) to the person who is entitled to the payment by It has always been clear to me that the Government virtue of regulations under paragraph (a), or and the regulatory authorities have the powers to (ii) where that entitlement has been wholly or partly require remediation. The issue I was attempting to assigned in accordance with regulations under this cover was if sufficient funds were not available to do section, to the person or persons for the time being that. The Minister said that the authorities, in granting enjoying the entitlement or any part of it;”; a licence, have the ability to say, “You have to provide (d) in paragraph (c), for “such payments” substitute “RHI some money upfront”. There was also reference to a payments”; mutual industry scheme. It seems to me prudent for (e) for paragraph (d) substitute— the Government to make that a condition of the “(d) authorise or require a person to provide specified licence—either that a fund is established or that the information;”; relevant body is a member of the scheme being established (f) in paragraph (e), omit “to the Secretary of State or the by the industry. Otherwise, we will end up with a Authority”; situation whereby, as a result of an unforeseen accident (g) in paragraph (h), omit “for the Secretary of State or the combined with financial problems for the company, Authority”; or, as a result of a situation whereby, many years (h) omit paragraph (i); hence, there is an abandoned site, orphan site or a site (i) at the end insert— that has been badly decommissioned, there is damage but there are no funds available to cover it, so at the “(j) authorise the Secretary of State to make payments to a person in respect of the exercise by the person of end of the day the taxpayer will pay for that. functions under regulations under this section; I accept a lot of what the Minister and the noble (k) make provision about the resolution of disputes relating Lord, Lord Jenkin, said but unless this is a condition to the exercise of functions under regulations under this of a licence, either through insurance or by establishing section, including provision about arbitration or appeals a fund, we will not have the situation entirely covered, (which may, in particular, provide for the person and that is not entirely reassuring to those who are conducting an arbitration or determining an appeal to worried about the potential impact of that on their order the payment of costs or compensation).” environment, business or dwellings. The Minister has (4) In subsection (3), after the definition of “fossil fuel supplier” gone some considerable way on this issue and I will insert— certainly not press the amendment any further tonight, ““other administration function” means a function relating to the administration of a scheme established under this section, but her reply was not quite as reassuring as I had other than a function conferred by regulations under hoped. Nevertheless, I thank her and others who have subsection (2)(bb);”. contributed to this debate. I beg leave to withdraw the (5) Section 105 of the Energy Act 2008 (Parliamentary control amendment. of subordinate legislation) is amended in accordance with subsections (6) to (8). Amendment 115D withdrawn. (6) In subsection (2)— (a) in paragraph (a), omit sub-paragraph (vi); Amendment 116 (b) after paragraph (aa) insert— Moved by Baroness Verma “(ab) regulations which contain (whether alone or together 116: After Clause 37, insert the following new Clause— with other provision) affirmative resolution provision “Renewable heat incentives made under section 100 (renewable heat incentives);”. 87 Infrastructure Bill [HL][LORDS] Infrastructure Bill [HL] 88

(7) In subsection (3), after “(2)(a)” insert “, (ab)” (9) In section 105 of the Utilities Act 2000 (general restrictions (8) After subsection (3) insert— on disclosure of information), in subsection (3)— “(3A) Provision made under section 100 is affirmative resolution (a) in paragraph (a), omit “or section 100”; provision if— (b) after paragraph (a) insert— (a) the provision is made under any of the powers which “(aa) it is made for the purpose of facilitating any functions always attract the affirmative resolution procedure, or of any person under section 100 of the Energy (b) the provision— Act 2008;”.” (i) is not made under any of those powers, and Baroness Verma: My Lords, as noble Lords know, (ii) meets condition A, B, C or D. this Government are committed to ambitious action (3B) The powers which always attract the affirmative resolution to reduce carbon emissions and increase renewable procedure are the powers conferred by— energy generation in the UK. To this end, the non- (a) section 100(2)(c), (e), (f), (g), (h) and (k), domestic renewable heat incentive was introduced in (b) section 100(5), and November 2011 and followed with a domestic scheme (c) section 100(6). in April this year. These schemes are the world’s first (3C) Provision meets condition A if— long-term financial support programmes for renewable heat. Switching to renewable heat can in some (a) it is made under the power conferred by section 100(2)(bb), and circumstances bring significant bill savings to businesses and households and helps the Government meet their (b) it requires a designated fossil fuel supplier to make a payment under an RHI scheme. challenging targets on climate change. (3D) Provision meets condition B if— The government amendment before the House responds to one tabled by the noble Baroness, Lady (a) it confers an administration function on a person who is not the Secretary of State or the Authority, and Eaton, in Grand Committee, on which I undertook to return to noble Lords on Report. The new clause (b) the time when the provision comes into force will be the first time that an administration function under the RHI proposes three changes to Section 100 of the Energy scheme concerned is exercisable by a person who is not Act 2008, which provided for the creation of the the Secretary of State or the Authority. schemes. I shall take each of the changes in turn. As (3E) Provision meets condition C if— noble Lords will be aware, administration of the schemes (a) it is made under a power conferred by paragraph (ba) or is currently limited to either Ofgem or the Secretary of (bb)(ii) of section 100(2), State. While Ofgem is successfully administering both (b) it is made in relation to an RHI scheme that was in schemes, our inability to run a competitive process is a existence immediately before the coming into force of constraint on achieving best value for money. The this subsection, and Government, therefore, signalled their intention to (c) it is the first provision to be made under that power in seek the necessary legal powers to enable an alternative relation to that RHI scheme. administrator to be appointed in their consultation on (3F) Provision meets condition D if— the domestic scheme in 2012. (a) it is made under a power conferred by paragraph (a), (b), Ofgem will continue to administer the scheme for (ba), (bb), (d) or (j) of section 100(2), the time being and in making this change the Government (b) it is made in relation to an RHI scheme that was not in will retain the power to appoint Ofgem to administer existence immediately before the coming into force of the scheme in the future. The ability to appoint a new this subsection, and administrator means that the Government will require (c) it is the first provision to be made under that power in the flexibility to adapt the appeals processes to any relation to that RHI scheme. new administrator and to ensure that these remain (3G) In deciding whether provision meets condition B, the robust. The amendment therefore also allows the following matters must be ignored— Government to make regulations covering dispute (a) for the purposes of subsection (3D)(a): any provision resolution through appeals processes. which confers a payment function on designated fossil The second change deals with payments. Payments fuel suppliers; under the scheme must currently be made to the owner (b) for the purposes of subsection (3D)(b): any payment of the renewable heat installation or to the producers function under the RHI scheme concerned which (before of biomethane, biogas and biofuels for heating. The the time when the provision comes into force) is, or has amendment will allow the schemes to be redesigned to been, exercisable by designated fossil fuel suppliers. mean that these parties can have the option to assign (3H) The fact that provision is to some extent made under a their payments to a third party. For the domestic power conferred by section 100(1), (1A) or (1B) does not prevent that provision from being taken (for the purposes of subsections scheme, this would mean that the upfront cost of (3A) to (3F)) as being made under any other power conferred by renewable heating systems could be funded by third section 100. parties for households unable to afford them, with (3I) In subsections (3B) to (3H) and this subsection— scheme payments then made directly to the third party, “administration function” means a function relating to the making this an attractive opportunity for investors. administration of an RHI scheme; For the non-domestic scheme, assigning rights to payments “designated fossil fuel suppliers” has the same meaning as in may allow for simpler financial arrangements between section 100; parties, reducing the costs of, and barriers to, the “payment function” means a function of making a payment installation of renewable heating. By incentivising new under an RHI scheme (whether the function authorises or requires funding arrangements, this change could lead to an the making of the payment); increase in both demand for and supply of renewable “RHI scheme” means a scheme under section 100 to facilitate heat technologies and a mix of higher deployment and and encourage renewable generation of heat.” lower costs. 89 Infrastructure Bill [HL][10 NOVEMBER 2014] Infrastructure Bill [HL] 90

Implementing changes would require secondary 8.15 pm legislation, on which we intend to engage with stakeholders. In making any changes, we will also Baroness Worthington: My Lords, I am grateful to work with the scheme administrator and other parties the Minister for speaking to her amendments. As she to ensure appropriate design of the consumer protection said, there are three aspects to this group. The first is framework and to integrate the assignment of rights the potential for somebody other than Ofgem to into the schemes existing cost control mechanism. administer the RHI. I am intrigued by this aspect and I wonder whether we may be creeping towards a bit The amendment would also allow some changes to more joined-up government in terms of renewable the schemes to be made by the negative resolution energy. There is always a tendency to equate renewables procedure. At present, all changes must be made by with electricity, whereas under the EU mandatory the affirmative procedure, regardless of their complexity targets agreed for 2020 we are required to move forward or materiality. In practice this is much slower than on renewable energy, which means electricity, transport the negative procedure. The Government have found and heat. There has been rather a stop-start process of that their inability to make changes to the schemes renewable transport fuel support, and a separate body quickly, in response to market changes and other oversees that. Under the RO the renewable electricity factors, may risk undermining confidence in them. side has been the responsibility of Ofgem, and it is For example, we cannot update regulations quickly to now moving to the department, for the Secretary of allow them to reference updated technical industry State specifically to oversee, while Ofgem has been standards. given the RHI to look after. It would seem sensible to The amendment tabled by the noble Baroness, Lady me to have one consolidated agency to deal with all Eaton, proposed that all secondary legislation in relation renewable energy, so that we could properly assess the to the schemes be made by the negative procedure. I best application of our renewable resources to the have considered the comments made in Grand Committee different markets. in response to that proposal. The amendment now before us aims to achieve greater flexibility while still If we apply a biomass unit of energy to the generation ensuring appropriate parliamentary scrutiny. It stipulates of heat we get far more efficiency and far more that some uses of the powers in important areas displacement of carbon in the heat market than we remain subject to the affirmative resolution procedure. would by going into electricity—or, indeed, into transport For example, this would include making provision fuels. We need a bit of joined-up thinking on our covering sanctions, enforcement and appeals, establishing various ways of supporting renewable energy. I wonder requirements on fossil fuel suppliers to fund the renewable whether this gives us an opportunity to have a look at heat incentive, or amending Section 100 of the Energy the regulatory framework. Act to change the general type of heat-generating On the second part, about third-party payments, I methods that can be funded through the scheme. am very supportive of the amendment. It will help to For other powers, the amendment stipulates that overcome a barrier about which people have personally the first use of the power should be via the affirmative petitioned me, and said how much of a barrier it is. procedure, but allows for use of the negative resolution On the third point, however, I am afraid that I am procedure for subsequent uses of the power in relation not quite so supportive. I do not want to detain us too to the same scheme. This will allow for appropriate long, but the Minister and I have spent many a pleasurable scrutiny where powers are first used, such as to provide afternoon in Committee discussing the RHI. It has for assignment of payments in the schemes, but means not been unnecessarily time-consuming or difficult—we that minor subsequent changes can be made by negative generally tend to get through SIs quickly—but it gives resolution. us an opportunity to revisit the RHI and see how it is The Government expect that future changes to the doing. It would be a shame if we were to create any existing schemes are likely to be straightforward and uncertainty in the industry by moving to the negative uncontroversial—for example, measures to reduce red resolution procedure. I seek clarification from the tape, or technical changes to allow the schemes to keep Minister. She speaks of uncontroversial straightforward pace with market innovation. I do not consider use of changes and describes them as technical. If that group the affirmative procedure necessary in these circumstances. of potential changes included changes to the subsidy The negative procedure, while still allowing for adequate levels for different technologies, that might cause alarm parliamentary scrutiny, provides flexibility to address for some people in the sector—particularly if they felt issues as they arise, rather than delaying matters while that they would not have the opportunity to petition suitable legislative opportunities are sought. Members on both sides of the House, to discuss and Together, these changes will allow significant to raise concerns. improvement in the efficiency and cost-effectiveness of This is an industry that has seen quite a lot of renewable heat incentive schemes, allowing the UK to changes, and is subject to rigorous derogations and meet its carbon reduction and renewables targets, while price control mechanisms. They are incredibly complex, also making efficient use of taxpayers’ money. I beg to and I do not really want to spend any more afternoons move. debating them—but I would do so if that would give comfort to the industry. It is a new and growing Lord Teverson: My Lords, I welcome these moves, industry, and we are not quite on track yet for meeting which will make financing much more flexible, and our targets. We need to see considerably higher growth mean that money really can flow into the RHI. I in renewable heat if we are to meet the challenging therefore congratulate the Minister on the amendments, targets that we have set ourselves. I am seeking and on moving this matter forward. reassurances from the Minister that these negative 91 Infrastructure Bill [HL][LORDS] Infrastructure Bill [HL] 92

[BARONESS WORTHINGTON] for the establishment of a UK sovereign wealth fund resolution procedures will not increase uncertainty in to receive a proportion of the Government’s revenues an industry that we need to see getting stuck into the from fracking and shale gas. job of delivering and putting us on a strong footing I tabled a similar amendment in Committee on with regard to our EU targets. 14 October and I hope that my noble friend will forgive me if I say that I did not find her response Baroness Verma: My Lords, I agree completely with entirely convincing. I have therefore retabled the the noble Baroness that we must ensure that there is amendment. It is primarily a Treasury matter, of course, proper parliamentary scrutiny. I assure her that the and I am therefore pleased and grateful to see that my amendment aims to achieve greater flexibility while noble friend Lord Deighton has taken up the cudgels retaining appropriate parliamentary scrutiny. The and will reply to this debate. I am grateful also to my amendment stipulates that some use of the powers is noble friends Lord Jenkin and Lord Teverson, and the important in areas that remain subject to the affirmative noble Lord, Lord Whitty, for adding their names in resolution procedure. We will not move away from support. that where there is cause for it. Where we just want to make some minor, technical changes is where it is The background to and reasons for my amendment probably more likely that we would wish to use the are as follows. This country has been blessed with a negative resolution procedure. wide range of natural assets. These can be divided into two parts, the finite and the infinite. The infinite Baroness Worthington: Will the noble Baroness write includes the sun, rain and wind—all of which we can to me? What I am most interested in is change to the harness in various ways. However, there are finite level of subsidy given to different technology bandings. resources. For example, our huge reserves of coal that powered the industrial revolution for a time made this country the workshop of the world. In the 1970s, we Baroness Verma: I of course undertake to write to discovered another great gift from nature—North Sea the noble Baroness and place a copy in the Library. oil. At the time of the original discovery, it was expected that by now it would all have run out. In the event, Amendment 116 agreed. because of improved technology and higher oil prices, despite our having extracted some 40 billion barrels of Clause 38: Consequential provision oil, it is estimated that at least some 16 billion barrels remain recoverable. But—and this is the important but—one day the oil will inevitably run out and this Amendment 117 gift from nature will have been entirely consumed. Moved by Baroness Verma Successive Governments and the country have benefited 117: Clause 38, page 41, line 36, leave out from “under” to end hugely from this oil. Estimates of the overall revenue of line 40 and insert “this Part (other than section 29).” run as high as £400 billion, but every penny of that revenue has been spent. A debate on whether it has Amendment 117 agreed. been wisely or foolishly spent would occupy your Lordships’ House for many a long day. That is not the Amendment 118 point this evening. The point this evening is that the revenue has all been spent and nothing has been put Moved by Lord Hodgson of Astley Abbotts aside for the future. 118: After Clause 38, insert the following new Clause— “Revenue from shale gas: sovereign wealth fund On the other side of the North Sea, Norway, which (1) The Secretary of State may, by regulation, establish a has also benefited from North Sea oil, had an extremely sovereign wealth fund to receive and deploy revenue from the fierce political debate about how to use its proceeds. In extraction and sale of shale gas. the end, it was decided that it should establish a (2) The regulations shall provide— sovereign wealth fund. Norway has a much smaller (a) that the fund shall receive no less than 50% of any population than we do—about 10% of that of the revenue received by the United Kingdom Government United Kingdom—and its oil and gas reserves are from any activity connected with the extraction and sale commensurately larger. Therefore, I do not wish to of shale gas; push the metrics too far. The fact is that in the 20 short (b) that the assets of the fund shall be deployed to serve years since revenue started to flow to the Norwegian long term public objectives other than those connected sovereign wealth fund, it has grown to $800 billion— with monetary and exchange rate policy; £500 billion. At this point, I should apologise to (c) that the assets of the fund may be deployed in the United Members of your Lordships’ House because when Kingdom or overseas; trying to send a letter to you from Chicago I mixed up (d) that no more than 4% of the assets of the fund may be my “millions” and “billions”. The figure is, in fact, paid out in any one year; and £500 billion, not £500 million, as in my original letter. (e) for the governance, independent oversight and That is not the end of it. It is confidently expected that transparent reporting of the activities of the fund.” the $800 billion will reach $1 trillion in the next few years. The fund generates between £20 billion and Lord Hodgson of Astley Abbotts (Con): My Lords, £25 billion every year. That is a lot of money. It is the purpose of the amendment is simple, although the roughly two-thirds of our annual defence expenditure policy implications are perhaps more complex. It is to or what we expect to spend on our nuclear deterrent insert a new clause that will provide a statutory framework over its life. It is roughly 10 times what the Leader of 93 Infrastructure Bill [HL][10 NOVEMBER 2014] Infrastructure Bill [HL] 94 the Opposition thought was necessary to save the worth noting that the Norwegian sovereign wealth National Health Service. He referred to £2.4 billion in fund now owns more than 1% of the entire world’s his speech at his party conference. quoted equities. In this country, we took a different approach, and Fourthly, no more than 4% of the fund may be paid the decision is irrevocable. Every penny that we receive out in any one year. The need for a limit is obvious. in future will be spent until the oil finally runs out. But Without one the fund would almost certainly be drained we now appear to have received another potential gift very quickly indeed. My proposed maximum level of from nature: natural gas extracted as a result of the withdrawal, 4%, is calculated based on a 2% long-term development of the new fracking process. I argue that rate of real return and a 2% allowance for inflation. we should learn from the decisions of the past, as well That level should mean that a well managed fund as from the example set by Norway, and provide for should be able to operate long into the future. the establishment of a sovereign wealth fund to receive at least part of the proceeds from shale gas exploration Finally and most importantly, proposed subsection 2(e) and development. I do so on three principal grounds. provides that the operation and activities of the fund First, the costs of infrastructure projects, which are so must be transparent and open to public scrutiny. If essential to this country’s long-term prosperity, are noble Lords read the literature, it is clear that transparency notoriously difficult to forecast. The returns from a has been a vital part of creating trust and confidence sovereign wealth fund would help to plug some of among the Norwegian public in the operation of their these overs and unders. fund. Secondly, a sovereign wealth fund would provide So much for the reasons for the fund and the detail some insurance against future uncertainties. Governments of my amendment. Before I conclude, let me briefly are constantly urging us as private citizens to save address the reasons given for not having a fund, which more to guard against the rising costs of our increasingly I think underlie the intervention from my noble friend long lives. We are told that we must forgo current Lord Forsyth. There are essentially three of them: consumption individually for our long-term benefit. It first, this is not the right time to do it because we do would surely be no bad thing if the Government not yet know how large and profitable the shale gas occasionally practised what they so assiduously preach. development will be. That is absolutely true. My answer Thirdly, and most importantly, it is about is that the amendment is permissive—it requires only intergenerational fairness and equity. These gas reserves an indication of the direction of travel. I hope the have built up over millions of years. Are they properly House will not think me unduly cynical if I say that, in ours to plunder and spend in a couple of generations? the absence of any specific prior commitment, I believe Should we not ensure that some parts of the proceeds the chances of establishing a sovereign wealth fund are left for those who come after us? once the revenues are beginning to flow are even closer to zero than the chances of the Government accepting Lord Forsyth of Drumlean (Con): In his amendment, my amendment tonight. my noble friend says that no less than 50% of any The second reason is that any revenue from shale revenue received should go into the fund. Can he gas should be used to reduce the deficit. Again, that is indicate what he expects that revenue to be and why he a perfectly understandable argument, but one that chose 50%? undermines the concept of intergenerational fairness. In any case, under my amendment, half the proceeds Lord Hodgson of Astley Abbotts: If my noble friend are available to reduce the deficit. However, to suggest waits for one minute, I shall explain the detail of the that all should be used for that purpose is akin to me amendment. That will take care of the 50% point. saying to my children, “I was going to leave you a Since I think there is possibly an indication that other decent sum of money, but I’m afraid I’ve been living uses should be made for this revenue, I will come to beyond my means and I’ve run up debts. I don’t wish that immediately after that point. If I have not answered to take difficult decisions to reduce my standard of those questions in a couple of minutes I invite him to living, so I’m afraid that if you want your inheritance, intervene again. you’ll have to take all my debts with it—or, of course, I I turn to the details of my amendment. As I have could use your inheritance to pay off my debts”. We said, it is an enabling amendment. It does not require need to face the consequences of our own actions and the Government to do anything now, but it does not slide them on to a future generation. indicate a direction of travel. The enabling provision is The third and last reason revolves around the most subject to five provisos. The first, as my noble friend feared word in Treasury-speak—hypothecation, the Lord Forsyth has just pointed out, is that the Government sin that dare not speak its name. If one consults the should get 50% of the revenue from shale gas. That is Oxford English Dictionary, hypothecate is defined as: part of the fairness argument: 50% for us, knowing that at least some of it will be spent on projects that “Pledge … by law to a specific purpose”. will benefit future generations, and 50% put aside for I argue that the establishment of a sovereign wealth those generations directly. fund which has no specific purpose would require an Secondly, the fund should support long-term public unusually broad interpretation of the concept of policy objectives. That underpins the philosophy and hypothecation. Of course, in reality, this is all a approach behind it. smokescreen. The real reason for Treasury opposition Thirdly, the fund may invest overseas, as well as in is that it always opposes policies that in any way the United Kingdom. That is necessary to ensure that diminish its direct day-to-day control over every aspect the fund obtains the best returns. In that context, it is of our national life. 95 Infrastructure Bill [HL][LORDS] Infrastructure Bill [HL] 96

[LORD HODGSON OF ASTLEY ABBOTTS] still to be spent would be constant. It stands constant. To conclude, this enabling amendment is designed It does not go down. That was the climate in which the to balance the long-term national interest against short- oil industry was operating then. The Government, I term political expediencies, to enable future generations think, gave it every opportunity to develop and we to share in this potential windfall and to encourage have enjoyed the success. Governments to follow the saving practices they so Secondly, I hesitated to put my name to my noble urgently suggest we individually adopt. friend’s new clause because of the figures. My noble friend Lord Forsyth has already raised this. Nevertheless, 8.30 pm I think the principle is sound, particularly what was Lord Forsyth of Drumlean: My noble friend has not said about intergenerational equity. Where you have answered my question on what he anticipates the the prospect of major wealth, is it right that it should revenuetobe. all be spent on the present generation? It seems to me that there is a principle here that it is desirable to Lord Hodgson of Astley Abbotts: I think I answered support. My noble friend referred at the end of his it by saying that the reason given for opposing a fund speech to what my right honourable friend the Chancellor at this stage is that nobody knows quite how much said over the weekend about, money is going to flow. No one can know. I pointed “making sure money is not squandered on day-to-day spending”. out that if you do not get something in principle in When you have the indebtedness we have it is place now, once the revenue starts to flow, the chances unrealistic to say that when you are spending money of having a sovereign wealth fund are very low. If we to keep the economy going to meet the needs of social do not get a peg in the board now, when revenue starts services and so on that somehow if we spend the to flow there will be a million reasons as to why it revenues from something such as shale gas we are should not be put in place at that stage. squandering it. However, there may come a time, as I was most encouraged by the remarks of the happened in Norway, when it would be right to set up Chancellor of the Exchequer over the weekend about a fund. My noble friend’s new clause says that the the advantages that a sovereign wealth fund would Government “may”—it does not say “must”. I have bring. I hope that my noble friend will put some flesh already indicated that I have some doubts about the on these bones when he winds up. The very last word figures he has put in at the end but the principle seems must rest with Jens Stoltenberg, the then Prime Minister to be very sound and I hope that the opportunity may of Norway. In September 2013, at the John F Kennedy come when we shall do something about it. Like him I School of Government, he said: look forward to the reply from my noble friend on the “The problem in Europe with the deficits and the debt crisis is Front Bench. that many European countries have spent money they don’t have. The problem in Norway is that we don’t spend money we do Lord Whitty: My Lords, I have also added my name have”. to this amendment. This is for two reasons—partly, I He went on to say that to achieve this happy state of was swept away by the rhetoric from the noble Lord, affairs needs actions to be taken that require “political Lord Hodgson, in Committee; it is such an obvious courage”. It is that political courage that I am looking strategic decision that I thought I must support it. The for from the Minister tonight. I beg to move. second reason is purely historic. Somewhere in the archives of the TUC, from about 1973, there is a paper Lord Jenkin of Roding: My Lords, I added my name with the initials “LW” on it. In that paper I argued to my noble friend’s amendment and I congratulate that we should set up a fund to invest in upgrading him on the way in which he moved it. I want to make into the new technologies of the manufacturing industry two points. First, I was the Minister for Energy in the and acquire assets at home and abroad to meet the very early stages of our North Sea oil and gas. I was interests of the state and of the British economy out of the Minister for only seven weeks when we lost the the tax revenues which we anticipated would come election at the end of February 1974. At that stage, no from the North Sea. We had no idea how much one had the remotest idea of setting up a sovereign revenue would be coming in from North Sea oil at that fund. I do not remember the thought crossing my time but it would clearly be substantial. I do not think mind or my desk. As my noble friend Lord Forsyth anybody thought at that point it would be as substantial has indicated, we did not have the slightest idea of as it turned out, altering the terms of trade of the UK, how much it was going to be. with the level of sterling rising to the detriment of the In a sense, I take issue with my noble friend Lord competitiveness of the British manufacturing sector Hodgson for saying that it was a massive mistake. I which was, of course, already a bit deadbeat and find it difficult to accept that. There may have come a uncompetitive. time when one should have seen that the prospects If only they had listened to me then. I am afraid were going to be as bright as they have been and one that I never got my paper to the noble Lord, Lord might have done something to meet my noble friend’s Jenkin, while he was still in office but the next Government wish. But to have expected that to happen in the very took no notice of it nor, indeed, the one after that. It early stages when the oil and gas had scarcely begun to stayed through all that period of North Sea oil revenue flow is a little unfair. At the time, when BP was the Government received—I would not use “squandered”. investing in the Brent oilfield, which became the most I disagree with a lot of the priorities of the Government important oilfield, its financial director said that he of the 1980s as noble Lords know, but that revenue had established a law; namely, that, however much is was not used for the long-term benefit of the British spent in developing a North Sea oilfield, the amount economy when at least a fraction of it should have 97 Infrastructure Bill [HL][10 NOVEMBER 2014] Infrastructure Bill [HL] 98 been. I thought the noble Lord, Lord Hodgson, had my noble friend, but he seems to have forgotten about an important point here. If this industry develops to it too. He did mention at the end of his speech that the extent that many of its proponents are saying, there is the issue of debt, which might be a reason why although none of us knows that yet, there will be a people would oppose this policy. It is certainly why I serious tax revenue that is in a strict sense a windfall would oppose it. for future Governments and a windfall for the British The national debt will have doubled during this economy. We should not make the same mistake and Parliament. The coalition Government are absolutely we should take a lesson from our Norwegian cousins determined to reduce it, but it is still growing. We are by investing in a fund that can provide some degree of not meeting our targets in terms of bringing the deficit security and improvement of the British economic under control. The idea that we should pre-empt situation for future generations. I am very happy to resources that may or may not come from shale gas is support in principle the noble Lord’s amendment. like going along to the bank manager and saying, “I would like to borrow £1.4 trillion and, by the way, I Lord Teverson: My Lords, I welcome this amendment would also like to open a savings account into which I and I was pleased to add my name to it both in shall put the proceeds from shale gas”. This is a noble Committee and now on Report. The important point thought. It would be great to have a sovereign wealth to make is that my noble friend Lord Hodgson is fund, but it would perhaps be a first step to live within absolutely right: if we do not put this on to the statute our means and pay back the debt that we have book as something that can happen, the temptation accumulated. will pass and it will be as if it never happened. That is why I am keen that it should be done now. I should say just as an observer, if you like, that it is 8.45 pm very easy to expand government expenditure and very My noble friend has talked about the importance of difficult to pull it back. It is easy to find uses for recognising our obligations to future generations and income if it is there, but perhaps those uses are not the finite nature of the resources. However, this national always the best for our long-term future. It is easy debt that we are growing is a charge on those future when there are financial and fiscal constraints of the generations. It is a millstone around their necks. At the kind the country is confronting at the moment, but very least our priorities should be to pay that down that is not always the case. It is hoped that we will get and not to think of new ways of spending money that over the current deficit at some point in the not too we do not have. distant future. That is why it is important to prepare I agree with my noble friend Lord Jenkin of Roding. for a sovereign wealth fund so that we can build it up When we discovered North Sea oil inflation was running in an intergenerational way, as has been advocated at something like 24% and interest rates were not already. much below that. I suppose that we could have argued The other aspect is completely different and not at that we would have got quite good interest, but the all the most important. In the last parliamentary inflation would have taken away any benefit. We had a Session this House set up a Select Committee to country that was haemorrhaging billions from the investigate the nature of soft power. I was not a nationalised industries and that was dependent on member of the committee, but it seems to me that industries with a great past but no future. That money, countries with sovereign wealth funds exercise considerably particularly in Scotland, was used to transform the more soft power in global affairs. That is not surprising economy, and create new industries and new opportunities. because money talks—not just within the family or in At that time, Scotland had more public housing than business, but across nations as well. Why does Norway the communist countries of central and eastern Europe. enjoy its stature? It is in part because of its sovereign The economy was transformed in the 1980s. The wealth fund. The same can be said for a number of blessing of North Sea oil provided for that. To use the Gulf states and for China. In terms of Britain’s status word “squandered” is grossly irresponsible. That money in the future, we would gain quite considerably if we was invested in building a new future for our country. were seen to be a country that is able to save, invest As we have just heard repeated over and over again by and exert influence financially beyond our borders in the leader of the Scottish nationalists, Scotland is now this way rather than one that just keeps its current the richest part of the United Kingdom outside the account going through non-renewable resources that south-east, and that is not just because of the Barnett cannot be brought back. That is why I feel strongly formula. It is because of the way in which the prosperity that we should at least take the step of this enabling from North Sea oil was invested and developed by the legislation and then let future Governments decide private sector. There is an argument that we could how it should be used. have achieved even more if the tax burden on those in the private sector who took the risks had not been so Lord Forsyth of Drumlean: My Lords, I did serve high. on the soft power committee and I have to say that the We have just won a referendum in which we discredited countries with sovereign wealth funds are not exercising the nationalist leader, Alex Salmond, for wanting to soft power; they are exercising hard power because set up a sovereign wealth fund with the proceeds of they are lending us money to keep going. Every year North Sea oil while at the same time spending the we are spending roughly £100 billion more than we money from North Sea oil. We are not in a position to have income. The leader of the Opposition forgot be taking any tax revenue, whether from shale gas or about the deficit in his speech at his party’s conference. anything else. We should not be doing anything other I have to say that I have very considerable respect for than paying down the debt that is due to us. 99 Infrastructure Bill [HL][LORDS] Infrastructure Bill [HL] 100

[LORD FORSYTH OF DRUMLEAN] that. I am sure we all are. But the problem is, of which If we embark upon this idea that we need to set up decade in the 20th century, or in the 19th century, funds for future generations, why should we limit it to would you have said, “The resources that that society shale gas? Why do we not have other sources of commanded in that decade ought to have had an revenue? My noble friend said that the Treasury was element of hypothecation not to be spent at that time concerned about hypothecation. This is not hypothecation. but to be looked after for the succeeding generations”? The definition of hypothecation is surely to take a The problem with that is if you were able to anticipate certain quantity of revenue and apply it to a certain the periodic crises in the capitalist society in the purpose. That is what his amendment does. It says 19th century and also get the 20th century right, then that, you could make appropriate judgments. Otherwise, “the fund shall receive no less than 50% of any revenue received what we are facing is a situation where, one decade by the United Kingdom Government”. after the next, the society gets considerably richer. I have another objection to my noble friend’s We have been used to 2.3% growth. Of course I amendment. He said that we need to put down a recognise the crisis that we all face at present. In fact, marker because, if we do not, when the money starts I have from time to time upbraided the Government’s coming in the Treasury will not want to hypothecate it Front Bench for seeming to portray it as a British for this purpose. If we put a marker down with 50% of crisis, quite unable to recognise that the whole of the revenues given to this purpose, the Government Europe and the advanced world, particularly the United will have every incentive to raise the tax on the people States, are under the same strains. But we are having a who are developing the shale gas and the industry. But period of very significant constraint upon growth at with a new industry, we should be ensuring that as present; in fact, of course, we have had a negative much of the available revenues as possible are used to position for a number of years. That is why it is right, invest and develop and take the thing forward. I very surely, that all the resources we have available are much regret that this is a proposal that we should not directed towards improving the balance of this society, accept. I was slightly dismayed to see the Chancellor as the noble Lord, Lord Forsyth, has indicated. But in over the weekend appearing to smile upon it, and to previous generations, such as the one after the Second describe the alternatives as squandering the money at World War, when it was quite usual to have 2.3% growth a time when we do not have the money we need to a year, within a quarter of a century this country had fund public services may have been a slip of the doubled its wealth. That generation would have looked tongue. pretty silly to have hypothecated money for those I very much hope that my noble friend will reject 30 years down the line when the growth in society this amendment and put to one side any thought that ensured that the later society was so much wealthier we should do anything over the next five or 10 years than it was. We have to rehabilitate—and I am glad I other than to reduce our deficit, eliminate our deficit am not the first person to actually try to do this—the and eliminate the debt. I do not know quite how we word “hypothecation”. After the noble Lord, Lord can do that: £1.4 trillion is an enormous sum and if we Hodgson, had spoken in Committee I went and had a are not going to have inflation eroded, it is a superhuman little chat. I probably indicated in Committee that I task to pay it off. I hope and pray that shale gas will took issue with my colleagues at the other end who help to provide some of the revenue that we need to do have got some responsibility for the Opposition’s position that for the sake of those future generations that my on the economy. noble friend has spoken of. Hypothecation is a real problem. Once any area is hypothecated, in effect the flexibility that attends a Lord Davies of Oldham: My Lords, I am delighted Government is inevitably reduced and we are all that the noble Lord, Lord Deighton, has joined us for operating—at this time of all times—on the tightest of this debate. I had anticipated that perhaps he would margins. I think it was said by the outgoing Government have a slightly more comfortable ride than he did at the last election that there was no money left. The earlier this afternoon in trying to justify the Government’s incoming Government after the next election are not position on the European issue. But the noble Lord, exactly going to be rolling in vast resources which they Lord Forsyth, has made this debate pretty challenging can allocate as they wish, hence the reason everybody as well and I hope therefore that the noble Lord, Lord is reining in the ambitions of potential Governments Deighton, will enjoy sailing between the shoals of for the next few years. difficulty in this proposal. I hope that the noble Lord, Lord Deighton, will We all enjoyed the contribution that the noble address himself to what I think is a complex debate. Lord, Lord Hodgson, made in Committee. I very He starts off, of course, from a very strong base much enjoyed reading his piece in the Telegraph this because he is the Minister responsible for infrastructure morning—not a journal I go to for enlightenment very and, after all, will always need to look a decade or often—which was an excellent explanation of the sovereign more ahead rather than the immediate five years in wealth fund and its benefits. But someone had to order to get infrastructure that is effective and accurate point out its problems and the noble Lord, Lord at a location. I am not sure the noble Lord, Lord Forsyth, has certainly done that. Deighton, can spend too many warm words on the I would like to add a dimension to this question. Of enthusiasm that the Chancellor has shown over the course, it looks attractive because it looks as if we are weekend towards this idea. It is an idea worthy of acting like benevolent grandparents—after all, we are exploration because the noble Lord, Lord Hodgson, the right age—trying to ensure that the future for our has got a concept that could well capture the public grandchildren is reasonably rosy. I am in favour of mood and would encourage people to say that in fact 101 Infrastructure Bill [HL][10 NOVEMBER 2014] Infrastructure Bill [HL] 102 we need to look to the longer term future in our recovered. Therefore, coming up today with a clear investment plans. However, I hope that is what plan for how this might fit into issues related to Governments intend to do in any case. determining how we reduce the deficit and how we Therefore I have no doubt that when the Minister invest in the long term is extremely difficult without responds he will have warm words to say towards the understanding what the revenues will be—I fully take noble Lord, Lord Hodgson, for the work that he has on the point made there by my noble friend Lord done and the speech that he has made this evening. Forsyth. However, I hope that he will explain why it is so very It should therefore be for future Governments to difficult for a Government to accept what is—in fact—a think about how such a fund could be designed, but majestic argument for hypothecation. we commit to the principle. The Chancellor will demonstrate his commitment to bring forward a proposal The Commercial Secretary to the Treasury (Lord in the next Parliament in his Autumn Statement. With Deighton) (Con): My Lords, as the noble Lord, Lord respect to the request made by my noble friend Lord Davies, has pointed out, superb cases have been made Hodgson for a peg in the board now, and for those for each side of this argument by my noble friends others who support this idea, I think that the right Lord Hodgson and Lord Forsyth. timing is when we have better information and are able Shale gas represents a huge economic opportunity to look at this matter properly. On that basis, I trust for the UK. It could create thousands of jobs, generate that the noble Lords, Lord Hodgson, Lord Whitty, business investment and in future provide substantial Lord Teverson and Lord Jenkin, will agree not to revenue for the Exchequer. A sovereign wealth fund press their amendment. would create a legacy for the long term and ensure the benefits are shared with future generations, and we Lord Forsyth of Drumlean: Perhaps I might follow have heard a lot about intergenerational fairness and up on my noble friend’s point about the Scottish the issues around that. It is a complicated issue to get position. He said that we were right at the end and not right. at the beginning. What would his response be to a As a Government we support the idea and want to proposition that said, “Well, for new fields that are explore—I think those were precisely the words used discovered, we should have a sovereign wealth fund”? by the noble Lord, Lord Davies—creating a sovereign Let us bear in mind that there are considerable potential wealth fund with the money that comes from shale resources to the west of the Shetland Islands and so gas. It would be a way of making sure that this money on. Surely this is a very dangerous argument given the is invested in the long-term economic health of the delicate situation that we are in, where we appear to be north of England, because of course that is where saying that, for some parts of the country and for most of the reserves are located, and in other areas some energy resources, a different view will be taken of hosting development to create jobs and investment the long-term future. Is this not a very dangerous there. My right honourable friend the Chancellor found proposition which could unravel rather badly? this an appealing concept because for him it is all part of building a northern powerhouse, which is at the Lord Deighton: That is one of the reasons for our heart of the Treasury’s current economic strategy. As anticipating that this subject would be explored in the my noble friend Lord Hodgson pointed out— next Parliament rather than this one.

9pm Lord Hodgson of Astley Abbotts: My Lords, I thank Lord Forsyth of Drumlean: Given what my noble all those who have taken part in this debate. I am friend has said, what answer would my right honourable grateful to my noble friend Lord Jenkin for his experienced friend the Chancellor give if Alex Salmond suggested view. I accept his stricture that it would have been hard that we should set up a sovereign wealth fund now in 1970 to foresee the flows from North Sea oil. I using the proceeds from North Sea oil so that Scotland thank the noble Lords, Lord Whitty and Lord Teverson, would benefit from it? Where does this hypothecation for their support. end? There was a characteristically combative speech from my noble friend Lord Forsyth from which I drew Lord Deighton: I think the difference between the four things. The first was that the priority must be two opportunities is that, in one case, we are right at debt repayment; otherwise, it is a charge on future the beginning and, in the other, we are right at the end. generations. That is fine, so long as you do not think Now is the time to explore the opportunity with that there should be any intergenerational fairness and respect to shale gas. you think that the assets that flow from shale gas are My noble friend Lord Hodgson pointed out that a ours to use to repay the debts that we have created. sovereign wealth fund was implemented successfully That is a philosophical question. Secondly, he said in Norway, but that fund was established in 1990, that we should not spend money that we do not have. which was nearly 20 years after oil was first produced. However, a sovereign wealth fund is not spending; it is The fund was set up when the levels of revenue were saving. It is not actually spending but making sure already well known—this was a point that my noble that we do not spend it. Thirdly, he said that it is like friend Lord Forsyth was also getting at. The UK shale going along to your bank manager and asking to gas industry is still in the exploration phase. We will borrow £1.4 trillion. Of course it is, but what we are not be able accurately to forecast the scale or timing of doing at the moment is saying, “We’re not going to shale revenues until more work is done to determine take the actions to cut that; we’re going to pledge some the extent of gas that can be technically and commercially future assets that actually might belong to future 103 Infrastructure Bill [HL][LORDS] Infrastructure Bill [HL] 104

[LORD HODGSON OF ASTLEY ABBOTTS] (d) the form in which the data should be presented; generations”. That is the conversation that we are (e) the persons that should receive a copy of the data. having with our bank manager rather than one about (3) The regulations may make different provision for different how we cut our coat according to our cloth. On my regulators where necessary. noble friend’s last point, this is a permissive amendment. (4) The Treasury must scrutinise the data provided under It is not designed to set out how things are going to subsection (1) and assess— work; it is designed merely to say that, if things (a) the impact of infrastructure spending on the cost of develop in a certain way—that is, profitably—then we products for consumers; should look at it again at that point. (b) the affordability of any anticipated increases in the cost In response to the noble Lord, Lord Davies of of products for consumers, taking into account factors Oldham, on the question of hypothecation, when we other than infrastructure spending that are also likely to are talking about a finite natural resource that might significantly impact the cost of products; and belong not just to this generation, we should consider (c) differences in affordability between different groups of whether there is a special case for dealing with it in a consumers, if any. particular way, which you might or might not call (5) The Treasury must publish the data provided under subsection (1) and the assessment made under subsection (4) in hypothecation. such manner as it reasonably deems appropriate. Finally, I turn to the Minister’s reply, for which I (6) The Treasury must take into account the assessment in thank him greatly. It is interesting that, given institutional subsection (4) in making decisions about the extent, prioritisation concern about this, the Kuwait Investment Authority, or timing of infrastructure spending. which is the sixth largest sovereign wealth fund in the (7) In this Part— world, is worth about $600 billion. It was set up in the “consumer” means any individual or household of individuals 1950s, at a time when Kuwait looked to this country that purchases a product or products; for guidance and help and support, by a team entirely “product” means a good or service the provision of which is from the UK Treasury. So we have tried to deal with regulated by a regulator; the sovereign wealth fund idea, but not here—only a “regulator” means any of— with people who were looking for our advice. (a) the Northern Ireland Authority for Utility Regulation; I recognise, and am grateful for, what is at least (b) the Office of Communications; half—probably more than half and possibly two- (c) the Office of Gas and Electricity Markets; thirds—of a loaf tonight. I think that I heard my (d) the Office of Rail Regulation; noble friend say that he wholeheartedly commits to the principle of a sovereign wealth fund, a commitment (e) the Water Industry Commission for Scotland; and which he said the Chancellor will reaffirm in his (f) the Water Services Regulation Authority, Autumn Statement. Further, the Chancellor will at and “the regulators” means all of them.” that time commit to bringing forward a proposal for a sovereign wealth fund in the next Parliament. Lord Jenkin of Roding: My Lords, I thank the two There is of course many a slip between principle noble Lords who added their names to the amendment. and practice. I equally have to recognise that my We turn from the question of spending the proceeds of amendment is a pretty rough and ready one on which shale gas to the question of who is paying for the to hang such a radical new departure for British public infrastructure investment on which the country has policy. Weighing all of these factors up, I am going to embarked and for which there is a great deal of support. trust that practice will follow principle, and watch developments closely. In the mean time, I thank my When my noble friend Lady Kramer wound up the noble friend for his reply, and I beg leave to withdraw debate on the new clause in Committee, she was kind my amendment. enough to suggest that I might approach my noble friend Lord Deighton to discuss this matter as it was Amendment 118 withdrawn. entirely a matter for the Treasury. It was therefore no surprise that a day or two later I received an invitation from my noble friend’s office to go to a meeting. It was Amendment 119 a very helpful meeting and I will refer to it later. Moved by Lord Jenkin of Roding However, I was most grateful for his readiness to meet me on that occasion, and for his presence here this 119: After Clause 38, insert the following new Clause— evening to respond to the debate. I recalled his splendid “Part 4A speech when he opened the second day’s debate on the Impact of infrastructure spending on costs for consumers Loyal Address last June. He demonstrated his deep Impact of infrastructure spending on costs for consumers commitment to the Government’s major programme (1) The Treasury may by regulations make provision for the of renewal and expansion of Britain’s infrastructure. regulators to provide data, in a manner prescribed by the regulations, The new clause concerns one important aspect of about the anticipated impact of infrastructure spending on the that. I refer to the absence at present of any systematic cost of products for consumers. system for calculating and publishing what part of the (2) Regulations made under subsection (1) may prescribe— costs will fall on consumers and have to be paid for in (a) the type of infrastructure spending about which data their bills. I suggested in Grand Committee that it was must be provided; time for the Treasury to “lift the veil”. But we are not (b) the nature of the data to be provided; the first. Last year the National Audit Office produced (c) the methodology for collating and manipulating the an interesting report. I will quote two passages from it. data, including assumptions that should be made; First, in paragraph 16, the NAO said: 105 Infrastructure Bill [HL][10 NOVEMBER 2014] Infrastructure Bill [HL] 106

“Government has made no assessment of the overall impact assessment of where we are in greater understanding of infrastructure on future bills or whether those bills will be of the impact of infrastructure investment on consumer affordable. Therefore government and regulators are taking decisions bills and what his department may be able to do to on behalf of consumers in the absence of full information about the situation for consumers”. advance that understanding. There is no doubt about the importance of the subject. Indeed, the presence of Later on, on page 11 of the report , it recommended: my noble friend to respond to the debate indicates that “The Treasury should ensure that there are mechanisms in the Government share that view. I beg to move. place to assess the cumulative impact of infrastructure investment on consumer bills and the affordability implications, particularly for low-income households”. 9.15 pm I say straight away that I have accepted the arguments Lord Berkeley (Lab): My Lords, I am very pleased that to try to do this cumulatively right across the to support the noble Lord, Lord Jenkin of Roding, on whole range of infrastructure is at this stage probably the amendment. My noble friend Lord Whitty apologises; unrealistic. In the present new clause, we have removed he had to leave. Presumably he thought this would any reference to the cumulative assessment that we come up a little earlier in the proceedings. The noble had in the version of it in Committee. Lord, Lord Jenkin, told the House a number of very The NAO report was taken up by the Public Accounts useful and interesting ideas about how this issue is Committee, which made a number of recommendations. going to be taken forward. I shall be very interested to One of them was to pick up that point made by the hear the response of the noble Lord, Lord Deighton. National Audit Office. On the same day, the Government First, obviously, I welcome the Government’s commitment published their response to the PAC report. That was to so much new infrastructure. It is not before time. really quite an interesting document. They accepted Most of it is sensible and should be good value for most of the recommendations but rejected the PAC’s money. However, as the amendment seeks to point recommendation that the, out, we need to know the effect on consumers, not just “Treasury should ensure that an assessment of the long-term this year and next year but in the long term; some of affordability of bills across the sectors is produced and published”. these projects take a long time to construct. If there However, at the end of that response, the Government has been some kind of financial arrangement in the added: private sector to finance them, we need to know the long-term effect. “Nonetheless, the Government agrees that there is scope to improve understanding of affordability in this important area It is worth pointing out that many of the sectors and will continue to work with the regulators on these issues, mentioned in the amendment are by definition including through the UK Regulators Network which is considering monopolies: railway infrastructure is a monopoly; water affordability as a key element of its work-plan”. services are generally monopolies; and gas and electricity I regarded that as a very important pointer to a are not generally monopolies, but some of them are. I possible way forward, in particular the reference to the think it is true to say that all regulators have a duty to UK Regulators Network. I was unaware of this body, protect the interests of consumers while also ensuring so explored its origins with Ofgem and learnt that it is that the companies they regulate are financially sound indeed a more formal and authoritative body than the and capable of investing and delivering for the future previous informal association of regulators. Here I needs of their customers. come to my meeting with my noble friend Lord Deighton. I will take one or two examples. We have to ask how He told me that the Treasury was in full support of the successful these industries and the regulators have UKRN. Indeed, its creation was on the initiative of been in protecting the customer’s interests. We have the Treasury itself. I also gathered that that paragraph had much debate this year over electricity prices, resilience in the response had actually been approved by my of supplies—are all the lights going to go out?—and noble friend. I was delighted to hear that. As I said, I people complaining that Hinkley Point EDF may be a have taken on board what I think was the most difficult deal that has screwed the Government. I do not know aspect of the proposal—the question of aggregating whether that is true: I am not an expert on it. Then, of consumer impacts across several different programmes. course, there is the latest investigation by the Competition We are now looking at just assessing the impact on and Markets Authority into the big six electricity consumers of each individual industry. suppliers in terms of vertical integration. Where the My noble friend told me at our meeting that the customers come in all this is quite difficult to understand Treasury regarded the regulators network as the right for the average payer of electricity and gas. That is body to take this initiative forward and that the Treasury something that could very usefully come as a result of would take very seriously any recommendation which discussions on the amendment. it might make. There is no doubt that the impact on On the railways, to take another example, the Office consumers is an issue of not only great but growing of Rail Regulation’s role is not directly to help the importance. This has been repeatedly acknowledged customer—it does, because the charges relating to by the coalition Government, not least in the recent Network Rail’s costs have come down—but it is relevant Statement of my right honourable friend the Secretary because it is regulating a monopoly. Everybody said at of State for Energy and Climate Change. the beginning that Network Rail was pretty efficient The PAC report of last July has not yet been the but it could probably do with a tweak here or there. subject of a debate in another place. In those However, the regulator over the last 10 years has circumstances, I would not think it the least bit appropriate succeeded in reducing Network Rail’s costs, or efficiencies, to invite the House to vote on the new clause. Rather, I by something like 40%. If it was 40% over what it see this debate as providing my noble friend Lord should have been as an efficient operator, that is quite Deighton with an opportunity to give the House his an achievement for a monopoly. Now the regulator is 107 Infrastructure Bill [HL][LORDS] Infrastructure Bill [HL] 108

[LORD BERKELEY] the issues. He did so to our great advantage in Committee expecting another 20% from it in the next five years, and has been a great strength today, so the noble Lord, and many people say that there is more to come. I do Lord Deighton, knows the nature of the opposition to not think that other infrastructure managers of which he needs to respond. monopolies are probably much different, which is We regard the noble Lord, Lord Jenkin, as entirely quite worrying. We have very efficient regulators across right to raise the key question of the costs to consumers; the sector and they have achieved a lot, but how much he is certainly right to repeat the call of the Public more is there to achieve? I just do not know. Accounts Committee, which argued that departments The water industry is a different issue. We have had should consider very carefully the costs to consumers many debates here, some of which I have instituted, of the policies that they pursue on infrastructure. He about whether the regulator has regulated Thames is also right, of course, to raise the fundamental issue Water in order to ensure that it had enough assets to of ensuring that costs are not unfairly passed on to provide the investment it believes is necessary for its consumers. If we had more time, we would dwell on long-term operation—personally I do not believe it is the number of occasions where we consider that to necessary, but that is not the point—and whether the have been the case. It is clear that in many sectors costs regulator was doing its job properly in ensuring that to consumers have risen very significantly: one in eight there was not a load of asset stripping, which appears households says that their water bills are unaffordable, to have gone on. More importantly, when is the regulator while around one-quarter of households and 64% of going to come up with some credible estimate of the the poorest households spend more than 3% of their effect that the Thames tideway tunnel and the other disposable income on water bills. Those bills are changes to the industry are going to have on the 40% higher in real terms than they were in 1989. customers? There has been lots of talk about this; it Obviously the licence agreements set a maximum price, would be interesting to know, but I suspect that that but whether Ofwat has quite the powers that it needs might require a bit of pressure. to alter those agreements is still unclear. Likewise, the Several newspapers today say that the Prime Minister rise in energy bills has been very well documented. The is apparently going to announce 300 new roads. Whether House will of course recognise the extent to which we they are all Highways Agency or strategic road company have been concerned about electricity bills, to the roads, I do not know—I suspect that the noble Baroness point of indicating that under the next Labour will tell us one day—but that is not the point, really; he Government there will be a period of time when bills is going to announce them, although I do not know are frozen. how they are going to be financed. Under the Bill, There is an apparent lack of connection between which some of us think is being set up for them wholesale prices and the retail prices that hit the eventually to be privatised, the roads will probably be consumer. It seems pretty obvious to us that the turned into toll roads, although the Minister has strongly consumer is often getting a bad deal. None of us denied that at every opportunity. There is still a question underestimates the extent to which infrastructure needs of how these new roads will be paid for, though, so to be improved. I am sure that the noble Lord, Lord should there not actually be some toll roads? However, Deighton, will dwell on that point. However, we need we are not going to go any further on that today. to ensure that increased infrastructure investment does The amendment is therefore very important. Having not fall on the consumer, mainly because currently we some consistent statistics and data across all these are very badly in need of better infrastructure delivery. different sectors regarding how much the consumer is It is absolutely clear that, given that output has fallen going to have to pay, and over what period, would be by over 19% since May 2010, less than a third of the very useful. It might also put pressure on the regulators projects in the Government’s infrastructure pipeline to come up with a bit more consistency than they have are classed as in construction. Therefore there is a shown up to now. The UK regulators network is a great deal to be done. The Government are rather good idea and I think it is making progress; I have also better at indicating promise and intent than at acting been involved in some suggestions that there should be in reality. The imperative is clear. We need to ensure a European rail regulator, or an association of European that our infrastructure output increases; likewise, we rail regulators, across 26 member states, though at the need to ensure that the costs are not unfairly passed on moment that seems to be a step too far. Still, the to consumers, as they have been in some areas in the concept of regulation is developing, and the question recent past. I hope that, just as the noble Lord, Lord we have to ask ourselves is: is it sufficient that the Jenkin, indicated, the presence of the noble Lord, regulators apply self-regulation to themselves? I have Lord Deighton, will guarantee that we are pointing in my doubts and would prefer the Treasury to do that to the right direction towards achieving the right balance start with, but maybe the Minister will be able to and a better one than has obtained in recent years. persuade us that they are capable of doing it themselves, with a good deal of Treasury supervision. It will be Lord Deighton: My Lords, I shall begin by thanking interesting to see what happens. Again I thank the my noble friend Lord Jenkin for raising this matter in noble Lord, Lord Jenkin, for bringing this to our the House. As we know, infrastructure investment is a attention on Report. key element of the Government’s economic plan. I agree with the noble Lord, Lord Davies, that it is key Lord Davies of Oldham: My Lords, this gives me to improving our long-term productivity and that the chance to congratulate the noble Lord, Lord Jenkin, delivering it effectively is a part of the Government’s on the assiduous way in which he has pursued this responsibility in working with the industries involved. topic and the way in which he has clarified many of Of course, we must ensure that it is delivered in a way 109 Infrastructure Bill [HL][10 NOVEMBER 2014] Infrastructure Bill [HL] 110 that is affordable for consumers and taxpayers. That is and also, of course, operating expenditure. There is a crucial and quite complicated issue. The way that we quite a focus now on looking at what one might refer finance and deliver infrastructure in each sector differs. to as total expenditure as a way of determining price The road sector, which the noble Lord, Lord Berkeley, settlements. referred to, is of course financed exclusively through We should not forget that infrastructure investment, taxpayer funding, so the question of passing the price if it is done well, ultimately reduces the future costs of on does not exist, whereas the energy and water sectors, supply, maintenance and renewal. That will drive down for example, are predominantly financed in the private prices as well as giving us other improved outcomes. sector. Telecoms is the best example in recent history where I am pleased to have this opportunity to set out the improvements in broadband and mobile data speed personally the Government’s position on this important and coverage brought about by huge infrastructure issue. If we look at the future pipeline of infrastructure investment have come alongside falling prices for expenditure, it works out that about 60% of it is consumers. So you have to be able to see both sides of expected to be privately funded—water, energy and the equation here. Similarly, not investing in energy telecommunications are the sectors where that is the generation now could be expected to increase prices case. To ensure that such privately funded investment further down the line if demand started to outstrip is affordable for consumers now and in the future has supply. Given all those complexities—this takes me to be central to the Government’s approach, and back to my noble friend Lord Jenkin and his focus independent economic regulation is at the heart of on this—I very much welcome the fact that, as part of that. At the core of the argument I am going to make its first annual work programme, the UK Regulators is that it is actually in our long-term interest to have Network is already looking at improving the the regulators primarily focused on this. That is where understanding of affordability pressures across the the expertise is. The fact that they operate independently sectors and, indeed, the part that infrastructure investment of the short-term changes that may come from plays in this. government policy is a very healthy thing in terms of both protecting the consumer and creating an environment The noble Lord, Lord Berkeley, said that it was that encourages investors to put their money into our important to achieve consistency across regulators. infrastructure for the longer term. One of the key objectives of the Regulators Network In that respect, protecting the consumer is central is to transfer best practice and to look at the differences, to the work of our regulators—particularly in the case ask whether they are justified and examine how we of Ofwat and Ofgem—and is enshrined in their statutory can improve overall performance. I think that there duties. They are able to take a long-term view free will be significant focus on this area of infrastructure from political involvement, as I said. This is a tried investment and affordability. This work will include and tested system. Indeed, the ability of regulators to looking at patterns of household spending across sectors, undertake their work independently of government characteristics of an essential service and how these interference is a cornerstone of our regulatory system’s influence household spending decisions and can be success. Our regulatory system, which has its challenges, drivers of customer decisions. I am happy to reiterate is the envy of the world. We need to keep on improving that the Government have made clear that they are it, but it is a strong competitive advantage for this committed to supporting the UKRN in taking this country. work forward. In fact, we are currently consulting on how we can best support and encourage the UKRN to help to embed this co-operation more widely between 9.30 pm the regulators. The regulators have the expert knowledge which allows them to scrutinise companies’ proposed infrastructure Of course, this is not the only way that the Government investment plans to ensure that they are necessary, are can take targeted action to help with the cost of living. delivered efficiently and are in the interests of the Sometimes it is appropriate to intervene in other ways consumers we are serving. One of the concerns that I to reduce the cost of living, through more targeted had about the amendment was that I did not think it action on bills. For example, in the Autumn Statement was in the interests of getting this right to have the alone, we announced a series of steps that are saving Government take over some of those roles. We need to the average household around £50 on its energy bills. focus the regulators on what is important, encourage Only recently, we announced an extension to the freeze them and ensure that they deliver on this mandate so on rail fares; with last year’s freeze, this will save that the impact of the investment programme is season ticket holders around £75 over 2014 and 2015. appropriately managed in terms of its impact on consumer There are other ways of intervening to manage the prices. impact of what is effectively amortising the investment spend through the pricing variable. There have also The relationship between infrastructure investment been other measures—such as increasing the tax-free and bills is a very complicated one. Infrastructure personal allowance, freezing fuel duty, and helping investment is one of many inputs into the ultimate local authorities to freeze council tax—all of which price, and the price itself is driven by many other reduce the cost of living burden on our citizens. factors. The price of our utility bills is one component in the overall cost of living equation, so you have to More specifically on infrastructure, a unit of the look at not only the detail but the macroeconomic Treasury, Infrastructure UK, is also taking forward a situation. A whole range of factors come into play in considerable amount of work with industry to reduce the final price paid by the consumer. Those can include the costs of infrastructure projects in both the public commodity prices, the cost of debt and capital expenditure and the private sector. 111 Infrastructure Bill [HL][LORDS] Infrastructure Bill [HL] 112

[LORD DEIGHTON] with my analysis of the current position nor with my In conclusion, I can reassure my noble friend that prediction of the future, and was not convinced that the Government fully recognise the importance of the amendment, which, essentially, would bring in a ensuring that vital infrastructure investment is cost-effective backstop power to enable us to limit the operating and affordable. That is why we have a system of hours of old coal, was needed. independent regulation that has the consumer at its Last week Eggborough, one of the coal-fired power heart. The regulators are the ones with the expertise in stations built in the 1960s that is seeking a three-year weighing up these complex issues, and it is better that contract to extend its life under the capacity payments we should look to them to do so. I very much welcome mechanism, was sold to a Czech energy company the fact that they are working together through the which, in addition to running power, heat and energy UK Regulators Network to further our understanding provision services in the Czech Republic, is also the of these issues. Indeed, I can give the assurance that third largest coal producer in Germany. This is its first the Government are committed to doing everything entry into the UK market. The company is EPH, we can to support them in this important work, at the whose spokesperson, Daniel Castvaj, said that there same time as taking action to help with cost of living were obviously questions over the long-term operation more broadly. of the plant but that the company intended to run the I thank my noble friend for giving me the opportunity existing units for as long as possible. to discuss these issues today. I hope that what I have Today a report was released by WWF with the help set out reassures him, and that he will feel comfortable of Imperial College London. It made the point that I in withdrawing his amendment. have continually been seeking to make to the Minister and the Government that just wishing old coal away is Lord Jenkin of Roding: Before I withdraw the not going to work. If we want coal to come off our amendment, may I say that I am immensely grateful to system and be replaced by cleaner, more efficient my noble friend for his reply to the debate? I—and infrastructure, we will have to regulate to make that others, I am sure—will want to study carefully what he happen. We were told during the passage of the Energy has said, because this represents, in some respects, a Bill that this would be achieved by financial measures, new departure in trying to assess who is actually through the introduction of a carbon price floor, having to pay for the huge programme of infrastructure which was in the Finance Bill, and that that would see investment on which we are currently embarked. an end to coal. No sooner did that Bill pass into law I thank the noble Lord, Lord Berkeley, and I should than that financial provision was frozen. The escalator, also mention that the noble Lord, Lord Whitty, apologised intended to drive off coal, was removed. to me for the fact that he had to leave. This has been a Everything that the Government told us during the useful debate, and I am grateful to my noble friend for passage of the Energy Bill has changed since it passed having been here to reply to it in the way that he did. I into law. More information has now come to light on beg leave to withdraw the amendment. the impact of the capacity mechanism. That was intended to enable investment in new infrastructure—to bring Amendment 119 withdrawn. forward cleaner infrastructure and make sure that the lights stay on. However, the Government’s choices in Amendment 119A how they have implemented that measure have meant that there is now a real possibility that we will not see Moved by Baroness Worthington the capacity mechanism bringing forward investment 119A: After Clause 38, insert the following new Clause— in new gas infrastructure. If we do, it will be on a very “Application of duty to limit emissions small scale. Instead there will be reinvestment in old coal. (1) The Energy Act 2013 is amended as follows. Overall, the capacity mechanism and the people (2) In Schedule 4 (application and modification of emission who have bid into it demonstrate that we have more limit duty), after paragraph 1(1)(b)(ii) at end insert— than sufficient plans for infrastructure and supply “(iii) substantial pollution abatement equipment than is demanded by the capacity mechanism. In fact, dealing with oxides of sulphur, oxides of nitrogen, it will come down to a straight choice between investment heavy metal emissions or particles is fitted to the generating station.”” in old coal or investment in new gas. The costs of that are such that it is my expectation—we will find out in Baroness Worthington: My Lords, a number of noble December whether this is the case—that it will be Lords may recognise this amendment, because this is old coal that wins and new gas will not. Essentially, not the first time we have had this discussion. I am the capacity mechanism favours short-term investments afraid that I do not intend to apologise for retabling it; by allowing coal plant to continue operating I shall keep retabling it until the issue is resolved. At unconstrained, at high load factors but lower efficiencies, the moment, whether because of a lack of joined-up than if there were investment in cleaner gas. thinking or because it is the Government’s intention, I am sure that I will hear from the noble Baroness we are seeing perverse effects arising from their energy that she disagrees, but the Imperial College study market reforms, leading to a reinvestment in old coal. launched today and commissioned by WWF said: I said earlier that I would far rather we used home- “Imperial College’s economic modelling shows that it is unwise grown gas to generate electricity than see imported to simply assume that coal-fired power stations will all close in the 2020s. If government wants old coal stations to close it needs to Russian coal being burnt in stations built in the 1960s ensure that happens through legislation. We modelled a variety of and 1970s that are now well past their use-by date. scenarios and, with the UK’s existing suite of energy policies, in When I tabled this amendment in Committee, the every instance coal still played a role in generating electricity and Minister’s response was to say that she agreed neither 2030 emissions targets were missed”. 113 Infrastructure Bill [HL][10 NOVEMBER 2014] Infrastructure Bill [HL] 114

That was picked up today by the Independent, which There are all sorts of other ways to do stop that went one step further and said that this really showed reinvestment. We have rehearsed these arguments many that the coalition’s commitment to being a green times before. It is the Chancellor’s and the Treasury’s Government was in tatters and that it did not have wish that we should have gas investment at a reasonable credibility in its comments on moving to a decarbonised level in this country over the next few years. Of course, electricity system. the more we take the risk of encouraging coal to I saw the noble Lord, Lord Turner, here earlier but reinvest into the future—we do not know how much of he is obviously not in his place now. He commented on that will happen but some of it already has—the more WWF’s report and I shall take the liberty of quoting we will crowd out investment in other technologies. I him. He said: suspect that the Minister will not accept the amendment, “″The Intergovernmental Panel on Climate Change’s latest unfortunately, but I know that a number of Ministers report update on climate change science makes it unequivocal and people in DECC understand the importance of that we must reduce carbon emissions dramatically to avoid taking coal out of generation. I hope that the Government major harm to human welfare. And we cannot achieve the required will one day come to a single view that this needs to be cuts unless we eliminate unabated coal from the electricity generating done. system”. At the end of an extensive comment, he concludes: The Earl of Caithness: My Lords, we were treated “A clear commitment to get unabated coal out of the UK yet again to an exposition by the noble Baroness on a generation system is needed to provide certainty against which matter that we debated at length and voted on last businesses can invest”. year on the Energy Bill. Here we are doing it again. If The amendment has been tabled a number of times the noble Baroness and her party had really wanted to and I make no apology for that. I will keep tabling it, meet some of the targets then they should not have probably until I run out of breath, because I care flapped around like wet hens in a thunderstorm when passionately about achieving decarbonisation at least they were in power and got on with doing something cost and by keeping our energy supplies secure. It is a about nuclear. As a result of this Government, the very short-term attitude to think that if we patch up energy programme is taking off in a way that it should old coal and keep it running at high load factors it will have done a long time ago. We all agree that we want somehow be beneficial for the country as a whole. Yes, to get coal out of the system. It is about getting the it may make a small difference in the short term, but in timing right for that, without creating extra costs for the longer term it will be wasted investment. If we are the consumer and without switching the lights off. The to hit our targets, we need to get our electricity systems coal power stations have to meet the new directive on, almost fully decarbonised by 2030. We need unabated I think, 1 January 2016. This subject has been debated coal to come off. These stations are old, inefficient and long and often and we have voted often. We will highly polluting. If we do not phase them out, using obviously continue to do so, but thankfully we are measures such as the EPS, we will simply see ourselves now heading in the right direction. I hope that my running very fast to stand still. Every coal station that noble friend on the Front Bench will not accept the stays open emits twice as much as a gas station. More amendment. renewables and nuclear have to be built to compensate for those extra emissions, at a greater cost. This is Baroness Verma: My Lords, I thank the noble Baroness, really not that difficult to work out: old coal should Lady Worthington, for yet again bringing this subject come off first. It is the most polluting and we are to the attention of the House. As my noble friend wrong to set in place a capacity mechanism that keeps Lord Caithness eloquently said, we debated this it going a moment longer than it needs to. amendment during the passage of the Energy Bill less than a year ago. Noble Lords will recall that, after I hope that at some point the Government will see careful consideration, this House and the other place the logic of my argument and accept that something decided that it should not be adopted. I do not propose needs to be done if we want to get these coal stations to set out in detail again the reasons why the Government out of our system early in the 2020s. I beg to move. did not support this amendment when it was last considered. However, noble Lords will recall that the 9.45 pm Government’s main concern was that it could lead to Lord Teverson: My Lords, I very much agree with circumstances where existing coal plants closed the amendment. I have backed similar amendments to prematurely, leading to a need for more generation other Bills. Unfortunately, we did not manage to get capacity to be built earlier than would otherwise be any further on it. It is Liberal Democrat policy that we necessary, and resulting in totally unnecessary and should get unabated coal out of the energy generation avoidable cost to consumers. system by 2025—to me that seems an eternity. One of I want to address the points made by the noble the key things that would do, as this amendment Baroness that developments since we last considered would do, would be to stop long-term investment of this amendment make it necessary to reconsider the any size in unabated coal generation and facilities. conclusion we reached at the time. It is true that there That seems to me an absolutely fundamental prerequisite, have been a number of developments over the course not only of meeting our carbon budgets, but of ensuring of this year. We have set about implementing our we meet our international obligations, such as on air electricity market reforms, which include taking the quality. It will be very difficult to continue to lead on actions that are delivering new investment and our climate change—as we do and as we want to continue plans for a secure, affordable and low-carbon electricity to do into the future—if we have a continued electricity system. That is well demonstrated by the allocation generation industry based on coal for the long term. in April of the first contracts for difference to eight 115 Infrastructure Bill [HL][LORDS] Infrastructure Bill [HL] 116

[BARONESS VERMA] been rejected by this House and so close to the first renewables projects. These projects include offshore capacity market auction where we will be seeking wind farms and coal to biomass conversions, which competitive commitments from over 48 gigawatts of alone will provide up to £12 billion of private sector capacity to ensure continued security of our electricity investment by 2020, supporting around 8,500 jobs and supplies over the course of this decade. It is also providing a further 4.5 gigawatts of low-carbon generation important to remember that over 10 gigawatts of new capacity to Britain’s energy mix. gas has come forward to participate in the December The noble Baroness pointed to the capacity market auction, highlighting that we have the right incentives and the fact that four of the 11 remaining coal plants in place to ensure security of supply at the least cost to are seeking a three-year capacity agreement to refurbish consumers and to encourage competition through new their plant. She said that that is evidence that these investment. As we discussed last year, I will oppose an plants will upgrade to comply with the industrial amendment that has the potential to increase consumer emissions directive allowing them to continue operation bills and increase the risks to security of supply. long into the future and generating at levels inconsistent There is an almost unanimous consensus on the with our decarbonisation plans. She also pointed out need to substantially decarbonise our electricity system that the freezing of the carbon price floor improves on the pathway to cutting our greenhouse gas emissions the economics of continuing to operate coal-fired by at least 80% by 2050. There is a similar consensus power stations. The fact is that neither of these that it is only with carbon capture and storage that developments is expected to have a significant impact coal will continue to play a role in that future. The on the overall future outlook for coal. measures we agreed last year to reform our electricity market are already bringing forward the investment The Government’s latest projections, which take needed to achieve this cost effectively and securely. into account recent changes to the carbon price floor, Against this background we continue to believe that suggest that virtually all coal will have retired by the applying the EPS as proposed by this amendment is a end of 2025. Only one of the four plants seeking a potentially risky intervention in the market. three-year capacity agreement has fitted the equipment needed to comply with the directive and operate without I hope I have gone half way to convincing the noble constraint when it comes into force on 1 January 2016, Baroness that the developments since the Energy Bill as my noble friend Lord Caithness rightly said. We are was before this House less than a year ago are unlikely not aware of evidence that any of the other plants will to have the impact she assumes and I hope on that be compliant with the directive at the time it comes basis she will be willing to withdraw her amendment. into force. Baroness Worthington: My Lords, I thank the Minister Even were these plants to achieve compliance at for her response. It may well be true that up to 10 gigawatts some point in the future, our assessment remains that has bid into the capacity market but my point is that overall levels of generation from coal will decline over not one of those apart from Carrington, which is time as multiple factors, including age, environmental already under construction, will successfully be awarded regulation, increasing levels of low carbon generation a capacity mechanism contract. They are going to be and a strengthening carbon price, act to reduce coal frozen out by contracts that will be given to existing generation, although the additional resilience to our coal. It is pointless telling me that lots of people out energy system that comes from a small number of there want to build gas if in reality we are going to compliant plants while they are still economic to operate keep coal open at the expense of those investments in would not be unwelcome. cleaner, more efficient technology. The risks that would be created by this amendment We have spent the largest part of this evening are also more immediate. I would like to draw the talking about fracking rather than the need to develop attention of noble Lords to the first auction under the the resource of gas so that we can use it as a bridging capacity market that will be held in December, which fuel. There is absolutely no point us investing in that if is our response to ensuring security of supply at the there are not going to be any stations in which we can least cost to the consumer. A potential impact of this burn it efficiently. The losers in this capacity mechanism amendment is to constrain the ability of plants to at the moment are the operators of existing gas stations generate when it is otherwise economic for them to do and those who wish to build new ones. That is because so. Accepting this amendment will therefore create a we continue to tell ourselves that the lights will go out significant regulatory risk to those plants seeking if we constrain coal and that that will necessarily force refurbishment contracts in the capacity market. Their a higher price on to consumers. The money we are response may therefore be to seek a higher capacity spending on propping up old coal is going to be clearing price to compensate for this possible reduction money wasted—we will have to shut these stations in electricity market revenue, particularly in the years anyway at some point. Why we seem to be perpetually preceding the first delivery year in 2018-19. Alternatively, telling ourselves that we cannot do without these these investments may not go-ahead. Neither scenario ageing dinosaurs in our electricity system is beyond me. is desirable, with the risk that the cost of the capacity I do not intend to detain the House any longer at market is pushed upwards with no accompanying this stage and I will, of course, withdraw my amendment. benefit to security of supply. However, I reiterate the words of Dr Gross from We should also consider what sort of signal it sends Imperial College that we will not see the end of old to investors of all types of generation, not just coal, coal without government intervention. If this Government now and in the future. They will interpret this as refuse to do it then it will fall to another Government. further intervention of a measure that has already There is a future for coal; it is with CCS and only with 117 Infrastructure Bill [HL][10 NOVEMBER 2014] Infrastructure Bill [HL] 118

CCS. Unabated coal is simply not something we should Clause 40: Extent be sustaining through the 21st century and no end of anyone telling me otherwise is going to persuade me. However, I will withdraw this amendment now. Amendments 120 to 122 Moved by Baroness Verma Amendment 119A withdrawn. 120: Clause 40, page 42, line 37, at end insert— “(1A) In Part 1A (powers of British Transport Police Force)— Clause 39: Regulations and orders (a) section (Powers of British Transport Police Force)(1) extends to England and Wales only, and (b) section (Powers of British Transport Police Force)(2) Amendment 119B extends to England and Wales and Scotland.” Moved by Baroness Verma 121: Clause 40, page 43, line 1, leave out “22(11)” and insert 119B: Clause 39, page 42, line 9, leave out “or 35” and insert “, “22(11) and (12)” 35 or 36” 122: Clause 40, page 43, line 2, after “Part” insert “and section 26(6)” Baroness Verma: My Lords, as part of our proposals on the right to use underground land to exploit oil Amendments 120 to 122 agreed. and gas and deep geothermal energy, each of these industries has put forward a voluntary offer for a Amendment 123 not moved. payment and notification system. The Government support this offer. We think that the offer is in the communities’ best interests because it ensures that the Amendment 124 payment scheme will be flexible and tailored to the Moved by Baroness Verma specific requirements of each community. We have 124: Clause 40, page 43, line 4, after “38” insert “, section proposed to take a delegated power in the Bill, both as (Renewable heat incentives)” an incentive to adhere to the voluntary agreement and, if it becomes necessary, to set out the voluntary Amendment 124 agreed. agreement on payment and notification in secondary legislation. For instance, if the scheme were not honoured by Clause 41: Commencement industry, we would look at making the notification and payment schemes a statutory requirement under secondary legislation. Any regulations made by statutory Amendments 125 to 127 instrument to set up a payment or notification scheme Moved by Baroness Verma will be subject to the affirmative resolution procedure. Under the sunsetting provision, the powers to make 125: Clause 41, page 43, line 14, at end insert— these regulations are subject to a one-off review and “(1A) Part 1A (powers of British Transport Police Force) must be repealed if they have not been used within comes into force at the end of the period of two months beginning seven years of commencement. with the day on which this Act is passed.” The Delegated Powers and Regulatory Reform 126: Clause 41, page 43, line 21, leave out “and 18” and insert Committee recommended that regulations made under “, 18 and 26” the sunsetting clause should be subject to the affirmative 127: Clause 41, page 43, line 29, leave out “, 25 and 26” and resolution procedure. We have agreed to this approach insert “and 25” and therefore propose an amendment that seeks to apply the affirmative procedure to regulations made Amendments 125 to 127 agreed. under Clause 36. I beg to move. Amendment 128 not moved. 10 pm Lord Grantchester (Lab): My Lords, as the noble Amendment 129 Baroness has stated, this amendment follows from the Moved by Baroness Verma recommendations made by the Delegated Powers and Regulatory Reform Committee of your Lordships’ 129: Clause 41, page 43, line 35, leave out from “28” to “come” House. It is clear that the availability of statutory and insert “and Schedule 5 come into force on 1 June 2016, safeguards was a matter of considerable concern to a (ab) section 29 and sections 32 to 37” large proportion of respondents to the Government’s consultation exercise. If these safeguards are to be The Deputy Speaker (Viscount Ullswater) (Con): I repealed, the proposed regulations should be approved must advise your Lordships that if this amendment is by Parliament after the Government have made a full agreed to, I cannot call Amendment 130 by reason of explanation which has been examined and debated by pre-emption. both Houses. We are pleased that the Government have seen fit to agree that any of these regulations will be made under the affirmative procedure. Amendment 129 agreed. Amendment 119B agreed. Amendment 130 not moved. 119 Infrastructure Bill [HL][LORDS] Infrastructure Bill [HL] 120

In the Title Amendments 131 to 132 Moved by Baroness Verma Amendment 133 131: Clause 41, page 43, line 40, leave out “section 38 comes” and insert “section 38 and section (Renewable heat incentives) Moved by Baroness Verma come” 133:In the Title, line 14, after “energy;” insert “to make 131A: Clause 41, page 43, line 42, leave out “or (3)(a) or provision about renewable heat incentives;” (b)(ii)” and insert “, (3)(a) or (b)(ii) or (5)(b)” 132: Clause 41, page 43, line 43, at end insert “or areas” Amendment 133 agreed.

Amendments 131 to 132 agreed. House adjourned at 10.02 pm. GC 1 Arrangement of Business[10 NOVEMBER 2014] Immigration Act 2014 Regulations 2014 GC 2

detail of the instruments themselves, I will first remind Grand Committee the Committee of the Government’s intentions for the banking provisions within the Immigration Act. Monday, 10 November 2014. The legislation is designed to prohibit banks and building societies from opening current accounts for Arrangement of Business those who are present in the UK and who require leave Announcement to remain in the UK, but who do not have it. The prohibition will apply only to illegal migrants whose 3.30 pm details have been notified by the Home Office to an anti-fraud or data-sharing organisation. The Home The Deputy Chairman of Committees (Baroness Office has already specified that this will be CIFAS—the Stedman-Scott) (Con): Good afternoon. I remind noble Credit Industry Fraud Avoidance Service. The Home Lords that should there be a Division in the House, Office will notify CIFAS of illegal migrants who have the Committee will adjourn for 10 minutes. exhausted the immigration process and are liable to removal from the UK. This will not include people who have an outstanding application or appeal. The Immigration Act 2014 (Bank Accounts) prohibition does not require banks and building societies Regulations 2014 to check immigration or identity documents presented Motion to Consider by the customer. Instead, they will be able to undertake electronic checks against the data provided by CIFAS. 3.30 pm The decision to limit the scope of this measure to Moved by Lord Newby current accounts provided by banks and building societies ensures that the measure is proportionate. This will That the Grand Committee do consider the ensure that smaller deposit-taking institutions, such as Immigration Act 2014 (Bank Accounts) Regulations credit unions, are not impacted by these measures. We 2014. have also decided that the prohibition should apply Relevant documents: 8th Report from the Joint only to current accounts, as they serve not only as a Committee on Statutory Instruments product for day-to-day transactional banking but also as gateways to further financial services and lines of credit. Lord Newby (LD): My Lords, the Government recognise and welcome the benefits that migrants bring I should make it clear that, in the view of the to our country. However, they also recognise the need Government, a current account is intended to be used to deter people from attempting to enter the country principally for conducting day-to-day banking activities. unlawfully and to ensure that those who are here Such an account would be expected to provide illegally are encouraged to leave. As part of the functionality to hold deposits and make withdrawals Government’s reform of the immigration system in without having to give notice. It would also typically the Immigration Act 2014, action is being taken on enable the customer to receive and make payments illegal migrants’ access to services. Effective immigration through a number of different methods, including by controls require responsibility to be shared—between cheque, direct debit, standing order, continuous payment government, local public service providers, employers, authority or other electronic payments. Withdrawals, landlords and other private service providers—for denying money transfers and other payment transactions can illegal migrants the means to establish themselves here typically be conducted through various channels, including unlawfully. That is why the Government are bringing ATMs, branches and online, mobile or telephone banking. forward this legislation to prevent known illegal migrants Many current accounts also have overdraft facilities. accessing banking products and services in the UK. For the purposes of the Immigration Act, “current accounts” should also include basic bank accounts. From 12 December 2014, banks and building societies will be prohibited from opening current accounts for The prohibition does not apply to savings accounts, illegal migrants unless they have first checked the which, in the Government’s view, are intended to be applicant’s immigration status with a specified anti-fraud opened for the primary purpose of accruing savings organisation or a specified data-matching organisation. and not for day-to-day transactional banking, although Where this check identifies that the applicant is a they may provide some of the functionality described “disqualified person”—that is, an illegal migrant that above. Savings accounts have been deliberately excluded the Home Secretary considers should be denied access from the provision as they do not act as a conduit to to a current account—the bank or building society further financial products in the same way as current must refuse to open the account. These measures will accounts. This will also ensure that smaller institutions make it more difficult for illegal migrants to establish a which only offer savings accounts are not unduly viable life in the UK by closing the gateway to transactional burdened. banking and lines of credit. I now turn to the statutory instruments themselves. The two orders we are considering today specify Following initial publication of the Bill, the banking which current accounts will be within scope of the sector raised concerns that the range of current accounts prohibition. The regulations will enable the Financial within scope of the prohibition might be too broad Conduct Authority to make arrangements for monitoring and could include accounts that were outside the and enforcing compliance with the prohibition imposed Government’s initial policy intention. For example, on banks and building societies. Before discussing the concerns were raised that accounts of large companies GC 3 Immigration Act 2014 Regulations 2014[LORDS] Immigration Act 2014 Regulations 2014 GC 4

[LORD NEWBY] Authority to restrict the deposit-taking permissions of would, unnecessarily, be covered by the prohibition. an institution that it considers has contravened a The Government’s intention through this legislation relevant requirement and to publish a statement naming has been to stop illegal migrants from opening current any such institution. These sanctions will act as a clear accounts in order to prevent them accessing other deterrent and help to ensure compliance with the products such as credit cards, mortgages or mobile prohibition imposed on banks and building societies. phones, and thereby establishing themselves illegally I commend the regulations to the Committee. in the UK. We have listened to the concerns raised and agree that the legislation, as it stands, goes further than necessary to achieve this aim. Lord Tunnicliffe (Lab): My Lords, the Opposition The effect of the two orders, taken together, is will not in any way oppose these three statutory to limit the scope of the prohibition to current instruments, but we have some small questions. The accounts that are operated by or for consumers, impact assessment created more questions than it microenterprises—that is, companies with fewer than answered. First, how many people will be impacted by 10 employees and an annual turnover or balance sheet these regulations? The impact assessment states, I total of no more than ¤2 million—and charities with think, that there are 60,000 disqualified persons and an annual income of less than £1 million. These categories then uses a questionable bit of logic to suggest that are consistent with the definition of a “banking customer” 2,000 of them might be impacted. Does the Minister already in common usage in the banking sector and agree with that estimate or feel that the actual figure set out in the FCA’s existing Banking Conduct of might be somewhat less? Business Sourcebook. The impact assessment implies that the net present Including consumers, microenterprises and charities value of the cost of the exercise is £2.7 million. I had within the ambit of the prohibition is also consistent some trouble between the pages but I think that that is with the distinction that the FCA already makes between what it states on page 8—that there will be £2.1 million the conduct of banks and building societies with respect set-up costs and £0.6 million of ongoing costs at net to these retail banking customers and to other customers present value. It is difficult to feel bad about that such as large corporations. This will make it easier for £2.7 million as it will be paid for by the banks, but, the banking sector to comply with the Act and for the nevertheless, it is not an insubstantial sum if the FCA to enforce the prohibition at Section 40 of the impact is going to be de minimis. The impact assessment Act. By retaining microenterprises and charities within leads one into even greyer territory when it comes to the prohibition, the amendment will also make it more the benefits. A benefit prayed in aid was that there difficult for illegal migrants to circumvent the prohibition might be fewer people to seek out and move out of the set out in Section 40 of the Act. Illegal migrants will country, and the impact assessment offered an incredibly be unable to set up as a sole trader, for example, in precise estimate of the cost of exiting a disqualified order to open a current account. person, with a range from £400 to £60,100. That is a pretty heroic estimate with no indication of where in In summary, the Government believe that this approach that range these individuals might fall or how many of strikes the right balance between ensuring that the them there might be. prohibition is appropriately targeted and minimises the burden on businesses while still preventing obvious I am trying to envisage a situation whereby any avoidance schemes. individual would come into this position. It seems to me that the provision could only apply against an I turn to the monitoring and enforcement of the individual who, for all other reasons, could reasonably Act. It is important that a relevant body is equipped expect to open an account with a bank. As I understand with the necessary authority and powers to monitor it, when one is an asylum seeker, you may open a bank and enforce the requirements in the Act. The Immigration account if a bank will allow you to open a bank Act 2014 (Bank Accounts) Regulations 2014 therefore account. There is no prohibition against an asylum give the Financial Conduct Authority the power to seeker opening a bank account, and these orders create monitor compliance with the Act and to further investigate no such prohibition, if I have understood them properly. firms when necessary. As the conduct regulator for I would be delighted if I am wrong. My understanding deposit-taking institutions, the FCA is well placed to is that if you are an asylum seeker and you can satisfy regulate, monitor compliance with and enforce these a bank in every other respect, the fact that you are an provisions. The regulations require banks to provide asylum seeker is not a reason for prohibition. the FCA, at the latter’s direction, with information in It seems to me that any asylum seeker of sufficient respect of compliance or non-compliance with the sophistication to intend not to leave the country when requirements of the Act. They will also oblige firms to they become a disqualified person and who wants to retain records relevant to compliance or non-compliance have a current account will have the wit to set up the for a minimum of five years. It is also important that account before they become a disqualified person. We there are proper sanctions against individuals or know from today’s Question Time that the period that institutions that fail to comply with the Act’s requirements. they are an asylum seeker as opposed to a disqualified That is why we are equipping the FCA with the person is frequently very long. It seems to me that power to levy financial penalties, of such amounts as most people who are in this situation will disappear it considers appropriate, on any firm that it considers into the black economy and not need a bank account. has breached the prohibition in Section 40 of the Act However, the small number who are going to do this or breached a requirement of or under the regulations. period as a disqualified person in a sophisticated way The regulations will also allow the Financial Conduct which requires a full bank account will surely have set GC 5 Immigration Act 2014 Regulations 2014[10 NOVEMBER 2014] Immigration Act 2014 Order 2014 GC 6 up a bank account beforehand. As I understand it, the at the end of the process, they are not given asylum order does not require a bank to close an account and are required to leave the country? We have taken when it is notified that somebody who has a bank the view that only new bank accounts should be account has become a disqualified person. I would be covered by these regulations, and therefore if there is grateful if the Minister would tell me if I am right or an existing bank account which it subsequently transpires correct me for the record. is operated by an illegal immigrant, the law under these regulations will not require the bank to close 3.45 pm that account. The view was and is taken by the Finally, I have to admit that I have stolen most of Government that the approach we are adopting is those points from the debate in the other place—so I proportionate and that to go beyond what we now hope the Minister has already had a chance to check propose would impose an unnecessary burden on the them out. I understand that when it comes to regulations, industry. there is a one-in, two-out policy. I have always felt that The noble Lord asked about one-in, two-out. I am regulations should be in if they add value to the told that this qualifies as one-in but, of itself, it is community and out if they do not—there is little other obviously not contributing to the two-out because it is calculation. Nevertheless, I believe that the Government a new regulation. The Government are committed have a one-in, two-out policy. Does the one-in, two-out over a period, taking all the activities of government, policy apply to these regulations, or are they covered to end up with two out for every one in. This is an in, by a one-in, no-out policy, or, indeed, even by a but there are lots of other outs, including some of the three-in, no-out policy? measures going through in the Deregulation Bill, almost literally as we speak. As the noble Lord is aware, the Government are absolutely committed to reducing the Lord Newby: My Lords, I am grateful to the noble burden of regulation and we believe that the broad Lord, Lord Tunnicliffe, for his support for these approach of having two out for every one in makes a regulations. He asked how many people are likely to major contribution to that effort. be affected by them. The impact assessment has made an estimate of approximately 2,000 people. As it happens, With those responses, I hope that I have satisfied it is estimated that, in 2013, almost 2,000 people were the noble Lord, and I commend the regulations to the the subject of Home Office data shared with CIFAS, Committee. who were then refused current accounts in 2013. So, in 2013, getting on for 2,000 people were refused current Motion agreed. accounts. On the basis that this legislation extends the scope of the scheme to some number of— Immigration Act 2014 (Bank Accounts) (Amendment) Order 2014 Lord Tunnicliffe: In 2000, as I think the Minister has just quoted, this scheme was not in place, so I Motion to Consider assume that those 2,000 people were refused for other reasons, such as their creditworthiness, or as potential 3.51 pm launderers, or whatever. It was nothing to do with Moved by Lord Newby their being asylum seekers, as I understand the logic. That the Grand Committee do consider the Immigration Act 2014 (Bank Accounts) (Amendment) Lord Newby: Not with being an asylum seeker; but Order 2014. banks that were already signed up to CIFAS were Relevant documents: 8th Report from the Joint already, before this legislation, as a matter of course, Committee on Statutory Instruments referring to CIFAS as regards whether a person was an illegal immigrant. The banks that were doing that already were refusing about 2,000 current accounts in Motion agreed. 2013. It is reasonable to expect that the figure will be 2,000, or something slightly more than that, as we Immigration Act 2014 (Bank Accounts) expand the number of banks and building societies that are covered by the scheme. It is obviously impossible (Prohibition on Opening Current Accounts to know exactly, but that gives you an idea of the order for Disqualified Persons) Order 2014 of magnitude. You are almost certainly talking about Motion to Consider a small number of thousands rather than a few hundred or tens of thousands. I think that that must be the 3.51 pm scale of the impact of the legislation or the process. Moved by Lord Newby The noble Lord asked whether, given the cost of implementing the scheme, it was worth it. We believe That the Grand Committee do consider the that it is worth it. The annual cost to banks and Immigration Act 2014 (Bank Accounts) (Prohibition building societies is only £200,000, which is relatively on Opening Current Accounts for Disqualified Persons) modest. The set-up cost, although greater in the overall Order 2014. scheme of things, is relatively modest. Relevant documents: 8th Report from the Joint The noble Lord asked about the situation of a Committee on Statutory Instruments legitimate asylum seeker who is going through the process and opens a bank account. What happens if, Motion agreed. GC 7 Statutory Shared Parental Pay Regs.[LORDS] StatutorySharedParentalPayRegs.2014 GC 8

Statutory Shared Parental Pay (General) The Government also have a more ambitious agenda. Regulations 2014 We want to facilitate a cultural shift towards the removal of outdated beliefs about the role of fathers Motion to Consider and partners in caring for their children. Evidence shows that where fathers and partners are involved early on in the life of the child, they are more likely to 3.52 pm stay involved and that there are positive benefits not Moved by Lord Bourne of Aberystwyth just for the children but for society generally. However, the current law propagates outdated assumptions. Instead That the Grand Committee do consider the of supporting fathers and partners who want to play Statutory Shared Parental Pay (General) Regulations an active role in caring for their children, it hinders 2014. them by placing constraints around how much time they can take off from work. Relevant documents: 8th Report from the Joint Committee on Statutory Instruments The current arrangements can be unhelpful to fathers and partners who want to, or who out of necessity have to, be the primary carer. The current law enables Lord Bourne of Aberystwyth (Con): My Lords, I fathers and partners to take one or two weeks’ paternity beg to move that the Statutory Shared Parental Pay leave within the first eight weeks following birth—a (General) Regulations 2014 be considered by the House. position that will remain the case after these regulations In doing so, I shall speak also to the Maternity and are passed—and further leave later on, but only if the Adoption Leave (Curtailment of Statutory Rights to mother has returned to work, whereas those regulations Leave) Regulations 2014 and the Shared Parental Leave will be subsumed by the regulations before us. In Regulations 2014. short, parents, including fathers, have some choice about who cares for their children, but it is a limited We are here today to consider changes to the law on choice. The Government believe that working parents family-related leave and pay. These changes started should be able to decide for themselves which of them with the Children and Families Act 2014, which enables is best placed to care for the child. We do not want to Parliament to make regulations introducing shared force arrangements on working parents which may parental leave and pay. These regulations give qualifying not work for them or their employers. We believe that working parents a new statutory right to share leave fathers and partners should be able to be the primary and pay where the mother has taken, or intends to carers, if the parents wish that, and that mothers who take, less than her full statutory maternity entitlement— want to work should be given rights which make their that is less than 52 weeks’ leave in the case of maternity transition back to work easier. leave, and less than 39 weeks’ pay in the case of statutory maternity pay or maternity allowance. The Shared parental leave and pay enables fathers and new system will apply to working parents who are partners to be the main carers if they so wish, both expecting a baby which is due on or after 5 April 2015. parents to spend time at home together and the parents These regulations put in place the overarching legal to stagger their leave so that one of them is at home framework for shared parental leave and pay and set when the other is at work. In enabling them to share out how this will work in practice. the responsibility for the care of their child, we enable Noble Lords may be wondering why it is necessary both parents to maintain stronger links with the labour to make these changes. They are required because the market. As I am sure noble Lords will agree, enabling laws on maternity and paternity leave and pay that we employees to maintain links with the labour market have now are rigid and inflexible. They have failed to and individual employers has many benefits for business. keep pace with the modern family and the modern These include lower staff turnover and therefore lower workplace. recruitment and training costs. Employees who have a Looking first at the modern family, the current law better work/life balance are also likely to take less sick assumes that the child’s mother is always the main leave and to have higher levels of commitment to their carer. This is clearly not the case for many families, as employers and work generally. women now make up almost half of the United Kingdom’s workforce. The role of women in the workplace The Maternity and Adoption Leave (Curtailment has changed dramatically since women were given of Statutory Rights to Leave) Regulations would rights to maternity leave and pay in the 1970s. In specifically enable a mother to give her employer nearly a third of households, women are the main notice to end her maternity leave early, on a date earners. It is therefore unsurprising that many women which she chooses, and to indicate that she or her choose to return to work sooner than they would have partner intends to take shared parental leave. The done historically. Women return to work for a variety word “curtailment” in the title of the regulations is of reasons, including financial reasons, as well as a perhaps unfortunate; it gives the impression that something desire to avoid any setbacks to their career or work is being lost by this when in reality it is an option to prospects that may follow a prolonged period of absence share the leave with the father or partner. from the workplace. The changes to the law that we are considering are therefore partly about reflecting Once notice has been given, there are only very modern life. The regulations before us restructure the limited circumstances in which the mother can reverse legal framework to make it easier for mothers to stay her decision. The mother needs to end her maternity in the labour market, if they wish to do so. leave early to create shared parental leave for her and GC 9 StatutorySharedParentalPayRegs.2014[10 NOVEMBER 2014] StatutorySharedParentalPayRegs.2014 GC 10 her employed partner to take. In essence, the untaken The regulations are necessarily detailed in places, as balance of the mother’s maternity leave is used to we need to provide for the wide variety of circumstances create the shared parental leave. Where the mother that parents may encounter. For example, the regulations creates shared parental leave by giving her employer need to cater for exceptional events such as the sad binding notice, her employed partner can start to take death of the child or one of the parents. The Government some or all of this leave while the mother is still on are providing guidance and tools to help working maternity leave, so that both parents can be at home parents and their employers to understand and use the together with their child if they so wish. Because the new shared parental leave and pay system. mother chooses the date when her maternity leave will end, she remains in control of the number of weeks of The Committee may be wondering what happens in maternity leave that she takes. If she wants to take the the case of adoptions and civil partnerships. I have full 52 weeks of maternity leave to which she is entitled, deliberately talked about birth parents, as they make she can do so. This is the default position if the up the vast majority of employed parents who will be mother does not opt into shared parental leave. eligible for shared parental leave and pay, but in the two other cases, they apply mutatis mutandis, in just the same way. I assure the Committee that the provisions 4pm in the regulations apply equally to parents who have a child placed with them for adoption on or after The Shared Parental Leave Regulations and the 5 April 2015 and similarly apply to civil partnerships. Statutory Shared Parental Pay (General) Regulations provide the nuts and bolts of the new system. They set In summary, the regulations provide the legal structure out how shared parental leave and pay work: for for shared parental leave and pay which is needed for example, how parents calculate how much shared parental the new system to work in practice. The provisions leave they can take and when they can take it. contained in the regulations are made under the powers In contrast to maternity leave, which has to be introduced through the Children and Families Act taken in a single block of consecutive weeks, shared 2014. They are in line with statements made in the parental leave can be stopped and started again, with course of debates on the Bill during its passage through the employee returning to work between periods of Parliament, and the policy on shared parental leave leave, if they wish. The regulations provide for that. and pay was consulted on extensively. I therefore trust For example, an employee could return to work between that the Committee will be able to support these periods of shared parental leave to complete a particular statutory instruments, and I commend them to the project or during a period when the business is particularly House. busy. The Committee will be able to see how that arrangement might work for certain employers or be attractive to certain employees: for example, those Baroness Turner of Camden (Lab): My Lords, in who are reliant on commission to make up their wages general, I support the regulations, because I understand or salary. that the thinking behind them is to enable both parents The regulations also enable an employee to claim to come together to care for the child; obviously, one up to 37 weeks of statutory shared parental pay while supports that. they are on shared parental leave and enable employees and workers who are not eligible for leave to create However, I should like to raise one or two issues statutory shared parental pay for their employed partner with the Government, just for clarification. Incidentally, to take. The statutory shared parental pay is created I thank the Minister for the detailed paper that has from untaken statutory maternity pay or maternity been issued in support of the regulations. The regulations allowance. The pay is based on the mother’s salary or stipulate that for an eligible mother to meet the on the maternity allowance. requirements for a shared allowance and so on, she must curtail her maternity or adoption leave in order The regulations give employees who are on, or that the curtailment can be used to support the new intend to take, shared parental leave similar protections shared parental provisions. to employees on maternity or paternity leave. They ensure that the employee is not treated less favourably This could give rise to some problems here and than other employees because they have exercised there, because not every couple is married and not their statutory right to take the leave. They also balance every couple is living together. The mother might have the needs of the parents with the needs of their difficulty contacting the father to enable them to come employers, who understandably want to know when to an agreement in relation to the shared provision their employee will be absent from work on shared provided for in these regulations. One has to remember parental leave in order to plan for the employee’s that relationships are not all exactly as we would wish absence. The regulations do that by linking entitlement them to be. People do not always live together—they to shared parental leave and pay to the employee may have a child together but may not live together, giving their employer adequate notice of both their and the woman may therefore have the obligation entitlement to leave and periods of absence. With very placed on her of trying to sort things out and make limited exceptions—which include early births—the sure that the shared rights are available. If she has to employer must receive at least eight weeks’ notice of curtail her own share, that may be a bit more difficult. any periods where the employee will be absent from Have the Government thought about this? We are of work on shared parental leave. If an employee fails to course working in this situation where not everybody give sufficient notice, they will not be eligible for the is in married partnerships or even living together. leave or pay. Nevertheless, we want to ensure that both parents GC 11 StatutorySharedParentalPayRegs.2014[LORDS] StatutorySharedParentalPayRegs.2014 GC 12

[BARONESS TURNER OF CAMDEN] very open-minded organisation and he would like to participate in looking after the child, when the child test it on extended parental leave at a fairly early date. needs to be looked after, and that the rights under the Finally, we need some really good evidence of how regulations are properly shared between the two parents. this is being used to encourage employers and prospective parents that this is something that will really change Baroness Brinton (LD): My Lords, the legislation in the nature of a child’s first year’s relationship with the Children and Families Bill went through extremely both their parents. smoothly. In fact, I think it was one of the smoothest things I have seen in the four and a half years since I came into the House because all sides welcomed the Lord Young of Norwood Green (Lab): My Lords, I introduction of parental leave. Just looking at noble thank the Minister for his comprehensive reply. I do Lords around the Grand Committee, I do not remember not know whether this is his first time in this Room. If any amendments at all during the passage of the Bill, it is—I think it must be—I offer him a warm welcome. which was very encouraging. I am principally glad—I My only complaint is that the progress made under am delighted that my noble friend outlined this at the the previous Government was given rather short shrift, start—that the interpretation of “family”in Regulation 3 if the Minister does not mind me saying so, so I will gives a clear picture that it comes in all shapes and give a little historical background. The Labour sizes, including same-sex partnerships. The issue about Government transformed rights for women and families the family unit is a difficult one but I hope this also in order to help them balance earning a living and covers the point made by the noble Baroness, Lady caring for their family. Over 13 years, Labour extended Turner, that a family is not always at the same address. paid maternity leave to nine months and the right to Recognition of that about the family unit is most take maternity leave to 12 months and gave new important and is a major step forward for government. entitlements to paternity leave and pay for fathers. Let us hope that employers are as encouraging. I am The Labour Government also introduced the right delighted to see that adopters have the same entitlement to request flexible working. In 2009, this was extended to leave. It is even more essential when a child may to parents with children up to the age of 16. We have had a distressing start to their life to be able to introduced a right to request flexible working to people have that relationship with both of their new parents. with caring responsibilities for disabled or elderly relatives I have two questions, which are not so much about and to parents with disabled children up to the age of the regulations but about their application. The first 18. We ought to remember that David Cameron and relates to Regulation 17, which modifies the eight-week the Conservatives voted against the introduction of regulation where a child is born early. I have a nagging paternity of leave, the extension of maternity leave worry that employers might use these regulations to be and the right to request flexible working. I always less than compassionate to a partner where the mother welcome a Government having a Damascene moment, and the baby might still be in hospital. If the baby is in and I am glad that the Government are on board, as a neonatal intensive care unit, could the employer say, they nowadays are, with the minimum wage. “Well no, the mother is using the leave and therefore We support today’s regulations to reform the work-life you can’t”? It is quite possible these days for a baby to balance for families. We think they are positive and be in a neonatal intensive care unit for more than the comprehensive legislation. As I worked my way through eight weeks covered by the early period after birth. them, I admit that they started to make my cerebral The second question refers to the following regulation, cortex ache with the various circumstances that might on change of circumstances. Can the Minister provide apply. The Government have tried comprehensively to some reassurance that there will be monitoring of account for more or less every circumstance that one employers saying that it is not convenient to change could think of. Shared parental leave is a step towards arrangements at fairly short notice? If this becomes a levelling the playing field for fathers, and that is to be default reason for refusing change, it will be defeating welcomed. The Minister talked about facilitating a the object of the regulations. cultural shift. That is an ambitious project and it takes Part 5, on taking shared parental leave, includes a time, but I think it is the right thing to say. I do not say regulation looking at protection from detriment. There that in a derogatory way. That is what we are trying to is some concern over the right to return after shared do. The Minister drew out some points, including the leave in Regulation 41 that the job the partner can go importance of maintaining links with work. Today, back to is broadly in sympathy with the job that both fathers and mothers, but principally women, the mother can return to. I think it would be wrong for want to continue careers. I also welcome the fact that a partner to have a less robust facility to go back to we now have a situation where both parents can be at their prior job. It would be reassuring to hear that that home, using that curtailment. There is flexibility. is the case. I also recognise that this is a challenge for employers Will there be codes of practice for employers on and that they will need adequate notice. The noble how they can liaise with each other when dealing with Baroness, Lady Brinton, made a valid point about the this arrangement between a mother and a partner need for a code of practice or guidance, given that trying to break down the leave between themselves, there will be different employers. particularly in relation to statutory maternal/paternal Returning to the point about facilitating a cultural pay? shift, we would be interested in hearing from the On a positive note, I know of at least one young Minister what the Government will do to promote couple who have delayed starting their family until shared parental leave, because we will have to promote this comes into place because the partner works for a it. We know from the data available for the first two GC 13 StatutorySharedParentalPayRegs.2014[10 NOVEMBER 2014] MaternityandAdoptionLeaveRegs.2014 GC 14 years of additional parental leave that only an estimated of practice has already been developed by ACAS, 1% of eligible fathers took it, so a cultural shift takes which has been warmly welcomed. No doubt it will be time. monitored and, if changes are necessary, they can be The Government estimated in their impact assessment made to it as things progress. We should not see this as that between 2% and 8% of fathers would take up something set in stone and adamantine; if changes are shared parental leave. However, experts claimed that needed, I am sure that they can be made. that figure was optimistic. As I said, only 1% of I turn to points raised by the noble Lord, Lord fathers have taken additional parental leave, which Young, thanking him for his kind remarks and the shows that even the lower end of the Government’s historical journey that he took us on; I suspected that estimate looks optimistic. That takes us back to what there might be a bit of party knockabout. I fully positive steps the Government are taking to promote recognise that these regulations are supported across this. the Room, and rightly so. It makes the cultural change that we all want that much easier if we all support it 4.15 pm and are doing everything we can to make sure that it happens. I will be interested to hear the Minister’s response to my noble friend Lady Turner’s point about couples I can reassure the noble Lord about the rollout. He not necessarily residing at the same address. She is is right that we need to do more on that to make sure absolutely right; we have every variation on the theme that it is taken fully on board by those who are that you could imagine nowadays with regard to parenting. prospective beneficiaries of it. At the moment, it is The noble Baroness, Lady Brinton, was right to bring featured on the GOV.UKwebsite, and there is evidence up the not necessarily exceptional circumstances, these that there has been a lot of downloads by employers, days, of children who are born extremely early. That is so they are aware of this. We have to make sure that a valid point. employees are aware of this, such as the potential family to which my noble friend referred. Perhaps The monitoring of employers and the review process these regulations should be named after them, if they will be very important. I will be grateful if the Minister are taking full benefit of this as pioneers. But it is will set out in his response what the Government will important, in all seriousness, that we make sure that do to increase the uptake of shared parental leave so the messages are rolled out. This is being done through that the intention of the changes introduced through the TUC, the CBI, the FSB and the National Childbirth the Children and Families Act 2014 and the regulations Trust. I have asked officials to look at the possibility of can be fully realised. ensuring that information is available through commercial Despite those comments and a number of questions, outlets such as Mothercare. It seems to me that places we entirely welcome the proposals. such as that would be a good way of trying to get the message across so that we ensure that everybody benefits in the way that we want, not just the families, partners Lord Bourne of Aberystwyth: I thank noble Lords and children concerned but society in general, as we for their contributions to what has been a very interesting want that cultural shift. debate, and for the support around the Room. I am delighted that noble Lords have supported the regulations These regulations will enable working parents better and to see strong support for the new shared parental to balance their caring and work responsibilities and leave and pay system. will enable employers to plan for the periods when their employees will be absent from work on shared I shall try to deal first with the points raised by the parental leave. I commend these statutory instruments noble Baroness, Lady Turner of Camden. First, on to the Committee. I beg to move. couples who are not part of a typical family unit, including where they are living apart, providing that Motion agreed. they meet the definition of partners, spouses or civil partners, they are fully covered. I take the point, also made by my noble friend Lady Brinton, that families come in all shapes and sizes now. The Government Maternity and Adoption Leave have certainly done our best to accommodate that, so (Curtailment of Statutory Rights to Leave) I hope that I can give reassurance on that point. Regulations 2014 The noble Baroness also asked about having some Motion to Consider way to facilitate agreement between the partners and what happened where people are living apart. Clearly, the Government are unable to legislate for every situation. 4.21 pm It is incumbent on partners, where they are living Moved by Lord Bourne of Aberystwyth apart or otherwise, to come to an agreement. Underlying all this is the principle that has to be in the interests of That the Grand Committee do consider the the child. Maternity and Adoption Leave (Curtailment of If I may, I shall come to some points raised by the Statutory Rights to Leave) Regulations 2014. noble Baroness about the code of practice when I deal Relevant documents: 8th Report from the Joint with the points raised by my noble friend Lady Brinton. Committee on Statutory Instruments Parties are entitled to shared paternity leave. The interests of both working partners are fully protected, both the father and mother, on an equal basis. A code Motion agreed. GC 15 Shared Parental Leave Regulations 2014[LORDS] Regulationof InvestigatoryPowersOrder GC 16

Shared Parental Leave Regulations 2014 control and oversight of how public authorities use Motion to Consider covert investigatory techniques. However, the Government keep a close eye on the regime to ensure that it is working as intended and, when improvements have 4.21 pm been identified, we have acted to put these into place. I Moved by Lord Bourne of Aberystwyth will briefly outline the main changes which have been incorporated into these revised codes. That the Grand Committee do consider the Shared First, in response to concerns about use of covert Parental Leave Regulations 2014. surveillance by local authorities to investigate relatively Relevant documents: 8th Report from the Joint minor matters in England and Wales, local authorities’ Committee on Statutory Instruments use of these powers has been restricted so that they can now use directed surveillance only to investigate Motion agreed. criminal offences which either attract sentences of at least six months’ imprisonment or relate to the underage sale of alcohol or tobacco. In addition, in all cases, Regulation of Investigatory Powers (Covert decisions by local authorities to grant or renew the authorisation of covert techniques will only take effect Surveillance and Property Interference: once an order approving the authorisation has been Code of Practice) Order 2014 granted by a justice of the peace. These changes were Motion to Consider made in Part 2 of the Protection of Freedoms Act 2012. To improve confidence in the decision-making and 4.23 pm authorisation of undercover deployments, RIPA has Moved by Lord Bates been amended to allow an independent body, the Office of Surveillance Commissioners, to provide enhanced That the Grand Committee do consider the oversight of all undercover law enforcement deployments. Regulation of Investigatory Powers (Covert Law enforcement agencies are now required to notify Surveillance and Property Interference: Code of the surveillance commissioners of an undercover Practice) Order 2014. deployment at its outset and must seek prior approval from the commissioners for all deployments that last Relevant documents: 8th Report from the Joint longer than 12 months. We have also increased the Committee on Statutory Instruments rank at which undercover deployments are authorised. The revised codes were the subject of a public The Parliamentary Under-Secretary of State, Home consultation exercise in February and March this year. Office (Lord Bates) (Con): My Lords, these orders We received responses from 126 organisations and bring into force revised codes of practice under Part 2 individuals, details of which we will publish on the of the Regulation of Investigatory Powers Act 2000. Home Office website, following an undertaking given The codes of practice have been revised to reflect by us during the debate on these orders in another changes that the Government have made to the Part 2 place, once we have obtained permission from the provisions on covert surveillance and the use of covert respondents. The consultation provided additional human intelligence sources since the codes were last recommendations for changes to the codes. revised in 2010. The codes also give guidance on One of the main concerns related to undercover property interference, an action which necessitates officers forming inappropriate relationships in the course authorisation under separate legislation, but which of their duties. To address this, the College of Policing will often form part of a wider covert operation. has issued a code of ethics which states clearly that I believe it is accepted that, faced with the sophistication officers must not engage in sexual conduct while on of the methods employed by modern-day criminals, duty, and shall not establish or pursue an improper our law enforcement agencies sometimes need to operate sexual or emotional relationship with a person with covertly in order to prevent or detect serious crime, whom they come into contact in the course of their but those powers must be deployed extremely carefully work. The revised Covert Human Intelligence Sources and properly balanced against individual rights, including code of practice in turn specifies that all police officers the right to privacy. deployed as undercover officers in England and Wales The Regulation of Investigatory Powers Act 2000, must, of course, comply with and uphold the principles or RIPA as we know it, provides a statutory framework and standards of professional behaviour set out in the for public authority use of a number of covert techniques code of ethics. likely to acquire private information, including the I turn to other changes. The Covert Human Intelligence techniques covered by the codes of practice concerned Sources code also includes a clarification that law here, and ensures that their use is compatible with an enforcement agencies must seek an authorisation when individual’s right to privacy. developing a cover persona, an activity known as The Act provided a number of safeguards to prevent “legend building”, if the activity will interfere with an misuse of the powers, including clear authorisation individual’s Article 8 rights. This change was made to procedures and independent scrutiny of the use of the ensure consistency and that proper consideration is powers by the Office of Surveillance Commissioners given to privacy and proportionality in all undercover and the Intelligence Services Commissioner. RIPA deployments, irrespective of the nature of the deployment. and its associated codes of practice have greatly improved The HMIC report into undercover policing published GC 17 Regulationof InvestigatoryPowersOrder[10 NOVEMBER 2014] Regulationof InvestigatoryPowersOrder GC 18 on 14 October highlighted this as a concern and I am There is recognition, and I am sure that the public pleased that we have already taken steps to address it. recognise this as well, that covert surveillance or operations In addition, in response to feedback, a number of have to be undertaken. To suggest that in each and more technical amendments have been made to the every case they are wrong would be completely to codes to provide greater clarity for those authorising misunderstand their purpose, as I think the noble and using covert techniques. Lord made clear. Those operations are dealing with The changes that I have described today clarify the some of the most dangerous crime and serious criminals way in which the law enforcement agencies can use and are an essential part of policing. We are talking these intrusive powers, and consolidate the changes we about drugs, trafficking, smuggling, sexual abuse and have made to ensure that the right level of oversight pornography. Often, as I am sure we will come to and authorisation is in place. They ensure that the debate on the Government’s opt-out and opt-in proposals, powers can be used only when it is necessary and that information is shared between countries and is an proportionate, when it will help to keep us safe from important part of putting together the jigsaw of the harm. I commend the orders to the House. details of some these international crimes, where there is cross-border communication that we can get only if we co-operate with other countries. 4.30 pm I was surprised that in the order there was nothing, Baroness Smith of Basildon (Lab): My Lords, I unless I have missed it within the two codes of practice, thank the Minister for his explanation. He will be distinguishing between long-term and short-term aware that there have been a number of debates on this operations. I would make that a clear definition and issue over the past few years in your Lordships’ House. perhaps do so on authorisations as well. Regarding It is helpful to have the two codes of practice before some of the things that we expect police officers to do, us; it was also helpful that he set it all in context. my local paper ran a story about one officer who had However, as he will know, following the debate on infiltrated a drugs gang. As he got more and more what became fast-tracked legislation in the Data Retention information—he got excellent information that went and Investigatory Powers Act, or DRIP, it was agreed to court—it was obviously putting him at risk. He through our amendment in the other place, which the ended up having to jump out of the window and run Government accepted, that there will be a full review pretty quickly down the street to ensure that he was of RIPA. As I think the Minister said, it has not kept not caught while still acting under cover. pace with technology and there have been changes. Clearly, there needs to be a full review to ensure that it The two issues that we have raised before, which are keeps pace with not just the technology but some of largely recognised in these provisions, are the inappropriate the problems that have arisen, which he also alluded use of powers, in regard to which I mentioned my to. noble friend Lady Lawrence, and inappropriate relations. If the Minister has not read it, I suggest that he reads a The Minister will also be aware, although he did book that was written about in the Guardian magazine not mention it in his comments, of the issue raised in on 22 June last year. I kept a copy of its excellent debate on the Serious Crime Bill, when the noble article about the problems caused by that kind of Lord, Lord Strasburger, tabled an amendment about covert surveillance when it got out of hand and the concerns regarding journalists and their sources being powers were abused. intercepted and accessed. We have had previous debates about his point about undercover police officers on We have two new draft codes of practice. What they covert operations having inappropriate relationships and any review needs to address is, first, the safeguards with people, particularly between male police officers to protect the public while addressing the balance and and women. Regarding surveillance techniques, I think conflicts and, secondly, establishing and maintaining particularly of my noble friend Lady Lawrence, whose public confidence in the integrity of the process and family was subject to surveillance that under no system. That is difficult, because you are balancing circumstances could ever be described as necessary or liberty against security, and privacy against public proportionate. There is clearly a need for guidelines to safety. Those issues clash, which is why the guide is so address that and, if guidelines are not adhered to or important. I hope that the Minister will give me an something goes wrong, a process by which those issues assurance that the draft codes of practice will still be can be taken up. We certainly welcome seeing the new part of RIPA. codes of practice, but I also hope that the Minister will confirm that all these issues will still be discussed and The Minister mentioned the consultation. I was a further considered when we have that full review of little surprised that he and Mike Penning in the other RIPA by David Anderson, the commissioner. place gave different numbers; they were only one out, We have made it clear that there has to be a full but the noble Lord said that there were 127 consultations, public debate on this and I hope that the noble Lord while the Minister in the other place said that there will agree. We do the public a disservice if we stand were 126. I went to the website to see what those back and say, “We need these powers”—and the consultations had said, because I thought it would be Government do need such powers—“but trust us, helpful to inform this debate if we could see the everything will be okay”. We would bring the public consultations—the Explanatory Notes say that most into our confidence a lot more on these issues if we of the points were taken on board. However, I went to explained why we need such powers and how they will the website on Friday to be told: be used. The public would understand that but we “We are analysing your feedback. Visit this page again soon to have to do a lot more than just ask for their trust. download the outcome to this public feedback”. GC 19 Regulationof InvestigatoryPowersOrder[LORDS] Regulationof InvestigatoryPowersOrder GC 20

[BARONESS SMITH OF BASILDON] are annually, but it would be very difficult for them to However, the Minister said today that as a result of look at every case. Would they have to inspect a the question David Winnick asked of the Minister in sample to see if they were happy that the code of the other place, Mike Penning, about whether it would conduct had been adhered to and that it was lawful, be made public, he was told, “No problem; it can be”. proportionate and necessary, or do they have to wait Did the Government never intend to publish the for a complaint? Under what circumstances would a consultation? They now have to go back to everybody commissioner look at issue? who contributed to the consultation, which implies That brings us back to the guidance about that there was no intention to publish it in the first proportionality. Again, the commissioner has been place. From a personal point of view, I always find the clear about the changes for local authorities, because publication of consultation responses extremely helpful there were cases when it was not proportionate; the in these kinds of debates. I am very disappointed that changes to which he has referred are very helpful and they have not been published. To suggest that the we support them totally, but last week the noble Lord, Government now have to spend money to go back to Lord Strasburger, made the point about journalists. everybody to ask them if they mind their information How is that affected by the code of conduct before us being published does not seem to be the best use of today? resources or time. Finally, I could not find anything about training, I will ask the Minister a couple of questions on the although I may have missed it because there are quite code of practice, because I was not 100% clear about a a lot of documents to go through and I did not know couple of things. In the Covert Human Intelligence whether it was raised in the consultation. I refer to the Sources Draft Code of Practice, a piece on page 9 training available to those who provide the authorisations refers to public officials who provide information to and to those who seek authorisations, under either the authorities, and there is new guidance on that. Is code. Will they receive any training on the new codes all that guidance new, or has it been adapted from of conduct and the guidance that has been issued so something that already existed? If a person is providing that they know exactly what their responsibilities and information—and not always information about an obligations are? offence; often it is what you might call personal I welcome the orders. Significant efforts have been information; and whether or not they become a covert made to address concerns that have been raised that human intelligence source or just a source in the any covert surveillance covered by either of the draft normal course of things—does it make it more likely codes of practice is lawful, proportionate and necessary. that they will be reluctant to provide information The deal with the public is that any legislation that will because they know that they are registered somewhere, be passed on surveillance is used only for the purpose someplace, as a covert human intelligence source? I do intended—to make people safer against serious crime, not know whether you call that a CHIS. Does that including crime against the community, crimes which make it more difficult for the authorities to obtain makes the community less safe. Terrorism is often information in that way? mentioned in that context, and that is part of it—but On page 19, paragraph 4.20, confidential constituent that co-operation to deal with serious crime, whatever information is referred to as being confidential the purpose, is the aim. This provision goes some way information, to addressing that, but I look forward to a full review “in relation to communications between a Member of Parliament of all the issues that we have discussed. I hope that we and a constituent in respect of constituency matters”, can get to the point of having a proper public debate because that is held in confidence. Does that also to ensure the integrity of the process that we need. apply to Members of the House of Lords? Although we do not have constituents as such, members of the Lord Bates: I thank the noble Baroness for her public contact us about issues. Indeed, the Houses of questions, which, as usual, have gone into the detail in Parliament website suggests that if you are not happy some depth. We are grateful for them because it gives with the response from your MP, you can contact a us an opportunity to put more information on the Member of the House of Lords. Would we be bound record. I am pleased to see the noble Baroness, Lady by the same confidentiality as Members of the House Lane-Fox, in her place. I would guess that she was of Commons and by the same provisions? That is not caught out by the pace at which the earlier business clear in that passage, as it specifically refers to Members moved through, like the rest of us, but I hope that we of Parliament with constituencies. may be able to take her points into consideration as part of an ongoing dialogue. I would also like a clarification about the authorisation criteria on page 22. The final one in the list says, I shall try to go through the issues in the order in which the noble Baroness raised them. There is no “for any other purpose prescribed in an order made by the requirement or convention to say that, when there is a Secretary of State”, public consultation, we should eventually publish all with the proviso that it has to enshrine the right to responses to it—for a variety of reasons, not least family life. Does that mean any order on any issue? It because sometimes people have given information that seems to be a very broad power; it would be helpful if they do not wish to be made public. However, as soon the Minister could say something about that. as the intervention was made to which she referred, we Finally, on the Covert Surveillance and Property said immediately that it should be published. We are in Interference Draft Code of Practice, I have a query the process of going back to the 125 or 126 people— about how the role of the surveillance commissioners works. I do not know how many authorisations there Baroness Smith of Basildon: It was 127. GC 21 Regulationof InvestigatoryPowersOrder[10 NOVEMBER 2014] Regulationof InvestigatoryPowersOrder GC 22

Lord Bates: We are going back to the 127 people The noble Baroness asked about judicial approval who are in the course of responding, just to clarify the of undercover deployment, which is a very important position. That will give further comfort to people that issue. RIPA provides a strong set of safeguards to the process has been open. ensure that the powers are used properly and to prevent I am pleased, too, that the noble Baroness welcomed abuses. In addition, the surveillance commissioners, the significant changes that have been made to the who are all retired members of the judiciary, provide code. These highlight genuine concerns that people oversight and approve longer term undercover operations, have had about these issues and raised in other legislative which is the area in which the historical abuses arose. fora, and the need for us to take action. The police and other enforcement agencies deploy undercover officers to deal with some of the most The noble Baroness asked how often the powers are serious violent crimes, to which the noble Baroness used. It may be helpful for the Committee to know referred. A balance needs to be struck between operational that under Part 2 of RIPA and Section 8 of the flexibility and controls which prevent misuse of their Regulation of Investigatory Powers (Scotland) Act, in powers. 2013-14 the number of authorisations by law enforcement for intrusive surveillance was 392; for directed surveillance I think I have covered most points, but I will happy it was 9,664, while for CHIS it was 4,377. Directed to go back and review with officials the remarks of the surveillance authorisations by other public bodies stood noble Baroness. I am grateful that she has made them. at 4,412 and for CHIS at 53. That is quite a large These orders and the codes of practice implement a number, but those who are undertaking covert surveillance small but important part of the process of ensuring account for less than 1% of total police numbers. They that a balance is maintained between effective law are trained to be deployed but they are not necessarily enforcement and universal entitlement to privacy and all on active duty at any point in time. ensure that any improvements which strengthen the regime are reflected in the codes. RIPA requires public 4.45 pm authorities to have regard to the codes of practice, and I know that they are relied upon extensively by On the broader issue on the powers of RIPA, the practitioners as a source of guidance on how to comply Data Retention and Regulatory Powers Act 2014 provides with the letter and spirit of the law. It is essential that for a review of investigatory powers to be undertaken the codes keep pace with changes to the legislation by Sir David Anderson QC, the independent reviewer and I am pleased that they have been brought before of terrorism legislation. He is obliged to report to the the Committee. I commend them to the Committee. Prime Minister by 2015. His review, and that of the Intelligence and Security Committee into privacy and security, will provide the opportunity for debate on the Motion agreed. use, capabilities, oversight and safeguards of the important powers provided for in RIPA. Indeed, that was part of Regulation of Investigatory Powers (Covert the amendment put forward by my noble friend Lord Strasburger during the passage of the Serious Crime Human Intelligence Sources: Code of Bill, when we were able to offer the reassurance that Practice) Order 2014 these issues are under active consideration. Clearly, Motion to Consider however, the Government did not want to pre-empt any specific recommendations which may come forward 4.48 pm from those reviews. Moved by Lord Bates In terms of the distinction between long-term and short-term authorisations, the code of practice notes That the Grand Committee do consider the the change we have made to the authorisation of Regulation of Investigatory Powers (Covert Human long-term covert operations to ensure a higher level of Intelligence Sources: Code of Practice) Order 2014. scrutiny. Operations continuing beyond 12 months must be authorised specifically by the Office of Relevant documents: 8th Report from the Joint Surveillance Commissioners, which provides independent Committee on Statutory Instruments scrutiny of such operations. That is in addition to the provisions under an authorisation from a justice of Motion agreed. the peace and the increase that we propose in the rank of the officer who needs to make such a decision. Committee adjourned at 4.49 pm.

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it has been expanded. Today it is a single transparent Written Statement source of top-level data on all NDPBs, Executive Monday 10 November 2014 Agencies and Non-ministerial Departments. ‘Public Bodies 2014’ also contains an annual update of the progress in rationalising the public bodies landscape, Public Bodies: Reform the savings made and the legacy delivered by the work Statement on the sponsorship and Triennial Review programme, which will continue reform. Lord Wallace of Saltaire (LD): My right honourable ‘Public Bodies 2014’ will be an online publication, friend the Minister for the Cabinet Office and Paymaster available at https://www.gov.uk/government/publications/ General (Francis Maude MP) has made the following public-bodies-2014, and the data set will be updated Written Ministerial Statement. quarterly where applicable. In May 2010, the Government committed to review public bodies, with the aim of increasing accountability Continuing reform for actions carried out on behalf of the state. Nearly We have delivered our promise. The landscape is four years on, I am pleased that the Public Bodies now smaller, more accountable and efficient, with Reform Programme has made excellent progress in the reduced administrative costs, ensuring better value for biggest reform of the public bodies in a generation. money to the public. This remarkable achievement is Earlier this year the National Audit Office commended thanks in no small part to the committed public this progress and “major simplification of the public servants who have embraced the spirit of reform. We bodies landscape”. will continue to work in partnership with the chairs Today I am placing in the Library of the House an and chief executives of public bodies to build on these update setting out progress. It is the first comprehensive achievements. and improve accountability, embracing update since the Public Bodies Act received royal innovation and, most importantly of all, raising the assent in 2011. The achievement now stands at over quality of services. This is efficiency and reform at its 95% of planned abolitions and mergers completed. best - not just cutting costs, but actually finding new and better ways of providing services that people can The Public Bodies Reform Programmes’ successes rely on. include: • Reducing the number of public bodies by over 285 Triennial Reviews provide regular, rigorous review - by abolishing more than 185 and merging over of the form and function of public bodies to guarantee 165 bodies into fewer than 70. that NDPBs exist for a clear purpose, deliver the services their users want, maximise value for money • Improved accountability through bringing the for the taxpayer and do not outlive their useful purpose. functions of over 75 bodies closer to democratically- The Cabinet Office and departments have worked elected representatives. together to apply lessons from the first phase of the • Increased funding from alternative sources and Triennial Review programme, firmly embed good practice volunteering by moving some organisations outside for the next phase and build the Civil Service’s capacity the public sector under innovative delivery models. for good governance of the landscape of arm’s-length • Achieving cumulative administrative spend reductions bodies. as at March 2014 of £2.0bn since 2010. To ensure that departments improve the way they • The programme is now on track to exceed cumulative sponsor public bodies in the long term a sponsorship spend reductions of £2.6bn by the end of March specialism has been established this year for over 2015. 500 officials across Government. Independent analysis Full details of the reforms are available at https:// of the Public Bodies Reform Programme undertaken www.gov.uk/public-bodies-reform. by academic experts at the Universities of Birmingham Today the Cabinet Office is publishing ‘Public Bodies and Sheffield demonstrate that a step change has been 2014’ - detailing the broad range of public bodies achieved in Government capacity to undertake public sponsored by the UK Government. bodies’ sponsorship, but we will continue to work to The ‘Public Bodies’ annual report was first published improve this. by the Cabinet Office in 1980. Initially it reported We are also pressing forward with a review of the on the size, expenditure and membership of Non- classification system for public bodies in order to Departmental Public Bodies (NDPBs), but since 2010 ensure that it is fit-for-purpose.

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they consider that the Greek-Cypriot rejection of Written Answers the United Nation’s Annan Plan in 2004 has had on the right of Turkish-Cypriots to recognition; and Monday 10 November 2014 on what grounds they still subscribe to an international embargo in respect of the Turkish Republic of Cash Dispensing Northern Cyprus. [HL2461] Question The Minister of State, Foreign and Commonwealth Asked by Lord Kennedy of Southwark Office (Baroness Anelay of St Johns) (Con): Over the years, variable progress has been made to reach a To ask Her Majesty’s Government what assessment comprehensive settlement in Cyprus. In 2004, the have they made of the availability in poorer communities Government assessed that the Annan Plan represented of automatic teller machines which do not charge the best available blueprint for settlement. Although customers for withdrawing money. [HL2519] the Greek Cypriots did not accept that plan, UN-led efforts continued. We support the current round of The Commercial Secretary to the Treasury (Lord talks, which resumed in February on the basis of the Deighton) (Con): The assessment made by the Government Joint Declaration agreed by the two communities. A is that 95 per cent of communities in deprived areas comprehensive settlement remains the best way to now have free-to-use ATMs within their area or less address the concerns of both communities, and for all than two thirds of a mile from the area’s centre, which Cypriots to enjoy the benefits of EU membership. has brought access to free-to-use ATMs to over 1.5 million No country, except Turkey, recognises the so-called people. “Turkish Republic of Northern Cyprus”. However, LINK has established a Financial Inclusion the UK strongly supports the ending of the isolation Programme to provide free-to-use ATMs where they of the Turkish Cypriot community. We continue to are needed, by installing ATMs that are subsidised to work with European Commission to promote economic make their operation commercially viable for operators. development and other opportunities for the Turkish The cost of this subsidy is shared out among LINK Cypriots. We would also support measures to increase member banks. 1,400 target areas now have access to trading opportunities for the Turkish Cypriot community, an industry subsidised ATM through the programme. including across the Green Line. Toynbee Hall is due to complete research on this issue shortly, commissioned by LINK. Developing Countries: Health Services Questions Church Schools Question Asked by Lord Avebury Asked by Baroness Eaton To ask Her Majesty’s Government what steps they plan to take to promote integrated healthcare To ask Her Majesty’s Government what impact structures and policy in the United Nations post-2015 assessment they have made of the risk of Islamic development agenda. [HL2444] extremism occurring in Christian schools which teach traditional Christian views about marriage. The Parliamentary Under-Secretary of State, Department [HL2439] for International Development (Baroness Northover) (LD): The UK government supports the inclusion of The Parliamentary Under-Secretary of State for Schools integrated approaches to healthcare in a post 2015 (Lord Nash) (Con): All schools have an important part agenda, as shown through the emphasis on Universal to play in increasing their pupils’ resilience to extremism Health Coverage in the Report of the High-Level and radicalisation and preparing them for life in modern Panel, chaired by the Prime Minister, and its inclusion Britain by promoting the fundamental British values as a target in the proposal of the Open Working of democracy, the rule of law, individual liberty and Group for Sustainable Development Goals. mutual respect and tolerance of those with different faiths and beliefs. The Department for Education has Asked by Lord Avebury not carried out a formal assessment of the risk of To ask Her Majesty’s Government whether they Islamic extremism occurring in the types of schools to plan to promote innovative medical technologies which my noble Friend refers. and product development partnerships as part of the post-2015 development agenda. [HL2445] Cyprus To ask Her Majesty’s Government what is their Question policy on the potential role of product development partnerships in the post-2015 development agenda. Asked by Lord Maginnis of Drumglass [HL2447] To ask Her Majesty’s Government further to the Written Answer by Baroness Anelay of St Johns on Baroness Northover: The UK Government recognises 24 October (HL2012), what is their assessment of the important role of new health technologies and the conduct over 40 years of the UN-led talks on product development partnerships (PDPs) in achieving the Cyprus problem that began in 1975; what impact the Millennium Development Goals and in the post-2015 WA 3 Written Answers[LORDS] Written Answers WA 4 agenda. The UK is the second largest government Full details of the UK’s financial commitments to supporter of this research and will continue to promote the development aid budget are published annually in it along with international partners. ‘Statistics on International Development’ (SID). The most recent version, for 2014 is available online at Asked by Lord Avebury https://www.gov.uk/government/statistics/statistics- To ask Her Majesty’s Government what discussions on-international-development-2014 . they have held with international counterparts on including product development partnerships in the Electoral Register post-2015 development agenda. [HL2446] Question

Baroness Northover: Officials from my Department Asked by Lord Tyler regularly discuss the importance of product development To ask Her Majesty’s Government what action partnerships (PDPs) and the continued important role they are taking to improve electoral registration for technology development in the post-2015 development rates among those attaining the age of 18. [HL2451] agenda. The UK currently chairs the international Product Development Funders’ Group, including both bilateral and multilateral agencies as well as private Lord Wallace of Saltaire (LD): Electoral registration foundations. Officials also participate in the annual is the responsibility of local Electoral Registration Product Development Forum arranged by the Bill and Officers (EROs), supported by the Electoral Commission. Melinda Gates Foundation. To support the transition to Individual Electoral Registration, the Government has invested £4.2 million Asked by Lord Avebury in 2013/14 shared across every ERO in Great Britain To ask Her Majesty’s Government what assessment and 5 national organisations to support the costs of they have made of the outcomes arising from the activities aimed at increasing the rate of voter registration. Department for International Developments-sponsored The Government has also introduced online product development partnerships. [HL2448] registration in Great Britain. As of midnight 28 October, 478,177 16-24 year olds had registered online. The Government has made freely available the Baroness Northover: Public private product development Rock Enrol! resource aimed at engaging young partnerships (PDPs) have been shown to expedite the people in democracy. This is free to download on development of new drugs, vaccines and diagnostic GOV.UK, Guardian Teach and on the Times Educational tests, achieving results faster than either the public or Supplement website. private sectors alone. Prior to the creation of PDPs, only 20 drugs were developed for neglected diseases between 1975 and EU Aid 2000. Since 2000, UK Government funded PDPs have Question developed 19 new products including drugs for malaria, TB, neglected tropical diseases (such as sleeping sickness Asked by Lord Empey and visceral leishmaniasis), one vaccine for diarrhoea To ask Her Majesty’s Government what is (rotavirus) and six new diagnostic tests (5 for TB and the European Union’s annual development aid the first ever rapid diagnostic test for sleeping sickness). contribution; and what is the contribution of each member state as a percentage of gross domestic Developing Countries: Sanitation product. [HL2568] Question The Parliamentary Under-Secretary of State, Department Asked by Baroness Kinnock of Holyhead for International Development (Baroness Northover) (LD): The provisional estimate for net Official To ask Her Majesty’s Government what financial Development Assistance (ODA) for the EU and its commitment they have made in the development Member States in 2013 is ¤ 56.6 million (approximately aid budget to improving sanitation in the last four £44 billion). The ODA contribution for each member years; and what percentage of the development aid state as a percentage of their Gross National Income budget it represents. [HL2449] for 2013 can be found on the European Union website at http://europa.eu/rapid/press-release_MEMO-14-263_ The Parliamentary Under-Secretary of State, Department en.htm. for International Development (Baroness Northover) (LD): Please see the table below for the UK’s financial EU Budget: Contributions commitments to the development aid budget to improve Questions water supply and sanitation for the last four years (statistics are only given for broad sector rather than Asked by Lord Stoddart of Swindon by individual intervention): To ask Her Majesty’s Government whether the Year Spend in £ Spend as % approval of the House of Commons will be sought before the £1.7 billion additional contributions to 2010-2013 £444m 1.9% the European Union are paid. [HL2462] WA 5 Written Answers[10 NOVEMBER 2014] Written Answers WA 6

The Commercial Secretary to the Treasury (Lord the European Commission’s new ¤300 billion Deighton) (Con): Own Resources payments requested investment package which will be borne by the by the European Union can be made by HM Treasury United Kingdom, whether through the European under the European Communities (Finance) Act 2008. Investment Bank or otherwise; and when the United The Prime Minister, in his statement to the House Kingdom will have to pay it. [HL2532] of Commons on 27 October,was clear that the Government will not pay the amount requested on 1 December and Baroness Anelay of St Johns: Exact details of the will challenge this in every way possible. package, including financing, are yet to be determined Asked by Lord Stoddart of Swindon but the European Commission’s Task Force will report to the European Council in December about the next To ask Her Majesty’s Government what effect steps. The UK has a great deal of experience to share they expect the request from the European Union in this area by virtue of our National Infrastructure for a further payment of £1.7 billion to the European Plan and Guarantee Scheme. The Government will Union budget will have on the Autumn Statement inform Parliament about the details at the earliest and the 2015 United Kingdom budget; and whether, opportunity. if paid, it will be financed from additional taxation Asked by Lord Pearson of Rannoch or by further borrowing. [HL2463] To ask Her Majesty’s Government whether at Lord Deighton: The Government adopts the the European Council meeting on 23 and 24 October independent Office for Budget Responsibility’s (OBR) the Prime Minister agreed to the European fiscal and economic forecasts as the official forecasts Commission’s new ¤300 billion investment package for the Budget and Autumn Statement Report. over 2015 to 2017, known as the Strategic Agenda The Prime Minister, in his statement to the House for the Union in Times of Change, or whether he of Commons on 27 October, was clear that Britain was outvoted. [HL2533] will not pay the amount requested on 1 December and will challenge this in every way possible. Baroness Anelay of St Johns: The Strategic Agenda and the European Commission’s proposed ¤300billion investment package are different things. The Strategic EU Economic Policy Agenda for the Union in Times of Change, as agreed Questions by EU Leaders in the June 2014 European Council, Asked by Lord Pearson of Rannoch outlines five priorities to guide the EU over the next five years. These priorities are stronger economies To ask Her Majesty’s Government why paragraphs 7 with more jobs; societies enabled to empower and and 8 of the European Council’s Conclusions of its protect; a secure energy and climate future; a trusted meeting of 23 and 24 October were excluded from area of fundamental freedoms and effective joint action their Statements about that meeting to both Houses in the world. The planned investment package is a of Parliament on 27 October. [HL2530] proposed way to work towards the first of these priorities. Exact details of the package, including financing, are The Minister of State, Foreign and Commonwealth yet to be determined. The European Commission’s Office (Baroness Anelay of St Johns) (Con): Paragraph 7 Task Force will report to the European Council in of the October European Council Conclusions refers December about the next steps. The UK has a great to the first of five priority areas (stronger economies deal of experience to share in this area by virtue of our with more jobs) of the Strategic Agenda for the Union National Infrastructure Plan and Guarantee Scheme. in Times of Change, the EU’s priorities for the next five years, as agreed by EU Leaders in the June 2014 European Council. EU Enlargement Question Paragraph 8 focuses on European Council support for concrete policy actions to boost investment, especially Asked by Lord Stoddart of Swindon the Commission’s proposed ¤300 billion investment initiative, encouraging full use of all existing and To ask Her Majesty’s Government what stance allocated EU resources. The UK successfully pushed they intend to take on the accession of any new for private investment to be a key part of this language. countries to the European Union in respect of such The investment package is currently a policy initiative countries’ ability to be net contributors to the European to be discussed by EU Heads of State at the December Union budget. [HL2464] European Council. The economic growth and jobs that the package aims to stimulate in the economies of The Minister of State, Foreign and Commonwealth EU Member States is of significant importance to the Office (Baroness Anelay of St Johns) (Con): Any future UK economy. UK assessment of the costs and benefits of any future Asked by Lord Pearson of Rannoch accession of a country to the EU would depend on a number of factors including the budgetary impact of To ask Her Majesty’s Government, further to any new accession, the benefits that enlargement can the remarks by the Prime Minister in response to bring in terms of increased opportunities for trade, Cheryl Gillan MP on 27 October (HC Deb, col 36), cooperation against organised crime and greater political when they will inform Parliament of the share of stability in Europe. The impact of accession of any WA 7 Written Answers[LORDS] Written Answers WA 8 new countries to the EU upon the EU’s budget would Iraq Committee of Inquiry depend on the relative wealth of the new Member Question State. Wealthier Member States would be additional net contributors to the EU budget while less wealthy Asked by Lord Lester of Herne Hill Member States, would be net recipients. We support the focus of the European Commission on the need Toask Her Majesty’sGovernment what remuneration for economic convergence to be a central element in is currently paid per day to each member of the the accession process of any candidate country. Chilcot Inquiry. [HL2622] The economic element of the Copenhagen Criteria— the rules that identify whether a country is ready to Lord Wallace of Saltaire (LD): Members of the Inquiry join the EU—provides that, to join the EU, a candidate are paid at the following rates: Chairman—£790 per country must become a “functioning market economy working day; Committee members—£565 per working and have the capacity to withstand competitive pressures day. These rates have not changed since the beginning and market forces within the Union.” of the Inquiry.

Foreign Policy Muslim Brotherhood Question Questions Asked by Lord Maginnis of Drumglass Asked by Baroness Falkner of Margravine To ask Her Majesty’s Government, further to To ask Her Majesty’s Government when they will the Written Answer by Baroness Anelay of St Johns publish the report of the inquiry by Sir John Jenkins on 24 October (HL2012), on what moral or into the activities of the Muslim Brotherhood in humanitarian basis they have developed their policies the United Kingdom. [HL2437] in respect of (1) Bosnians, (2) Palestinians, and (3) Turkish-Cypriots; and what underlying principles Lord Wallace of Saltaire (LD): I refer the noble are being applied in each case. [HL2460] peer to the answer I gave on 13 October, Official Report, Column WA13. The Minister of State, Foreign and Commonwealth Asked by Lord Alton of Liverpool Office (Baroness Anelay of St Johns) (Con): UK interests and values remain at the heart of our foreign policy To ask Her Majesty’s Government when they development. We also take into account international expect to complete their review of the Muslim law (including human rights treaties and obligations), Brotherhood; and whether they intend to publish relevant UN resolutions and applicable provisions of the review’s findings in full. [HL2590] the relevant regional organisations. However, a one- To ask Her Majesty’s Government whether a full size-fits-all approach to countries or territories, or to list of organisations investigated by their review of groups of countries or regions would fail to recognise the Muslim Brotherhood will be made public, together the often varied, complex and unique circumstances in with any recommended actions. [HL2591] which the international community and we are engaged. To ask Her Majesty’s Government whether the Cordoba Foundation, Middle East Eye, British Muslim Insurance Initiative and Interpal have featured in their review Question of the Muslim Brotherhood. [HL2592] Asked by Lord Kennedy of Southwark Lord Wallace of Saltaire: I refer the noble Lord to To ask Her Majesty’s Government what assessment the answer I gave on 13 October 2014, Official Report, have they made of the fees and charges levied by the Column WA13. insurance industry. [HL2520] National Insurance The Commercial Secretary to the Treasury (Lord Question Deighton) (Con): Decisions regarding the pricing of insurance products, including fees and levies charged Asked by Lord Tyler are commercial decisions for individual insurers and the Government does not seek to intervene in these To ask Her Majesty’s Government when they decisions. However, the Government is determined plan to provide a live online service by which citizens that customers should be treated fairly. The Financial may obtain a reminder of their National Insurance Conduct Authority regulates the conduct of the insurance number. [HL2452] industry and requires firms to disclose information on fees to be paid for insurance products. The Commercial Secretary to the Treasury (Lord As part of the Government’s automatic enrolment Deighton) (Con): Her Majesty’s Revenue and Customs reforms, measures have recently been put forward to are exploring options for what information could be cap fees for workplace pensions to 0.75 per cent so presented to an authenticated customer via an online that pensions savings are invested in value for money service as part of a digital tax account. The digital tax schemes. account is a key component of HMRC’s Digital Strategy. WA 9 Written Answers[10 NOVEMBER 2014] Written Answers WA 10

NHS: Drugs The Parliamentary Under-Secretary of State for Schools Question (Lord Nash) (Con): As set out in section 5(2) of the Education Act 2005 (as amended) all state-funded Asked by Lord Lester of Herne Hill schools are subject to inspection by Ofsted. This includes all community, foundation and voluntary schools, To ask Her Majesty’s Government what safeguards community and foundation special schools, pupil referral exist to ensure that the pricing of “specials” drugs units, maintained nursery schools, academies (which prescribed within the National Health Service is includes free schools), city technology colleges, city consistent and non-discriminatory, including when technology colleges for the technology of the arts and prescribed by general practitioners. [HL2433] certain non-maintained special schools approved by the Secretary of State under section 342 of the Education Act 1996. The Parliamentary Under-Secretary of State, Department of Health (Earl Howe) (Con): The Drug Tariff sets out what National Health Service dispensing contractors Orchestras: Northern Ireland will be paid for the products supplied as part of providing Question pharmaceutical services and the fees for providing those services in primary care. Asked by Lord Lexden The current arrangements in the Drug Tariff for To ask Her Majesty’s Government whether they paying for specials were introduced in 2011. The Drug have any plans to hold discussions with the BBC Tariff sets the price that the NHS pays to dispensing about the future funding of the Ulster Orchestra. contractors for dispensing some of the most popular [HL2670] specials. Setting a reimbursement price encourages dispensing contractors to obtain best value for the NHS while also ensuring patients received the medicines Lord Gardiner of Kimble (Con): The Government they need, when they need them. The products listed has no current plans. and their reimbursement prices are agreed with the Pharmaceutical Services Negotiating Committee and Palestinians reviewed regularly. However, due to the number of specials that can potentially be prescribed, it is not Question possible to list a reimbursement price for all available Asked by Baroness Tonge specials. Where the reimbursement price of a product has To ask Her Majesty’s Government what discussions not been set, dispensing contractors are paid according they have held with other European governments to how the product is sourced. Where a dispensing concerning the apportioning of contracts to rebuild contractor buys the product from a specials manufacturer Gazan housing and infrastructure. [HL2479] or an importer, they must claim the invoice price of the pack size used to dispense the product minus any The Parliamentary Under-Secretary of State, Department discounts or rebates received. for International Development (Baroness Northover) NHS England is responsible for commissioning (LD): No such discussions have taken place. pharmaceutical services in primary care and it is for NHS England to consider whether dispensing contractors have acted appropriately. In addition, the General Pensions Pharmaceutical Council is responsible for regulating Question the pharmacy professions should there be any concerns Asked by Lord Taylor of Warwick of professional misconduct. Many hospital pharmacies manufacture their own To ask Her Majesty’s Government what assessment specials on the premises. Any procurement of unlicensed they have made of the risk and impact of people medicines via framework agreements for the use of spending their pensions irresponsibly following changes NHS secondary care establishments in England is to the system to allow them to receive a lump sum; undertaken through tenders governed by the Public and whether they are going to take any steps further Contracts Regulations (2006), as amended, which require to assist pensioners to manage their finances. the procurement to be conducted in a transparent and [HL2471] equitable manner. The Commercial Secretary to the Treasury (Lord Deighton) (Con): The Government believes that individuals should be trusted with their pension savings; it should Ofsted not be for the state to dictate how someone spends Question their savings in retirement. Asked by Lord Quirk The new right to free and impartial guidance at retirement will help savers make confident and informed To ask Her Majesty’s Government whether further decisions on how they use their pension savings, making consideration is being given to extending Ofsted’s sure that they are clear on their retirement income remit to cover all state-funded schools; and if not, options before they make any decisions about what to why not. [HL2620] do with their savings. WA 11 Written Answers[LORDS] Written Answers WA 12

Pupils: Disadvantaged Schools: Immigrants Question Question Asked by Lord Taylor of Warwick Asked by Lord Quirk To ask Her Majesty’s Government what plans To ask Her Majesty’s Government what steps they have to assist those who cannot afford non-core they will take to address the concerns of HM Chief costs associated with state education. [HL2512] Inspector of Education, Children’s Services and Skills, Sir Michael Wilshaw, that schools “faced with an influx of children from other countries” need to be given “the resources and capacity to deal with it”. [HL2621] The Parliamentary Under-Secretary of State for Schools (Lord Nash) (Con): The Department for Education The Parliamentary Under-Secretary of State for Schools recognises that meeting the incidental costs of state (Lord Nash) (Con): As part of our plan for education education can be a challenge for some low-income the Government is ensuring that local authorities have families. We already have a range of policies in place the resources and flexibility to provide the school to help ensure that all children benefit from a good places needed by their communities. education, regardless of their background, and to We are giving councils £5 billion to spend on new support low-income families with the non-core costs school places over the course of this parliament and of education. have announced a further £2.35 billion to create the The additional funding provided to schools through places needed by September 2017. This has already the pupil premium is helping schools to transform the enabled local authorities to create 260,000 additional way they educate disadvantaged children. Schools are pupil places between May 2010 and May 2013, with made accountable for this additional funding, worth many more in the pipeline for September 2015. £2.5 billion this year and protected in real terms next Funding for the day-to-day running of a school is year, through performance tables and Ofsted inspection. based primarily on the number of pupils in the school. A recent Ofsted report showed that this policy is Local authorities are able to allocate additional funding working, and schools are using the funding more for pupils with particular needs – including pupils for effectively than ever before. whom English is not their first language. In addition, the Department has invested £340 million to support cultural education and announced an Schools: Standards additional £18 million funding boost for music education, giving thousands more disadvantaged pupils access to Question instruments. Asked by Lord Trefgarne The Department issues very clear guidance to schools To ask Her Majesty’s Government whether they which seeks to minimise the impact of school uniform intend to withdraw practical courses in agriculture costs and emphasises the need for schools to consider and horticulture from assessment towards school the cost and availability of uniform when setting their league tables. [HL2581] policy. Individual local authorities and academies may choose to provide grants to help with the cost of The Parliamentary Under-Secretary of State for Schools school clothing in cases of financial hardship, and we (Lord Nash) (Con): The Government has no such plans. would also encourage individual schools to consider There are 20 qualifications in agriculture, countryside running their own schemes. management and environment sustainability for 16-19 year The Department has also published advice on charging olds that meet the Government’s quality standards for for school activities to support schools in fulfilling reporting in school and college performance tables. their statutory duties in relation to charging and remission The Department for Education is currently considering for school activities and school visits. This guidance qualifications for teaching from September 2015, and advises schools to make it clear to parents that there is we are hopeful that new land-based provision will be no obligation to make any contribution. As ever, schools approved against our standards for 14-16 year olds. have the discretion to use their additional funds to help with the cost of visits and activities for pupils whose families cannot afford it. Turkey Question Finally, from 1 September the Government has expanded free school meals to all children in reception, Asked by Lord Harris of Haringey year 1 and year 2. As a result, up to 100,000 more poor To ask Her Majesty’s Government what children are benefiting from a healthy and nutritious representations they have made to the government meal every day, saving low-income families around of Turkey about its plans to conduct seismic surveys £400 per year per child. within the Exclusive Economic Zone of the Republic We know that education is the key to breaking the of Cyprus from 20 October to 30 December this intergenerational cycle of poverty. As a Government, year; and what are the implications of the actions we are committed to ensuring that all children, regardless of that government for the United Kingdom’s Treaty of background, benefit from an education which allows of Guarantee obligations to the Republic of Cyprus. them to achieve their full potential. [HL2434] WA 13 Written Answers[10 NOVEMBER 2014] Written Answers WA 14

The Minister of State, Foreign and Commonwealth Office The Minister of State, Department for Transport (Baroness Anelay of St Johns) (Con): Our Ambassador (Baroness Kramer) (LD): Operators undertaking in Ankara has conveyed UK concerns to Turkey about commercial aerial work using Remotely Piloted Aircraft plans to conduct commercial seismic surveys in the need the permission of the Civil Aviation Authority Republic of Cyprus’ Exclusive Economic Zone. This (CAA). The CAA keeps a record of permissions given ongoing dispute puts at risk UN-facilitated efforts to to those operators. reach a comprehensive settlement. We and our partners will continue to urge the parties to reduce tensions, and we strongly support the resumption of settlement talks. The regulation of small unmanned aircraft is The UK’s commitments under the Treaty of Guarantee specifically covered by two articles within the Air are unchanged. Navigation Order, which legislate for the ‘general’ flying aspects and the flight of those equipped for Unmanned Air Vehicles surveillance. However, as well as these specific articles, Question a more general article, which prevents a person ‘causing or permitting an aircraft to endanger the safety of any Asked by Lord Condon person or property’, also remains applicable. To ask Her Majesty’s Government how they are monitoring the growth in use of unmanned aerial vehicles (″drones″); and whether they consider the We do not believe that any additional regulatory current legal framework is adequate for the purpose changes are needed to ensure adequate privacy and of regulating the use of drones. [HL2438] data protection.

Monday 10 November 2014

ALPHABETICAL INDEX TO WRITTEN STATEMENTS

Col. No. Col. No. Public Bodies: Reform ...... 1

Monday 10 November 2014

ALPHABETICAL INDEX TO WRITTEN ANSWERS

Col. No. Col. No. Cash Dispensing ...... 1 Iraq Committee of Inquiry...... 8

Church Schools ...... 1 Muslim Brotherhood...... 8

Cyprus...... 1 National Insurance...... 8

Developing Countries: Health Services...... 2 NHS: Drugs ...... 9

Developing Countries: Sanitation...... 3 Ofsted...... 9 Orchestras: Northern Ireland...... 10 Electoral Register ...... 4 Palestinians...... 10 EU Aid...... 4 Pensions...... 10 EU Budget: Contributions...... 4 Pupils: Disadvantaged ...... 11 EU Economic Policy ...... 5 Schools: Immigrants...... 12 EU Enlargement...... 6 Schools: Standards ...... 12

Foreign Policy...... 7 Turkey ...... 12

Insurance...... 7 Unmanned Air Vehicles...... 13 NUMERICAL INDEX TO WRITTEN ANSWERS

Col. No. Col. No. [HL2433] ...... 9 [HL2452] ...... 8

[HL2434] ...... 12 [HL2460] ...... 7

[HL2437] ...... 8 [HL2461] ...... 2

[HL2438] ...... 13 [HL2462] ...... 4

[HL2439] ...... 1 [HL2463] ...... 5

[HL2444] ...... 2 [HL2464] ...... 6

[HL2445] ...... 2 [HL2471] ...... 10

[HL2446] ...... 3 [HL2479] ...... 10

[HL2447] ...... 2 [HL2512] ...... 11

[HL2448] ...... 3 [HL2519] ...... 1

[HL2449] ...... 3 [HL2520] ...... 7

[HL2451] ...... 4 [HL2530] ...... 5 Col. No. Col. No. [HL2532] ...... 6 [HL2591] ...... 8

[HL2533] ...... 6 [HL2592] ...... 8 [HL2620] ...... 9 [HL2568] ...... 4 [HL2621] ...... 12 [HL2581] ...... 12 [HL2622] ...... 8 [HL2590] ...... 8 [HL2670] ...... 10 Volume 757 Monday No. 55 10 November 2014

CONTENTS

Monday 10 November 2014 List of Government and Principal Officers of the House Introduction: Baroness Janke...... 1 Questions Asylum Seekers: Mental Health...... 1 Underoccupancy Charge: Carers...... 4 Leaseholders...... 6 Olympics 2016...... 9 Draft Protection of Charities Bill Membership Motion ...... 11 Criminal Justice and Courts Bill Third Reading...... 12 EU Budget Surcharge Statement...... 27 Infrastructure Bill [HL] Report (3rd Day)...... 31 Grand Committee Immigration Act 2014 (Bank Accounts) Regulations 2014 Motion to Consider ...... GC 1 Immigration Act 2014 (Bank Accounts) (Amendment) Order 2014 Motion to Consider ...... GC 6 Immigration Act 2014 (Bank Accounts) (Prohibition on Opening Current Accounts for Disqualified Persons) Order 2014 Motion to Consider ...... GC 6 Statutory Shared Parental Pay (General) Regulations 2014 Motion to Consider ...... GC 7 Maternity and Adoption Leave (Curtailment of Statutory Rights to Leave) Regulations 2014 Motion to Consider ...... GC 14 Shared Parental Leave Regulations 2014 Motion to Consider ...... GC 15 Regulation of Investigatory Powers (Covert Surveillance and Property Interference: Code of Practice) Order 2014 Motion to Consider ...... GC 15 Regulation of Investigatory Powers (Covert Human Intelligence Sources: Code of Practice) Order 2014 Motion to Consider ...... GC 22 Written Statement...... WS 1 Written Answers ...... WA 1