House of Commons
Friday 25 January 2008
The House met at half-past Nine o’clock
The Chairman of Ways and Means took the Chair as Deputy Speaker, pursuant to the Standing Order.
Orders of the Day
Planning and Energy Bill
I beg to move, That the Bill be now read a Second time.
I am grateful for the wide support that the Bill has received, not only from my co-sponsors from all parts of the House, but from those councils at the forefront of good energy practice, the Local Government Association and our energy industry, which is ready and willing to help meet the challenge of climate change.
This is not a big Bill, but it does one important thing: it will enshrine in law, I hope, the so-called Merton rule, which I shall describe in more detail. Back in 2003, the London borough of Merton adopted in its local planning documents the policy that, for new developments, at least 10 per cent. of the new energy required must come from renewable or low-carbon sources on or near that development. The aim was to reduce the amount of energy that had to be brought in from miles away and to encourage microgeneration and more energy-efficient buildings, which would use less energy in the first place.
The Bill therefore gives Merton-style planning policies statutory protection. I should emphasise that it does not compel other councils to follow Merton, although around 100 are doing that. I should add—perhaps because the ghost of our late colleague Eric Forth seems to haunt this place on Fridays—that the Bill does not compel anybody to do anything. What it does is to put on the statute book the ability of a council to adopt a Merton-style policy, if it wants to do so. Without the Bill, councils will be left uncertain as to whether the policies that they adopt will remain legal.
Nothing illustrates that uncertainty better than the shifting position of central Government since Merton originally adopted its policy. I welcome the Minister to the Dispatch Box, but Ministers have blown hot and cold on Merton policies. First they encouraged Merton; then last summer we heard a new draft planning policy statement that seemed to back off. It looked as though borough-wide policies might be excluded or even that off-site energy might be included. Then last month, three weeks after I had sent a copy of the Bill to the then Minister, the latest text of the planning policy statement appeared, which said that borough-wide policies could be included and that off-site energy supplies would definitely be excluded.
I welcome that improvement, but there has been too much to-ing and fro-ing, and we are still not clear about what central Government’s final position will be. We now have the guidance to follow that planning policy statement, and all the lobbying and counter-lobbying will begin all over again. The whole point of the Bill is to get away from all that and give councils the certainty that they need, so that they are no longer dependent upon a supportive Minister or at the mercy of the latest lobbying of No. 10. The Bill therefore sets out, very simply, that councils can—not must, but can—set a minimum requirement for local energy generation and energy efficiency standards that are higher than the minimum.
The big volume house builders would of course prefer a single set of rules for the whole country; but I want to be clear to the House that I would not be promoting the Bill if I thought that it would inhibit the future development of new affordable housing.
Will my hon. Friend take it from me, at the user end in the rapidly expanding town of Daventry, that I can recall no objections from home owners or purchasers to the use of enhanced planning powers? Nor have I encountered any representations from the developers who are developing the town about the difficulty of meeting the council’s requirement.
I thank the hon. Gentleman for giving way and, even more, for bringing forward the Bill, which I very much support. Its origins lie partly in the difficulties that Cambridge city council encountered in setting policies higher than the national standard. Does he agree that it is no objection to the Bill that it might lead to different standards? There is already a different standard between publicly supported house building and the private sector, because on the social housing side, the Housing Corporation already requires higher standards. One could therefore argue that the Bill will allow the same standard to be set for all sorts of housing.
I am sure that that is true. The hon. Gentleman makes a helpful point. I am well aware of Cambridge city council’s position on this. Of course, a borough-wide policy sets a more even standard than the setting of individual requirements for individual developments within a borough or city.
I would not be promoting this Bill if I thought that it would inhibit housing generally. I have made inquiries of Merton borough council, and it has assured me that no developer has ever had any difficulty in coping with its requirements. Let us look at the facts. Merton’s policy is four years old, and its housing target—set by the Greater London authority—states that it must build 430 new homes each year. Since the policy was adopted in 2003, the actual annual totals of new homes constructed in Merton have been 484, 497, 546 and 528. So there is no evidence there that the policy inhibits the growth of new housing.
I rise to support my hon. Friend’s point, having been a councillor in Merton before being elected to this place. I support the forward thinking of the council in introducing that measure, which was unusual for the time. I should like to confirm that there have been no problems with the planning procedure or with the building of new houses there.
The House has just heard the voice of Merton, and my hon. Friend fully supports the position that I have just set out.
Let us also remember that the percentage for new housing set by Merton is not 90 per cent. or 80 per cent. or even 75 per cent. It is only 10 per cent. So this measure cannot be something that will over-excite the volume house builders. Indeed, some other house builders have told me that they can achieve a premium for houses built under these policies, and that they have no difficulty in doing so.
Let me turn to some of the specific issues raised in the Bill. I want to emphasise that I am very happy to meet any concerns about the drafting of any part of clause 1 in Committee, if the House allows the Bill to proceed today. In respect of the definition of part of the proposed development, of course I want it to include near-site as well as on-site, provided that that is connected to the development. I also want to assure developers that this must involve a dedicated supply. They would not necessarily be required to supply energy over a much wider area.
The provision in clause 1(c) will incentivise councils to reach beyond the minimum building standards, and of course I should like to see that aligned with Government policy on the code for renewable energy. I also want to point out that, as set out at the beginning of clause 1, the whole of my Bill is subject to the test of reasonableness. Developers and house builders will not—cannot—be required to do anything that is unreasonable. In any event, they will be fully consulted in the drawing up of the local development plans to which my Bill refers.
In the final analysis, Ministers will still have control. It is for Ministers to approve local development plans, and when individual planning applications are taken to appeal the Secretary of State sends her inspectors in to rule on them. I am therefore disappointed that I have not yet heard that Ministers are fully supportive of the Bill, especially as it is they who want all new homes to be zero-carbon by 2016. That is only eight years away, after all. I want local councils to help us to meet that challenge. I fear, however, that Ministers still think that can be done by central prescription.
This is not a big Bill, but it involves a clear difference of approach. Ministers seem to want circulars, statements and guidance; they seem to want revision after revision and draft after draft.
I congratulate my hon. Friend on introducing the Bill, which, as he knows, has support on both sides of the House. He has just referred to the attitude of Ministers, and it is mysterious that there seems to be a lack of clarity in that regard. Presumably, he has had discussions with Ministers about the Government’s approach to the Bill. Has he been encouraged or discouraged by those discussions?
I do not want to refer too much to private meetings, but yes, the House should know that I have had discussions with Ministers. As soon as I had finalised the draft of my Bill, I thought it right and courteous to send a copy to the Minister concerned, and I did so in November. There was a subsequent meeting. I claim no particular prescience, but one of the points that I made at that meeting was that Ministers come and go. Last night, that Minister went, which is a little unfortunate.
There is a point to that. Circulars are succeeded by other circulars, and guidance is succeeded by other guidance. A planning policy statement, even when finalised, will be succeeded in two or three years by another planning policy statement. My Bill backs a better route. It puts councils in the driving seat. It also encourages a measure of competition by emulation. More than 100 other councils have already followed Merton’s lead.
My council has a problem that I am sure is common to many rural councils. Does my hon. Friend think that his Bill would be capable of amendment in Committee to address the anomaly whereby people living in areas of outstanding natural beauty who wish to put a solar panel on their roof have to pay £135 and apply for full planning permission? People who do not live in an AONB do not have to do that, as long as their roof does not face a road. Such details present a real disincentive. Does my hon. Friend believe that we could address that matter in Committee?
Yes, I do. That is exactly the kind of issue that the Committee stage is designed for. We could certainly look at that kind of detail, and at some other issues, such as new building in agricultural and conservation areas, where some of these targets and requirements might be harder to meet. Those matters can certainly be taken up in Committee, and perhaps my hon. Friend would like to take part in that by agreeing to serve on the Committee if the Bill makes progress today.
As I have said, the Bill takes a different approach. The last Minister said that she backed local power schemes. The Bill backs local powers. If we are to meet the challenge of climate change, this cannot just be a matter for central Government. We need to have our local communities out in front, helping to meet that challenge. We are all in this together, and I urge the House to back localism and give the Bill a Second Reading.
I congratulate the hon. Member for Sevenoaks (Mr. Fallon) on coming first in the ballot and, even more importantly, on choosing this issue as the subject for his Bill, which I wholeheartedly support. Perhaps that is no surprise, as it is remarkably similar to my private Member’s Bill of last year. It has a much snappier title, however, and I congratulate the hon. Gentleman on that. When my Bill fell by the wayside, I sought to achieve exactly the same objectives through an amendment to the Local Government and Public Involvement in Health Bill, although that attempt also sadly failed.
My objectives are exactly the same as those set out in the short Bill before us today. It is an enabling measure. As the hon. Gentleman said, it would not make anyone do anything. It would free local authorities to help to combat climate change using planning policy. It would allow councils to set higher standards for energy efficiency in their development plans than those laid down in building regulations, and allow them to make provision for sustainable energy and microgeneration requirements in the same document.
That approach has wide support across the House. An early-day motion supporting this kind of legislation was signed by more than 300 Members last year. It also has wide support outside the House, from local government, the sustainable energy partnerships, the Royal Institute of British Architects, the Royal Institution of Chartered Surveyors, the Socialist Environment and Resources Association and, of course, from its primary supporters, the Association for the Conservation of Energy and the Micropower Council.
The Bill is about empowerment, but it is also about encouragement. Climate change is undoubtedly the greatest challenge facing the planet now—perhaps the greatest challenge that it has ever faced. We need every level of government, including local government, to play its part in meeting that challenge. Following the lead of councils such as Woking and Merton, this Bill points planning authorities in the right direction of setting high environmental standards for new developments, residential and non-residential alike.
This Government’s policy of making all new homes zero-carbon by 2016—and the Prime Minister’s proposal for new eco-communities—is excellent and we should all support it, but to turn the concept into reality, we need more examples of low and zero-carbon homes than the present small number of experimental buildings, including those about to be constructed. We need them very soon and local authorities can, if enabled to do so, make that happen in planning policy development. As the Government’s renewables advisory board said in November:
“The zero carbon policy is longsighted and bold and could produce big environmental benefits in existing and new homes if it is used to accelerate the development of decentralised energy services and technology. However”—
I am grateful to the hon. Gentleman for giving way and I would like to record Plaid Cymru’s full support for the Bill and the principles enshrined within it. I would like to ask him about what may seem a technical constitutional point, but we are talking about decentralising power. Does he agree that it would be worth looking further in Committee into conferring framework powers on the National Assembly, which could be a better means of achieving the Bill’s objectives in Wales?
The hon. Gentleman raises a very good point. He knows that, as a fellow Member representing a constituency in Wales, I am a committed devolutionist. I realise that the Bill talks about England and Wales, but the most appropriate way to move forward, especially given that the Minister with responsibility for planning is currently consulting on combating climate change, would be to provide for those framework powers in the Bill.
I am curious why the hon. Gentleman believes that the Government will not support the Bill. We have seen not a twitch from the Minister, yet at a time when the UK has been set a 17 per cent. target for renewable energy and we are achieving only 2 per cent. can the hon. Gentleman think of any reason why his party in government will not support this excellent Bill?
I think I know what the Government will say—that the ground is already covered in planning policy statements—but I shall come on to say that I do not accept that. When my Bill and amendments were up for discussion, I met Ministers and their civil servants many times, but I never really received a satisfactory answer to the question that the hon. Gentleman has just put to me.
Let me continue to quote what the renewables advisory board said:
“However the Government’s current timescale postpones much of the hard work until 2016, with little opportunity to learn or build capacity in the UK onsite renewables sector in the next eight years. If left unaddressed this could slow house building but we think there are options to overcome this supply gap. This includes using the planning system to require earlier uptake of renewable energy in larger housing developments.”
Up until now, there has been great uncertainty in local government about whether it can or cannot set higher standards. The Bill’s supporters certainly advocate that it should.
Government planning inspectors responsible for overseeing the development plan process have sent out extremely mixed messages. For example, Reading was allowed to specify thermal performance requirements at least 12 per cent. higher than required in building regulations, but Cambridge was made to water down its planning policy, which required large developers to provide evidence of how they had minimised energy consumption and maximised energy efficiency and to consider the feasibility of using combined heat and power systems. To that, the planning inspector said that it was
“unreasonable to the extent that it imposes more onerous requirements than the Building Regulations”.
The same line was taken by the Government office for the east of England when Bedford borough council wanted to reduce CO2 emissions by 10 per cent. more than in the building regulations in certain developments. We need clarity and active encouragement for ambitious standard setting.
We are now in a different position from last year because we have the planning policy statement on climate change published in December. That was welcome and certainly moves us in the right direction of travel. It says that councils will be expected to provide for onsite renewables and local community energy schemes to cut carbon emissions in new developments. In the Department for Communities and Local Government press release and, indeed, in letters to myself and other Members, it is claimed that the PPS builds on the Merton rule, which requires all new non-residential developments above a certain size to generate at least 10 per cent. of their energy on site from renewable sources. Then there is the Mayor of London’s plan to double the renewables share of UK electricity supply from the 2010 target of 10 per cent. to 20 per cent. by 2020. That all sounds very good and I suspect that the Minister will argue that there is consequently no need to enact the Bill.
Unfortunately, I do not believe that. The problem is that the policy statement is unlikely to match in achievement the rhetoric that has accompanied it. It contains too many caveats and hurdles to jump over, which will put off all but the most committed local authorities from going for higher standards in their development plans, and it provides loopholes for developers. In reading it, I gained the impression that minimising carbon emissions through planning policy comes a poor second to making development happen. When they set their targets, councils have to
“have regard to the overall costs of bringing sites to the market (including the costs of any necessary support infrastructure) and the need to avoid any adverse impact on the development needs of communities”.
In respect of housing development and when setting development area or site-specific expectations, councils need to
“demonstrate that the proposed approach is consistent with securing the expected supply and pace of housing development shown in the housing trajectory required by the Housing Planning Policy Statement of 2006.”
My real fear is that those conditions will be used by some planning inspectors to overrule provision in some local development plans for challenging targets for renewables or other carbon reduction requirements. My even greater fear is that it will deter planning authorities from being as ambitious as they would like. I am also still concerned about the provision for off-site generation of green energy by a developer instead of the on-site generation stipulated in Merton. If that approach is chosen by developers, as I suspect it often will be, we will end up utilising renewables that would have been built anyway, so it does not, in the end, increase green energy capacity. That said, much in the PPS is good and I wish it well, but I do not accept that it obviates the need for this Bill to become law.
Underlying the resistance to this measure—and, indeed, the caveats in the PPS—is a fear of what councils will do if they are empowered in the way we want them to be. That fear is misplaced and wrong-headed. Councils will not want to deter economic development within their own boundaries, nor prevent the provision of new homes for their citizens. They will weigh up all the factors and set realistic and measured targets. We need reflect only on how things have worked out in green leader councils such as Merton, Woking, Croydon, Knowsley, Calderdale, Sefton, Norwich and many others that the hon. Member for Sevenoaks mentioned to see that this can be done—and done responsibly. Indeed, in making the case for my Bill last year, we asked DCLG officials to provide us with evidence of local authorities that had prevented progress by setting higher environmental standards. We are still waiting for those examples.
I hope that this Bill receives its Second Reading today. Yes, it will need to be amended in Committee to address Government concerns, but I am sure that it can provide a useful weapon in combating climate change. We should not reject it.
It is a pleasure to speak in favour of the Bill. The House is rightly focused on the issues of climate change and planning, which is exactly what the Bill does in highlighting those two critical issues.
I welcome the three main objectives set out in the Bill. Hon. Members will have noticed that clause 1 states that a local planning authority
“may…specify that any person making an application for planning permission should include such reasonable provision”,
going on to list the three areas in which it applies. I emphasise the word “may”, which means that the Bill is not prescriptive, but provides local authorities with the flexibility they need to implement policies that are appropriate to their areas. Broadly speaking, we are all supportive of that and the Secretary of State for Communities and Local Government has repeatedly stated the importance of allowing local authorities to take their own decisions.
The hon. Member for Gower (Mr. Caton), who ran with the issue before—I hope that this Bill receives more success—said that the Bill makes nobody do anything. Normally, I would object to that in principle, but in this case it is entirely right, as the Bill provides flexibility to local authorities. The Bill sets out the powers that a local authority would have to specify the generation of energy from renewable sources, the generation of low-carbon energy and an appropriate and more challenging energy efficiency standard for any proposed development in its area.
The hon. Member for Sevenoaks (Mr. Fallon) rightly indicated that the Bill might require refinement, as is often the case with private Members’ Bills. Regrettably, Back-Bench Members do not have the same level of resource as Ministers when they prepare Bills. This process should provide the opportunity to refine the Bill if the Minister feels that it is not as precise as it should be.
All Members will appreciate why the Bill is needed. Since 1997, CO2 emissions have gone up. Far from tackling what is, in the words of the Government’s chief scientific adviser, the “biggest challenge we face”—a real global threat—we have seen CO2 emissions rising. The Bill would help in that respect.
The Bill would also counter the potential impact of the Planning Bill. I do not know how closely Members have been following that Bill, but part of it would set up the infrastructure planning commission. If the Government get their way, the IPC will authorise up to 50 large-scale infrastructure projects a year. There is a real concern that the safeguards in that Bill in relation to environmental issues are weak. The IPC might allow through a raft of significant developments such as nuclear power stations or airports, which will have a very negative impact on climate change. This Bill will counterbalance that by tackling CO2 emissions in local developments.
This Bill will also help the Government face the very tough task of meeting the targets set by the European Union. Other Members will have looked at the research paper helpfully produced by the Library, and will be as familiar as I am with the table on page 10 setting out the UK’s achievement in generating electricity from renewable energy in comparison with other EU countries. I am afraid to say that the UK performs very badly. A few countries are doing worse than we are—Malta, which has no figures, Estonia, Belgium and Poland. But the list of countries doing better than the UK includes the Czech Republic, Hungary, Ireland, Greece, Bulgaria, Romania, Latvia, Sweden and Austria. The UK is performing exceedingly poorly in providing more electricity from renewable sources.
The Bill is also necessary because it allows local authorities to introduce tougher energy efficiency standards. Again, our performance in that regard is, I am afraid, pathetic. Members are probably sick to death of references to BedZED, a zero-energy development in my constituency. Its first occupiers moved in four years ago, but it is still an exemplar of its type. All aspects of the development, from using recycled materials in its construction, through to triple glazing and the highest energy efficiency standards, with green roofs and so on, minimise energy use. I remember BioRegional, the developers, coming to my surgery nearly nine years ago, and yet the UK has made little progress since then.
Does my hon. Friend agree that the evidence from the continent, particularly Germany, is that when large numbers of new homes with microgeneration and substantial energy efficiency measures are built, the cost comes down dramatically? The Government should therefore be far more resistant to the lobbying calls of the big house builders, and far more open to a substantial increase in such build, so that we can get the economies of scale and the energy savings that would offset the extra building costs.
I agree entirely with my hon. Friend’s comments. More imagination is also required to allow certain smaller schemes to go ahead. Russell Smith, a constituent of mine, gutted his brick-built semi-detached property, which is typical of the UK housing stock that will be with us probably for the next 50, 60 or 70 years, and installed a range of insulation measures, panels and so on to demonstrate how a property of the type that most people live in could be transformed suitably into an energy-efficient dwelling. He was frustrated in his attempt to get permission to install a small combined heat and power plant, and ended up having to give up on that, as it proved too complex. We need to look at what is happening abroad and ensure that we are more flexible in our approach.
It is a regret not that the Merton rule exists but that it is called the Merton rule. It is significant that one local authority in the UK has given us the name Merton rule as a way of describing local authorities that are taking the lead environmentally. I doubt very much whether Germany has something called the Munich rule or the Hamburg rule, because all local authorities there are involved, and there is no need to point to one local authority that is way in advance of all the others.
I understand the hon. Gentleman’s point, but is it not encouraging that so many other councils in the country are adopting the Merton rule—well over 100? Does that not provide further evidence of support among the local authority community for the Bill that we are debating?
I agree entirely with the hon. Gentleman’s comments. Many other local authorities are following Merton’s lead and taking the lead in other respects in relation to the environment. Many of those authorities, whether Merton or my local authority, Sutton, which is the neighbouring borough to Merton, have been mentioned today. It is still significant, however, that we often think of individual authorities taking the lead. In many respects, the energy efficiency standards or building regulations are deficient or at least not challenging enough.
The Bill addresses energy efficiency standards and clears up the uncertainty that surrounds the Merton rule. In response to a number of questions and interventions, DCLG Ministers have given assurances that there is no threat to the Merton rule. The experience on the ground, however, is that some local authorities find it difficult, or are reluctant to use it, to provide the level of renewable energy provided in Merton.
I do not want to detain the House any longer. I want to see the Bill proceed. It is a short Bill that would make a huge difference to the UK’s ability to tackle CO2 emissions and climate change, and I hope that it will receive its Second Reading today.
It is customary to congratulate the Member who wins the ballot. I have always wondered why we do that—I would rather have won the ballot myself—but I do congratulate the hon. Member for Sevenoaks (Mr. Fallon) on choosing this topic. I was happy to lend my name to this brief, modest and reasonable Bill.
The Bill calls for a bit of reverse engineering in our approach to tackling the challenge of climate change, rather than leaving everything to top-down targets without thinking about the mechanisms that are needed on the ground floor. The very first word—“enable”—is probably the most important. The Bill is intended not to tell, not to spend, not to force, but to enable. It contains another word that I hesitate to mention, the word “reasonable”. I know that we can spend hours, weeks and years in this place debating what it means to be reasonable, and I hope we will not get into the semantics now, but I think that the intention in this instance is more than clear.
We sometimes underestimate the hugeness of the challenge of climate change to our politics, our public institutions, to private business and to our personal behaviour. It covers the waterfront. Ipsos MORI recently published a review of the year which I think was sent to Members, although I was not able to lay hands on it yesterday. One of the centre-spreads featured attitudes to climate change. The general conclusion was that people in Britain now accept that there is a problem and accept that human behaviour is making a difference, which was not the case five or 10 years ago. When it comes to dealing with the problem, however, a gulf emerges. The survey exposed the fact that apart from doing a little bit of, dare I say, recycling—perhaps changing light bulbs—most of us are “armchair environmentalists”. We demand that the Government do something rather than doing anything ourselves, while issuing the caveat that whatever the Government propose we will oppose, and thus we make no progress whatever. The purpose of the Bill is not to focus on the great big problem and leave it nebulous, or to ask the Government to do everything, but to concentrate on what local government can do and enable it to build in the capacity to meet its targets.
I approved of what the hon. Member for East Surrey (Mr. Ainsworth) said in his intervention. We ought to acknowledge that local authorities are getting ahead of the Government on this issue, and engage in a stronger dialogue with them about what they can achieve at ground-floor and local-community level. The aim of the Merton rule, which has been widely known and accepted for more than four years and has been copied by over 100 local authorities, is to persuade developers to obtain at least 10 per cent. of any new building energy from renewable sources.
I know about the BedZED project, but there are quite a few other projects scattered across Britain. There are combined heat and power and energy-efficiency projects, and experimental schemes initiated by architects going all the way back to Susan Rolfe’s experimental house with solar panels in Oxford. Such development is patchy, however. The Bill is intended to achieve some co-ordination so that best practice can be shared, and authorities can learn about what is going on elsewhere and proceed in a positive fashion.
I jotted down a phrase that the hon. Gentleman used earlier. He said that what was needed was more imagination, political and practical. We also need to take more cognisance of developments in science and technology, and experiment a bit more. It might mean failing some of the time, but we might also achieve our aims more quickly. The 10 per cent. target will be hard to achieve without co-ordinated action on the part of all local authorities.
The Bill’s purpose is to enable all local authorities to set renewable and low-energy targets for new developments. That could apply not just to individual buildings, but to complexes. Without the Bill, I can envisage the game being played in the opposite way. Without a mandate to get on with meeting the 10 per cent. target, it could be challenged by people who would say “We will hold up the planning process because you are trying to suggest that we do something that we know we do not have to do.” The whole process could be stalled and blocked by authorities pulling us in the opposite direction from the best-practice councils gathered around Merton.
Let me pursue the point made by the hon. Member for Carshalton and Wallington (Tom Brake) about imagination. When I was Minister for Energy and Industry between 1997 and 1999, we published a report on renewable energy. It did not quite catch the zeitgeist—I am pleased that we have moved on in the past 10 years—but at the time I went to Northumberland to see a project on a council estate consisting of about 3,000 houses. The developers had adopted almost a traditional village-green approach: using brilliant engineering and science, they had managed to blend in a complex of renewable microgeneration in the centre of the estate, using energy from waste, wind power and biomass. Rather than depending on a wind farm, which would produce nothing when the wind did not blow, they were able to “cross-reference” energy sources.
That approach has not been considered more widely. In general, people are opting for single-issue solutions. Given that there is no single source of energy that could be described as perfectly pure and green, why not blend sources together and create new possibilities like the developers of that estate in Northumberland, which was kept warm by a complex of renewable energy sources?
Hospital waste cannot be buried. I had a furious row with some “deep greens” who said “We cannot burn hospital waste.” Well, hospital waste must be burnt, but why not install a combined-heat-and-power station in the hospital and use energy from the waste to heat it? That has already been done at St James’s University hospital in my city. We need more imaginative application at local level if we are to get anywhere near our targets.
It has been said that the Bill is about individual buildings. I think back to that community in the north-east, because in my view the Bill should be about communities. The hon. Member for Eastleigh (Chris Huhne) mentioned cost. In Leeds there are still rows and rows of terraced houses—classic terraced streets with washing hanging across them—but their ownership is mixed. A terraced house there could be owner-occupied, owned by a landlord, or a council miscellaneous property. In the past, if new roofs were needed it was not a case of putting a roof on one house, leaving a gap because a roof could not be afforded for the next house, putting on another roof, leaving another couple of gaps, putting on another roof and so on all along the terrace. There was a scheme enabling the whole terrace to be repaired—roofs, doors and windows. It was called “enveloping”.
The same system could be applied to renewable energy, including solar energy for heating water. I know that January has not been a brilliant month for sunshine, but although most people do not realise it, what is needed for solar energy is not bright sunshine but light in general. We could improve whole communities and rebuild neighbourhoods: we could build renewable energy into neighbourhoods.
I am still thinking in terms of imagination. A report published by the Department for Business, Enterprise and Regulatory Reform and Ofgem suggests that we should view the distribution of energy in Britain very differently. We should not think of the system as a grid, although it is one at present. How can we build microgeneration into it? We might not need buried cables and power lines stretching across the country in future; instead, the system could function at micro level. The Government have already made good progress, after great argument, to enable the electricity that is generated but not needed in a local community to be passed back to others through the grid.
The right hon. Gentleman is talking a great deal of sense and he will find a lot of support for what he is saying from Conservative Members. His comments are all the more important because he speaks from experience as a former Minister. Has he had the opportunity to read “Power to the People”, the Conservative policy document on microgeneration, which encapsulates much of what he says and puts some flesh on the bones of how we might achieve our aims?
I will be delighted to read anything that the Conservatives publish. I cannot say that I have read the document but if the hon. Gentleman sends me a copy, I assure him that I will read it. It is amazing to hear the Conservatives speaking of “Power to the People”. I sat on the Opposition Benches for 10 years and usually heard the opposite. However, this is not the occasion to become deeply divided politically about who is and who is not on the side of the people.
To support the right hon. Gentleman’s point about microgeneration, does he agree that the more we decentralise and devolve sources of energy, the more resilient we are likely to be in coping both with natural disasters of the sort that we saw in his county of Yorkshire last summer and with terrorist outrages? We would have a portfolio of different energy sources, none of which we would be reliant on in the totality.
I agree but perhaps the hon. Gentleman’s background motive—this also applies to the response I gave to the hon. Member for Bexhill and Battle (Gregory Barker)—relates to the fact that the term “Power to the People” means engaging people so that they can be involved in formulating, building and owning the solutions to their problems. They therefore take some form of ownership. What do I mean by that? I mean that people and communities become personally engaged in microgeneration. I do not want them to do that because they fear that supplies through the gas pipeline may be cut off by the Russians; I want microgeneration to be seen as part of community building. Energy generation and waste management will have to take place in local communities and we will have to take more personal and community responsibility in the future.
One of the hallmarks of our culture is that we all watch “Neighbours” in our homes with the door shut. We know everything about Ramsay street in Australia, but no one here has a clue who lives in the flat above them or in the street alongside. What we do in neighbourhoods may play a part in rebuilding and refabricating new communities, and the energy and waste management issues will be key to that. However, let us look at that in the positive terms of building relationships and new systems rather than through acting out of fear.
On that note, I congratulate the Government on introducing eco-communities. I do not know whether the concept of eco-communities appears in the Conservative’s pamphlet, but that notion could be radically deepened and expanded. We should have a debate and engage people in this issue; otherwise they will be left only with the fantastic targets. They hear about Kyoto and Bali and they think big numbers, but then they ask themselves what they can do. They think that it is laudable that the Government are setting targets for the reduction of carbon emissions that are miles ahead of those set by everyone else, and we are about to build those targets into law through the Climate Change Bill. We are miles ahead of the rest of Europe, which is quite positive on this issue, and we have managed to get the Americans to catch up a little, but I fear that those big figures, including the one that says that we should not increase the warming of the planet by 2°C, only lead people to ask what they can do about managing the whole planet. There is a disconnection between what a person can do and the targets we are setting.
The target that all homes should be carbon zero by 2016 is laudable, and I say to the hon. Member for Eastleigh (Chris Huhne) that I am pretty sure—perhaps the Minister can confirm this—that the Home Builders Federation is signed up to the zero-carbon targets. I do not want to set house builders against the microgenerators; I do not think that they are at odds. A conversation is going on and a consensus is building that could be useful. However, even if we have the target of zero-carbon homes by 2016, people at the ground floor level will ask what they can do about it. They need to be part of the conversation in a practical way. That is why the Bill reverse engineers the whole process. Rather than setting targets that are left there hanging nebulously, let us try to build the targets into the buildings in the new communities and address the problem through the planning system and local authorities.
I welcome the Bill and applaud the hon. Member for Stevenage for the work that he has put in. [Interruption.] Did I get the constituency of the hon. Member for Sevenoaks wrong? What did I say? [Hon. Members: “ Stevenage.”] I do apologise; Stevenage is the new town. I also applaud my hon. Friend the Member for Gower (Mr. Caton), who has insisted that we rightly keep this issue in the forefront of our minds. Eventually, we will get there. In that spirit, I suggest that this is a modest and reasonable little Bill, and I will be surprised if the Minister says that it is not necessary and that it is all done. We have much more to do. In response to all the contributions I have heard today, I simply say that this matter will not go away. Whether the Bill does or does not go through, we have a lot of work to do to embed its spirit and intention within our communities.
It is a pleasure to follow the right hon. Member for Leeds, West (John Battle). I was left feeling that if we are to be condemned to having a Labour Energy Minister, I rather wish that it were still him. I found myself agreeing with a great deal of what he said. I join him in congratulating my hon. Friend the Member for Sevenoaks (Mr. Fallon) on his good fortune in the ballot, on the pithy nature of his Bill and on the punch of his argument for its Second Reading.
I was in my hon. Friend’s shoes this time last year when I proposed the Second Reading of the Sustainable Communities Bill. In essence, that Bill was about localism and its premise was that, when it came to decisions about local communities and their future, local people knew best. I am very happy to support this Bill, because the same principle is at play here today. My Bill became an Act because it had strong cross-party support and because the central Government got comfortable with the view that it went within the grain of their localism agenda. This Bill is another test of how far the Government are prepared to go down that track. It fundamentally asks, “To what degree are we prepared to stimulate ambition, innovation and diversity among local authorities?”
This Bill sends out a very positive message to the market. It says, “Yes, in the face of the biggest challenge that we face”—namely the transformation of our energy infrastructure—“you, local authorities, be prepared to go beyond the minimum standard that we set in the centre. Help us raise the ground floor”, to use the expression of the right hon. Member for Leeds, West that I liked. The Bill sends out a challenge to the most conservative of industries—the house building industry—to go the extra yard and be more efficient in delivering renewable energy and energy efficiency at a lower cost. That freedom will be put in statute, so that the industry and the market have certainty rather than be exposed to the capriciousness of central Government and the revolving ministerial door.
That is an extremely positive and simple message that sends a much stronger signal to the market than the message coming out of Government. As my hon. Friend the Member for Sevenoaks suggested, after 10 years of talking about climate change, the Government have only just got round to recognising what the Stern report trumpeted loud and clear and that we have followed up in our quality of life commission—that planning and land use are fundamental tools in our collective effort to get on top of emissions.
The Government’s approach is in contrast to the Bill’s simplicity. They drip out bland planning guidance that encourages action as long as it does not compromise other social objectives and that comes on top of a botched consultation on the national standards that we need. Anyone who has any doubt about that should listen to the evidence before the Environmental Audit Committee in its inquiry on sustainable homes. The Government’s guidance also comes on top of the debacle on home information packs that we thrashed out many times in the Housing Bill. All that bends towards a target of zero-carbon homes by 2016, which sounds great on the airwaves but is not propped up by any credible detail or strategy for achieving or enforcing it. As the right hon. Member for Leeds, West suggested, surely by now, we have learned that simply expressing a remote target is not enough.
The background to the Bill is fundamentally one of failure. We are failing to control our emissions. As was said by the hon. Member for Carshalton and Wallington (Tom Brake), who speaks for the Liberal Democrats, emissions of CO2 have risen since 1997. It is not enough for Ministers to stand at the Dispatch Box and keep talking about the Kyoto target. We know the background to it, and we know why we did well on that target. We know about its inadequacy, and about the scale of the challenge that we face in meeting the targets ahead of us. We know that we are not on top of our emissions.
Underpinning that general macro-failure is a chronic failure as regards our renewable energy strategy. I have been invited to speak at a few renewable energy conferences held by people who are trying to make money out of the industry, to finance the industry, or to deploy the technology, and I always ask three questions: “How many of you think that the Government’s renewable energy strategy is a success?”, “How many of you think that the UK is the most promising market for renewable energy in Europe?”, and “How many of you think that we are on track to meet our 2010 target, let alone our 2020 target?” To date, I have seen only one hand go up in answer to those three questions, and the person concerned turned out to be a consultant to the Government. When it comes to renewable energy, the Government’s strategy and credibility are in tatters.
As the hon. Gentleman who spoke for the Liberals pointed out, the reality is that we drastically under-perform in Europe when it comes to the deployment and penetration of renewable energy. The Library note mentions the figure of 4 per cent. of total gross energy; that is compared to an EU average of 14 per cent., despite our having some of the best natural resources in Europe. The failure is not just in the relatively low levels of penetration and deployment; it is in the amount of money that we have spent to achieve the little that we have achieved. Both Ofgem and the National Audit Office have been coruscating in their criticism of the Government. The simple fact is that the very limited amount of renewable energy that we produce costs British taxpayers £1.4 billion a year. The cost per tonne of CO2 abated is a staggering £110. By comparison, the average price of carbon under the EU emissions trading scheme in 2006 was about £11.50 a tonne.
We have achieved very little at a high cost, and it is clear that we need a different approach. That is why I wholly applaud the work done by our Front Benchers, particularly the hon. Member for Bexhill and Battle (Gregory Barker), through our paper, “Power to the People”, which takes a different approach to decentralising energy.
The other failure that is relevant to the Bill is the failure to transform the energy efficiency of our housing stock. That is a crucial part of our collective approach to climate change, because 50 per cent. of emissions come from our buildings. When it comes to thermal performance, the UK has some of the worst housing stock in Europe. As the Liberal spokesman made clear, if we compare the dynamism and ambition of our Government to that found in Germany, it is frankly embarrassing.
On that point, the hon. Gentleman may note that in Sweden, where average January temperatures are 7° C below ours, the average household energy bill is £385 a year less than the average household energy bill in the United Kingdom. That is an extraordinary condemnation of our failure to get to grips with the issue that he raises.
I thank the hon. Gentleman for that intervention. I have heard him make that point before. I think that it comes on the back of research that he has done, and it is an extremely powerful statistic. He will be aware of the frustration that is felt about the extraordinary paucity of ambition and energy shown by the Government. We have to remind ourselves that back in March 1995 the current Prime Minister announced that the Labour Government would lead a major push for energy efficiency in the home. However, as the hon. Member for Cambridge (David Howarth) will know, the Association for the Conservation of Energy said to the Environmental Audit Committee that
“the energy efficiency industry as a whole…is extremely disappointed by the painfully slow progress towards introducing new economic instruments to improve household energy efficiency. Frankly, we are beginning to wonder whether it will ever happen”.
The background to the Bill is one of failure, and we should recognise that. There has been no shortage of rhetoric from the Government. That rhetoric has its place, particularly on the international stage, but we must get to grips with the fact that there is failure of delivery on the ground. The problem is not a shortage of initiatives. The policy landscape is very full; in fact, it is cluttered, and there is lots of stuff going on, but it is all driven by the proposition that central Government have all the answers. The penny must soon drop, and we must soon realise that the levers that central Government are pulling are not necessarily connected to anything.
As the right hon. Member for Leeds, West suggested, we need to take a different approach. We should realise that if we are to encourage people to change their values and behaviour over economic cycles and across generations, we have to engage them in a bottom-up process, and involves them in their communities. There has been chronic failure to do so, and an opportunity has been missed. Local authorities are closer to their communities and are more trusted than central Government.
The reality is that local authorities are not adequately engaged. They are major stakeholders in the debate. They are huge estate managers; 25 per cent. of the housing stock in this country is social housing, which is their responsibility, directly or indirectly. They are service providers, who must help us to manage waste and enforce building regulations. They are enablers, and play a role through Warm Front and the energy efficiency commitment. They ought to be standing shoulder to shoulder with central Government as partners in that collective effort, but they are not. As the National Audit Office pointed out to the Environmental Audit Committee in a 2007 report:
“Although over 200 local authorities have made high level commitments to climate change…analysis suggests a mixed picture of performance, with few replicating the achievements of the best.”
I am struck by how often we come back to the examples of Woking and Merton in such debates—there are no other names in the frame. However, things are happening out there, as my hon. Friend the Member for East Surrey (Mr. Ainsworth) said. I draw particular attention to Kirklees, which is enormously innovative and energetic on such issues. My council, Hillingdon, is one of the 100 authorities that are beginning to deploy some of the principles behind the Merton rule, in their own way. We need more leaders. The Bill is attractive because it sends a strong signal to the market to encourage people to lead, not through imposing targets but by giving local authorities real power. The Bill is therefore a step in the right direction.
I begin by congratulating my hon. Friend the Member for Sevenoaks (Mr. Fallon) on bringing forward this eminently sensible and worthy Bill. I hope that the consensus that there has been so far will continue until the Minister’s comments at the end of the debate. The Bill has been described as small; it is indeed brief and concise, and its purpose is to enshrine the Merton rule in primary legislation. That will make an important contribution towards the Government’s 2016 targets on zero-carbon homes.
The Merton rule requires all new non-residential developments of a certain size to generate at least 10 per cent. of their energy on-site from renewable sources. The policy was adopted in October 2003 in Merton’s unitary development plan, and it has since been adopted by a number of other councils—the figure that has been mentioned today is 100. Compliance with the policy is a condition of planning consent. Until the condition is signed off, the development will not be legal. I am delighted to be able to announce to my hon. Friend the Member for Sevenoaks and the rest of the House that the excellent London borough of Havering—my forward-thinking, efficient council—has already introduced its own policy, which requires new developments to include a target of at least 20 per cent. of renewable energy in its large non-residential developments. I am grateful to the Local Government Association for sending me a note about that, just in case I had not been aware of it; I was, but had I not been, the note would have been very useful.
One thing that I hope will come out of the debates in Committee is how the effects will be measured and monitored when the policies are adopted by local authorities. Having the target and the policy enshrined in the plans is one thing; ensuring that the policy is working and being achieved is another. We need to be imaginative in looking at developments after they have been built, when they are occupied and in use, to ensure that they are achieving the 20 per cent.—or, in other local authority areas, perhaps 10 per cent.—target. That needs to be a reality, not just an aspiration.
I am sure that all colleagues here will regularly have received letters from constituents who assume that MPs have powers over local planning. One of my constituents wrote me a notable letter saying, “You’re in charge of the local council. Why did you not stop it granting this planning application?” Such constituents are often disappointed to hear that MPs are not involved in planning applications; this Bill, however, is an example of when MPs can indeed influence the planning process. I wish the Bill well; I have not yet heard one comment against it in this debate, so I am optimistic. I do not wish to put any pressure on the Minister, but I give him every encouragement to join the consensus.
Colleagues as ancient as I am—especially those brought up in cities; I was brought up in London, but other cities were probably the same in this regard—will recall the smogs of yesteryear: those extremely unhealthy, thick yellow fogs from the days when solid fuels were the main source of energy. People actually went out in masks, and we all welcomed the Clean Air Acts of the 1950s and 1960s.
Progress is continually made on energy use and production, and we now encourage individuals not to waste energy; there is an important distinction between using and wasting energy. People are now willing to leave their cars at home and walk if their journey is short, they have no heavy equipment to carry and it is not pouring with rain. People now make choices about when to use their cars, but not so long ago they might have got into their cars automatically, no matter where they were going. That change has meant a reduction in energy consumption.
When people flick the switches in their homes, they expect the light to come on; when they switch on their central heating or gas fires, they expect their homes to become warm. We have to strike a sensible balance between energy use and the general necessities and comforts of life on the one hand, and excessive use and waste on the other. That message is now reaching the general public and there is a great deal of co-operation as people try to reduce their energy use and energy bills; that is particularly pertinent at the moment, because energy costs are rising alarmingly.
The situation may be more difficult for low-income families, who could not consider solar panels or even a new central heating boiler. They might have an old, inefficient boiler but not have the income to replace it. However, there are lots of things that everybody can do without suffering any inconvenience—not leaving electrical equipment on standby and switching off lights when they leave rooms, for example. I and people like me have done such things all our lives; I remember the post-war years when there was a shortage and nobody wasted anything. I no longer save string or brown paper, but I have a lifelong habit of not wasting energy—I do not put more water than is necessary into the kettle, for instance. Such ideas are new to the younger generation, but huge swathes of the population have been aware of them all their lives, and the habits are being reintroduced. Individually, such simple economies do not make a huge difference, but collectively they do.
In encouraging conservation in energy use in large non-residential developments, the Bill will make a significant contribution. Local authorities are looking for all sorts of ways to help the moves towards reducing carbon emissions and making zero-carbon homes. Some local authorities will consider making energy from waste, provided that there is community consent and that the waste being burned is residual and contains nothing that could be recycled. Contaminated plastics, for example, have a high energy content and little other use. However, the process needs to be small in scale so that it does not encourage lots of lorry movements bringing waste from A to B. The burning process needs to be modern, clean and efficient. Local authorities are generally considering every possible way of reducing energy needs and making everything as efficient as possible.
We are setting a good example in this country, which produces comparatively few carbon emissions. In global terms, what we can achieve is probably modest, but in setting a good example to other countries, what we can achieve is important and cannot be underestimated.
The hon. Lady has focused on personal contributions. However, does she agree that we must ensure that the new, renewable technologies are developed, encouraged and fostered? They are an example of good science: good, practical engineering imagination goes into the new ideas on tackling the challenges. Such technologies mean the provision of the jobs of the future as well as tackling the emissions challenge. They will involve a new set of industries that will provide new jobs for the youngsters of today. We have to be encouraging and get the framework right so that those new technologies and businesses can get going as well.
The right hon. Gentleman is absolutely right; we need to consider such education and training for very young children so that they are focused on the widening job opportunities in engineering, technology and development, which will become ever more modern. We need to keep up with the latest developments and have the imagination to initiate them. That contribution will be extremely important—not only nationally, but internationally.
I urge all Members to support the Bill and I am hopeful that the Minister will join the consensus in this debate. I have carefully considered the Bill and cannot foresee any reason why the Minister would not allow it to proceed to Committee if this Second Reading reaches a positive conclusion.
It is a great pleasure to speak on behalf of the official Opposition in strong favour of this excellent Bill introduced by my hon. Friend the Member for Sevenoaks (Mr. Fallon). I am pleased that it bears a striking resemblance to an amendment that I tabled to the Climate Change Bill during the last Session. The cause has a good history, not least that of the battle fought by the hon. Member for Gower (Mr. Caton). We recognise the efforts on both sides of the House to give statutory standing to the localist agenda at the heart of this new and badly needed legislation.
This has been a very worthwhile and particularly good Friday morning debate. All the contributions from both sides of the House have been extremely positive and insightful, drawing on the great experience of the Members who are here. Many Members support this measure, including the right hon. Member for Leeds, West (John Battle), the hon. Members for Gower and for Carshalton and Wallington (Tom Brake), and my hon. Friends the Members for Ruislip-Northwood (Mr. Hurd) and for Upminster (Angela Watkinson), who all made worthwhile and forceful contributions to the debate.
The Bill is an excellent piece of workmanlike drafting; it does exactly what it says on the tin. I commend my hon. Friend the Member for Sevenoaks for his brevity. In just a page, it could achieve a paradigm shift in the pursuit of climate change policy.
Members need little reminding of the economic and human necessity of acting now to restrict the worst impacts of climate change. The latest report from the intergovernmental panel on climate change states in the strongest language yet that the scientific evidence is now overwhelming. The case for economic action now rather than later is also increasingly clear thanks to the work of Lord Stern. Yet despite the seemingly widespread acceptance of those facts across the House, the policies of this Government, while generally heading in the right direction, lack sufficient ambition and urgency and the vision that is needed to meet the scale of the global warming challenge within the time frame that we now know is necessary. The Government’s record on carbon reduction and low-carbon technology deployment here in Britain is disappointing to say the least.
Credit is due to the Government for introducing the Climate Change Bill; we look forward to working constructively with them to toughen it up when it reaches the Commons shortly. However, unless there is a clear layer of policies beneath the Bill to deliver real change in our economy, it will have been a waste of time and risks just becoming an effective way to audit our failures. On its own, it will not deliver the changes that we need to make—the dynamic industrial changes, the changes in consumer behaviour, the changes in Government policy—if we are to rise to the challenge of a low-carbon future.
Despite three consecutive Labour manifesto promises to cut emissions by 20 per cent. by 2010, it is a matter of record that total UK carbon emissions have risen since 1997. If the Government had a record to boast of in this regard, perhaps there would be less passion and less need for my hon. Friend’s Bill, but all the evidence and all our experience show that the drive and impetus for the radical changes that we need to make in the UK are coming from the bottom, not the top. In 2006, emissions fell by just 0.1 per cent., despite the great help from some of the warmest weather on record. In 2006, Labour’s manifesto commitment was quietly dropped in favour of a watered down target of 15 per cent. by 2010.
Just for the record, emissions are sometimes the result of warm weather because the greatest use of energy and cause of crises on the grid is usually in the summer when people rush out to buy fans for cooling. Use of energy is not a function of whether the weather is warm or cold. I make that point because there is a great misconception about where the stresses and strains are.
The right hon. Gentleman makes a good point, but I was referring to mild winters when air conditioning is not typically used, rather than hot summers. Air conditioning, unlike winter energy use, is growing rapidly and is very energy-intensive. We need to tackle that if we are to crack this problem.
In the same year that the manifesto commitment was dropped, the then Chancellor pledged in his Budget £20 million—not a great sum, but welcome nevertheless—to energy efficiency, but only a quarter of those funds made it through into efficiency projects. Last year, the Government cut around £300 million from their DEFRA climate change initiatives, including recycling, energy conservation and emissions reduction programmes. The existing capital grant scheme for microgeneration technologies—the low-carbon buildings programme—has been insufficient from the outset. The grants on offer were so undersupplied that they typically ran out after 30 minutes of being available on the internet on the first day of each month. Since then, the low-carbon buildings programme has descended into little more than a farce. In the past 12 months, there have been no fewer than five major changes to the grants programme, including a reduction in the maximum grant per household from a really worthwhile £15,000 to just £2,500.
Then, the new Prime Minister, five months into his premiership, finally made his first foray into the climate change debate. That speech was welcomed in advance, but what was the big idea at the centre of his new climate change strategy? It was a consultation on plastic bags—welcome, but not exactly commensurate with the scale of the challenge of global warming. Do these actions suggest that the Prime Minister is making Britain’s low-carbon future a real priority? Sadly, I do not think so.
That is why, in Britain in the early part of the 21st century, we are now so reliant on local initiatives. There is, in direct contrast to the inertia at the centre of Government, excitement, passion, drive and determination to push some of the most progressive and innovative schemes coming up from the local level. There is real support in our communities, and there are great things going on in our local councils, universities, local organisations and community action groups, with people pushing for genuine change.
I would like to draw the hon. Gentleman’s attention to my constituent Russell Smith who set up a company called Parity Projects. Members should be able to see on his website the readings from his own house on heat loss according to the different insulation materials that he has installed. They show the effectiveness of the various measures that he has implemented.
That is a terrific plug for a very good and welcome innovation.
Ultimately, if we are honest, all these measures, while making a contribution, will not be enough unless we have dynamic industrial change and real leadership at the centre, but it appears that we are going to have to wait for a change of Government for that. In the interim, the best that we can hope for is that the lead will be given not from the centre but from the community.
The hon. Gentleman should be fair. Many of those projects are funded by grant from central Government, including Susan Rolfe’s house in Oxford, which got the first solar panels. Sometimes the spark has been provided by assistance and funding from central Government. It is not the case that there is no support for initiatives, but it is a question of connection and scale.
The right hon. Gentleman is right, although grants are not necessarily the best way of supporting innovation and diversity. We believe that feed-in tariffs giving long-term support for microgeneration represent a better way. That is outlined in our pamphlet “Power to the People: the decentralised energy revolution”. However, if we are going to have a grant scheme, we should fund it properly so that there are examplars. As I mentioned earlier, the maximum grant has been cut from £15,000 to £2,500. I wonder how much money the excellent project the right hon. Gentleman referred to benefited from, because I would wager that if that was attempted again with the grants that are currently available, it would struggle to put together the finances.
I am looking forward to reading the hon. Gentleman’s pamphlet, because I hope his proposals stretch right across the piece and do not look at the Warm Front budget alone. I was a Science Minister, and I suggest the hon. Gentleman look at the science budget, including for the research councils. Where does he think the funding for many of the new science and technology developments came from? It came from Government to the science research councils and then through to universities, technology colleges and institutes. This issue must be looked at in the round, because more is happening than the hon. Gentleman might be prepared to acknowledge.
That is absolutely right, and I acknowledge the right hon. Gentleman’s considerable experience in, and knowledge of, this sector. Our universities and research centres are among the best in the world, and it is only fair to say that there has been an increase in funding, which is to the Government’s credit. However, I cannot think of one other G8 country that spends a lower proportion of its GDP on research and development than Great Britain. The general direction of travel under this Government, who lauded their support for science and research and development when in opposition, is downwards almost year on year. That is very unfortunate. The right hon. Gentleman is right to say that we have extraordinary creative genius in this country and some of the most talented individuals, and I believe that the solutions to many of the greatest challenges we face are locked in our universities. They can play a huge role in allowing this country to facilitate those solutions not only by leading by example, but by sharing information, solutions and technology. Unfortunately however, under this Government we are not realising our potential. We have huge potential. We see it, but, sadly, the Government are not unlocking or exploiting it.
It is important that we get the facts right. The Financial Times publishes investment in research and development and it shows that our Government invest more than other Governments across Europe—and including America now. The failure is in the private sector, where businesses and other concerns do not put enough of their own profits back into research. That is the gap that we need to address. It is not fair simply to say that the Government do not invest as much in research and development as other countries. We must look at where investment comes from, and that is a complex issue.
The Government are pretty quick to claim credit for private sector investment when that goes up, and to claim the credit for growth in the economy; all that growth comes from the private sector. The Government have a responsibility to create an environment in which companies come forward to invest in research and development and to put in place a long-term framework. On any count, it is clear that the Government have failed to do that. That is simply because there is not the vision, the ambition or the determination to create the innovative, skills-based economy with a long-term direction that we desperately need. That is one reason why good local initiatives are so badly needed, and why the Bill deserves our full support.
When, in 2003, Merton council took the bold step of setting a 10 per cent. target for on-site renewable generation, it helped to spark an unprecedented investment in the microgen sector. Investors felt that frameworks such as Merton could provide a long-term marketplace for the developers and manufacturers of small-scale, low-carbon technologies.
On the path towards the zero-carbon homes target in 2016, there are stepped increases in minimum standards for public sector housing projects. In 2013, the standards jump to a 44 per cent. efficiency improvement on today’s standards—or level 4 in the code for sustainable homes. That is ambitious. There is concern in the microgen sector, voiced by industry groups such as the Micropower Council, that this large increase could result in a huge increase in demand for microgeneration in a short period of time, and that unless careful thought and preparation goes into anticipating that, the industry will struggle to meet it. That is because previous minimum standards could be met through energy efficiency measures alone, whereas it believes that the 44 per cent. standard could not, which would demand that that standard is met by on-site renewables in almost all cases. Many of the manufacturers argue that at its current level the microgeneration sector could not supply that demand, and that that failure would seriously upset the 2016 zero-carbon homes target.
Merton rules provide the longer term security for continued and sustained investment in the microgeneration sector and will allow it to match demand as standards are ratcheted up. We need that sustained growth in microgeneration. The Government’s response to the Merton rule has been typically shambolic and dithering. In a written statement to the House in June of last year, the then Minister for Housing and Planning, the right hon. Member for Pontefract and Castleford (Yvette Cooper), endorsed the rule, in what many thought was a welcome move. She said:
“the Government expect all planning authorities to include policies in their development plans that require a percentage of the energy in new developments to come from on-site renewables”—[Official Report, 8 June 2006; Vol. 447, c. 33WS.]
Those were sound words.
The statement encouraged yet more councils up and down the country to set such rules according to their local needs—dealing with on-site renewables and energy efficiency in residential and commercial properties as appropriate. Although it is still early for these schemes to be judged, the early adopters, such as Merton and Croydon, have met with considerable success, and, with no significant impact on building rates in those areas, the rules provided a lifeline to the renewables industry and began to lower the shamefully high emissions of our property stock.
Yet, sadly, following intense lobbying from the house building sector—uneasy with change and keen to preserve its one-size-fits-all production methods—the Minister, wielding the empty threat of a slowdown in the housing market, performed a dramatic U-turn on her statement. On Tuesday 23 August, a leaked document from the Department for Communities and Local Government argued:
“Planning authorities should…focus on local development or site specific opportunities, and avoid blanket requirements applying across extensive areas with a broad range of development proposals and circumstances.”
That clumsy U-turn did untold damage to the microgen sector, set a hare running in the press and created uncertainty, which is bad for investment and confidence, and it was broadly condemned by environmental non-governmental organisations, trade associations and environmental campaigners, as well as by many authoritative commentators.
Therefore, when Ministers assure us that the change of heart in December’s planning policy statement now supports Merton-style rules, how can we believe them? Can the innovative talents in the microgen sector now go to their investors with a straight face and say, “Don’t worry; the U-turn’s been U-turned and we’ve now got a new turn”?
The Bill is important precisely because of this culture of uncertainty and dither that lies at the very heart of the Government. The Bill will replace dither with clear statute. Short, pithy and to the point, it will give certainty. As has been said, it is a permissive Bill; it will give new rights, not impose regulations. It will enshrine the rights of local councils to make their own proposals for renewable targets within reasonable limits in law. It will prevent the unseen hand of Whitehall choking off local initiatives. There was a brazen example of that earlier last year, when the Yorkshire and Humber development plan was scrutinised by the former Minister. Its on-site renewable target mysteriously disappeared.
The Bill would protect in law the right of local councils to set targets while ensuring that they are reached through the public process of consultation on a development plan. I am sure that the Minister will claim that the planning policy statement in soon-to-be published guidance will give all councils guidelines on making the targets. How is a centralised diktat better at meeting local targets than local planning officers acting in consultation with local property owners and developers, local people and communities and locally elected councillors?
That is what a planning policy statement is—it is a diktat that comes from central Government on high. Planning guidance has the weight of law, but it is not debated and it is not accountable in the same way.
Let us consider the example of inner-city areas, and, in particular, high-rise developments, where it is harder to place renewables on site. In such circumstances, near-site renewables or dedicated generation may be a better solution. The exact definition of an acceptable near-site renewable could be decided on, as appropriate, within each local authority’s development plan. We should trust local communities to get the solution that is right for their area. The Government’s approach is typical of their one-size-fits-all, centrally-controlling mentality. Who is to say that the next planning policy statement will not flip-flop back against the rules, promoting again the Government’s centralised targets-setting policy, which raises only the floor and leaves no opportunity to raise the ceiling?
The Bill may stipulate energy efficiency in the mix too. It is incredibly important that while building standards drive up the underachieving councils, councils with the vision to see the benefits and leadership involved in moving ahead, and with the support of their communities to do so, are given the ability to drive progress in their area and create beacons of excellence.
One of the problems with relying solely on building standards to improve energy efficiency is that even our existing building standards, which do not set high enough targets as yet, are not being enforced. Many of those present in the Chamber are either members or former members of the Environmental Audit Committee. It has taken evidence that showed that more than 30 per cent. of new houses are built below existing building regulations standards. Planning can thus help to fill that gap.
The hon. Gentleman is spot on. I think I am right in saying that there has not been a single prosecution for breaches of those standards—perhaps the Minister could inform us of any such prosecution. The standards might be a good idea in Whitehall, but they are not being implemented in the country. It would be far better to give local communities local ownership of, and input in, these matters.
I agree with the sentiments expressed by my hon. Friend the Member for Gower (Mr. Caton) and the hon. Gentleman. Would the hon. Gentleman join me in welcoming the clauses in the Housing and Regeneration Bill that extend the time limits for prosecutions of building regulations breaches from six months to two years? They will enable us to capture a lot more breaches and many more prosecutions will take place.
That Bill will not capture a lot more, because we are not currently capturing any at all. If it catches one, that will be an improvement. I do not want the time limit for prosecutions to go from six months to two years—I want the Government to get on with the job and start prosecuting shoddy cowboy builders and irresponsible developers. I want them to enforce the existing legislation, rather than seek longer time to do the job that the Minister and the rest of this inefficient and calamitous Government are failing to do now.
I am certainly not opposed to it in principle, although I am not familiar with the Housing and Regeneration Bill. I would be more comfortable about doing that if I really thought that a strong effort was going into prosecuting as things stand. I do not want us just to give more wriggle room. However, I hear what the Minister is saying.
Some councils may allow developers to account for some of their target through efficiency measures and others may set independent targets for microgeneration and efficiency. There are concerns that there may be a plethora of new efficiency standards as a result of the Planning and Energy Bill, but the current wave of Merton rules has produced no such complexity. It is clear that it is far more time-efficient for most local authorities to use existing codes, such as the Government’s sustainable homes code, than to develop completely new standards from scratch. The rule also gives a welcome chance to smaller, local property developers to serve their local market. Larger developers, who have a more unwieldy, mass-produced product to adapt, might not as easily tap into such a market. We could thus use the benefits of local knowledge and of involving small entrepreneurs.
If we are really serious about tackling climate change, every aspect of government must be prepared for dynamic change. We must also be prepared to challenge the status quo. This Government have proved that business as usual will simply not deliver the speed of transformation in our economy that we need. We must foster excellence in innovation and new technology, invest in and develop burgeoning green technologies, and we must look ahead and be far more ambitious in their deployment. Rather than pick individual technological winners centrally, or dictate from Whitehall planning guidance that is uncertain in the long term and unsuitably broad brush in its approach for the needs of localism, the Bill would allow and empower those communities who are most able—often those where land values are higher—and most willing to blaze a trail for others to follow.
The Bill would allow the right solutions to reach the endlessly varied parts of this country and give us at least a fighting chance of reaching our 2016 zero-carbon homes target. The Government claim from time to time to back Merton-style rules. Indeed, the former Minister for Housing—now Chief Secretary to the Treasury—has called the PPS solution Merton plus. If she had been truly convinced of the importance of market certainty to developing our microgen sector and of the power and effectiveness of Merton rules, she surely would have joined us by giving local authorities the statutory right to set them.
Before I conclude, I should like to cite the word of the president of the Royal Institute of British Architects, Jack Pringle. He has said:
“The RIBA strongly believes that local authorities should be free to demand higher building standards than those set nationally. Individual local authorities can play a huge role in driving innovation and can themselves become beacons of sustainability. If the reports are true and this ability will be lost, that will be detrimental to the government’s goal of reducing carbon emissions from buildings.”
In this time of Government dithering, business certainty is vital. This Bill has the potential to provide that in one area at least. It does exactly what it says on the tin. One would expect something crisp, sharp, pithy and non-regulatory from my hon. Friend the Member for Sevenoaks, who is a tireless and redoubtable member of the Treasury Committee and a hammer of needless regulation and burdensome government. The Bill has also proved him to be a champion of modern localism. He has not only captured the spirit of a new political age in the Bill, but he has endeavoured to give our local communities, which are far more ambitious and more progressive than this inert Government, the power to begin the job that we will finish.
I begin by welcoming the spirit in which the debate has taken place today, and the intent, manner and sentiment behind the Bill, although that was spoilt somewhat by the partisan approach of the hon. Member for Bexhill and Battle (Gregory Barker).
I am glad that we have moved on. We have all come a long way in 20 years, not least the hon. Member for Sevenoaks (Mr. Fallon). As a north-eastern MP, I remember him as a former Member for Darlington. There has always been a lot of animosity between Darlington and Hartlepool, largely as a result of football clubs, but I hope we do not see any of that animosity today. About 20 years ago, climate change was so low on the political radar that when Margaret Thatcher’s chief scientific adviser warned her about the threat of global warming she is said to have replied, “Are you seriously telling me that I should have to worry about the weather?” That is important; we have moved on because climate change is of profound concern to us all today. The weight of scientific evidence is irrefutable.
I would still maintain that throughout the 1980s, climate change was not one of the Thatcher Administration’s main concerns, and this Government have progressively ensured that it has moved further and further up the political agenda.
Before I move on, I pay tribute to the hon. Member for Upminster (Angela Watkinson), whose comments resonated a lot with what I think. I shall not say too much about energy efficiency, but her point about going round turning lights off resonates with me. I am a father of four children and I seem to spend my weekends doing exactly that. As the hon. Lady was speaking, I recalled the scene in the BBC comedy series “The Royle Family”, where they were sat on the sofa and Caroline Aherne’s character, I think, said, “Where were you, Dad, when Kennedy was shot?” and he said, “I’ve no idea, but I’m sure our immersion heater was on”—very similar to our household.
We are moving towards a powerful international consensus that urgent action is needed to tackle climate change. The evidence suggests that human activity is a major cause of climate change, and that evidence is growing. This state of affairs does not just affect climate change and energy policy; it will have major global repercussions for things such as migration, economic development and economic policy. We need to tackle the problem in the round.
I would like to describe some of the actions being taken by the Government to address climate change, particularly through housing and planning legislation. The benefits in particular of the planning policy statement on climate change that was published in December are central to my argument Unfortunately, when that guidance was published, the results of the ballot had already come through for the hon. Member for Sevenoaks. He may correct me on this, but had he been aware of the PPS, he would have been aware that his Bill would be superseded by it, and he might have changed his mind regarding its content. The PPS renders the hon. Gentleman’s proposals unnecessary. It achieves the same ends, and there is a strong consensus throughout the House on the basis of those ends. The Government cannot support the Bill. Although we support the ends, we can achieve them through different means.
Given what the Minister has said, will he put on the record that the Government’s new policy position makes lawful and acceptable the rule that the local authority in Cambridge put forward and had rejected? That rule stated that developers have to provide evidence of how they have minimised energy consumption, maximised energy efficiency and considered the feasibility of combined heat and power. If he can put on the record that such a rule is okay, I shall go along with what he is saying. Otherwise, the Bill is necessary.
I am unfamiliar with the Cambridge example, and I do not want to box myself in. Having said that, the planning policy statement states that local authorities should have climate change and its mitigation at the heart of what they do in their local planning documents. In that respect, I imagine that Cambridge should be doing exactly that. I hope that answers his question.
I have been struck by some of the comments made in defence of the Bill, and I wrote some of them down, such as, “It makes nobody do anything”. I approach such matters on the principle that legislation should make somebody do something—[Hon. Members: “Oh!”] Opposition Members surely accept that there needs to be an absolute reason for legislation. That is the whole point of our being in this House—to make things a lot better. The concerns raised by Opposition Members surprise me, because we need to ensure that climate change is mitigated as effectively as possible, bearing in mind the fast-moving elements involved and the changes in technology. The planning policy statement helps to address that.
Although I have a problem with the fundamentals of the Bill, I agree with all the sentiments expressed today about the need to take radical action to tackle climate change. Indeed, as the hon. Member for Bexhill and Battle acknowledged most graciously, the Government are leading the world in taking the tough action needed through our Climate Change Bill. That is currently in the other place, and it sets out our plans to tackle climate change in the next 50 years. It demonstrates to the world that we are determined to take the tough decisions needed, and that we will not ask any country, especially the poorer ones, to take any steps that we are not prepared to take ourselves. That Bill is the first of its kind anywhere in the world, setting clear legally binding targets to reduce carbon dioxide levels by at least 60 per cent. by 2050, and by 26 to 32 per cent. by 2020, based on 1990 levels. It will provide a new system of legally binding five-year carbon budgets, set at least 15 years ahead, which will provide clarity on the optimum pathway towards the key targets. I suggest to the House that that will offer greater certainty and confidence, facilitating the business planning and investment necessary to work towards a low-carbon economy.
I was contemplating what points the Minister could possibly dredge up as objections to allowing the Bill a Second Reading, and I hope that he is not moving towards such an objection. Is he saying that the provisions of the Climate Change Bill encompass what the Planning and Energy Bill provides? Earlier, he said that this Bill does not achieve anything. Does he not agree that enshrining the Merton rule in primary legislation is a positive thing for the Bill to achieve?
The main thrust of my argument is twofold. First, as I shall come to later, last year’s planning policy statement provides local authorities with what is required by the Bill, but gives us flexibility because we do not need primary legislation to deal with it. My second argument, which I shall advance in a moment, is that the range of legislation currently going through this House and the other place, such as the Climate Change Bill, the Energy Bill, the Planning Bill, most importantly, and the Housing and Regeneration Bill, provides other means by which we can achieve what is set out in this Bill. Because parliamentary time is extremely valuable, I would suggest that the Bill is not necessary. Our commitment to tackling climate change and ensuring that that can be done within the planning framework absolutely reflects what the hon. Member for Sevenoaks wants to achieve, but it achieves it by other means.
We need to ensure that every element of our economy and society can reinforce our ambitions to cut carbon emissions and tackle climate change throughout the fields of transport, buildings and industry. In my Department for Communities and Local Government, we are paying particular attention to what can be done to improve housing and planning in order to cut carbon emissions from buildings.
As I said to the hon. Member for Upminster, we also believe that the planning system has an important role to play in promoting the greater use of renewable energy. The Planning Bill has been introduced—it is in Committee at the moment—in order to promote a green and growing economy. The new planning rules set out stronger environmental requirements for local authorities, putting the tackling of climate change at the heart of the planning system for the first time. I understand that the Public Bill Committee considering that Bill will shortly be dealing with clause 147, which is entitled, “Development plan documents: climate change policies”. That clause sets out that local authorities must include policies in their development plan documents that are
“designed to secure that the development and use of land in the local planning authority’s area contributes to the mitigation of, and adaptation to, climate change.”
In effect, the clause puts a duty on councils to take action on climate change in preparing their local plans. It does precisely what it says on the tin, and it also does what the Bill proposed by the hon. Member for Sevenoaks says on its tin. That duty has been welcomed by stakeholders because of the positive contribution that it will make.
Further to the point made by the hon. Member for Sevenoaks (Mr. Fallon), there are so many caveats in the planning policy statement that it is left open for developers to challenge. The policies will not therefore have the statutory force that they would if the Bill were passed.
I am not entirely certain what the hon. Gentleman is getting at. The point that I am advancing is that clause 147 of the Planning Bill, which will be debated very shortly, will introduce in primary legislation the very point that the hon. Member for Sevenoaks wants to make with his Bill.
The Minister just said that the clause will place a general duty to refer to climate change measures. It does not go into microgeneration or low-energy generation, which are what we are talking about today. The two things are related, but they are not the same.
I can understand the hon. Gentleman’s point that the subjects are related. As an enabling Government, we are providing a web of policies, guidance and legislation to ensure that everything is captured, and at the same time we are ensuring that local authorities step up to the plate and make provisions according to their responsibilities on a range of matters—particularly on climate change and planning, but also on housing growth and economic development. We have adopted precisely the right approach. I hope that the hon. Gentleman would agree with me on that.
Section 19(2) of the Planning and Compulsory Purchase Act 2004 states that in preparing a development plan document, local planning authorities must have regard to
“national policies and advice contained in guidance issued by the Secretary of State”.
That guidance includes the planning policy statement on climate change that we published last month—this is the point that the hon. Member for Carmarthen, East and Dinefwr (Adam Price) just touched upon—which will in effect set the parameters for implementing the duty set out in clause 147 of the Planning Bill. That clause, the requirements of the 2004 Act and the PPS together implement our proposal in the planning White Paper to legislate in order to set out clearly the role of local planning authorities in tackling energy efficiency and climate change. That should be welcomed by Members in all parties.
I am a junior Housing Minister, and that is incredibly important today—[Laughter.] I still have my phone on, though. The point has been made that housing contributes a great deal to our carbon emissions—something like 26 or 27 per cent. We need to do something to cut that. That is why—this has been mentioned time and again by hon. Members on both sides of the House—from 2016, all new homes will be zero-carbon. What do we mean by zero-carbon? The definition is that over the course of a year there will be net zero-carbon emissions from homes, including from heating, lighting and appliances—everything from the TV to the fridge. We are the first country in the world to be so ambitious, particularly when our ambitious targets for housing growth are considered. We want to have 3 million such homes by 2020 and 2 million by 2016.
There is agreement from green organisations and house builders that our goal is achievable. More than 170 organisations in the building industry have already signed up to our zero-carbon target. The recent review of the house building industry by John Calcutt confirmed that that industry has the skills and capacity to deliver environmentally sustainable housing growth. As Calcutt recommended, we will set up a delivery body to ensure that we reach that target. We will outline the details of that organisation shortly.
We already have a clear timetable for raising the energy efficiency standards of homes, with progressively tough standards enshrined in building regulations. In 2010, there will be a 25 per cent. improvement from 2006 in the number of homes built to comply with part L of the building standards. In 2013, there will be a 44 per cent. increase in those standards. We are putting in place a series of measures to set us firmly on the path of achieving the zero-carbon target. They include measures to promote energy efficiency, and also to promote the greater use of renewable energy. One method alone, I suggest, will not be enough.
With a demanding national timetable, it is important that councils have a strategic local lead, including through their planning responsibilities. Our new planning rules, backed by the climate duty in the Planning Bill, provide a strong framework for the collaborative and responsible working needed to make that happen. [Interruption.] Perhaps the hon. Member for Upminster would agree that someone has left the kettle on. They have put too much water in it, and it keeps boiling and boiling.
I stand corrected, Mr. Deputy Speaker.
We have also talked about the code for sustainable homes. Again, this is an important point. The Housing and Regeneration Bill is in Committee. The hon. Member for Ruislip-Northwood (Mr. Hurd), who is a member of that Committee, has to suffer my company daily. That Bill will make it mandatory for all new homes to be rated against the code for sustainable homes. The code demonstrates the overall sustainability of each new home—not just in energy efficiency, but in water use. Standards set out in the code match up with the progressively demanding building regulations that will be introduced. Code level 6 represents zero-carbon and exemplary development in energy and water efficiency.
By making it mandatory for homes to have a sustainability rating, we are providing the information that consumers need to make informed judgments when they buy. Homes built to higher code levels, for example, are likely to have lower fuel bills, which any prospective buyer will consider important. They will move the market accordingly. Fridge ratings could form an analogy. Five or 10 years ago, people did not know what fridge ratings were, and now no one would buy a fridge or other white appliance if it was not energy rated. I think that homes will go down a similar path.
It is not mandatory for all homes to be assessed. In some circumstances, developers will be building only to minimum building regulations and there is no need to make them pay for an unnecessary assessment. However, English Partnerships is already building at code level 3. The Housing Corporation will join it for the next affordable housing programme. That will give developers that are building mixed developments a choice about whether they want to be seen to build homes that are less sustainable than Government-funded housing programmes. They will have to consider that when they market their new homes. We are already seeing movement in the building industry to support the code. Developers can already use the code voluntarily. Berkeley Homes, for example, has already committed to building all new homes to code level 3.
Local planning authorities are already working with developers in innovative and imaginative ways to help us to meet our house building targets and to ensure that those houses are more stable and resilient, so that they can deal with the challenges posed by climate change, such as more extreme weather and floods. We also believe that we need to develop a similar approach for non-domestic buildings, so that all new shops, offices and so on would have to be zero-carbon. The work undertaken by the UK Green Building Council suggests that it would be possible, in the right circumstances, for the majority of non-domestic buildings to be zero-carbon by 2020. We are considering those findings.
The final element that I want to mention is the biggie: last month’s planning policy statement on climate change. It has four main themes. The first is the aim to ensure that local plans have strong carbon ambitions and targets. That will fully integrate tackling climate change into all planning policy. It will ensure that councils will take such issues into account when considering the location for new developments so that they can take full advantage of local renewable and low-carbon energy opportunities. The PPS emphasises the need for delivery, accelerating action so that plans do not simply sit on shelves.
Secondly, to pick up on a point that my right hon. Friend the Member for Leeds, West (John Battle) made and about which I am excited, the PPS represents a major direction that energy policy can take in the next century. It will help deliver decentralised, renewable and low-carbon energy and expect new development to incorporate local renewable and low-carbon energy when viable. In the Housing and Regeneration Bill Public Bill Committee, we are currently discussing the right to buy and the relative merits and demerits of that. It goes without saying that many communities felt empowered by that in the 1980s and 1990s. Decentralising the energy network, whereby local communities have some sort of facility to generate electricity, feed it into the national grid and be paid for it, could be a modern way in which to empower new local communities and provide genuine community spirit. The PPS facilitates that.
Many councils are already adopting policies and development plans that require a percentage of the energy in new developments to come from on-site renewables when that is viable. As has been said time and again, that is known as the Merton rule. It follows the example in 2003 of the London borough of Merton, which established a policy whereby new residential developments over a specific size were expected to incorporate renewable energy production equipment to provide at least 10 per cent. of predicted energy requirements.
Although the idea has been somewhat derided, I believe that the PPS goes even further and embeds Merton plus rules in all councils. That means that we expect a council-wide, Merton-style rule for cutting carbon by using local renewable and low-carbon energy in new development as well as tailored targets for sites where there are bigger opportunities than the council-wide target. We do not want the average to be the height of ambition.
The PPS will encourage new developments that limit carbon dioxide emissions, and help existing developments adopt local renewable or low-carbon energy. Moreover, the PPS confirms that there will be times when local councils should expect higher standards of building sustainability than those set nationally through building regulations. They could include, for example, areas of serious water stress, where, without the highest standard of water efficiency, the proposed development would be unacceptable.
Thirdly, the PPS would speed up the shift to renew renewable and low-carbon energy. It expects regional targets for renewable energy in line with national targets—better, when possible. It will encourage technical innovation. If one word sums up the theme of today’s debate, it is “innovation”. The PPS helps innovate. It will develop decentralised, renewable energy generation networks. It is all exciting stuff, which will provide what the Bill hopes to achieve.
Fourthly, the PPS will help create communities that are resilient to the effects of climate change. We must act to reduce the impact but also to mitigate it. The PPS will ensure that communities are fit for future climates. It especially emphasises the importance of providing public and open spaces in new developments, recognising the many benefits that green spaces provide, not only to local people but to wildlife and biodiversity.
In summary, the planning rules go much further than the Bill, which would simply enable councils to set requirements for energy generation. When councils do not take the new planning rules seriously and reflect them in their plans, they are more likely to find those plans amended or overturned.
Let me discuss the extent of consultation on the PPS to show the depth of support for its approach, in contrast with the limited endorsement that the Bill received. The draft PPS was first published for consultation more than a year ago. That closed in March 2007 and we received more than 300 responses. A range of organisations responded to the consultation, including 11 developers, 158 local planning authorities, 22 regional planning organisations, 39 non-governmental organisations, 38 professional bodies and 12 quasi-governmental organisations such as the Carbon Trust.
Consultation responses showed strong support for the PPS and made clear the value of using planning positively to help shape and deliver places with lower carbon emissions that are resilient to the impact of climate change. More than 200 consultees agreed that the proposed climate change PPS, as part of the Department’s wider package of action, including the 2016 zero-carbon homes policy, would secure planning strategies that deliver reductions in emissions and help shape sustainable communities that are resilient to the extent of climate change, which is accepted as inevitable.
The consultation also sought views on the proposal that local planning authorities should ensure that a significant proportion of the energy supply of substantial new development is gained on site, renewably and/or from a decentralised renewable or low-carbon energy supply. That approach was supported by 169 respondents; only 21 disagreed. There is, therefore, a range of support for our approach.
Let me deal with the Bill. It would enable a local planning authority to specify for any development in its area the generation of energy from renewable sources as part of the proposed development; the generation of low-carbon energy as part of the proposed development; and an energy efficiency standard in all, part or parts of a proposed development that exceeds any required by national building regulations.
My interpretation of the Bill, which the hon. Member for Sevenoaks reinforced in his opening speech, is that its purpose is to promote the Merton rule. As I said, the PPS promotes Merton plus—and more. I want to make it clear that I disagree with the fundamentals of the Bill simply because it is impractical and ineffective. We therefore reject the means rather than the end.
The approach in the PPS means that councils need to examine the best options in their areas, which could mean on-site renewables or local low-carbon energy such as CHP. It would not be sensible to specify rigidly the right solution for each development or to predict the most effective technology in the coming years. The pace of change in technology and research and development is too fast. For that reason, we do not want councils to insist on on-site renewables if there are better ways of cutting carbon from local energy.
Insisting on an on-site definition may be a barrier to local renewables. That is because a new housing development could get more power from a medium-sized wind turbine on a nearby hill or verge, rather than from one for every house in the development. A site near a power plant could utilise its surplus heat with a combined heat and power generator. A medium-sized wind turbine or a combined heat and power plant may not be feasible within many individual development sites but could provide the most cost-effective way of cutting carbon and be located locally and close to the development—perhaps on a highway verge or other open space.
Experience suggests that local policies are most effective if they include elements of both on-site and near-site generation and do not rule out, for example, low-carbon CHP such as that in Woking, or medium-sized wind turbines serving a whole development.
I strongly believe that councils could set targets for decentralised renewable energy if the evidence suggests that that is sensible. However, the overall approach should promote and encourage renewable and low-carbon energy generation but not dictate or prescribe the solution for every area. The hon. Member for Sevenoaks made that precise point. That will become increasingly important as we work towards our zero-carbon homes target and our similar ambitions for zero-carbon new non-domestic buildings.
There is increasing evidence that it would be impractical and not cost-effective if every development specified on-site, rather than near-site, renewable energy. For example, Element Energy, in its recent work for the Renewables Advisory Board on the potential contribution of renewables to the zero-carbon homes policy, recommends that
“local offsite generation is encouraged”.
It advises that it is important that
“larger scale CHP and district heating is culturally and commercially attractive in the UK since it offers a relatively cheap route to compliance”.
Similarly, the work that we commissioned from the UK Green Building Council on energy efficiency in new non-domestic buildings underlines the importance of local energy solutions in moving to zero-carbon new buildings, and highlights the planning system’s key role in making that happen. The council says:
“planning by local planning authorities therefore needs to incorporate energy planning, undertaking heat mapping and community renewable potential in order to assign the best near-site solutions in terms of carbon reduction and maximising the use of resources.”
We have therefore specifically rejected using primary legislation for the type of provisions proposed in the hon. Gentleman’s private Member’s Bill, because of the difficulties in keeping it up to date and responsive to fast-moving and changing circumstances. We need policy to keep up with the rapid advances in technology. With the greatest of respect, I suggest to the hon. Gentleman that it would be somewhat cumbersome and time-consuming if that meant amending primary legislation time and again. If, for example, we needed to tighten the requirements on renewables but not on low-carbon energy, it would be far easier to amend the PPS than primary legislation. That is why the PPS is the right place to set out the detail.
Because the Bill is a somewhat blunt instrument, it has the potential to undermine the progress towards the zero carbon target, through a series of counter-productive consequences. I understand where the hon. Gentleman is coming from, and that is clearly not his intention, but it could be the effect. First, the Bill does not replicate the safeguards within the PPS. Those safeguards will ensure that environmental standards are raised in a sensible way, so that we can continue to deliver the necessary levels of new housing at the same time. Whatever requirements councils set need to be tested publicly as part of the planning process and need to be compatible with delivering housing targets and affordable homes. The Bill does not have the same safeguards. It requires councils only to set targets that are “reasonable”, but as my right hon. Friend the Member for Leeds, West said, we could talk for hours—indeed, I am tempted to do so—about what is “reasonable”. As a result, the Bill could undermine our targets to deliver much-needed affordable housing.
Secondly, the Bill could rule out, for example, more cost-effective local but near-site energy solutions, by stipulating just on-site renewables or just low-carbon energy. That excludes local community energy schemes. We recognise that the industry producing solar panels and small scale wind turbines has been arguing strongly for such an exclusive approach. However, we believe that councils should not set rules that deter developers from connecting new developments directly to a local community renewable scheme. That is why the planning rules are clear that councils should consider near-site energy generation as well as on-site generation. By “near-site” we mean in the local area and dedicated to serving, or serving via a wider energy network, the development concerned, not a site many miles away, such as in Orkney.
Thirdly, the Bill would enable councils to set their own energy efficiency standards. That would effectively allow every council to set their own building regulations, which, as the Minister responsible for building regulations, I believe would cause huge problems for the delivery of new zero-carbon technologies and the delivery of housing. That would not be workable and would be a nightmare for industry to adapt to, which is why the proposal is not feasible. If house builders have to meet hundreds of different types of standards across the country, that will prevent the economies of scale, which have been mentioned, that are desperately needed in the industry for building zero-carbon homes; it will make it much harder for house builders to deliver the homes that we need; and it will reduce competition, by making it harder for house builders to cross boundaries into areas that require different building techniques.
There is therefore a risk that the Bill would distort investment in research and development, and technologies, and could disrupt the orderly development of supply chains for the delivery of zero-carbon homes. I do not think that that is what the hon. Member for Sevenoaks wants. Instead, the Government’s current framework will increase national standards substantially and clearly, in 2010 and 2013, and fully reach zero carbon by 2016, so all builders will have to meet higher standards and the construction industry can benefit from economies of scale and, importantly, plan for that zero carbon target.
The enabling provision on energy efficiency could set different standards for different parts of the same development, which could encourage the fragmentation of building standards. We are keen to avoid that, as it would be at odds with the approach set out in the PPS, which encourages councils to go for a higher code level for specific sites and where there are particular, demonstrable circumstances to justify such action. It is important to note that, although different councils might be working to different standards, they are all standards on the same scale, set out in the code for sustainable homes, rather than each council adopting an entirely different approach, as the Bill would permit.
The House will be pleased to hear that I am now reaching my conclusion. I again welcome the spirit of the Bill and commend the hon. Gentleman for bringing it to the House. What our green and growing economy needs is an evidence-based and comprehensive green strategy, not a green fig leaf that dies quickly when this season’s fashion ends. We need practical, local proposals that capture the support of the wide range of organisations that we need to work with to realise our shared ambitions, not the unrealistic dreams of one particular lobby group. We need a flexible approach that can respond to advances in technology and changes in demand, not a legislative straitjacket that would leave us unable to swim on as the water rises. This is what the current legislative programme offers and, importantly, what the PPS provides, but it is what the Bill would fail to deliver. That is why I do not believe that we should give it a Second Reading.
With the leave of the House, I should like to say that the case for the Bill has been well supported on both sides of the House, and I am most grateful to all those who have spoken. I simply do not understand how the Minister can describe it as a green fig leaf. The whole point of it is to place on the statute book and beyond doubt the ability of councils to adopt these policies.
Question put, That the Bill be now read a Second time:—
Bill read a Second time, and committed to a Public Bill Committee, pursuant to Standing Order No. 63 (Committal of Bills).
On a point of order, Mr. Deputy Speaker. Am I right that there was a time when the occupant of the Chair would remind Members that if they call a vote they are normally expected to vote the way that they are supposed to? Could the Minister be invited to come back, give an explanation for not voting against the Bill and perhaps offer his resignation within 24 hours of taking up his position?
Environmental Protection (Transfers at Sea) Bill
Order for Second Reading read.
I beg to move, That the Bill be now read a Second time.
I thank the Royal Society for the Protection of Birds for its support in the preparation, development and encouragement of the Bill. I declare that support as an interest. I also thank the Scottish Wildlife Trust, the Wildlife Trusts throughout Britain and Surfers Against Sewage for their backing for the Bill. I have received support from many Members on both sides of the House, particularly my hon. Friend the Member for East Lothian (Anne Moffat), who introduced a ten-minute rule Bill on the subject last year. Support has come from across the House, across the country and across parties.
The Bill seeks to improve the regulation of ship-to-ship oil transfers around the United Kingdom. As some Members will know, the proposal for such transfers in the firth of Forth is a long-running issue in my constituency. I shall say more about that later. Other Members representing coastal areas all around the country will have similar concerns. By ensuring effective regulation of ship-to-ship transfers, the Bill will have significant benefits for protection of the marine environment, wildlife and coastal communities throughout the United Kingdom.
Ship-to-ship cargo transfers are carried out globally, both for commercial reasons and in emergencies to prevent pollution or risk to human health and safety. They are established and standard practice in many parts of the world, and take place regularly in various parts of the United Kingdom—for example, in harbours in the Northern Isles and a number of designated locations off the coast of England. The busiest United Kingdom locality is Scapa Flow in Orkney, with a maximum of more than 2 million tonnes of oil transferred in one year.
As the distribution patterns arising from the world trade in oil have changed, the shipping industry has been presented with opportunities for new trading activities. In particular—this is the background to the proposals that have caused concern in my locality—the rising trade in oil from offshore fields in northern Russia has led to an increasing flow of traffic through the Baltic and Barents seas, and a resulting increase in tanker-based transportation. What is particularly significant about the new trade is that the offshore fields require specialised vessels that are unsuited to making long journeys with oil cargoes. As a result, the cargoes must be transferred from those vessels to general tankers that can make longer crossings to the United States and the far east, which is an important market for the new oilfields.
I should make clear that my Bill does not seek to ban ship-to-ship transfers of oil or other cargoes. Such operations are perfectly acceptable if carried out in the right place and the right conditions, with the right infrastructure and pollution prevention expertise. However, it must be ensured that they can take place only in locations where they are safe, with the appropriate protection mechanisms applied in case something goes wrong. The transfer of oil at sea is of course an inherently hazardous activity, and aspects of the regulation of the marine industries of some of the countries from which oil may come in the future might—to put it mildly—cause us some concern. It is therefore important to ensure that we have the right kind of protection for our marine environment.
Environmentalists in and around Worthing and district will understand the points that the hon. Gentleman is making. Although the greatest threat exists on the northern costs of Great Britain, when a large amount of timber floated ashore in Worthing from the Ice Princess we were well aware of what would have happened had there been 2,000 tonnes of oil floating around the seas and the Solent. Timber does much less damage. The hon. Gentleman will receive considerable support from the south coast as well.
I am grateful for the hon. Gentleman’s support. It is true that some of the worst disasters involving pollution have happened off the south coast. Most of us will remember the Torrey Canyon, and there have been other incidents along the south coast in recent years.
In seeking regulation, I do not seek to prohibit or regulate what are known as emergency transfers which take place when it is essential to move oil from one vessel to another. I am talking about general practice and general trading operations.
As the hon. Gentleman reminded us, there is concern about the transfer of oil at sea precisely because many parts of this country are blessed with beautiful coastlines that are of major importance to the communities that live along them. They are important not only for the natural environment in itself, but for the support that the natural environment brings to local communities in terms of tourism, recreation and other economic activities. I mentioned the Torrey Canyon, but there have been other episodes in recent years off the south coast of England. Indeed, as hon. Members are well aware, the oil spill from the Erika off the west coast of France also had consequences for the UK.
As a Member representing a constituency in Scotland, I can point to the beauty of Scotland’s seas that are home to 45 per cent. of the breeding seabirds in the entire European Union. Those seas are of European significance and, in that regard, I should put on record the support that I have received from the staff at the Scottish Seabird Centre in North Berwick who have helped to publicise the issues behind the Bill and the campaign. I strongly recommend to anyone who has not visited the centre that they should do so. It is a good example in showing how important the welfare of the natural environment is for the protection of our most vulnerable marine species. The firth of Forth alone is home to about 300,000 seabirds and the seas around Scotland contain a wide variety of species, from basking sharks to rare coldwater corals. As I have suggested, that wildlife brings great financial benefits to our coastal communities. It is in everyone’s interests that the marine environment is managed sustainably to allow us to reap the benefit of healthy, productive and diverse seas and coasts.
I am sure that I support the sentiments behind the Bill and I am all for protecting our coastlines and our wildlife. However, the shipping industry is an equally important part of our economy, so can the hon. Gentleman tell us what representations, if any, about the Bill he has received from that industry? Does it see any particular reasons why we should not support the Bill?
I am grateful to the hon. Gentleman for raising an important point. As a Member representing a coastal constituency, I also represent a port, although one that is not as busy as it once was. I am equally interested in ensuring that there is a healthy and vibrant marine industry. Although there has been widespread publicity for my Bill in some of the specialist press and media dealing with the marine industry, it is interesting that, as far as I am aware, no one from the industry, apart from one individual, who is opposed to the Bill, has contacted me.
On the other hand, many organisations—obviously primarily from the environment and community side—have contacted me to support it. I emphasise that I certainly do not want to do anything that would undermine the shipping industry. As I hope to assure the hon. Gentleman later, the Bill would provide for the industry a bit of a—level playing field is an unfortunate analogy for things at sea—level regime that would benefit it in some respects. Part of the concern is that the oil may come from countries whose regimes for marine safety are not as good as ours, and that is why it is in the interests of this country to have a high-quality regime that applies to all. Although I have particular concern for my area, the issues are of concern throughout the entire UK—along the south coast of England, and in Devon, Cornwall, Wales and many other areas.
Ship-to-ship transfers take place in Scapa Flow and there are active proposals for cargo transport operations in at least two other UK harbour locations—the firth of Forth and Falmouth. I believe that the proposal in Falmouth has been quite controversial, but I am not as fully aware of the situation there as that in the firth of Forth.
It should be emphasised that often no independent authorisation or consent is required to set up an oil-handling operation. It depends on local regulations; sometimes local legislation is in place. A wide range of regimes apply in the UK. I see the Under-Secretary of State for Transport, my hon. Friend the Member for Poplar and Canning Town (Jim Fitzpatrick), expressing doubt about that, but varied regimes and regulations apply; they are certainly not entirely consistent across the UK. My Bill aims to ensure consistency.
The primary objective of my Bill is to ensure that the standards that currently apply to ship-to-shore transfers, which are carefully regulated, also apply to ship-to-ship cargo transfers. We should not expect lower standards of environmental protection for transfers that take place at sea than for oil transfers from ship to shore. The issue is complex, but my understanding is that transfers at sea are regulated in a fairly piecemeal fashion, and that national rules and guidelines apply only in limited ways; however, I will not go into that in great detail. That is the background to my proposal.
The situation is slightly different in Scotland. Last June, as a result of concern about proposals in the firth of Forth, the Scottish Parliament put forward regulations relating to the habitats directive, with all-party support. The regulations give Scottish Ministers power to intervene to ensure that any transfers agreed by a competent authority are consistent with the EU habitats directive. However, as I understand it, the regulations cannot apply to ship-to-ship transfers outside the control of the competent authorities, and of course as they are made under the habitats directive, they apply only to areas that are designated under the birds and habitats directives. If a transfer is proposed in an area that is not yet classified under the directives, or that is of tourist significance but is not considered as falling within the terms of the birds and habitats directives, the regulations agreed in Scotland do not apply, even in Scotland.
To come to the crux of the matter, my Bill would place a requirement on the Government to introduce regulations under the Merchant Shipping Act 1995 to control ship-to-ship transfers. The Government currently have powers to introduce such regulations, and indeed draft regulations were produced in 1999. There has been discussion about such regulations over the years, but they have not appeared. My Bill would replace the power with a requirement on Government to bring forward regulations. I have set out various criteria that have to be borne in mind, but clearly once regulations are brought forward, there will be a consultation on the details. Basically, I am trying to move the Government forward from simply having a power that they have not yet exercised to bringing forward regulations.
My Bill sets out a number of principles that the Secretary of State will be required to take into account when introducing regulations. I shall mention them briefly; I do not want to take up too much of the House’s time, as I know that there are other Bills to be discussed today. My Bill would require the Secretary of State to prohibit cargo transfers of oil and oil products in UK waters, except within statutory harbour authority areas, where the anti-pollution measures should be better than on the open seas. The Secretary of State would be required to consider a transfer, or programme of transfers, to be an “oil handling facility”. He would also be required to ensure that such transfers were considered to be a plan or project under the Conservation (Natural Habitats, &tc.) Regulations 1994.
The Bill would also require the Secretary of State to consider various aspects of the environmental impact assessment regulations, and it would exempt emergency transfers from its provisions.
Is the implication that ship-to-ship transfers would have to take place within the harbour area, or would certain areas not be considered environmentally sensitive and are some currently designated for such transfers? I was not clear about that from the drafting.
I should be clear. Although the intention is that such transfers would take place within harbour areas, the drafting indicates that they would be
“prohibited except within such areas as the Secretary of State shall designate in regulations”.
That means that transfers could take place outside harbour areas when that would be safe. I am sure that the hon. Gentleman knows that the definition of “harbour area” can be broad and cover parts of the sea, rather than only the area within a couple of piers, for example. My suggestion is that transfers would be allowed in areas where they would be safe—normally harbour areas, but other areas as well.
I turn briefly to the issue of environmental impact assessments, an important dimension of the debate. Within the firth of Forth area, Forth ports have required an environmental impact assessment to be drawn up by the relevant shipping company. I welcome that. I do not want to single out Forth ports for criticism; indeed, they have approached the issue with a fair degree of awareness of public concern and there has been open dialogue about the issue with local communities.
Those ports have done more than the minimum required of them. In many circumstances, those port authorities, or any others, are under no requirement to carry out environmental impact assessments. More importantly, there is no independent oversight of the process to ensure that the assessment is sufficient or that any environmental recommendations arising from such an assessment are appropriate. In many cases, a port operator will have a commercial interest in the activities that need to be regulated. The practical consequences of the lack of any general, formal requirement for cargo transfer proposals to be subject to the environmental impact regulations are that there is no independent, publicly accountable scrutiny of the environmental impacts of cargo transfer proposals except those that relate to European wildlife sites in Scotland, as a result of Scottish Parliament legislation.
In sum, the Bill would remove the provisions that empower the Secretary of State for Transport to regulate cargo transfers, and replace them with a requirement that she regulate them. That would go a long way towards reassuring the concerns of many coastal communities. I emphasise again that the Bill does not seek in any sense to hinder the important marine industry—the ports and shipping industry—in our country. It seeks to set a clearer framework for dealing with ship-to-ship transfers throughout the UK. That issue is important to many communities throughout this country.
I know from my discussions with the Minister that the Government are not unsympathetic to my objectives in the Bill and I look forward to his reply. I emphasise again that I am not against shipping or the marine industry, which are vital for our island nation and its industries and imports. They are vital for jobs in many communities, including my own. Nor am I, per se, against ship-to-ship transfers, which in the right place are a perfectly acceptable activity. However, they must take place only in safe locations and in safe conditions and only use safe procedures. We need to ensure that because we have to protect our coastal environment—one of the most precious natural assets of our islands.
I am delighted to speak on this Bill, and I congratulate the hon. Member for Edinburgh, North and Leith (Mark Lazarowicz) on securing this slot and introducing it. The Opposition very much appreciate the intentions behind it and the considerable amount of work that has gone into drafting it. The timing is good, as it gives us an opportunity to consider the effects of man on our marine life and the birds that make Britain’s coasts their primary habitat. It also gives us an opportunity to think about the importance of shipping and the fact that it is easily the least carbon-intensive way of moving goods around the world, and to try to think of ways we can make that industry safer for the environment.
The protection of our coastline and the wildlife that lives on it will be a most important concern for the next Conservative Government. We all know the damage that can be wrought when things go wrong at sea. An island, by its very nature, is vulnerable to oil spillages. I remember most acutely the Braer disaster off Shetland and the Sea Empress at Milford Haven, as, I am sure, do other hon. Members. The cost of those has been estimated at $83 million and $62 million respectively, according to figures from the Royal Society for the Protection of Birds. More importantly, they left tens of thousands of birds dying in the slicks and ruined hundreds of miles of coastline for a very long period. Fortunately, oil spills are now very rare. Nevertheless, the hon. Member for Edinburgh, North and Leith made it clear why we are likely to see an increase in oil trade around Scotland and the north of our country, with the shift towards Russia as an increasingly important oil producer and supplier to the UK.
The need to preserve areas of outstanding beauty or environmental significance from the threat of oil pollution is very great. Indeed, the last time I debated oil pollution in this Chamber, I led Opposition demands for the Government to introduce, after a 13-year delay, provisions for marine high-risk areas. I am pleased to say that not long after that the Government did at last use the powers to create such no-go areas for ships on some of the most sensitive parts of our coastline. The Bill is not in quite the same league, because it deals only with transfers of oil, not huge potential oil slicks, but it raises an important issue and the hon. Gentleman is right to have put it on to the House’s agenda. As far as I am able to discover, we have never had in the UK a single spillage from a ship-to-ship transfer in our waters, and the level of incidents worldwide is very small. In the past 10 years, the largest single incident of ship-to-ship oil spillage involved only six barrels, although it would not have been nice to be on a nearby section of coastline. Worldwide, the average annual spillage is about eight barrels of oil per annum.
However, even the smallest oil slick can cause significant damage along a sensitive piece of coastline—not only to bird-life but to the coastline itself. It is sensible that, as the Bill proposes, the Secretary of State should have the power to determine where such transfers occur. By limiting these practices to areas where the Secretary of State is certain they will cause limited damage, the Bill would remove much of the concern about such transfers. In calling for ships engaging in transfers of oil to be considered “an oil handling facility”, the Bill would in effect demand that shipping companies prepare oil pollution emergency plans. I understand that in practice that usually happens anyway, but when it does not, it should, and it is thoroughly sensible to put that requirement on a statutory footing. Enshrining the circumstances necessary for an environmental impact statement to be required, as laid out in the Marine Works (Environmental Impact Assessment) Regulations 2007, would also provide greater clarity in the law, which should be welcomed in all parts of the House.
However, my hon. Friends and I have serious concerns about one aspect of the Bill. It insists that each ship-to-ship transfer be treated as a “plan or project” under the habitats directive. We believe that that would place a disproportionate burden on the industry. Before explaining why we believe that, I wish to remind the House of the importance of the industry, which the hon. Gentleman mentioned in the context of his constituency. We in this country should be proud of this industry, and the entire House should support it. Measured by weight, 95 per cent. of all goods that come to this country come by sea—from the toy reindeer around the Santa grotto, to the paddling pools in the summer, to the footballs used in the premiership. The industry has an annual turnover of £40 billion if all the ancillary industries are included, and it contributed £11 billion to GDP last year alone.
We should also support the industry because it is by far the greenest form of transport. The figures speak for themselves. Per tonne-kilometre, an articulated lorry emits 130 g of CO2 whereas a medium-sized cargo vessel on a short sea voyage pumps out less than a quarter of that. There are similar such startling differences in respect of other gases. A truck produces more than 0.8 g of NOx per tonne-kilometre, whereas a ship emits barely half a gram. There is no doubt that the more goods are moved by sea—rather than by lorry and then over a channel crossing or, worse still, by air—the better it is for the environment. That does not mean that the shipping industry does not need to clean up parts of its act; it does, especially with regard to sulphur and nitrogen oxide emissions. What it does mean, however, is that we ought to encourage the use of shipping where it does not directly cause damage to the environment, because shipping is by far the greenest form of transport.
That brings me directly back to the problem we have with the one provision I have mentioned. We and the industry believe that the application of the habitats directive in the way the Bill proposes would result in ship-to-ship transfers being ruled out almost altogether. In supporting the Bill, the RSPB made it clear that that was not its intention, and the hon. Gentleman has also made that clear several times in his speech—at the beginning, the middle and the end—but I want to explain why we think that that would be the effect.
The United Kingdom Major Ports Group conducted a study of the impact of the habitats directive on dredging, which it was concerned about. We must bear in mind the fact that dredging is an activity that usually takes place over weeks, rather than being over in an hour or two. Let me quote from that study:
“There is a complex regime of controls governing any proposed ‘plan or project’ which is likely to have a significant effect on the site. There is a requirement for an ‘appropriate assessment’ and if the assessment indicates that the project will adversely affect the integrity of the site, the project may only go ahead if it is considered to be necessary for ‘imperative reasons of overriding public interest’ and if there are no alternatives. In such circumstances compensatory measures are required. (Article 6(3) and (4)).”
One can immediately see why that could be a problem for dredging, and particularly maintenance dredging, which some ports regularly require in order to be kept open. If that is a problem for applications for each instance of dredging, which takes place over at least days and normally weeks, one can imagine how much of a problem it would be for an activity that happens over a period of a few hours—perhaps over a weekend or during a public holiday. It would virtually prevent it.
We must consider another environmental dimension, which deals with the matter from another angle. Ship-to-ship transfers are sometimes environmentally necessary. The European Union has forbidden the use of so-called dirty oil—oil that has high sulphur emissions—in the English channel and the North sea. Such emissions often also carry particulates, which have genuine implications for public health. Interestingly, that is the case only if the particulates occur within a couple of hundred miles of land; particulates are not a problem out in the middle of our oceans because they do not spread over unlimited distances, unlike greenhouses gases which simply go upwards. Particulates are a problem around coastlines, and the EU has rightly chosen to adopt a higher standard for ships in such areas than the International Maritime Organisation requires of ships on the high seas.
For that reason, many ships need to take on low-sulphur oil when they are approaching UK waters. That requires the use of ship-to-ship oil transfers for solid environmental reasons—I am certain that the hon. Member for Edinburgh, North and Leith, the Government and all other Members of the House fully support that. In the long run, we all hope that the IMO will raise its game to the level of the European Union. Although some of the problems do not arise on the high seas, they certainly apply to such countries as China, from which these vessels are mostly leaving. That is a matter for the long term. In the meantime, there is an immediate requirement for such ships to carry out these transfers as they approach the UK coastline.
I envisage the hon. Gentleman referring in his summing up to the fact that nothing in the Bill will interfere with emergency transfers, so I should make it clear that the transfers I am discussing are not emergency transfers. They are statutorily required transfers, but they are not emergency transfers. They would be covered by this burdensome provision, so the demand that each ship-to-ship transfer be treated as a “plan or project” raises the prospect of an inquiry in respect of every such transfer. If the hon. Gentleman were willing to have discussions with the industry or to receive a Government briefing—although I should not anticipate what the Minister is going to say—I am sure he would subsequently agree that that one provision in the Bill needs serious redrafting or, perhaps, eliminating.
Nevertheless, the Bill as a whole has excellent intentions. It outlines some sensible ideas for tackling a matter that has not yet been a problem, but which, as the hon. Gentleman rightly says, could be one in the future, given the growth in trade from an unfamiliar direction of the sort that has been described. He is right to have brought the Bill before the House. Should it go to Committee, the Opposition will seek to amend the offending provision in the way I have mentioned, if the Government do not table amendments. This is a good Bill that contains some excellent ideas. It addresses a genuine area of public concern, and we support its receiving a Second Reading by the House.
I, too, congratulate the hon. Member for Edinburgh, North and Leith (Mark Lazarowicz) on introducing his Bill. I shall indicate, in the same general terms used by the hon. Member for Canterbury (Mr. Brazier), that we too support the Bill. We certainly wish it to receive a Second Reading.
Like all Bills, this one contains issues that we will wish to explore in Committee, should it proceed that far. I am grateful to the hon. Member for Edinburgh, North and Leith for having made it so clear in his speech that it is not his intention to impede or end the practice of ship-to-ship transfers. That was a very important point and I am glad that the hon. Gentleman made it as clearly and frequently as he did. It would be in no one’s interest for this House to pass legislation that was then subject to the law of unintended consequences.
At a very low level, this is not a new debate but one that has carried on for some years now. It has acquired a particular political potency since the issue of oil transfers carried out in the firth of Forth became a live one. I like to think that the lack of political heat in this debate is in a small way a tribute to the way in which my constituents have carried out ship-to-ship transfers at Scapa Flow and, to a lesser extent, at Sullom Voe, over the years. At both places, this matter is regarded as very much routine.
Scapa Flow, if I might take that as a working example, is an excellent place where such transfers can be done, if they are done properly. Within Scapa Flow is the Flotta oil terminal, so there is a substantial body of expertise and a substantial resource relating to pollution control that can be called upon should it be necessary. The question of transfers in the firth of Forth has been quite a different one, and we see a tension between what is the most convenient place for ship-to-ship transfers and what is the most suitable one. I do not detract from the concerns of the hon. Member for Edinburgh, North and Leith in any way when I say that for us in the Northern Isles the history of ship-to-ship transfer has been a smooth and uncontentious one.
Scapa Flow is a safe, sheltered, deep-water harbour. Nature has blessed us with that; it does not even require any dredging, such is the depth of the water. That in itself is a commercial asset. To say that it is safe and sheltered is not to say that the whole process of ship-to-ship transfers is somehow straightforward. It is safe because in the Northern Isles we have a substantial body of skilled workmen who have been well managed, and who have the expertise to carry out such tasks. We should not underestimate the importance of the resources, or the vast range of experience that has been built up for 30 years or more. Even in a place such as Scapa Flow, it is not unknown for there to be strong winds—that might be known even by most Members here—which means that the work force who carry out ship-to-ship transfers are doing so at the very limits of their capability. I pay tribute to the work force in Scapa Flow who operate in such conditions. It may often look routine on a nice summer’s day when there is a flat calm, but when the wind is blowing, and there is a commercial imperative that such work is done—and if it can be done—my constituents go out and do it.
The practice is the subject of some local interest at the moment. The Orkney Islands council owns Orkney Towage, which operates the tugs in Scapa Flow that carry out ship-to-ship transfers, and the council is currently proposing to reduce the number of staff employed on the tugs from 36 to 20. That is a significant reduction, and it will bring an entirely different pattern of shift working that has caused concern among the workmen affected. I met about 40 of the men employed by Orkney Towage and the harbours department—there are implications for piloted boats in the plans—and their union representatives on the Saturday just gone. I was very
impressed by the case that they presented, which was forthright, clear and unambiguous about their concerns. They were reasoned and mannerly, as one would expect Orcadians to be. I felt that what they wanted was eminently reasonable. They sought merely an independent review of the decision taken by Orkney Towage and the harbours department.
I was disappointed that when we put that case to the council it was dismissed more or less out of hand. I see no reason why any review could not have been conducted by a single man of some skill and expertise, in a short compass that covered interviewing all the parties concerned and giving some assessment of the towage plans. Such a review will be necessary if the work force—and, by implication, the community—in Orkney are to have confidence in the decision that has been taken.
I do not know whether the judgment is right or wrong; I am not qualified to make that judgment. There were men at the meeting on Saturday with more than 30 years’ experience of working the tug boats, often in difficult circumstances, and it is apparent that they at least do not have confidence in the decision. If the process has been as robust as Orkney Towage suggests, at the very least it could have been subjected to some external scrutiny. It is a source of considerable disappointment to me that we have not done so. That may yet have further implications for industrial relations in the sector.
I mention that point because it is important to illustrate the way in which commercial concerns can come to bear on operations such as ship-to-ship transfers. It brings into sharp focus the nature of the regulation that will be required. The fashion these days is to speak of light-touch regulation. As a general presumption, that is sensible. However, light-touch regulation still has to be meaningful. Many aspects of shipping and maritime regulation in this country have lost some of their potency and force in recent years. In particular, I am thinking of some of the discussions that I have had with other unions in my constituency about the operation of safe manning documentation and so on. In that case, the touch of the regulatory body, the Maritime and Coastguard Agency, is so light as to be indiscernible.
The regulations must have a purpose. They must seek to protect the safety of the work force who are most directly concerned and who will often work in unpleasant and difficult conditions. Working at sea is never easy. As the hon. Member for Edinburgh, North and Leith mentioned, there is no such thing as a level playing field on the water. Sometimes, the playing field is so unlevel that people wonder whether they will ever get to the sidelines again.
The protection of the coastal environment is of supreme importance to me and my constituents. It is a resource that provides food and employment through the fishing industry and the diving industry, which is a big operator in Scapa Flow. The coastal environment is also an attraction in our ever-growing tourist industry. We consider environmental protection to be very important. It has always been regarded as important by those who have hitherto been responsible for the ship-to-ship transfers in Orkney. That is why we have been able to do it so effectively and safely for so long.
The nature of the regulation must not be so burdensome as to lose the business. That is the balance that the Minister must strike. He must be mindful of the fact that we are dealing not with a UK market but with a northern European market. If we regulate that valuable, important and desirable business out of our waters, it will go elsewhere in northern Europe. That would not benefit anybody. If it were a business that we could not cope with or did not want, we would not want to keep it. However, that is not the case. It is important to my constituents and to other parts of the industry.
I agree with the hon. Gentleman’s sentiments, which appear to follow on from those of my hon. Friend the Member for Canterbury (Mr. Brazier). Will he deal with my hon. Friend’s specific point about paragraph (c) in proposed new subsection (4A) in clause 1(2), and the programme of transfers being considered as a plan or project? Does he agree with my hon. Friend that that aspect of the Bill provides for regulations that are too burdensome for the shipping industry, or does he believe that they are necessary from the environmental perspective, which the promoter mentioned?
I would like that to be explored in Committee. On the face of it, regulating each individual transfer under the habitats directive would be burdensome to the point of threatening the future of an important part of the industry. That is what I meant when I mentioned the law of unintended consequences. It might be more sensible to require, for example, the conduct of ship-to-ship transfers per se—not every individual transfer in an area—to be subject to the habitats directive. That might satisfy both sides and meet their objectives. I await the comments of the Under-Secretary of State for Transport, the hon. Member for Poplar and Canning Town (Jim Fitzpatrick) and the subsequent comments of the promoter with interest, because I know that some discussions have taken place. However, if the Bill gets to Committee, we would like to explore the point there.
I do not believe that there is any difference between the hon. Gentleman and me on the matter. He hinted that a compromise could be reached on the habitats directive, but if it is not to apply to individual transfer, it is difficult to understand what else could constitute the unit. The exercise could be done once for an area, but other aspects of the Bill cover that. If each transfer is not called a plan or project for the purposes of the habitats directive, it is difficult to understand how the directive could be introduced. That is why we have problems with the clause per se.
I do not wish to pre-empt the Committee discussion. My suggestion was that the Secretary of State would have to consider the operation of the habitats directive before giving his consent in a designated area. All operations in that area would therefore be deemed to be covered. That might be the right compromise, but it might not—if we get to Committee, we will have that discussion. If the Secretary of State introduced regulations under the Merchant Shipping Act 1995—a power that he currently has—it would not be a live issue. Doubtless, that consideration will be in the Under-Secretary’s mind when he replies.
Regulation offers opportunities, but it must not be used as a tool to kill a most important part of our oil and shipping industries. With that caveat, which I believe the promoter accepts, I am more than happy for the Bill to be given a Second Reading today.
I congratulate the hon. Member for Edinburgh, North and Leith (Mark Lazarowicz) on promoting the Bill. I am here because I wish to support it. I also congratulate my hon. Friend the Member for Canterbury (Mr. Brazier) on his excellent speech from the Front Bench. I have learned a great deal more about ship-to-ship transfers than I knew previously.
An important point that I have gleaned from the debate is that there has been no serious accident to date. I was grateful to the promoter for clarifying the points about harbour areas. The Bill covers most eventualities, such as emergency ship-to-ship transfers, but I was worried when I read it that the Secretary of State would be put in a position whereby he determined areas that were closed for ship-to-ship transfer, thus suggesting that there are other areas where a potential accident might be acceptable. Obviously, that is not the case.
On the hon. Gentleman’s point about there having been no such incidents so far, I am sure that he would agree that if one did occur it would not be like a car accident, which can sometimes be fairly minor; rather, it could be very serious indeed. The point is that there has been a change in the trading patterns that makes the kind of eventuality about which we are so concerned more possible.
One reason why I wanted to participate in this debate is that I remember as a little boy going fishing off the south coast, and there were no fish and very few crabs because of the clean-up following the Torrey Canyon disaster, and after that we had the Amoco Cadiz. My sympathies are therefore entirely with the hon. Gentleman.
It is not just the Royal Society for the Protection of Birds that wants the Bill on the statute book—I want to take this opportunity to say that it does a tremendous job of drawing people’s attention to the importance of the environment and has done particularly good work on the marine environment and the proposed marine Bill, which I shall come to shortly. I am particularly concerned about the pod of dolphins living in the firth of Forth. Dolphins are highly intelligent, and we have an appalling record in the UK of protecting them. Tragically, the Yangtze river dolphin was last year deemed extinct. We should therefore make considerable efforts to improve our track record on cetaceans.
When people are asked what they most want to do in their life, swimming with dolphins is often a top priority, and we have that opportunity off our coast. I remember thinking when I was smaller that Flipper the dolphin could live only in Florida. Actually, Flipper was a bottlenose dolphin, which are native to our seas, too. We therefore need to do a great deal more to raise our game.
I have some statistics for the House, which I am grateful to DEFRA for supplying in written answers. Of the 1,542 dolphins that were examined by the natural history museum and the Institute of Zoology, seven were killed by boat strike and 338 by pollution. The Department could not identify the number killed by pair trawling, which is a major problem for cetaceans. The bottlenose dolphin, the common dolphin and the harbour porpoise all fall victim to the type of netting used to catch bass, where two powerful trawlers pull a huge net between them. I am pleased that the practice has been stopped for British fishermen within our 12-mile limit, but that does not apply to the rest of our European partners. Again, there is a great deal more that we can do to support and protect our dolphin population.
The other creatures of considerable importance in the firth of Forth are the birds. My understanding is that the firth is already a special protection area under the European bird directive, which is very welcome. Apparently, 90,000 birds go to the firth, including red-throated divers, puffins and gannets. Puffins are particularly important, because they live off sand eels. Sand eels are low down in the food chain, but they are an important indicator of the water quality and the quality of the biodiversity in our seas. Factory fishing has wiped out huge quantities of biomass to make fish meal, which leads to a corresponding drop in the number of puffins, which is a great tragedy. Anything that the Bill does to protect the area from oil spillage will therefore have a positive knock-on effect on the wildlife.
My other worry is about the damage caused to the tourist sector when there is an oil spill. I experienced such an effect in my constituency, although not from an oil spill, when our tourism sector was decimated during the first foot and mouth crisis. Oil spills have the same effect on coastal towns, hotels, boarding houses and the various other parts of the industry that depend on tourists. It is therefore crucial that people do not find either that their feet are covered in spatters of oil when they walk along the beach or that the beach is shut while it is cleaned up.
Who could ever forget the horrible images on our television screens of birds that have been caught in oil slicks trying to preen their feathers and eating some of the oil, from which there is really no saving them? It is the Royal Society for the Protection of Birds and other animal welfare associations such as the Royal Society for the Prevention of Cruelty to Animals that go to the rescue and do their best to wash the birds. Often, the clearing up of an oil spill causes as much environmental damage as the spill itself. Oil breaks down very slowly over many years through bacterial attack, but the detergents that are used to break it down more quickly can be extremely poisonous, especially to birds and fish. Any protection that we can provide through this small but important piece of legislation will be very welcome.
Measures such as these should already have been covered by the marine Bill that the Government have yet to introduce. They first promised us such a Bill properly in 2004. Another was supposed to be in the Queen’s Speech in 2007, but was not. However, there was one in the Queen’s Speech in 2006, and we all became quite hopeful. My hon. Friend the Member for Uxbridge (Mr. Randall) started it all with his private Member’s Bill some years ago, and I am pleased to say that the RSPB was very supportive of it. It is incredibly important that we get this legislation right, and I am sad that the marine Bill has been delayed for so long, largely through the problems of devolution.
My hon. Friend is making a most powerful and in parts—dare I say it—moving speech. Does he agree that one of the oddities of devolution is that, while shipping remains an issue for the UK Government and Parliament, ports have been devolved, resulting in a rather curious hiatus in joined-up government?
That is just one of the many anomalies, and my hon. Friend is absolutely right to draw it to the House’s attention. There are many more. However, I do not want to stray from the subject. I am very inclined to do that when the matter of devolution comes up, and I have to be careful not to do so. One of my political Achilles heels is to stray into discussing devolution, but I shall avoid doing so, if my hon. Friend will forgive me. However, I will go as far as to say that the Government have been disappointingly slow to create a joined-up strategy for marine spatial planning and proper marine protection, and to integrate it into European marine policy.
My hon. Friend has been talking about devolution. May I go the other way and talk about the European Union? I expect that we shall hear plenty more on that subject next week. Although I am sympathetic towards the Bill, I am also keen to ensure that the regulatory costs or burdens on British industry will not disproportionately affect our competitiveness with, for example, our closest European Union neighbours. Are the kinds of regulations that we are considering already in place in the other EU countries?
Before I answer my hon. Friend’s question, I want to say that, prior to considering the minutiae of the competitive costs we must look at the wider picture and ask what would happen if there were a spillage. The hon. Member for Orkney and Shetland (Mr. Carmichael) made a great case about how well his constituents were already doing the job, and the fact that their track record is pretty good speaks for itself. The key point, however, is that when an oil spillage happens it is no good saying, “Ah well, this is a consequence of being competitive.” We have a much greater responsibility, and it is to the whole of our country, and to its biodiversity, its marine life, its tourist industry and its shipping industry—to the bigger picture. Therefore, I will not be drawn into giving my hon. Friend an answer about being cheaper or better or the same price as our French competitors. What really matters is that we do the right thing for the marine environment.
My hon. Friend should not forget that we share a channel with the French—if we are going to pick on one particular country—and an oil spill there might impinge on our own waters after a while. That would have an impact, and I wonder whether he knows what consultations have taken place between the British Government and other European Union Governments to ensure that the same strict protection that we are proposing to afford our wildlife will also be afforded to the wildlife in those other countries, particularly if their oil spills could impinge on the wildlife in the United Kingdom?
My hon. Friend raises another important point. I recall a recent spillage in Spain where we saw how much devastation can be caused. I cannot say whether the Minister has or has not spoken to his European counterparts, but I am pretty confident that he will have an opportunity to tell us himself in a very short time—as I do not intend to detain the House for much longer. My hon. Friend makes the point that we cannot put our own industry out of business on the basis of high principles alone, but I would return to my point that we must maintain those high standards. We must have our eye firmly on the environmental ball, as well as respond to the commercial considerations of the shipping sector.
That is why the Bill provides a balance: we must allow the procedures to take place, but only in areas where it is safe to do so. That is why I was grateful for the answer that I received when I intervened to ask which were the best areas. I was told that harbours were obviously the best areas, and I remind the House that Scapa Flow already has a great record. That response solved various issues. As I tried to emphasise, however, my concern is that we end up with proper marine planning, marine spatial understanding and marine protection for biodiversity that we all look for and enjoy in our seas. We will also need to integrate those aspects with what proposals emerge from the European Commission.
I fear, however, that that is not as joined up as the Government promised it would be, so I urge the Minister to take note. He should ensure first that the Government deliver their manifesto promise to produce a marine Bill and, secondly, that they do an effective job of it with no watering down. Thus far, we have seen only the White Paper and it is very—
I should be delighted to do so, Madam Deputy Speaker. Of course, I do not have a draft Bill; I have only the Government’s White Paper to concentrate on, so I could not go on any longer about the marine Bill, but I am grateful for your guidance.
I close by saying how impressed I was not only with the quality of the briefings produced by the RSPB and other interested parties, but with the quality of today’s debate on this interesting subject. We have to get the balance right between the value we place on marine biodiversity and the value we place on people’s livelihoods and the jobs that they are carrying out effectively at the moment.
Of course, not just the livelihoods of people in the industry—important though they are—are at stake, as 95 per cent. of British goods come to this country by such a route, so it is also important to get the balance right in the interests of the country as a whole.
My hon. Friend is absolutely right. It is not as complicated as having to deal with all shipping, as the Bill deals with a specific procedure.
To conclude, I hope that if the Bill does not receive its Second Reading or fails to get through Committee the value in it—for marine protection—will transfer to however the Government eventually choose to act on this front. I emphasise that this must not be yet another missed opportunity.
We have had a useful and constructive debate, which has also been interesting, if slightly curtailed. First, I congratulate the hon. Member for Edinburgh, North and Leith (Mark Lazarowicz) on introducing the Bill. As we have all acknowledged, it contains very useful provisions and we should all agree with the sentiments behind it. We should all want to protect the coastline and wildlife of the United Kingdom, which helps to make our country such a special place.
We seem to have got ourselves into a division in that the Bill is perceived as providing a choice between either protecting our environment and wildlife or wrecking the shipping industry. There seems to be a danger of understanding the Bill as if it goes down either that line or the other. What has emerged from our debate, however, and particularly from my hon. Friend the Member for Canterbury (Mr. Brazier)—if I may be allowed to sing his praises—is that the Bill is capable of combining the two, so that we can protect our environment and wildlife while also looking after the best interests of our shipping industry. Having heard all the contributions, I believe that we all want to see that.
My former colleague—and political hero—Eric Forth might have started off by saying that, given that we have not had an oil spillage from a ship-to-ship transfer in UK waters, the Bill was a solution looking for a problem, and that we should not regulate when there did not seem to be a problem. Equally it is nice, for a change, for politicians to come forward with proposals to prevent a problem from happening. Far too often in the political process, we wait for some great problem to happen and then rush into a knee-jerk reaction to try to solve it. Usually, that leads to bad law and laws with unintended consequences. It is refreshing that the hon. Gentleman has brought forward a Bill that will address what we can all see is a potential problem before a major problem actually occurs on our coastline.
My hon. Friend is absolutely right, but the context for the problem is the new one of large numbers of transfers in the firth of Forth. When I made the point that there had been no spillages, to which he alluded, it was in a context in which there was less prospect of spillages. That has changed, which is the reason for the Bill.
My hon. Friend is absolutely right. He makes an important point very well.
As we all know, the Bill is supported by the RSPB, which does a tremendous job protecting the interests of our birds and wildlife. We must be aware that any kind of oil spill would have devastating consequences for seabirds and waterfowl along our coast. It is absolutely right that we look at ways of giving those important parts of our bird population the protection that they deserve.
My hon. Friend is absolutely right to highlight the problem of wildlife, but the issue is much bigger: tourism and the livelihoods of those who live along the coast would also be affected. The RSPB actively supports the Bill, and I support the RSPB, but the Bill is not purely about wildlife.
My hon. Friend is absolutely right. The consequences of any kind of oil spillage would be far-reaching for our country. He is right that particular coastlines, the people who live along them, and any tourist industry that depends on people visiting those places would be adversely affected. The country has a large interest in dealing with this problem.
I do not wish to pre-empt the Minister’s comments, but I would be very nervous if he were to start urging the hon. Member for Edinburgh, North and Leith to trust the Government, not to bother with the Bill, which is all very nice, and to leave it to them to come back with something a little better. We have heard all that before. The Government are for ever saying, “Leave it with us; we will come forward with some even better proposals if you will just give us the benefit of the doubt.” Time after time, we get such warm words and assurances, and yet nothing seems to come from the Government. I hope that the Minister will not take that line, as he might find that many of us are sceptical about such assurances. If he does, I hope that the Government really intend to bring forward proper proposals, rather than just to get over a particular hurdle on a particular day, and to kick something into the long grass. People’s hopes are raised by the promise of some action and then dashed when it does not happen. That damages not just the Government’s reputation but that of all Members.
My hon. Friend the Member for Canterbury was right to emphasise the importance of the shipping industry to the UK economy. I was struck by some of the figures that he quoted: about 95 per cent. of the country’s international freight movements by tonnage, and 75 per cent. by value, are moved through our ports each year. That is a considerable part of our economy.
It would be absolute folly to do anything that might damage the industry. As my hon. Friend pointed out forcefully, shipping is very good for the environment. Surely we do not wish to do anything that would make moving goods by ship a less attractive option. Indeed, we should encourage it. I should be very nervous if any aspect of the Bill had the unintended consequence of persuading people to move their goods by plane, for instance, because that would be much worse for the environment.
I have agreed with everything that my hon. Friend has said until now. I did not quite say that shipping was very good for the environment. I said that given that goods are being moved, it was by far the least environmentally damaging method of moving them—much less damaging than, say, bringing them most of the way by lorry and then across the channel, or, much worse, transporting them by air.
I note the distinction that my hon. Friend makes, but given that we all want goods to be moved—all of us, surely, believe in free trade—shipping, in that context, is good for the environment. It is certainly better than the alternatives, unless we adopt a system whereby we do not bother to move goods around at all. I hope my hon. Friend will understand that I was speaking in that context, but if anyone misunderstood the point that I was making, his clarification will have been helpful.
I do not want a Bill that would damage the shipping industry or create perverse incentives. Nor do I want a Bill that would impose additional costs on the industry, thus raising the prices paid by consumers. While I am entirely committed to the spirit of the Bill—protection for the environment, for wildlife and, as my hon. Friend the Member for Uxbridge (Mr. Randall) pointed out, for the public living on the coast and the tourism industry—we must ensure that it does not have those unintended consequences.
I was struck by what my hon. Friend the Member for Canterbury said about clause 1(2)(c), which provides for a transfer at sea to be considered a “plan or project”. He said that it might prove not to be good for the shipping industry, and hence in the long run might not be good for the environment. If, as I hope, the Bill proceeds to a Committee stage, the hon. Member for Edinburgh, North and Leith may wish to consider allowing it to be removed.
As was pointed out earlier, Bills must be meaningful, and I certainly would not wish to fillet this Bill, allowing the sentiment to remain but preventing it from achieving anything. However, if clause 1(2)(c) were removed, the rest of the Bill would ensure that it was still meaningful. I agree with my hon. Friend the Member for Canterbury about the helpful nature of the subsection providing for the designation of places where ship-to-ship transfers could take place. The hon. Member for Edinburgh, North and Leith pointed out that it would also help the shipping industry by providing certainty about how and where transfers could best be carried out. I hope that the Committee will consider removing the paragraph, because removing it would improve the Bill rather than rendering it meaningless.
The best aspect of the Bill is that it highlights an issue that rarely gets highlighted here—the importance of wildlife and our coastlines. I know that the hon. Gentleman has a specific constituency interest in introducing the Bill, but he has done a great service to the whole House and the country by highlighting the issue. Although my constituency is very much inland and has no coastline to be affected by the Bill, many of my constituents are equally concerned about protecting wildlife and the beauty of our coastlines. He should be congratulated wholeheartedly on choosing to introduce a private Member’s Bill on this subject.
My hon. Friend has just said that his constituency does not have a coastline. Knowing Shipley relatively well, I can endorse that fact. It will take a lot of global warming before he finds a bit of coastline round Shipley. If he does, I have had it. My constituency is the Ribble Valley just the other side from him.
Does my hon. Friend recognise that our coastline is one of the best things about the United Kingdom? We are an island and we have a fantastic coastline. Irrespective of where our constituents happen to be, they almost have a feeling of ownership of our absolutely beautiful coastline.
My hon. Friend is absolutely right. The coastline is one of the things that makes our country great and unique. In an earlier intervention on my hon. Friend the Member for Leominster (Bill Wiggin), he touched on the subject of how similar legislation might be implemented in other parts of the European Union. Knowing him well, I am sure that his intervention was not calling for more intervention from the EU, but he makes an important point. The United Kingdom is in many respects unique given the coastline and wildlife that we have on this island. Therefore, it is imperative that the protection we have for our coastline and wildlife is greater than might be considered by other European countries if we were to engage in common action. They do not have the same beautiful coastline.
My hon. Friend is absolutely right, but there is a problem with such legislation. If we legislate for ships registered in Britain, how can we ensure that ships flying the flags of other countries, including the flags of countries that do not have coastlines, would be as good as our merchant fleet in doing what they should?
My hon. Friend is absolutely right, and highlights why we should avoid excessive and burdensome regulation. The point that I would like to make about the Bill is that we can secure protection for our coastlines and wildlife without creating excessive burdens that will make us uncompetitive and put us in a less advantageous position than some of our neighbours. It is important that we strike the right balance, which is why I believe that the Bill is a positive one. However, it is important that we take on board the point made by my hon. Friend the Member for Canterbury and remove the provision in clause 1 that may have unintended consequences.
I am grateful to the hon. Gentleman for giving way and for his support. Given his comments about the need for us not to get out of step with our European partners, I trust that that will lead him to give his full support to the Bill on the European treaty when it comes before the House in the next few weeks.
Indeed, I am warming up for next week’s debate, but I will resist the temptation to go down that line even though it was offered to me. I can only ask the hon. Member for Edinburgh, North and Leith to watch the debate next week; then he will see why I do not support the European treaty. As I do not wish to introduce a discordant note in a debate on a Bill that is, on the whole, very good, I will move on.
To sum up, I congratulate the hon. Gentleman on introducing the Bill, and I congratulate my hon. Friend the Member for Canterbury on making his comments in a constructive way. He supports the spirit and intention of the Bill, but his modest alteration would avoid an unintended consequence. I hope that the Minister will state his support for the principles of the Bill, and I hope that he will not say that he will introduce something better in future, if we will just be patient and bear with him.
Given the number of Conservative Members who are coming into the Chamber to listen to the hon. Gentleman, I get the impression that I might not get the opportunity to express any view on the Bill.
It is always a pleasure to listen to the Minister. I am so keen to find out what he will say about the Bill, and to make sure that any promises that he makes at the Dispatch Box today are honoured, that I will conclude my remarks, so that he has the maximum amount of time in which to tell us exactly what the Government will do.
I assure the Minister, who happens to be my Member of Parliament when I am living in London, that I, too, want to listen to what he has to say, but I want to make a short contribution first. I congratulate the hon. Member for Edinburgh, North and Leith (Mark Lazarowicz) on his success in the private Members’ Bills ballot. I have introduced a number of private Members’ Bills in my time. In my 15 years as an MP, I have been very successful in the ballot, but sadly I have not been as lucky with the national lottery. None the less, I am hopeful about that, too. One of my Bills actually had Government support and was put on the statute book. I hope that he finds himself in a similar position: I hope that the Government want to introduce the measure, and that he will therefore be given all the support that he needs to ensure that the Bill becomes an effective Act.
When my hon. Friend the Member for Shipley (Philip Davies) mentioned not having any coast in his constituency, it reminded me that you, Madam Deputy Speaker, and I were born, or at least spent a considerable time, in Swansea, which has a beautiful coastline in the Gower area. It is a superb part of the United Kingdom. As has been said, the issue is not just shipping and related business in those parts of the UK of which we have fond memories; there is also tourism. An enormous number of tourists are attracted to coastal towns. Sadly, some of our major coastal towns are not faring as well as we might wish. One can only begin to think of what the impact would be on those areas of a massive ship-to-ship oil spill; there would be enormous consequences for wildlife and the beauty of the coastline. It is important that we do what we can to protect it.
As my hon. Friend the Member for Shipley asked, why should we wait until there is a major disaster before introducing regulations that will help to prevent that disaster? When I write to a county council and say that there ought to be traffic lights or a zebra crossing somewhere, it looks at the statistics and says, “Too few people have been killed on that stretch of the road to warrant us taking those measures.” I am exasperated by that. Why should we wait for a disaster before something is corrected, if we know that there is a blackspot, or a problem waiting to happen? The same principle applies to the Bill. We recognise that an enormous amount of shipping takes place around, in and out of the United Kingdom, and we hope that it is all done according to best practice, but we do not want to allow the possibility of a spillage, which would have an enormous impact, for want of the Bill and its regulations.
I looked through some statistics before I came to make my speech. The enormous amount of freight carried by ship in UK waters surprised me. Like my hon. Friend the Member for Canterbury (Mr. Brazier), I am delighted that the vast majority of freight is transported that way. We want a healthy and vibrant merchant shipping industry in this country; shipping has stood us in good stead for a considerable number of years. Some 388 million tonnes of international freight moved through UK ports in 1999, the last year for which I have figures; that represents 95 per cent. of the total. Environmentally, shipping is the best way of transporting goods throughout the world.
The sad decline of manufacturing industry in our country means that we are importing more than ever before, from countries in Asia and elsewhere. In China, I have seen docks in which containers have been stacked up very high and ships have been in their bays ready to come to the United Kingdom. It is right that we recognise the importance of shipping into the UK and that the right regulations should be in place to ensure that oil transfers are done in the best way.
When accidents happen, I have always believed in the “polluter pays” principle. Using current regulations, we might well be able to ensure that those responsible for environmental damage paid for it. However, irrespective of how much money we were talking about, we could not correct the damage done to wildlife. That is immeasurable. We could take action in some respects, but we want to protect our wildlife from such impacts, for which no money could properly compensate.
I am delighted that the RSPB has supported and got behind the Bill. I have received a briefing from the organisation, which has more than 1 million members—about 1,500 per constituency. If we care about wildlife and the preservation of the bird species in the United Kingdom, we have to do something about those very things. If our constituencies do not have coastlines or ports, that matters little: we have a wider responsibility for UK ports and how shipping uses them.
That brings me to the wider argument that I mentioned to my hon. Friend the Member for Leominster (Bill Wiggin). I do not want British shipping to be subject to burdensome extra costs or costs that are not met by shipping in other countries, but I said that I felt a sort of ownership of the coastline around the UK, even though I represent Ribble Valley, which is inland—and long may that remain the case. I also believe that we have some sort of ownership of the wildlife in the whole world. I want to do what I can to ensure that the environment is properly protected.
When we go to schools, we find that youngsters may not be so interested in party politics and that they scratch their heads in working out how they are relevant to them. But my goodness—when we ask our youngsters about the issues they are interested in, they are keen to say that they want the Government to do what they can to protect wildlife.
My hon. Friend makes a valid point about the ownership of wildlife, which is not our own at all. In fact, many bird species directly affected by any form of oil spill are among the most migratory. The Arctic tern, for example, migrates from the Arctic virtually to the Antarctic—there cannot be anything much more global than that in the animal world.
I have just found out from my hon. Friend that my hon. Friend the Member for Uxbridge (Mr. Randall) is an expert on birds and their migratory patterns.
I hope that the Minister can comment on the international discussions that he has had, not only with our neighbours but more widely. We have seen the effect that such discussions can have on whaling—obviously, that activity does not take place on our shores—in that as soon as the Japanese announced that they were resuming whaling, although under the guise of scientific research, which we all know to be rubbish, there was an outcry. The Minister and his Government have been very proactive in trying to stop the Japanese from doing that. I therefore assume that they have also been proactive on a wider scale about ship-to-ship transfers of oil throughout the world. My hon. Friend the Member for Uxbridge made a valid point about birds, which may well come to our shores from other parts of the world. The fact that something happens in a part of the world that is not our legislative responsibility does not mean that the Minister cannot have in-depth talks with his fellow Ministers about what we can do to raise standards throughout the world.
As I said, 388 million tonnes of freight a year comes into the UK. That is a staggering amount. One can only imagine, therefore, the number of ship-to-ship transfers of oil that are taking place worldwide. I am sorry to say that I was not here for the opening speech by the hon. Member for Edinburgh, North and Leith, but I will read it. He may have said whether his Bill reflects best practice that is already occurring somewhere else or tries to break the mould by introducing legislation that is not in effect in other parts of the world. If it is the latter, I hope that it will be looked at by other countries throughout the world with huge amounts of shipping, such as Asia, particularly Singapore, China, South Africa, South America and the United States.
I agree with my hon. Friend the Member for Leominster that the provisions would have x costs for the industry and that that could make us less competitive with some of our near neighbours. However, we have to put the wildlife first. We must take common-sense measures and then look for the unintended consequences, as my hon. Friend the Member for Shipley said. Having legislated in good faith, we must ensure that we do not put such heavy burdens on our own shipping that it has the unintended consequence of making our merchant shipping uncompetitive with the rest of the EU. France is a near neighbour—we share the channel—and very heavy shipping takes place between the UK and Amsterdam. I hope that the Minister can comment on the discussions that he has had on the costs to industry.
Several Members have mentioned clause 1(2)(c), which could have unintended consequences whereby hardly any transfers can take place at all. The Bill is not intended to stop ship-to-ship transfers of oil but to make them safer. Unintended things may happen in any event, but we must try to make the process safer where we can. Subsection (2)(c) is a problem, whether because of the legalese or because something has not been properly considered. It is important that we get the Bill into Committee so that we can discuss that in detail, sort it out and get the Bill on to the statute book in the most workable shape.
I am delighted to give my support to this necessary Bill and again congratulate the hon. Member for Edinburgh, North and Leith. We have to be lucky to win in a private Member’s Bill draw, and then be even luckier, and have the good will of the Government, to get such a Bill on the statute book. I have spoken on a number of Fridays over the past 15 years, and I must say that I miss Eric Forth. He was one of the great Conservative Members of Parliament and a great parliamentarian. His frostiness and resistance on a Friday to the vast majority of Private Members’ Bills was well known—he was probably singly responsible for stopping most of them—but I hope that even he would have seen the rightness of the measures proposed by the hon. Member for Edinburgh, North and Leith.
I join the hon. Member for Ribble Valley (Mr. Evans) in congratulating my hon. Friend the Member for Edinburgh, North and Leith (Mark Lazarowicz) on his success in the ballots and on introducing the Bill. I am aware that there is considerable concern among Members about the prospect of large-scale transfers of oil between ships in United Kingdom waters.
I welcome the contributions made in the debate. The hon. Member for Canterbury (Mr. Brazier) spoke in support of the Bill and rightly acknowledged the role that shipping plays in our daily lives and in the economy. The industry rarely gets the acknowledgement it deserves, and I fully agree with his tribute to it. The hon. Member for Orkney and Shetland (Mr. Carmichael) also spoke in support, but from a position of greater authority and with greater knowledge of the procedures involved, given that Scapa Flow is in his constituency. The hon. Member for Leominster (Bill Wiggin) spoke in favour of the Bill, too, and raised environmental concerns that we all share. I am not sure that I fully agree with the hon. Member for Ribble Valley that it was a powerful speech, but it was certainly thoughtful—and geographical.
The hon. Member for Shipley (Philip Davies) demonstrated a degree of scepticism—ordinary UK scepticism, not the other variety for which he has a reputation—about the Government’s intentions and only time will tell if he has reason for that. The hon. Member for Ribble Valley, my part-time constituent who hails from the land-locked perch of Ribble Valley, also referred to the significance of shipping but said that we must have due regard for the protection of wildlife as well. I can assure him that we are working internationally on all such issues. We are also very conscious of the impact my hon. Friend’s Bill might have on shipping, and Members would not want to do anything to damage that important industry.
The United Kingdom has a highly successful record in maritime safety and the prevention of pollution, and we appreciate the importance of both issues. In particular, we have a highly developed strategic approach to protecting the UK’s seas and coasts from ship-source pollution, which involves all of the following steps and measures. We have put in place a network of shore-based stations around the UK coastline to monitor vessel traffic, using automatic identification system technology. We achieve agreement in the forum of the International Maritime Organisation on ships’ routing measures which will reduce the risk of groundings or collisions. We ensure that powerful tug boats—commonly referred to as “emergency towing vessels”—are available, so that they can go out and assist ships that lose motive power. We have established arrangements under which a ship that requires assistance, and whose condition needs to be stabilised, can be brought into a place of refuge. We have a highly effective structure for command and control of an incident, in which the Secretary of State’s representative for maritime salvage and intervention—SOSREP—plays a major role. We have a fully developed national contingency plan, consistent with the 1990 international convention on oil pollution preparedness, response and co-operation—the OPRC convention. We participate actively in international assistance and co-operation arrangements of a bipartite, multipartite or regional nature—again consistent with the OPRC convention.
I hope to be able to explain to the hon. Gentleman later the extent of the discussions—I shall do so if I have time. They are high on the IMO’s agenda, and we are in discussions with all our European and international partners in respect of these important matters.
In addition, the United Kingdom takes specific actions to give effect to the international convention for the prevention of pollution from ships—the MARPOL convention—notably by the following: ensuring that, in UK ports, reception facilities are available for the types of waste that are generated on board ship, thereby leaving no excuse for ships to resort to discharging their waste illegally at sea; carrying out surveillance, either aerial or satellite, to identify ships carrying out acts of pollution; and having an effective enforcement regime in place, so that ships that have been identified carrying out acts of pollution are prosecuted.
I am afraid that I am not able to do that at this point in time, but later in my speech those statistics may very well emerge.
The Bill seeks, first, to place an obligation on the Secretary of State for Transport to introduce regulations to control ship-to-ship transfers by the end of 2008. Secondly, it seeks to impose on the Secretary of State certain obligations, although it calls them “principles”, to be given effect when regulating ship-to-ship transfers. As my hon. Friend the Member for Edinburgh, North and Leith said, those are: to prohibit ship-to-ship transfer operations in United Kingdom waters except in areas designated by the Secretary of State; and, except in the case of emergency, to treat either any programme of ship-to-ship transfers or each individual ship-to-ship transfer as an “oil handling facility” for the purposes of the Merchant Shipping (Oil Pollution Preparedness, Response and Co-operation Convention) Regulations 1998 and as a “plan or project” for the purposes of the Conservation (Natural Habitats, &c.) Regulations 1994.
Finally, the Bill seeks to allow the Secretary of State to treat either any programme of ship-to-ship transfers or each individual ship-to-ship transfer as a
“surface storage of fossil fuels”
project in terms of the Marine Works (Environmental Impact Assessment) Regulations 2007, but not in the case of emergency.
It is clear that the Bill seeks to protect the marine environment from the possible negative effects of ship-to-ship oil transfers, and the Government fully support that objective. However, with the greatest respect to my hon. Friend, I must say that we oppose the Bill on the basis that it goes about that in the wrong way, and the desired control over ship-to-ship oil transfers can be achieved without the need for a Bill.
We have been working for some time on producing regulations under section 130 of the Merchant Shipping Act 1995 to control ship-to-ship oil transfers within UK territorial waters and to ensure that any such transfers are subject to appropriate environmental scrutiny. It is our intention to lay such regulations before Parliament this year, so placing an obligation on the Secretary of State to do so would achieve nothing of value. On the contrary, working on this Bill could only delay the introduction of those regulations by diverting the attention of all concerned.
We hope to be able to open a consultation this spring and to lay regulations by the summer. That is our intention. We have every expectation of being able to meet it, but given the matters that have been raised by hon. Members on behalf of the shipping industry, the serious issues involved and the fact that a number of environmental groups are keen to contribute, the process might be slowed up slightly. We are close to completing the regulations, so we hope soon to be able to issue them in draft for consultation.
The Minister will doubtless have environmental considerations at the forefront of his mind when he is consulting. Will he bear in mind the important personal safety considerations that must also be taken into account? In that regard, will he be having close discussions with the affected unions?
I can give the hon. Gentleman that assurance. The matter occurred to me when he was making his remarks about the tug companies’ proposals on staffing levels and so on. They will obviously want to examine the new regulations as part of their review of operations, to ensure that they are not in any way, shape or form being compromised in respect of the proposals that they put to the unions. I expect him to beat a path to our door if either the companies or the unions have strong points of view that they want to put directly, besides putting them through the usual channels of the consultative arrangements.
The Department for Transport and its predecessors have been working with relevant regulations for some time, and they were referred to in Lord Donaldson’s landmark report “Safer Ships, Cleaner Seas”, which was published in 1994. In 1999, a draft set of regulations and an accompanying draft merchant shipping notice were produced, based on the premise that ship-to-ship oil transfers would be permitted only in two places outside harbour authority areas, these being Lyme bay and Southwold. However, those 1999 regulations were never made or laid before Parliament because of a potential conflict with another recommendation of “Safer Ships, Cleaner Seas”: the proposed development of marine environmental high risk areas, or MEHRAs, in locations where there is both high environmental sensitivity and risk from shipping.
We were aware that some of the proposed permitted ship-to-ship transfer areas might also score highly enough to become MEHRAs, and that that would have sent mixed messages on environmental protection. It was anticipated that the process of identifying MEHRAs would be concluded swiftly and therefore the ship-to-ship transfer regulations were put on hold. Nevertheless, in the interim, the 1999 draft regulations and merchant shipping notice have served as the basis for non-statutory arrangements and procedures under which ship owners and operators are expected to notify the Maritime and Coastguard Agency of the intention to carry out a ship-to-ship oil transfer, and to carry out such transfers according to best practice.
I thank the Minister; he is being very courteous in allowing these interventions. He mentioned the problem of permitted ship-to-ship transfers taking place in environmental areas. Is there a problem because we are talking about two different Departments? How has the problem been tackled by the Department for Transport and the Department for Environment, Food and Rural Affairs?
Obviously, any regulations that affect different Departments have to be subject to consultation and joint clearance. I can assure the hon. Gentleman that we are almost ready to bring forward the regulations for consultation. We have cleared the hurdles up to the last point, and we do not expect any delays as a result of representations from other Departments. We shall proceed as I have outlined, and I hope that that offers him the reassurance he seeks.
Although there have been many delays in the further development of the regulations, they are now very near completion and I expect a revised set of draft regulations to go out to public consultation this spring. As I have said, the Bill would first place a duty on the Secretary of State to lay regulations before Parliament for approval before the end of 2008. This change to the 1995 Act is unnecessary, as we plan to consult on our regulations much earlier this year and so aim to lay them before Parliament in the summer. Working with my hon. Friend the Member for Edinburgh, North and Leith would only delay this process.
As I have already mentioned, the Bill would place a duty on the Secretary of State to “observe” certain “principles” in regulating ship-to-ship oil transfers, although on closer inspection all but one of these “principles” prove to be a duty to regulate in a particular way. Again, we consider this to be unnecessary and inappropriate, as the legislation referred to in the Bill either already applies and achieves what appear to be my hon. Friend’s objectives—as in the case of the habitats regulations—or is not suitable to apply to ship-to-ship transfers, a point raised by several hon. Members. For example, section 130 of the Merchant Shipping Act 1995 already gives the Secretary of State the power to make regulations prohibiting ship-to-ship transfers of oil except in designated areas—paragraph (a) of the proposed new subsection 4A—and to take account of emergencies, which is in proposed new subsection 4A(e).
There is no need to define a ship-to-ship oil transfer as an “oil handling facility” with regard to the Merchant Shipping (Oil Pollution Preparedness, Response and Co-operation Convention) Regulations 1998—as proposed in subsection 4A(b) in my hon. Friend’s Bill—as the application of those regulations to such transfers is clear. An oil pollution emergency plan must be in place for every relevant harbour authority area and must be approved by the Maritime and Coastguard Agency as appropriate for dealing with any oil pollution incident that may occur, whether or not it occurs as a result of a ship-to-ship transfer and even if it occurs in an emergency.
Similarly, the application of the Conservation (Natural Habitats, &c.) Regulations 1994, as amended, to plans or projects that might adversely affect nature conservation sites—even in the event of an emergency—is already clear, and so paragraph (c) is also unnecessary.
Finally, paragraph (d) would allow the Secretary of State to classify a ship-to-ship oil transfer or a programme of such transfers as a surface storage of fossil fuels project for the purposes of the Marine Works (Environmental Impact Assessment) Regulations 2007, except in cases of emergency. I respectfully suggest that that is simply not appropriate. The regulations are not designed or drafted in a way that can be applied to operations such as ship-to-ship oil transfers. The regulations require environmental impact assessments to be carried out before consent is granted for certain regulated activities in UK waters and UK-controlled waters in cases where that is required to comply with Council directive 85/337/EC—the environmental impact assessment, or EIA, directive. The types of regulated activities to which the regulations apply are deposits in the sea, works to ensure navigational safety and harbour works.
Of course, we recognise that the framework under which ship-to-ship oil transfers are regulated needs to include appropriate measures to take account of their possible adverse environmental effects. I can also assure the House and my hon. Friend the Member for Edinburgh, North and Leith that we are investigating and will incorporate appropriate provisions on that matter in the draft regulations that we will bring before Parliament shortly.
I hope that I .have explained why my hon. Friend’s Bill would not achieve his objectives, as well as the fact that some of his objectives are already covered. I assure him that we intend to consult this spring and hope to introduce the new regulations in summer. I therefore hope that he will seek leave to withdraw his Bill.
I apologise to the hon. Member for Edinburgh, North and Leith (Mark Lazarowicz) for not being present to hear his opening remarks. I must confess that I was caught out by the speed at which the Bill promoted by my hon. Friend the Member for Sevenoaks (Mr. Fallon) was dispatched. I congratulate the hon. Gentleman on getting a place in the ballot. Having just heard the Minister’s rather devastating reply, I hope that I can provide some unexpected comfort to the Government. I am nervous about the philosophy behind the approach. I also want to raise one specific issue. I hope that it will be taken into account when the Minister lays the regulations before Parliament later in the year.
Let me first pick up on the remarks made by my hon. Friend the Member for Ribble Valley (Mr. Evans), who said that Mr. Eric Forth, our much-lamented departed colleague, would have approved of the Bill. I can be reasonably confident that our late colleague would not have approved of the measure in any way, shape or form.
The Minister gave a devastating response, which made it clear that most of the powers proposed by the Bill are already available in one form or another.
May I reassure the hon. Gentleman that had he been present for my opening speech—I understand that he was elsewhere—he would have heard that, although I accept the fact that the Government have the powers, I want to place a duty on them? That is what I was trying to do.
I am grateful to the hon. Gentleman for that explanation.
Let me turn to my philosophical objection to the Bill. The evil is the pollution caused by ship-to-ship transfer when oil pours into the sea because the transfer has not been conducted properly. I believe that we should be addressing the evil, not trying to rule out any potential cause of it. In normal circumstances, if ship-to-ship transfers were properly conducted, there would not be pollution. It is only when transfers take place incorrectly, either because they are badly managed by poor operators or because they happen by accident, that pollution occurs. It should be our duty not to rush round trying to find regulations and statutes to prevent people from doing anything that might cause something, but to address the cause of the evil. If there is pollution in British territorial waters caused by poor operations, we should be clear that it will be punished most severely because of all the consequences to birdlife, marine life and our coastlines. I find the Bill’s approach concerning.
My specific concern is about the effect of the Bill and the regulations on the Royal Navy and the Royal Fleet Auxiliary Service. I believe that the Royal Navy is exempt from the Merchant Shipping Act 1995, but that the Royal Fleet Auxiliary Service is not. I am sure that hon. Members will correct me if I am wrong. There will be occasions on operations—perhaps when supporting fishery patrol vessels offshore close to British waters and especially when training—when ships of the Royal Navy and the Royal Fleet Auxiliary wish to make ship-to-ship transfers. I hope that when the Under-Secretary lays regulations before the House in the summer he will address that point and ensure that the Royal Navy can conduct operations and training if and wherever it deems it necessary. Training is obviously likely to be in British territorial waters. We should not impose extra burdens on the Royal Navy, because training is obviously important in sustaining the Navy around the world. We should not impose additional expense on the Ministry of Defence by forcing the Navy to sail even further away from its bases.
In 25 years, there has not been a single spillage during ship-to-ship transfers in Scapa Flow. The Maritime and Coastguard Agency has reviewed the figures for UK waters, and two minor incidents occurred, both before 1976. I do not believe that the danger to which the hon. Gentleman alludes is there, and we believe that the regulations will fulfil the objectives of my hon. Friend the Member for Edinburgh, North and Leith (Mark Lazarowicz) in protecting the environment and—most important—the shipping industry. Delay in introducing the regulations could create additional uncertainty, which I am sure no hon. Member wishes to cause the shipping industry.
I am grateful for that intervention, which suggests that the evil that we are trying to tackle is minor. Based on experience, the risk is minor. I would be horrified if the Royal Navy and the Royal Fleet Auxiliary Service were not good at those operations. The scale, too, of the oil transfer is likely to be much smaller than for commercial operations.
The hon. Gentleman said that the risk was minor. I do not know whether he intended to say that but it should not be allowed to pass. The risk is substantial, but it can be managed and it has been successfully managed, especially in Scapa Flow, where, as the Under-Secretary said, that has happened for the past 25 years.
The consequences of an accident, especially with serious pollution, would be appalling. However, I understood the Under-Secretary to say that the probability based on experience of its happening was small. The risk is therefore small, although the consequences would be catastrophic.
I agree with the Under-Secretary’s concerns about the Bill—I hope that that will not get me into trouble with my colleagues. He has heard my views about making the Royal Navy and the Royal Fleet Auxiliary Service exempt from regulations.
I apologise to you, Madam Deputy Speaker and to the hon. Member for Edinburgh, North and Leith (Mark Lazarowicz) for not being present at the beginning of the debate.
I want to make two brief points. One arises from a letter from my constituent, Jillian Atkins, who is a regular correspondent on environmental matters. Her letter encapsulates the sentiments that most Members have expressed. We do not wish to prohibit ship-to-ship transfers, but we want to ensure that strict procedures and regulations are in place to prevent the potentially catastrophic impact of an oil spillage on seabird colonies and their habitats, and on coastlines and beaches.
The reference to coastlines and beaches led me to look more closely at proposed new section 130(4A)(c) of the 1995 Act, which is the only paragraph that does not refer to oil or oil products. When the hon. Member for Edinburgh, North and Leith winds up the debate, perhaps he will clarify whether that provision could include the discharging of bilge-water, which might contain non-indigenous or predatory species, which can have a significant effect on the indigenous species in our waters, particularly if bilges are discharged close to our coastline. I noticed that the provision did not refer specifically to oil products, so perhaps it was the hon. Gentleman’s intention to include other substances, too. The Minister referred to ship-based pollution, so I wonder whether contaminated bilge-water or bilge-water containing non-indigenous or predatory species could be included in those provisions.
With the leave of the House, this has been a wide-ranging debate. It would not be appropriate in the time available for me to try to respond to all the points that have been made. I heard what the Minister had to say and I take issue with some of his points. If we take the avenue that he suggested or if the Bill proceeds, it would be possible in the consultation process both for me and for all the organisations that are keen to see the legislation taken forward to take up those points.
I am grateful to the hon. Gentleman for giving way and will not take up much of his time. Like him, I have been approached by many constituents who are members of the RSPB. I, too, am a member and have been for 45 years. In fact, I have written to myself in no uncertain terms in order that I be here to support the Bill. Is the hon. Gentleman happy and does he think that the RSPB will be happy with the reassurances that the Minister gave?
My objective in promoting the Bill was to encourage the Government to bring forward regulations—indeed, the Bill would put an obligation on them to do so. I heard what my hon. Friend the Minister said. I am not interested in getting my name up in lights through a private Member’s Bill just for the sake of it; I want to get a result. If the Minister sticks to the time commitments that he has given, as I am sure he will, we could have regulations in place by the summer, which would be earlier than under the Bill. My wish is to bring those regulations forward.
I have spoken to RSPB Scotland, whose support for the Bill has been key. Its view is also that this debate should have a productive outcome, rather than going down in flames just for the sake of making a show. It is in the interests of the organisations that are keen to see the legislation come forward to have an early discussion and an early decision, and I am sure that that is in the interests of the shipping industry, too.
As the hon. Gentleman will therefore realise, although it is tempting to get a third private Member’s Bill under my belt—I have been more fortunate than him—and although that would take me some way towards the record of his predecessor, who I think had eight private Members’ Bills in his time, I want to get a result. Now that we have had our fun and games this Friday, I hope that hon. Members will appreciate that the important thing is to take the issue forward and to have a constructive debate in the consultative process. The Minister has given an assurance, which I know he will seek to fulfil, and Members on both sides of the House will no doubt monitor closely the way in which he does so.
In that spirit, I beg to ask leave to withdraw the motion.
Motion and Bill, by leave, withdrawn.
On a point of order, Madam Deputy Speaker. Following yesterday’s mini-reshuffle of the Cabinet and the separation of the posts of Secretary of State for Wales and Secretary of State for Work and Pensions, which I warmly welcome, could you advise the House on whether you have been given any indication that there is likely to be a ministerial statement concerning the logical follow-on to that: the separation of the posts of Secretary of State for Scotland and Secretary of State for Defence?
Disqualification from Parliament (Taxation Status) Bill
Order for Second Reading read.—[Queen’s Consent, on behalf of the Crown, signified.]
I beg to move, That the Bill be now read a Second time.
I am grateful to Her Majesty. This is a very short Bill, and I am going to make a very short speech, because I would like to hear the Minister’s response. The general principle behind the Bill is that those who make our laws should pay our taxes. There should be no representation without taxation, so to speak. People out there would be astonished to learn that there are Members of Parliament, legislating for the rest of us, who do not pay UK taxes. My short Bill would disqualify Members from the House of Commons and the House of Lords if they were not resident in the United Kingdom for tax purposes. Members of the Commons would declare their residency status once in every Parliament, but peers would have to certify annually that they were UK residents.
May I just make some progress?
People might ask why this provision is necessary. The House of Lords Appointments Commission identified the problem in its report for 2006-07. It concerns a Conservative peer and donor, Irvine Laidlaw, now Lord Laidlaw. He was ennobled in 2004 after promising to become a UK resident for tax purposes. Unfortunately, he reneged on that promise. This is all documented in the House of Lords Appointments Commission’s annual report. He is a tax exile, living in Monaco. Lord Stevenson, the Chair of the Commission, has written to the Prime Minister to flag up his concerns about this matter. In October last year he also told my colleague, the hon. Member for Cannock Chase (Dr. Wright), who chairs the Public Administration Committee, that the commission was no longer prepared to accept assurances from people who do not pay UK taxes but would apparently do so some time in the future. He also said that it would no longer accept non-UK taxpayers as candidates for the peerage. Lord Laidlaw, who lives in Monaco, as I said, has now taken leave of absence from the House of Lords.
So, new rules are clearly needed, and they need to have a statutory basis. The irony is that the House of Lords Appointments Commission is not set up by statute and is, in a sense, making up the rules as it goes along. The House of Lords Appointments Commission decided after the Laidlaw case that it was not going to wave people through to a peerage if they were not UK taxpayers, but there is nothing in statute to address the problem and that applies only to new peers, not to existing ones. Clearly, there is a lacuna in the law.
There is, of course, great speculation about Lord Ashcroft. On his website, he says:
“If home is where the heart is, then Belize is my home”.
No one really knows—he has not volunteered the information—whether Lord Ashcroft, a major donor to the Conservative party, is resident for tax purposes in the UK or in Belize. In 2004, in what I believe is called the House of Lords expenses register, he gave his main residence as Belize. He has repeatedly declined to say where he does reside and I do not know—no one here knows—whether he pays UK taxes.
We have had “no taxation without representation” for many years and we now seem to be on “no representation without taxation”, which is an interesting change. I am an old seahorse when it comes to private Members’ Bills. Will the hon. Gentleman advise us whether in his discussions with the Minister he has been given any indication that his Bill has Government support?
I hope that it has Government support and also that it gains support from all right-thinking people. Is it not amazing that anyone would want to justify membership of Parliament when the individual concerned is not a UK taxpayer? Of course I believe that the Government support my Bill. If it fails to make progress, I hope that the general principle will be gathered up in the omnibus constitutional reform Bill that the Government are bringing forward next month.
The hon. Gentleman’s Bill clearly merits serious consideration. In drafting it, did he consider individuals such as Lord Kinnock or Lord Robertson of Port Ellen who, having been appointed to the House of Lords, moved on to fulfil overseas appointments? I have no direct evidence, but I suspect that that may well have affected their tax status, particularly if they are EU Commissioners. Does the hon. Gentleman intend such individuals to be disqualified and never able to return to this House? There is nothing in his Bill to suggest that by taking leave of absence, for example, it would be possible to escape permanent disqualification.
Those are all important issues, which can be explored in Committee. I am perfectly prepared for my Bill to be amended in Committee to catch those categories of individuals who should not be serving in the legislature.
Let me finish on this point. The House of Lords Appointments Commission has registered its view and the Public Administration Committee, of which I am privileged to be a member, recommends a change along the lines that I have suggested. I would like to know the basis of the undertaking that Michael Ashcroft, now Lord Ashcroft, gave in 2000 before being elevated to the peerage. In March 2000, No. 10 Downing street issued a press release, which included this note to editors:
“In order to meet the requirements for Working Peer, Mr Michael Ashcroft has given his clear and unequivocal assurance that he will take up permanent residence in the United Kingdom again before the end of the calendar year”—
in 2000. It continues:
“He would be introduced into the House of Lords only after taking up that residence. These undertakings have been endorsed by the Leader of the Conservative Party and conveyed to the Prime Minister—and to the Political Honours Scrutiny Committee.”
I want to know the form of the undertaking and to whom that undertaking was given—it is nothing to do with how much tax Lord Ashcroft pays or does not pay—but the Cabinet Secretary has refused my request under the Freedom of Information Act 2000. The matter is now subject to an internal review, but I fully intend to take this matter to the Information Commissioner. I finish by emphasising that it is totally unacceptable for people to make the laws of the United Kingdom when they do not pay their taxes here.
I congratulate my hon. Friend the Member for Pendle (Mr. Prentice) on securing this debate. He has raised the question of the tax status of Members of the other place previously, including through early-day motions, and I am pleased to give the Government’s view on the matter.
The Government agree with the intention underlying the Bill—that Members of this House and the other place should pay taxes in the United Kingdom. That is an important way in which they demonstrate their connection with and commitment to our country. The public would find it odd if their elected representative in this House could, as a tax exile, vote on the provision of income tax but was not subject personally to that regime. I doubt that the electorate would consider that fair.
How might the proposals impact on the Good Friday agreement and the terms of the peace settlement in Northern Ireland, in relation to the ability of citizens of the Irish Republic to stand for the United Kingdom Parliament while remaining resident in the Republic of Ireland? If my recollection is correct, that is specifically provided for and allowed for, and it might make it difficult for the hon. Gentleman to achieve his intention.
The hon. Gentleman makes a good point, to which I was going to refer later in my speech, but I will address it now. He is correct that the Bill as drafted would have an anomaly in that a citizen of the Republic of Ireland could be disqualified from standing for the Northern Ireland Assembly. The same point might apply to Members of the European Parliament. In both those situations, people could be unfairly disqualified from standing. Although we support the idea behind the Bill in principle, I will ask my hon. Friend the Member for Pendle whether he would be open to amendments in Committee—he has indicated that he would—to ensure that such candidates would not be unfairly prevented from standing for Parliament.
Would the principle that people who do not pay taxes here should not make our laws, prevent the European Commission ever making any laws that affect our country? Were that the basis on which the Bill was being brought forward, I would support it wholeheartedly.
The hon. Gentleman makes an ingenious intervention, and I am sure that he will have the opportunity to raise the issue again in the next dozen or so days when we debate European matters. Ingenious as it is, however, it is not absolutely relevant to the question before us today.
The Bill has some potential technical problems, and the hon. Member for Beaconsfield (Mr. Grieve) has raised one. I want to mention some others. For example, only this week Her Majesty’s Revenue and Customs published proposed amendments to the residence and domicile tax rules. Those are still being consulted on, so I would be cautious about cross-referencing the Bill to any of the current tax residency rules, because of possible changes.
To make the position clear, I understand the seriousness of purpose, and the merit, in the matters that the hon. Member for Pendle (Mr. Prentice) wishes to examine. But the issues are more than technical, because if we start providing exceptions as opposed to the blanket approach that he wants, that raises the question of what exceptions. We would then start a process of looking down the list that might lead to the justification of all sorts of exceptions, which might start to undermine his intention.
Again, the hon. Gentleman makes a fair point. However, although the Government make some criticisms of the Bill, in a spirit of helpfulness we support its intention. There are good reasons for introducing legislation along such lines. With assurances from my hon. Friend the Member for Pendle that he would be prepared to accept amendments in Committee, I would be happy to endorse the principle behind the Bill.
The hon. Member for Pendle has raised an important issue. In the past, we have considered such matters as whether donations can be made to political parties and whether individuals can stand for Parliament in the context of their status. The historic—
It being half-past Two o’clock, the debate stood adjourned.
Debate to be resumed on Friday 14 March.
Luton Town Football Club
Motion made, and Question proposed, That this House do now adjourn.—[Liz Blackman.]
I stand here today not only as Member of Parliament for Mid-Bedfordshire, but as the great-granddaughter of the founder of Everton football club. In those days it was a small community town football club known as St. Domingo’s. The principles of small football clubs were much as they are today: it was about community, young boys having a focus and a local club, and all that that entails. My great-grandfather’s son went on to play football as a goalkeeper, and his grandson has been a member of the amateur Referees’ Association for most of his life.
I am here today to try to protect another club that was started at almost exactly the same time as my great-grandfather started Everton: Luton Town, one of the oldest clubs in English football, founded in 1885. It has been witness to a lively past—unfortunately it has been in administration three times in the last nine years—but my interest today lies with its future more than its past, and with what we can do to ensure that that future remains stable and long-lasting.
The club went into administration in November last year. The financial directors and controllers had realised that its liabilities and costs were becoming greater, and that administration was the only option. As a result, in accordance with Football League rules, the club lost 10 points. Experienced football insolvency expert Brendan Guilfoyle was one of the three administrators appointed. He has a sound track record of helping other clubs in the same position, including Leeds United. His rescue of Leeds from its first insolvency culminated in the club’s paying off its creditors. If anyone is to secure the future of Luton Town football club, Brendan Guilfoyle will certainly be one of those who do so, but what we need, and what we have, is the right combination of administrator, loyal and dedicated fan base—some of whom are here today—and, of course, Luton Town itself.
All the ingredients are in place to ensure that a good bid is presented, as indeed it has been, by a consortium known as Luton Town 2020. The name represents the bid’s objective, which is to secure the club’s long-term future. The consortium is led by a lifelong Luton fan and television presenter, Nick Owen. He has done a fantastic job so far in attracting the investment that the club needs, and we hope that it will be possible to inject £10 million into the rescue operation.
As I have said, the priority is to stabilise the club and ensure that it remains stable in the future, without a repeat of its unfortunate past. As a member of the Football League, the club must abide by the league’s rules, which is why 10 points were deducted when it went into administration. It will face more stringent penalties if, during the administration process, it fails to meet other regulations laid down by the league. For example, it must now meet an additional 16-point plan set by the league if it is to emerge from administration. It must establish a company voluntary arrangement, which must be approved by the Football League before any progress can be made. The Football League, in more ways than one, sets the rules of the game and compliance with the CVA is effectively non-negotiable.
For the record, an exceptional circumstance arrangement can be established and sometimes that is permissible, but the cost would mean that the club would lose a further 15 points on top of the 10 points that have already been deducted. That would mean removal from the Football League, which would be a disaster for the club because it would have an impact on gates and the price of players. It would destroy Luton Town football club and must be avoided.
Following discussions I have had recently with the administrators, 2020, supporters groups and others, it appears that we are very close to securing the CVA, which would meet the approval of the Football League. That is extremely encouraging and would give Luton Town the fresh start that it desperately needs. However, the club is facing an extreme dilemma. As Benjamin Franklin famously said:
“But in this world nothing can be said to be certain, except death and taxes.”
As the Minister may be aware, the club owes about £2.5 million in unpaid taxes to Her Majesty’s Revenue and Customs, which is equivalent to about 80 per cent. of the club’s total debt. The magnitude of the debt means that HMRC is likely to object to the CVA and effectively will veto the club’s best chance of a sustainable future. That is because, under the CVA, the administrator is allowed to pay football creditors, such as players and other clubs, and they are allowed to receive 100 per cent. of what they are owed. However, other creditors, such as HMRC, are likely to receive nearer to 25 per cent. of what they are due. Ultimately, that will leave the club practically insolvent.
Clearly in an ideal world, in which none of us live, everybody would be paid in full, but 2020, which is the best option for securing the long-term future of the club, does not have access to the funds needed to extend 100 per cent. payment to everybody—to all the creditors. If HMRC continues to insist on such an arrangement, 2020’s bid, which is the only feasible one on the table, will fail completely. The irony is that the taxman will receive nothing if the club becomes insolvent rather than the 25 per cent. he would receive if he went into reasonable negotiations with the club. Although I understand the reasons for HMRC’s stance, I fear that intransigence and a lack of ability to negotiate on its part could prove a fatal blow to the club.
I want to take the opportunity to urge the Minister to make representations to ensure that HMRC takes a more flexible approach to the club’s outstanding payments. It is more than just a club; it is not just a case of negotiation between HMRC and the administrators. It is about the lifeblood of an important part of Luton and Bedfordshire. Many of my constituents support Luton Town football club, and football is a beautiful game. It is not just a beautiful game for Liverpool, Manchester United and the clubs in the big super-leagues; it is a beautiful game for the little boys who go home from school at night, put on their boots, go out into the street and pretend they are scoring a goal for the Hatters. It is a beautiful game for any small town that has its own club, which becomes such a vital part of the community.
Just this week in this Chamber, we had a debate on obesity and the danger it is proving to today’s children. The Government have sent out guidelines this week on how we need to encourage our children to move away from their PCs and to get out and engage in more sports. The club is situated in one of the poorest areas of the country and it is vital that a football club should exist in Luton that children can walk to. The club should be there to inspire children and to run youth training schemes and youth leagues so that it is part of the wider Bedfordshire community. I cannot say enough what a loss to Luton and Bedfordshire it would be if HMRC did not negotiate, the bid failed and Luton Town football club ceased to exist tomorrow.
The issue is not just about Luton Town; it is about other clubs. Many clubs across the UK all too often find themselves in a similar position to the one that Luton Town finds itself in today. If we want our kids to get out from in front of their PCs, let us make sure that local football clubs exist. Let us make sure that they are there to be an inspiration and to make sure that football is not just about those who have the big bucks and can afford to go to the big games and travel to the big matches. Football should be accessible to everyone, particularly in a town such as Luton, which is one of the poorest areas of the country.
There is another reason why I support the bid: the 2020 consortium is committed to ensuring that Luton Town football club fits snugly as close to Luton as possible. It recognises the importance of its being accessible to Luton fans. It is considering the feasibility of three options for re-siting the club at junction 10, so that Luton Town football fans could still travel to the club without great cost. It is also considering rebuilding the club in the Kenilworth road area, right in the heart of Luton. As far as I am concerned, that is where the football club should be. I agree that Kenilworth Road stadium should be rebuilt. Its rebuilding, and the resulting influx of capital to the area, would be fantastic for Luton. People in Bedfordshire who have always travelled to Luton town to watch the Hatters will still do so; there would be no great change there.
I am sympathetic to the bid, because those in the consortium take an objective view on what is right for the town, the club and the fans. The bid will not go ahead unless HMRC considers the issues more reasonably. It is not in anyone’s interests for the club to fall and to go into insolvency or liquidation. That would not benefit any club in the UK, or the fans or the people of Luton. I hope that the Minister will seriously consider arranging a meeting with HMRC, and bringing the parties together to talk. Perhaps he could arrange and facilitate a meeting between HMRC and the Minister with responsibility for sport, the hon. Member for Bradford, South (Mr. Sutcliffe), so that they can discuss the best way forward and the best way to help the consortium.
If the consortium trying to bring Luton out of administration meets the mandatory Football League obligations by paying all football creditors in full, and other creditors a reasonable percentage of the money owed, why should HMRC object? I would like an answer on that specific point from the Minister, if possible. Why would HMRC object, given that otherwise, the outcome would be a reduction in income for the Treasury?
If the consortium is forced to reduce its offer to football creditors, the Football League will object and refuse to reallocate Luton’s membership of the league, meaning that the club will be unable to play league football, and could be forced out of business altogether. I would like the Minister to say what the 2020 consortium should do. It is stuck between a rock, or HMRC, and a hard place, or the Football League. What does he think that the consortium should do to get itself out of that position? It is stuck between one set of measures that will take it into liquidation, and which would mean that the club will fall, and another. There seems to be no way for the club to steer itself out of the problem.
Will the Minister answering the debate join forces with the hon. Member for Bradford, South, if he still is Minister with responsibility for sport? On Wednesday, I was told that a Treasury Minister would respond to this debate. On Thursday, it was to be someone who would deal with the business side of the issue. The Minister present today is the Under-Secretary of State for Business, Enterprise and Regulatory Reform. I am not sure who the Minister for sport is at present, but if it still is the hon. Member for Bradford, South—I am not even sure whether he is still a Minister—will the Minister join forces with him and arrange a meeting between the football authorities, the Treasury and the consortium, so that they can reach an understanding that will allow them to deal more sensitively with clubs that find themselves in the same predicament as Luton Town?
Let us set up a framework, so that when another club finds itself in the same position, it knows what to do and where to go. The situation is impossible. Fans want to save the club, and administrators and local people want to do the best for it, but it seems as though everybody else is against the club surviving. Will the Minister facilitate such a framework? We need to know where clubs in such a position can go. The same thing has happened in Leeds. I have also been contacted by Labour Members whose local football clubs have been in the same situation. We need a framework within which small clubs can operate. Football is not just about the championship, or the premiership. It is not just about the super-clubs with the big money; it is about the small clubs, too. That is where the passion for football starts.
The 2020 consortium has established a reasonable and fair offer for the Treasury—the best offer on the table. The consortium would pay off many of the club’s debts and has pledged to prioritise financial stability. I wish that other such organisations considered long-term stability when companies went into administration. Luton Town football club is bringing forward the best deal that anybody could hope for; that is why it seems all the more ironic that HMRC is refusing to negotiate—“refusing” may be too strong, but it certainly seems intransigent about negotiating at the moment. The offer is the best on the table to pay off debts and pledge financial stability so that the club can survive. Stability will ensure that the Treasury sees an ongoing income. If the club fails, the Treasury will get no money at all, or just 25 per cent., but a successful club will bring ongoing income to the Treasury. That makes it all the more ironic and ridiculous that the club should face closure—if it closes, it will provide no income at all to the Treasury.
Will the Minister answer this specific question? Will he make representations to HMRC to ensure that the 2020 offer is accepted and the club can survive? Surely he agrees that the club’s long-term survival is paramount to all. Football is fundamentally a grass-roots sport; it is about little boys playing in the street who believe in their minds that they are playing for the Hatters when they get home from school. It is about people who walk to the match on a Saturday afternoon and about local communities and towns. Luton is one of the poorest towns in the country and it is important that Luton people have access to their football club.
The Hatters are a great team with a great past. After I attend constituency engagements on Saturdays, I frequently switch on the radio to find out what happened to the Hatters in the afternoon. Bedfordshire people either support the Hatters or their super-club and the Hatters as well. The club has a great past; will the Minister try to ensure that it has a great future as well?
I congratulate the hon. Member for Mid-Bedfordshire (Mrs. Dorries) on securing this debate and on the way she has reflected the no doubt considerable passions in her constituency about the subject. I recognise that other Members with significant numbers of Luton Town supporters in their constituencies will share some of her concerns. There are two small football clubs in my constituency—the excellent Harrow Borough and Wealdstone football clubs—so I recognise that Luton Town’s origins and the excellent work that it does in its community, which the hon. Lady has described, have helped to generate considerable enthusiasm for the Hatters and considerable concern about the club’s current circumstances.
For the hon. Lady’s benefit, and that of the House more generally, I should say a little about the law on administration and the legal environment in which Her Majesty’s Revenue and Customs and other creditors are engaging at the moment. The availability of managed exit routes from the market for companies in financial trouble is an essential aspect of any mature economy. In this country, we have an insolvency regime that balances the needs of creditors with those of the insolvent company or individual. Underpinning that regime is a targeted enforcement process, which ensures that those who have been reckless or dishonest are dealt with appropriately and that their ability to damage the interests of creditors is restricted.
The new administration regime, introduced by the Government in the Enterprise Act 2002, puts the survival of a company or its business at the centre of the procedure. Companies may encounter serious financial difficulties for a number of reasons, but their underlying businesses may be sound. Administration can be used so that those businesses, and the jobs of those whom they employ, can be saved. As part of their statutory role, administrators must try to achieve the purpose of administration—to try to rescue the company as a going concern. If that is not possible, they must seek to achieve a better result for the company’s creditors as a whole than would be likely if the company went into liquidation straight away. If neither of those outcomes is possible, the administrator may realise the company’s assets and pay one or more of the company’s secured or preferential creditors. That hierarchy of objectives ensures that the administrator’s first thought is the survival of the business—in this case, the football club.
Perhaps I can give some comfort to the hon. Lady and to those in Luton who are following this debate when I say that the majority of football clubs that have become insolvent in the past 16 years have gone into administration and survived, and occasionally thrived. No Football League club has gone out of business since the liquidation of Aldershot back in 1992.
I fully appreciate what the Minister says, but the nub of the issue is this: the football players and other clubs are to be paid 100p in the pound as the first line of creditors and, as normally happens in these situations, other creditors are to be paid 25p in the pound, which seems to be what HMRC is objecting to. If it is intransigent and definite in its objection, there is no way forward. I understand what the Minister says about other football clubs not having gone bankrupt, but that is a real possibility facing Luton Town if HMRC will not negotiate.
The hon. Lady describes the situation correctly.
I acknowledge that, as the hon. Lady said, football clubs play an important role, at all levels, in the social fabric of the nation. I hope she will acknowledge, however, that the rules that govern corporate life, including those on insolvency, cannot be selectively applied depending on the industry, business or activity in which a particular company is involved. In an administration, the survival of the company or business should always be balanced against the interests of the creditors.
Administrators usually have up to eight weeks from their appointment to send the creditors a statement of proposals for achieving the purpose of administration, although the legislation allows for that period to be extended. In the case of Luton Town, the joint administrators have made use of those provisions and obtained permission to extend this period by some eight weeks, and 2020 has been granted a period of exclusivity by the administrators in which to make a bid for the club in return for its agreeing to contribute towards the funding of the administration during that period, which ends, as I suspect that the hon. Lady is aware, at the end of February. The administrators’ proposals will be issued after the expiration of that period.
The administrators have stated that the proposal will be, as the hon. Lady described, to exit administration via a company voluntary agreement. The proposals then have to be agreed by the creditors, and the administrators will arrange a meeting for that purpose, which is due to be held on 13 March. If a majority of the creditors vote in favour of the proposals, they will be approved and the administrators will then work to achieve the agreed outcome. The creditors are able to modify the proposals, although if the administrators do not agree with the changes made by the creditors, they would have to go to court to determine how they should proceed with the administration.
It would put the football club in a very difficult position, as the hon. Lady is aware.
Let me outline one of the particular difficulties to do with insolvency and football clubs. There have been more than 40 football insolvencies in the past 15 years, with some clubs having entered administration on more than one occasion. With players’ salaries one of the largest expenses facing football cubs, even away from the heights of the premier league, the debt owed to Revenue and Customs in these insolvencies is often considerable.
Luton Town football club is a member of the Football League, which is essentially a private club with rules that its members must follow if they wish to remain a part of that club. Among these rules is the league’s own insolvency policy that members must adhere to should they enter an insolvency procedure—as the hon. Lady knows, that is one of the complicating factors in this situation. Failure to keep to this policy will, other than in exceptional circumstances, result in the loss of the member club’s share in the league. Without that share, the club cannot take part in league matches and will effectively cease to trade. In the case of a football club in administration, the loss of this share will almost inevitably result in liquidation. Players’ contracts would be void and they would receive what are known as free transfers, and the football club would, in effect, be dead.
The underlying principle of the Football League’s insolvency policy is that it is untenable for a league club to continue as a member of the league if football creditors are not paid in full. Football creditors are those organisations within the football family that are owed money by the insolvent club. I will not list all the potential creditors but it could be considerable, and it would include amounts owed to the football staff of the club, including players, and amounts owed to the league, the Football Association and to other clubs.
The league has stated that the conditions it places on insolvent clubs are tailored to conform to three key priorities: the continuation of the football club, if at all possible; full payment of all football creditors; and the best possible return for all other creditors. The insolvency policy goes on to specify that a club must exit administration via a company voluntary arrangement—a CVA—under the Companies Act 1985. For a CVA to succeed, at least 75 per cent. of unsecured creditors must vote in favour of the proposal.
Administrators are regulated professionals and are obliged by law to perform their functions in the interests of the company’s creditors as a whole. The administrators are not bound by the league’s rules on football creditors; they are required by law to treat all unsecured creditors equally.
It is clearly in the interests of a potential purchaser to abide by the league’s rules and ensure that football creditors are paid in full. If that stipulation is not met, there is a significant risk that the league will not allow the club to compete in its competition and the purchaser would own a worthless football club. Any proposal in the administration or CVA that is not approved by the creditors, or does not provide for the payment in full of football creditors, is likely to result in the end of the club.
I hope I have made it clear that I sympathise with Luton Town’s many loyal supporters and with the hon. Lady’s case, but football clubs are companies like any other and they must abide by the laws that govern companies. HMRC has a statutory duty to collect all tax and duty that is legally due. It has a responsibility to the vast majority of taxpayers who pay their tax on time to ensure that all tax debts are collected promptly and that taxpayers are treated fairly. HMRC must manage its relationship with football clubs as it would with any other individual or company.
The comfort I can, perhaps, give the hon. Lady and Luton’s supporters is that HMRC supports voluntary arrangements that meet its published criteria and where all the unsecured creditors are bound by the terms to receive the same treatment. It applies the same criteria to all businesses, and football is no exception.
The hon. Gentleman has just explained that if the club did that—if everybody had to be paid at the same rate—it would not be able to pay out and meet the Football League’s criteria, which would mean it would lose its golden share, so how on earth does he expect the football club to be able to do this?
Well, I was going to go on to say, by way of conclusion, that there is still time before the expiry of the period for further conversations to take place between the consortium and HMRC, and I hope that the consortium will be willing to have those conversations.
It is clear that the club was insolvent and that led to the directors’ decision to put the club into administration. I hope that a solution can be found to ensure Luton’s continued membership of the Football League, but that decision can be made only by the creditors of the club on the proposals put before them. We need to ensure that all creditors—not just those within the football family—are treated appropriately. Hence the concerns of HMRC.
The hon. Lady has asked me to bring the debate and the points made in it to the attention of other Ministers, and I shall do that.
Question put and agreed to.
Adjourned accordingly at Three o’clock.