Before the Minister moves that the first statutory instrument be considered, I remind noble Lords that in the case of each statutory instrument the Motion before the Committee will be that the Committee consider the statutory instrument in question. I should perhaps make it clear that the Motion to approve the statutory instrument will be moved in the Chamber in the usual way.

rose to move, That the Grand Committee do report to the House that it has considered the Passenger and Goods Vehicles (Recording Equipment) (Downloading and Retention of Data) Regulations 2008.

The noble Lord said: The regulations represent the final stage of a series of legislative changes that are necessary to reflect the introduction of digital tachographs throughout the European Union. The EU drivers’ hours and tachograph rules require most HGVs and some buses and coaches to be equipped with a tachograph to monitor drivers’ driving times and rest periods through recording the time, speed and distance of journeys. The rules also require that drivers and operators keep records of hours worked. The first generation of analogue tachographs recorded the information on paper disks. However, due to increased abuses and manipulation of the equipment, digital tachographs were developed and, for vehicles first brought into service on or after 1 May 2006, these new tachographs are now mandatory under EU legislation. The digital tachograph records information electronically on both the unit fitted to a vehicle and a magnetic card that is personal to an individual driver.

The EU legislation requires member states to ensure that the data necessary to enforce the rules can be made available for at least 365 days after recording and under conditions that guarantee the security and accuracy of the data. Because of the risk of overwriting of data or its loss for other reasons, the EU regulation makes regular downloading of data mandatory. However, the rules leave the frequency of downloading to individual member states. These regulations would specify that data must be downloaded at least every 56 days for vehicle units and at least every 28 days for drivers’ cards.

In addition, the new EU legislation requires drivers to keep records covering the previous 28 days in their vehicle. That is inconsistent with existing domestic legislation, which requires drivers to return records to their employer within 21 days. To avoid conflict, the regulations extend the period within which drivers must return records to their employer to 42 days. The regulations will apply throughout Great Britain. Similar provisions are being made for Northern Ireland. The regulations have already been considered and approved by the other place. Happily, I beg to move.

Moved, That the Grand Committee do report to the House that it has considered the Passenger and Goods Vehicles (Recording Equipment) (Downloading and Retention of Data) Regulations 2008. 4th Report from the Statutory Instruments Committee.—(Lord Bassam of Brighton.)

I welcome the regulations, which will obviously help to improve safety on our roads. I do not oppose them in any way, but I have one or two questions for the Minister, so that we know exactly where we are going. In another place, there was discussion of how the regulations might affect rural bus services. Where there is a distance of, I think, over 50 kilometres—that will obviously be the case in some rural areas—the bus driver might be required to conform to the regulations. I gather that discussions are ongoing and are not yet finalised. Perhaps the Minister could tell me where we are on bus drivers and the regulations.

I gather that recent figures on the checking of offences have shown that one in 27 offences is caused by drivers from the European Union whereas for UK drivers the figure is only one in 99. Are the Government doing anything about the fact that there is considerably more offending by European drivers? I would also like confirmation—I think that it was confirmed in the other place—that the regulations apply only to vehicles that were registered after early 2006, so that older vehicles, such as horse boxes, do not have to be regulated in this way at the moment. This year, the requirement by VOSA to check drivers has risen from 1 per cent of days worked to 2 per cent. Perhaps the Minister could explain that to me. We very much support the regulations, but I should like these questions to be answered for the sake of clarity.

I apologise that my noble friend Lord Bradshaw is unable to be here this afternoon, but it is a great pleasure for me to be discussing subjects other than those that relate to the Treasury brief.

We, too, have a number of questions, although we welcome the regulations as a whole. As we have heard, there are serious issues about the way in which the regulations are being implemented in respect of bus drivers, particularly rural bus drivers. I believe that the Minister made an offer to my noble friend Lord Bradshaw when these matters were discussed previously that a meeting would be arranged with the relevant Minister, Mr Fitzpatrick. My noble friend would like to know whether that offer still stands and, if so, when a meeting might be held.

This issue has also been raised, but how will foreign lorries, of which there are increasing numbers on British roads, be covered? Who will be responsible for enforcing the regulations, which are repeatedly breached, particularly by Irish and eastern European drivers? How secure does the Minister think that the smart cards are? What steps are being taken to prevent forging or dual use of cards—that is, a driver possessing more than one of them? Finally, why is the evidence of speeding not routinely accessed and looked at by the enforcement authorities? Anybody who has driven more than a few miles on a motorway knows that speeding by vehicles covered by these regulations is rife and is a deliberate way of avoiding the drivers’ hours regulations. We support the thrust of the regulations but would be grateful for answers to those questions.

I am grateful to both noble Lords who have participated, particularly the noble Lord, Lord Newby, who is acting as a stand-in for the noble Lord, Lord Bradshaw. He has usefully alighted on issues that I know the noble Lord, Lord Bradshaw, has close to his heart. As the noble Lord, Lord Hanningfield, will remember, the noble Lord, Lord Bradshaw, raised the issue of rural bus services, on which we have had some useful discourse.

It is perhaps worth reminding ourselves why we have these regulations. They are intended to promote road safety; I do not think that there is anything between us on the importance of doing that. They are also intended to promote decent working conditions and fair competition. Those are all important objectives. As such, they are of particular importance to the road transportation industry and to drivers throughout Europe, as we have been reminded by some of the questions asked this afternoon.

The regulations will improve the security of drivers’ hours recording and prevent abuses. It has been estimated that, in the longer term, they will save money by reducing administrative burdens associated with the current analogue system. This is relevant, because we estimate savings of around £15 million a year in 2009, rising to £24 million a year in 2010. That is no insignificant saving.

The regulations complete the legislative process through which they were introduced. One can fairly argue that they more than offset other operating costs to operators, which I am sure will be welcome to smaller operators, in particular those operating bus services. In preparing the regulations, we consulted widely and took on board many of the comments received. Our final proposals on downloading default periods received strong support from the industry, the Vehicle and Operator Services Agency and the police, who have responsibility for enforcing the EU drivers’ hours and tachograph rules across Great Britain. Without the downloading requirements set out in the regulations, enforcement authorities would have difficulty obtaining key information from digital tachographs and those few unscrupulous operators would find it easier to avoid providing these data. That would have an adverse impact on road safety.

It is also worth reminding ourselves that there is a need to amend existing legislative requirements on record keeping to avoid a conflict with the new EU requirements and to ensure that drivers and operators are not put in a position where they cannot comply with the law. The revised period of 42 days for drivers to return records to their employer reflects views put forward by the industry during consultation. The regulations provide for enforcement of the new requirements. They will make specific provision for proceedings against corporate and unincorporated bodies for offences under the drivers’ hours and tachograph legislation generally. The burden of record keeping will now be firmly placed on transport operators.

Both noble Lords referred to rural bus services; I had the full version of the concern about that when this matter was discussed last year. Both old and new EU regulations apply to bus drivers operating on routes of more than 50 kilometres, so in that respect nothing has changed. The new EU regulation has changed some core provisions on breaks and rest periods. In addition, drivers on regular services on routes of more than 50 kilometres now need to record their hours using tachographs rather than written records, so the scope for falsification is more limited. When the new EU regulation was being negotiated, the Government received little evidence from the industry to suggest that these changes would cause any problems for bus operators, particularly rural bus operators. Our flexibility to provide dispensations for particular circumstances is very limited. I see no realistic prospect of securing the necessary level of support from other member states to change the regulation.

The noble Lord, Lord Newby, asked about the meeting that I agreed to organise. Jim Fitzpatrick, my colleague, recently met representatives of rural bus operators and the Confederation of Passenger Transport to explore the issues that have been raised this afternoon and the solutions that there might be within the constraints of the new EU regulation. Following that meeting, he agreed to provide further clarity on what constitutes a route for the purposes of the 50-kilometre limit. Officials will shortly be holding discussions with the Vehicle and Operator Services Agency and the Confederation of Passenger Transport on the issue.

In the end, it is for the courts to interpret the law. The Government can vary how the domestic drivers’ hours rules apply to drivers of regular services on routes not exceeding 50 kilometres, but not to the extent that the rules would conflict with or undermine the EU regulation, which takes precedence over domestic legislation. In the past, the courts have ruled that attempts to split a route artificially—for example, by changing the destination board on a vehicle part-way through a journey—do not have the effect of dividing a longer route into two shorter routes. We are not in a position to overturn that decision. That is as much information as I can provide on that issue. I understand the point that is being made on it, but I think that the companies will have to adjust. Some of the savings that they will make in the cost of operating the system will compensate them for some of the additional costs that they might have to bear in rostering and so on.

Will the Minister comment on why VOSA increased the number of vehicles checked, in terms of days worked in the year by drivers, from 1 per cent to 2 per cent? I just want an explanation for that; I am not necessarily against it.

The level of enforcement checks is laid down in EU legislation. Up to the end of last year, there was a minimum requirement check of 1 per cent of days worked by drivers, which was roughly 1.1 million tachograph charts per annum. From 1 January this year, this has increased to 2 per cent, which is roughly 2.2 million charts.

What is the reason for doing that? As I say, I am not necessarily against it. Was it just to be more effective in checking vehicles?

Exactly so. From the information that I gave earlier, it is clear that our enforcement activity is beginning to hit hard and show results. That is to the credit of the enforcement agency and, of course, means that we can have more confidence in continued improvements in driver standards, including, we hope, for those drivers not from the UK over the longer term.

On Question, Motion agreed to.

rose to move, That the Grand Committee do report to the House that it has considered the Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) (No. 2) Order 2007.

The noble Lord said: I start by setting out the purpose of this order. At present, the Financial Services Authority—the FSA—is responsible for regulating the sale of general insurance products, including travel insurance sold by insurers and insurance brokers. However, the sale of travel insurance products sold as a package alongside a holiday, which I will call “connected travel insurance”, was exempted from regulation when the Government implemented the EU’s insurance mediation directive in 2002. Although this decision was based on a desire to control the regulatory burden, the Government were aware of concerns with this market and were committed to review that position in due course. Since then, there has been continuing concern that the unregulated position of connected travel insurance may mean that standards are lower, putting consumers at risk. Moreover, consumers have less protection and redress when buying insurance from an unregulated supplier.

In 2006, therefore, the Government launched a review into this issue and called for evidence. Last June, they announced their intention to extend the scope of FSA regulation to include the selling of connected travel insurance and published draft legislation and a consultation document. In December, they published a summary of the responses to that consultation and confirmed that regulation would be extended to connected travel insurance. The order before us puts that decision into effect by amending Article 72B of the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 to limit the exemption set out in that article.

The order will mean that the exemption from FSA regulation no longer applies to the greater part of connected travel insurance. The exemption will, however, still continue to apply to insurance linked to an event where the travel is provided by the organiser of that event and to the hire of a vehicle that does not provide sleeping accommodation—car hire is an obvious example. The Government are retaining these exemptions because they have not been made aware of any concerns relating to the sale of insurance in those markets.

I will now explain the reasoning behind the decision to limit this exemption and the reasons why I hope that the Committee will support this order. Travel insurance is an important product that offers both financial protection and peace of mind. However, it is not a comprehensive product. It is important that consumers understand under which circumstances they will and will not be covered. Travel insurance is also a relatively complex insurance product, which often provides medical, emergency, repatriation and liability cover.

As I said, in recent years there have been growing concerns from consumer groups and sections of the industry that the market is not working as well as it could. In 2006, a Which? survey found that only 35 per cent of 26 travel agents surveyed asked medical questions, only 19 per cent explained what the policy covered and no explanations were given of what the policy did not cover. In all cases, the disclosure standards of regulated banks and insurers selling the same product were far higher. Research commissioned by the British Insurance Brokers Association also found consistently higher standards of disclosure by regulated companies.

Promoting and ultimately requiring higher standards of disclosure across the board is an important reason to regulate. Not only should customers know what they are and are not buying, but one of the features of insurance law is that a policy can be voided if the customer has made incorrect or simply insufficient disclosures. Regulation is designed to reduce the risks of that happening. Perhaps even more important, if incorrect or insufficient disclosures occur under a regulated sale, consumers will have far greater options for redress and compensation than might otherwise be available. The Financial Ombudsman Service and the Financial Services Compensation Scheme provide a comprehensive dispute resolution service covering regulated companies with an upper compensatory limit of £100,000.

This order, therefore, not only makes it less likely that things will go wrong but ensures that, if they do, customers are better protected. Protecting customers is the most important reason for the Government’s decision to regulate, although there are others. Regulation will establish a level playing field for all insurance providers. Currently, I am sure that most consumers would find it bizarre that travel insurance is regulated when they buy it from insurance experts but not when they buy it from firms that specialise in travel.

However, we do not take decisions to regulate lightly. The decision has been carefully consulted on through the call for evidence in 2006 and the consultation document published in June 2007, to which the majority of responses called for regulation. The FSA published a consultation paper in December last year, which deals with the detailed issues of implementation. The Treasury Select Committee has also recommended FSA regulation. It said:

“We see merit in the introduction of a coherent and unified system of statutory regulation for the travel insurance market and we believe that the FSA is best-placed to deliver such a system”.

Throughout the process, the concerns that I know exist in the connected travel insurance industry have been considered, but let me explain why we have decided to regulate. First, I know that some will say that there is not a problem to address, or that, if there is, regulation will not resolve it. The Government believe that the evidence suggests that there is a problem to address and that FSA-regulated firms do a better job in product disclosure and navigating the consumer through the sales process. As I said, regulation would also make a difference by providing better rights to redress.

Secondly, it has been argued that regulation is disproportionate and would be burdensome for the travel industry—something that we consider carefully. The Government believe that the benefits of this change outweigh the costs and that this is therefore proportionate. Although only a small percentage of travel insurance policies are claimed on—about 4 per cent—it is vital that when claims do arise, often when the consumer is stranded in a foreign country, consumers know what their level of cover is, that their claim will not be denied and that they will have proper compensation if things go wrong.

I thank the Minister for introducing the order, although I am surprised that the Government are pressing ahead with it. Even those on the extreme wing of the consumerist agenda could not claim that travel insurance is one of the great wrongs in society waiting to be righted by yet more regulation.

In 2003, after the Government consulted on the insurance mediation directive, they concluded that in the regulation of travel agents selling travel insurance there was insufficient evidence for gold-plating the directive and increasing the regulatory burden. At that stage, the Treasury found little evidence of consumer detriment and no evidence whatever of systematic actual consumer detriment. Somehow, however, three years later in 2006, the Government reached the view that there were,

“growing concerns from consumer groups and sections of the industry that the market is not working as well as it could”.

The source of those concerns was not spelled out, but as is so often the case the Government’s action opened Pandora’s box, which led inexorably to more regulation.

The Treasury Select Committee in another place carried out its own inquiries. The summary of its report, issued in February last year, said:

“We conclude that there is significant evidence of consumer detriment in the travel insurance market”.

However, that comment was aimed at the insurance industry overall, as the criticisms generally concerned consumer awareness of exclusions and the effects of pre-existing medical conditions. When the Select Committee considered the narrower area of bundle travel insurance, paragraph 19 of the detailed report said only that the committee had received “some evidence” of significant consumer detriment. Needless to say, in the Select Committee, the consumer groups were keen to press regulation as a solution, as were some organisations in the insurance industry, doubtless on the grounds that if they had to suffer regulation, others should as well. I fully expect my noble friend Lord Sheikh, who has much experience in the insurance industry, to tell us its view.

I cannot see anywhere in the Government’s papers or the Treasury Select Committee’s report any strong evidence to support the imposition of further regulation. We start from the principle that legislation should be considered only when other approaches have demonstrably failed. We have not seen any evidence of widespread failure of the current arrangements, although there are plenty of assertions about the extent of that failure. The Which? report cited by the Minister was based on a very small sample, and complaints levels within the travel industry are generally very low. Therefore, we cannot see the case for the heavy-handed regulatory response in this order.

Even the largely risible regulatory impact assessment does not make a case for regulation. The regulatory option is expected to impose one-off costs of up to £8.1 million and an annual cost of up to £5.1 million, and it is expected to yield benefits worth £173 million. The option of strengthened self-regulation will accrue 80 per cent of those benefits, up to £138 million, at a negligible one-off cost and a maximum annual cost of £1.5 million. I thought that the benefit calculations in the regulatory impact assessment were in cloud-cuckoo-land, but, if we take them at face value, the Government’s figures suggest that improved self-regulation is a no-brainer. On a best-estimate basis, the net present value of the net benefit of regulation compared with improved self-regulation is less than £3 million, which is well within the margins of error.

The Government’s regulatory solution will bear down heavily on small firms, which is the very thing that the Government keep promising that they will not do. Many travel agents and tour operators are very small businesses operating on slender margins. The vast majority of the members of the Association of British Travel Agents are small businesses. ABTA believes that regulation will drive many more companies out of providing travel insurance alongside travel products. That is what happened when ABTA’s self-regulatory mechanisms were sharpened up after 2002. The Minister hopes otherwise, but that is just hope. If fewer travel businesses sell travel insurance alongside travel products, that will tend to increase the number of people travelling without insurance—it is currently estimated that around 14 per cent of travellers do so—which is in direct conflict with the Government’s policy, as promoted by the Foreign Office, that those who travel abroad should have cover.

There is another reason to cast doubt on the Government’s judgment in bringing forward this order. The Treasury Select Committee in another place recommended that regulation be carried out by the Financial Services Authority if the Government were satisfied that the FSA could meet the requirements of consistency across the travel insurance market and of being principles-and-risk-based. The Government’s response was that they were so satisfied. However, the report and the response were written ahead of the Northern Rock debacle last summer. While we do not yet have a full picture of the precise failings of the FSA, it is clear that it did fail. How else can the FSA explain the lack of, or inadequate, monitoring of solvency? Anybody who visits the City will find views, often very strongly expressed, about the FSA’s other failings in banking supervision and its other activities. The FSA is not an organisation on top of its role and therefore able to expand its regulatory functions. It might be willing to do so, but that is not the point. The regulation of travel insurance is clearly not a top priority for any Government. At best, the FSA is overburdened; at worst, it needs a major overhaul. It borders on lunacy for the Government to pile on to such an organisation something that may be in the “nice to have” category of regulation but could not be placed any higher than that.

It is not too late for the Government to think again about the impact on the FSA. It is not too late for them to reconsider whether they have properly considered the impact on small firms. It is not too late to stop adding yet more examples of gold-plating to that long list of embellished EU directives. I hope that the Minister will say that the Government are prepared to think again.

Coming into this debate, I had assumed that we were talking about what was almost a tidying-up exercise and that there were no serious issues of argument in bringing connected travel insurance into the scope of the regulation alongside travel insurance. I was clearly far too naive and had underestimated the ability of the noble Baroness, Lady Noakes, to find fault with this order.

The noble Baroness and I agree that the aims of the regulatory regime are worth while, in that it is important that firms are fit and proper and properly resourced; that their staff are competent to undertake the business that they do; that consumers get clear, concise and consistent information about the products; and that if things go wrong consumers are able to seek redress. So far, so good—I suspect that all of us are of that view. The question is then what is the best way of ensuring that that is the case.

I was rather surprised to see in the regulatory impact assessment the estimate that currently 25 per cent of policies are mis-sold. That is a very high figure. If it is true—and the statement claims that the figure has been arrived at on the basis of evidence provided by ABTA, the British Insurance Brokers Association and Which?—this is a strong prima facie case for statutory regulation as provided for in the measure that we are discussing today. If we assume that the assumptions are correct, the potential benefits of the measure are significant. I would therefore be grateful if the Minister could reassure me, even if he is incapable of reassuring the noble Baroness, that these figures are robust; the whole case for regulation rests on that. If they are, the case for the order is made.

In my experience, insurance connected to travel is not properly taken into account by many vulnerable people who are buying a package with an insurance element attached. I am not thinking of myself; I am thinking of my mother and her friends, who go on coach tours around the UK. I know, because I fill in the forms for her, that travel insurance is attached. I am pretty sure that, by and large, that group of people is not spending a lot of time looking at the travel insurance small print. It is therefore important that they are reassured that that insurance is being sold properly, that they are not being overcharged and that it covers the things that they expect it to.

I am supportive of the principle of effective regulation. I am not opposed in principle to this being done via the FSA; that is what the FSA is there for. We have the FSA because self-regulation has frankly failed in many cases. This should be a small addition to the overall work of the FSA. I always share the noble Baroness’s concern when we are adding burdens to the FSA, because it is an overburdened body. However, we are doing so because we have found scandals in the selling of financial service products in area after area. That is why we have so much regulation in this area. It is not a question of the Government, any of the opposition parties or the FSA empire building for the sake of it. It is because consumers have been consistently misled across whole swathes of the population and across a whole raft of financial services products. Therefore, although I share some of the concerns that the noble Baroness has expressed about the robustness of the figures, I do not approach this order with the same degree of scepticism as she does.

I declare an interest as the chairman and chief executive of an insurance broking organisation. I have been a director of the British Insurance Brokers Association and previously was a regional chairman. I welcome the order and I strongly support the regulation of travel firms that sell travel insurance in connection with a travel product. I should like to set the scene by highlighting some salient statistics about the travel insurance market, with which, no doubt, Members of the Committee are familiar.

First, in 2006, 21 million travel insurance policies were purchased, making a total premium income of £670 million. Secondly, it is believed that only 66 per cent of people buy travel insurance when they go away. Finally, it seems hard to obtain an accurate picture of the number or value of policies bought from travel firms, because the figures are different, depending on which organisation is quoting the figures. The Association of British Travel Agents believes that the travel industry’s share of the travel insurance market is about 25 per cent.

I support this amendment to the Financial Services and Markets Act 2000 for many reasons. I shall briefly outline what I believe to be the main arguments in its favour. The Financial Services Authority has four statutory objectives, one of which is consumer protection and securing the appropriate degree of protection for consumers. The existing regulatory system for the insurance industry excludes travel insurance sold by travel agents and tour operators. Therefore, it does not provide protection to all consumers. The fact that consumers are given varying levels of protection depending on where they choose to buy the insurance is unsatisfactory. To allow the FSA to achieve its aim of protecting consumers, the sale of connected travel insurance must be brought within the scope of FSA regulation.

Currently, unregulated travel agents and tour operators are not obliged to outline the cover, terms, conditions and exclusions of the policies being sold. In December 2006, the British Insurance Brokers Association commissioned research, the results of which are startling. For example, 72 per cent of consumers buying travel insurance from a travel agent were not advised whether their policy included terrorism cover. Consumers buying products that they do not fully understand could result in consumer detriment, which is evidenced by customers making claims on their policies unaware that cover is not in place for the incident or loss in question. It is also vital that consumers are made aware of how to make a claim under the policy, as this can vary depending on the section of the policy to which the claim relates. There is no obligation for travel firms to highlight this, which may be detrimental at present.

Bringing travel firms into the existing regulatory environment would compel them to abide by the FSA’s insurance conduct of business rules. Those rules ensure that customers are provided with such information to allow them to make an informed decision when buying insurance; the rules outline what information must be disclosed to a client as part of the sales process. That will result in consumers making educated decisions and reduce the risk of consumer detriment. Consumers must also be made aware that travel insurance is specifically designed for short periods and particular scenarios and is not to be seen as an alternative for private medical cover, home insurance or personal accident insurance.

Full FSA regulation of travel agents and tour operators will give consumers who buy travel insurance from one of those firms access to the Financial Ombudsman Service, an independent dispute resolution service. Furthermore, consumers will have access to the Financial Services Compensation Scheme, which protects consumers in the event of an insurance company being unable to meet its financial responsibility to clients. Allowing customers recourse to both the FOS and the FSCS is, in my opinion, an important protection mechanism. I also point out that creating protection for people buying travel insurance from a travel firm will serve to enhance the reputation of travel insurance policies over time. In return, it is hoped that that will help to increase the number of people who purchase this important form of insurance.

It is also important that such regulation of an industry does not create a competitive disadvantage for any group of businesses. The system in place at the moment clearly does not achieve that. Travel firms selling travel insurance have a clear advantage over insurance intermediaries and brokers selling the same products. Travel firms do not have any compliance costs, whereas brokers and intermediaries do. The proposal before us will address that imbalance and ensure that all firms operate on a level playing field.

Throughout the discussions on the regulation of travel firms, significant time has been devoted to the cost of compliance for those businesses. It is worth noting that many travel firms receive in excess of 25 per cent commission on each policy that they sell. In the light of that, I believe that the costs associated with regulation will not have a significant impact on those firms and, as such, cannot be used as a reason not to regulate travel agents and tour operators.

Several options are available to travel firms that do not wish to become directly authorised by the FSA. They can form relationships with existing regulatory firms by becoming appointed representatives, introducer appointed representatives or simple introducers. Each of those options would reduce the compliance costs involved with regulation while still ensuring that the standards remain high. In light of the reasons that I have outlined before the Committee, I support the order in its current form and wish to see it adopted.

I am grateful to all who have contributed to the short debate and to the two noble Lords in particular. I am also grateful to the noble Baroness. I was quite shocked when the noble Lord, Lord Newby, suggested that he had underestimated the noble Baroness’s ability to find fault with government proposals. I certainly did not underestimate her, nor did I fail to predict that gold-plating would emerge at some stage in the discussion, as well as the Financial Services Authority and Northern Rock. The noble Baroness has deployed her case with her usual skill but, as I hope to convince the Committee, not with sufficient conviction.

Let me make it absolutely clear that when we implemented the directive in 2003, we wanted, as it will be appreciated, to keep the regulatory burden at an absolute minimum, which is why we did not include provisions covered by the order. We brought forward the order on the basis of the weight of evidence that has emerged over the three years. We did so not because we are enthusiastic about adding burdens to industry—far from it; the Government stay committed to light-touch, minimum regulation—but because we must regulate where discerned and defined difficulties occur.

The noble Baroness suggested that the Treasury Select Committee in the other place expressed little anxiety about the position. However, it said:

“In the context of meeting the challenges that face the travel insurance industry and those who sell travel insurance, we observe that there is evidence to suggest that problems in the sales process are likely to be accentuated when sales take place away from the professional regulated insurance environment through an intermediary such as a travel agent”.

That was the burden of the remarks made by the noble Lord, Lord Sheikh. He identified where consumers could be at risk if they did not deal with a proper agent who knew exactly what insurance terms should obtain and did not ask the right questions.

It is quite difficult to buy insurance and then commit oneself to reading the very small print. Yet the very small print is often the absolute essence of what the insurance offers. It is all too easy, particularly in a widening market where inevitably there are many players, for seductive arguments to produce the necessary impetus for the consumer to take up the offer, who then perhaps neglects the essential aspect of being sure that the insurance does what it says.

The problem with travel insurance, as I indicated in my opening remarks, is that being inadequately covered can be quite disastrous, because the issues come to light only when one is already stranded abroad. We are all too well aware that, because we benefit from certain healthcare provisions in this country and have reciprocal arrangements in the European Community and with a number of other Administrations, it is easy for people to assume that they do not need to be absolutely clear about the policy or absolutely sure about the authenticity of the person who is selling it. They then go to somewhere such as the United States where medical costs can prove to be absolutely crippling when things go wrong and they are utterly inadequately covered.

I appreciate the noble Baroness’s argument that we should be careful about regulation, but the Government have demonstrated their care. We did not regulate in this area after the first initiative in 2003 and we have come to this position only as a result of evidence that has been produced. I mentioned the Treasury Select Committee, but the Consumers’ Association also brought to our attention the difficulties that arise when insurance is not sold as well as it should be. The noble Baroness will therefore recognise that we are motivated not by the wish to regulate but by a clear and defined need.

I do not need to repeat the arguments or the statistics that the noble Lord, Lord Sheikh, gave to the Committee. One of the benefits of this House is that someone such as he, who has vast experience and detailed knowledge of an industry of this kind, can make as good a job of understanding the issues as the Government. I cast no aspersions on the team that supports me; it is absolutely excellent. I would regale the Committee with a vast battery of statistics at this stage, but the noble Lord, Lord Sheikh, has largely presented the case for the order in detail and in such a way that I need not detain the Committee.

I always like to make sure that the Minister is answering the points that I make. I did not at any point suggest that any small firm would go under; I suggested that small firms would not carry on doing travel insurance.

I apologise to the noble Baroness. Her point is important and we want to encourage the take-up of travel insurance. The percentage to which the noble Lord, Lord Sheikh, referred, is a great worry. A far too high percentage of people travel without cover; they are taking conspicuous risks. I agree with her that the objective is not in any way to reduce the availability of travel insurance, nor to produce a disincentive to participation.

As far as travel firms are concerned, this issue is a small element in their overall operations; the profit dimension is between 1 per cent and 2 per cent. Therefore, I do not think that one is saying that regulation in this area would be the straw that breaks the back of an organisation or causes it to recast its position. It is essential that those who provide travel insurance are capable of providing the product that fulfils the intended purpose. The consumer needs support in this area. After all, it will be recognised on all sides that insurance is one of the more complex consumer goods to purchase. With a great deal of other consumer goods, the guarantees are all too clear, although the small print on guarantees regarding direct consumer goods needs to be looked at carefully. With insurance, it is notoriously difficult for people to be sure of the range of their coverage; we all know the nature of exemptions and excess clauses, which present difficulties of understanding. We want the providers to be fully qualified and regulated and to give an effective service.

We maintain that we have sufficient evidence after several years that there is a problem here in which a small additional burden of regulation, which is well within the capacity of government and which the industry is readily able to bear, creating fairness across the industry and all companies involved in travel provision, merits action being taken. Therefore, I hope that noble Lords will support the order.

On Question, Motion agreed to.

rose to move, That the Grand Committee do report to the House that it has considered the Electricity and Gas (Carbon Emissions Reduction) Order 2008.

The noble Lord said: The order places on electricity and gas suppliers an overall target for reduction of carbon emissions in the household sector in Great Britain, known as the carbon emissions reduction target, or CERT; while I do not generally use acronyms, because of the constant reference to this I will say “CERT” from now on. We held extensive informal consultations with a wide range of stakeholders on the development of the CERT, culminating in the issue of formal consultations in May 2007.

The CERT is planned to run from 1 April 2008 to 31 March 2011 and will build on the success of the previous two phases of the energy efficiency commitment, with the current phase ending in March this year. Gas and electricity suppliers will meet their targets by encouraging and assisting household consumers to take up carbon abatement measures, specifically the promotion of measures for the following purposes: achieving improvements in energy efficiency; increasing the amount of electricity generated or heat produced by microgeneration; increasing the amount of heat produced by any plant that relies wholly or mainly on wood; and reducing energy consumption. By reducing carbon emissions and using energy more efficiently, household consumers will have the opportunity to reduce their carbon footprint, lower their fuel costs or be able to enjoy greater comfort.

The main aim of the CERT is to make a significant contribution in the household sector to the United Kingdom’s targets and ambitions under the climate change programme. The CERT will have an overall target of 154 million tonnes of carbon dioxide over its lifetime. That is equivalent to annual net savings of 4.2 million tonnes by 2010, which is equivalent to the emissions from 700,000 homes each year. This will build on the 2.9 million tonnes of CO₂ that we expect to be delivered by the previous phases of the energy efficiency commitment.

The CERT will also give particular help to low-income consumers and the elderly, who spend a larger proportion of their income on energy or are more vulnerable. Energy suppliers will be required to achieve at least 40 per cent of their target by directing activity at householders in receipt of income or disability benefits or tax or pension credits. In order to ensure a focus on the most vulnerable members of our communities, we have also included all those customers aged 70 or over. The CERT will also introduce a new priority group flexibility option, which will support energy suppliers that wish to focus some of their CERT activity with low-income customers on those who are especially vulnerable or at risk of fuel poverty, using measures that will make a real practical difference for those hard-to-treat households. We expect that these new approaches will allow the CERT to contribute effectively to the alleviation of fuel poverty. On 6 December, the UK Fuel Poverty Strategy fifth annual report was published. It sets out our wider approach to tackling fuel poverty in the UK.

We also want to ensure that we are ready for the carbon reduction challenges ahead. The CERT will introduce creative and significant support for innovation, offering space for energy suppliers to explore and experiment with totally new routes for carbon abatement in the household sector, including specific encouragement for microgeneration activity. The order sets an overall obligation on all relevant electricity and gas suppliers of 154 million tonnes of carbon dioxide over the lifetime. This is a challenging target at about twice the level of the current energy efficiency commitment, but we believe that it is achievable and will drive the effective promotion of carbon reductions in the household sector.

The cost of meeting the obligation will fall on energy suppliers. However, we expect that, even if suppliers pass those costs on in full to customers, that would be no more than about £105 per household for the three years of the programme, or about 70p a week. Those costs are balanced by a range of direct and indirect benefits. We expect the average ongoing financial benefit for consumers, in terms of lower energy bills or increased comfort, to be about £29 per year for the lifetime of the measures installed, which could be up to 40 years in the case of cavity wall insulation, for example. An equivalent measure would be to fit four energy-saving light bulbs, which, over their lifetime, would pay for the cost.

The regulator, Ofgem, is responsible for administration of the CERT. The order provides the framework for Ofgem to set the targets for individual electricity and gas suppliers and to monitor their progress in achieving them. Ofgem will also be responsible for enforcement. We intend to monitor the continuing development of the CERT. Ofgem is required to report annually to the Secretary of State on suppliers’ progress towards achieving their targets. We want to help and support householders in understanding and reducing their carbon footprint. The CERT will be an important part of this process and will sit effectively with other major policies and initiatives aimed at meeting our climate change ambitions in this sector.

Looking to the future, the Government have already made a commitment to some form of supplier obligation after the CERT to at least 2020. The new flexibilities introduced with the CERT, including new routes for innovation and for working with those most vulnerable in our society, will offer the opportunity to prepare effectively for new approaches.

I hope that the Committee will agree to the Motion. I am most grateful to the noble Lord, Lord Jenkin of Roding, who has given me advance notice of some of his questions. I am happy to set out some of the answers before he speaks, so that he can comment on them later.

I hope that the noble Lord might comment, but I think that my noble friend Lord Cathcart will want to speak first.

I shall therefore comment on those issues later. I beg to move.

Moved, That the Grand Committee do report to the House that it has considered the Electricity and Gas (Carbon Emissions Reduction) Order 2008. 5th Report from the Statutory Instruments Committee.—(Lord Rooker.)

I thank the Minister for introducing this order. From our debates on the Climate Change Bill, I know that he shares my interest in reducing carbon emissions. While the Bill is setting out the framework for the effort to stem climate change, orders of this kind are the nuts and bolts. Thus, I welcome the opportunity to debate this order.

Under this Government, emissions have risen. There is no chance of the Government meeting their target of a 20 per cent reduction of CO₂ by 2010. Scrutiny is therefore important. We need to ensure that opportunities for improvement are not missed, so it is important that the potential benefit of some of the provisions in this instrument are realised. The carbon emissions reduction target could play an important role in emissions reduction. Indeed, the housing stock in this country accounts for 27 per cent of our CO₂ emissions. Targeting housing, then, is a welcome step.

The CERT will build on the energy efficiency commitment, which stimulated tremendous investment—£600 million—in energy efficiency. The net benefits to householders are estimated to be over £3 billion. This can claim to be a success. However, I remain sceptical about the way in which the Government are rolling out a scheme and trying to stimulate microgeneration. The goal in all our efforts to stop climate change is to reduce emissions and to secure for the UK a genuinely greener energy sector. Thus, we must not be, as was said in another place, too quick to pick winners in the mix of available technologies. Reducing carbon emissions through the various microgeneration technologies that are allowed to be used by suppliers under this order is by no means bad in its own right. However, it skews the market towards a narrow way of thinking about reductions. There does not seem to be enough to stimulate real investment in further green technology that could provide potentially much greater benefits.

The point here is one of emphasis. Does the Minister think that enough has been done with this instrument to encourage innovation? If we are to tackle the problem of climate change, there needs to be nothing short of a revolution in energy supply. Does the Minister see this order as the best example of encouraging the necessary innovation? Suppliers can currently claim back 50 per cent if they make market transformative actions. Will the Minister explain what constitutes a market transformative action? What standards are used to judge this? Does he think that it is adequate to encourage suppliers to innovate?

My concern is that there does not seem to be a clear enough mechanism for making a real change to energy supply. There seems to be a risk that suppliers will focus on the cheapest short-term solutions that tick the box; that is, even if the targets can be met, that will be done in such a way that suppliers are locked into a higher-carbon method of providing energy than they would be if serious emphasis were placed on greater capacity for innovation.

The order places an overall target for reduction in carbon emissions in the household sector on energy suppliers. The regulation, enforcement and determination of what measures can be used to meet the targets will be the responsibility of Ofgem. This is also a cause for concern. The report of the Government’s own Sustainable Development Commission, Lost in Transmission?, calls for huge changes to the structure of Ofgem to ensure that it prioritises the transition to low-carbon energy supply. Has the fact that a large regulatory burden is placed on a body that has been criticised by this report been considered? Has the report been considered and have the necessary changes been made to Ofgem? The accountability of the suppliers to Ofgem and of Ofgem to the Government is unclear in this instrument. Could the Minister explain the mechanism that will ensure that suppliers are accountable to Ofgem?

As the instrument stands, we will not know the progress that suppliers are making towards the targets for a three-year period. Article 22 requires Ofgem to determine whether or not a supplier has met its obligations regarding emissions cuts. The cuts must occur between 1 April 2008 and 31 March 2011, after which Ofgem will present a report to the Secretary of State. Can Ofgem intervene, if progress is not being made to meet these obligations? Will there be any interim reporting? Is there any mechanism to ensure that the efforts made by the suppliers will be on course with meeting their obligations? What if suppliers do not meet the overall targets?

When the CERT was put out for consultation, grave concerns were expressed by some of those who would be involved, particularly regarding the targets, which some respondents considered very challenging. There was concern about the fact that there might be significant costs to consumers. What will happen if consumers do not get on board? Does the Minister think that there is a need to increase customers’ willingness to participate in the scheme through incentives or marketing? There was also concern that Defra’s estimation of the costs had been too low. Consumer participation seems to be essential in ensuring that this works. If the burden on the consumer is considerable, there will be no scope without further incentives to encourage microgeneration or other types of innovation. Considering the scepticism of the consultation, what further measures have been taken to ensure that the targets are feasible?

I also wish to express some concerns regarding fuel poverty. The energy providers will be obliged to achieve 40 per cent of their reductions by promoting measures to those on benefits and tax credits and to householders over 70. In the consultations, energy suppliers and climate change groups considered this target to be unachievable. Has the fact that this target has already been deemed unrealistic been taken into account? How are the energy suppliers to identify the priority group in the first place? I know that my noble friend Lord Jenkin of Roding may speak to this part of the statutory instrument. None the less, I want to mention the lack of clarity surrounding just how this group is going to be reached. Is the Minister convinced that enough people will volunteer for this scheme? Will energy companies be obliged to spend money advertising that there are schemes for those on benefits?

We must ensure that the benefits of this instrument will be long-term benefits. For example, this is supposed to promote microgeneration, but are there provisions that allow for small generation to sell back to the grid? Are there any price-controlling mechanisms to ensure that small generators can prove to be a worthwhile investment?

It would be a cruel fate to see measures such as these, with so much potential to make a real step towards stimulating green energy and energy reduction in this country, being scuppered by quick-fix solutions and ineffective accountability. I look forward to hearing the Minister’s response.

We on this side also welcome the statutory instrument, especially the provisions for microgeneration and fuel poverty, which, given the recent rise in gas prices, will be very necessary for a growing proportion of the population.

The order omits to mention boilers, which are the most important generators of carbon in the domestic sector. It talks about insulation, which is a worthy and cost-effective way of keeping the heat in. It talks about cavity wall insulation, which is also needed, as vast numbers of properties do not have it. However, boilers have been neglected in this sphere, which seems rather strange, because boilers emit the carbon in the first place. Inefficient boilers, such as the 4 million G-rated boilers in this country, which account for 75 per cent of the energy produced through water heating and space heating, are an area where improvement could reap vast rewards in terms of carbon.

The Climate Change Bill is going through the House at the moment. While microgeneration is being given a degree of support in the order, just replacing G-rated boilers would ensure a much more effective reduction in carbon dioxide. That could be done by using EPCs—another flagship policy of the Government—through the HIPs to look at the state of boilers in every home. EPCs are of course carried out at the point of sale, but that does not have to be the case; many of the energy companies could carry out an EPC for any property in which they wished to install energy efficiency methods. The CERT could then be used towards replacing G-rated boilers. A G-rated boiler has a pilot light. I learnt a great deal about boilers recently, but I did not realise that a pilot light sticks 10 per cent of the energy straight up the chimney, with no benefit to the consumer at all. Removing the 4 million G-rated boilers, with a resulting 10 per cent efficiency gain on each and every one, would be a helpful method of vastly reducing the carbon dioxide.

One good thing about the statutory instrument is that it gives Ofgem the flexibility to look at these issues. One of the reasons why I make this point is that, although I know that Ofgem is interested in looking at this and can bring about the changes, I very much hope that there is a mood change within Defra to look at boilers, because the letters that we have received from Ministers until now have questioned the value of replacing G-rated boilers. The big problem with those boilers is that they are so simple that they rarely break down and you can keep them going for ages. I have a G-rated boiler, which I am about to change. However, my gas fitter turned around and said, “What a fabulous boiler. They’re so easy to maintain, this will go on for ever. They don’t break down. You shouldn’t get rid of this”. Of course that is fairly disastrous in carbon terms.

In the area of fuel poverty, many older people will have a G-rated boiler that they will nurse for many decades because of the cost of replacing it. The CERT could be a way of giving a grant towards replacing these boilers, which would vastly reduce the amount of carbon dioxide. I therefore very much hope that the Minister can say that he will look flexibly at this and that Defra officials will start doing the work to realise that this is a good thing.

I must express my gratitude to the Minister for not answering my questions before I asked them. I thought that that was the usual way around, but he quickly recognised that that might be the best thing to do.

I start my speech with a quotation from Hansard. As the Minister noted, I have given him notice of this. On 26 April, there was an exchange on the Floor of the House about fuel poverty. The questions were answered by the noble Lord, Lord Truscott, who was then a government Whip. I asked him what the point was,

“of setting targets for the gas and electricity suppliers to help families in fuel poverty if they are denied the information to know who they are”.

The noble Lord answered by saying,

“the noble Lord makes a valid point. We are working on sharing data, but we must bear in mind issues such as the Data Protection Act and the protection of individuals’ information. We are, however, working on sharing data between government departments to ensure that we target better those who need support. We are working actively to achieve that”.—[Official Report, 26/4/07; col. 758.]

I ask the Committee to concentrate on the words “between government departments”, because it is not government departments that need to share information. Indeed, a huge amount of information is already shared between them. The order puts obligations on the supplier industries, which are the ones that must target households. Exactly the same question was asked last week when the order was debated in another place. Mr Phil Woolas, the Minister who replied to my honourable friend Greg Barker, did not even attempt to answer the question about how the industry was to get the names and addresses.

I remind noble Lords, and emphasise the point that the Minister outlined very clearly, that at least 40 per cent of the carbon emissions reduction obligation must be achieved by action carried out in the priority group. Article 2 defines “priority group” as those who get benefits or tax credits as listed in Schedule 2, have the relevant income of £15,592 or less or are at least 70 years old. I was interested that the Minister said that that last group is the most vulnerable. I fear that I have to declare an interest, as I come into that group. I am over 70, as is my wife, but I had not hitherto regarded myself as vulnerable, although I recognise that there are many pensioners who are.

I had not intended to say anything—I am here to discuss the next order—but I felt that I should make a very general remark after listening to the debate. I welcome the order and anything to do with energy conservation and reducing carbon emissions. A number of years ago, we on the European Communities Committee held an inquiry into renewable energy. Of course things have moved on, but much of what the Government are doing now largely involves panic measures. Governments—previous Governments, not necessarily this one—have failed to do anything for years.

The European Communities Committee visited Denmark because it has a climate extremely like our own. We found that how little we had done and are still doing was embarrassing in Denmark. At that time, the use of energy—electricity—there had not increased in the previous 20 years, although GDP had gone up as much as ours had. Why? Because Denmark had conservation measures that actually worked. We were informed that our building control regulations were miles behind those of that similar country. The opinion was offered that this was partly because of the power of the construction industry within the wheels of government and everything else. However, our regulations were miles behind for whatever reason. They are still behind those of Denmark, which is so similar to our country. Why are our building regulations not such that we are conserving more energy than we ever did? We are not up to speed with other nations.

Secondly, there is all this encouragement for microgeneration, which I find rather interesting. It was introduced in Northern Ireland about six months before it was brought in here. Denmark went along that route 20 or 30 years ago, which helped it a great deal. Because of the eyesore problems, cost and so on, Denmark is now providing incentives to group microgeneration schemes together so that it is no longer for individual houses. Yet it appears that we are starting back where Denmark started, having learnt precious little from its experience.

We have heard this evening that the Government have not always given a lead. Without a doubt, that was the finding of our inquiry: the Government were not giving a lead or the correct incentives to the suppliers to provide what was required to meet our targets. We are now at a stage where, although it may not appear like panic, we are rushing everything through. Although I am entirely behind nuclear, it appears that the decision on it the other day was introduced in exactly the same way. I am delighted by the decision because I believe in nuclear, although I do not have a thorough knowledge of it.

A symptom of how the Government do not provide incentives is the number of projects that have failed in the past five to 10 years, whether for planning reasons or because of insufficient incentives to get the project right in the first place. I am talking about projects such as the Holsworthy biogas project in the south-west, where there was not enough incentive to get the filters right and it did not work. This Government and previous Governments are very much to blame for not giving enough of a lead. There is not enough information out there and not enough incentive for business to come to this in a major way. I hope that we achieve those targets. I welcome the order, but we need a lot more to get down to grass-roots level.

I say to the noble Viscount that we have one—I hope—day left in Committee on the Climate Change Bill. I look forward to him participating in our debate on Wednesday. He brings valuable experience.

I have no brief on this, but the short answer to the noble Viscount’s point about Denmark is that coal and North Sea oil and gas made us incredibly lazy and inefficient in this country. It made everybody ignore renewables, as there was no pressure. The Danes did not have those resources, so they went down their route. What has happened in this country is an absolute disgrace and, of course, we are making up for it now. As the noble Viscount rightly says, there has been a push in this respect in Northern Ireland because of the former Secretary of State, Peter Hain. That was in the face of some pressure that I know of—I sat at the table with him—against even the turbine experiment at Strangford Lough. It took enormous pressure to drive that through to see what we could do with renewables.

I entirely agree with the noble Lord, Lord Jenkin, about eaga. I pay tribute to the support that it gave to my former constituents. It is an absolutely first-class organisation, both when it was an agency and since it has been in the private sector. It provides a valuable service, as any Member of the other place would confirm.

I shall do my best to answer the specific questions. I shall take first those asked by the noble Earl, Lord Cathcart. He asked about the CERT, the incentives for innovation and how it would work. We think that there are two key routes for innovation: the market transformation route and the demonstration route. The market transformation activity is that for which the carbon saving is known but which was not used in the energy efficiency commitment phase 1. As an incentive for these measures new to the market, they will be attributed with an extra 50 per cent carbon saving. Solid wall insulation and ground source heat pumps are also included since, although they were used in small numbers under the energy efficiency commitment phase 1, we wish to support market transformation for those measures. Demonstration action will allow energy suppliers for the first time to count towards their obligation innovation measures in which accurate carbon savings cannot yet be determined. In return for an upfront score based on the cost of the project, energy suppliers will make publicly available the results of their demonstration projects so that we can all benefit from a better understanding of these new approaches.

The noble Earl asked how the delivery of the CERT will be overseen. The draft order makes Ofgem the regulator responsible for overseeing the delivery of the CERT. I know nothing about the background to why Ofgem was chosen as opposed to any other body. I am giving the position at the moment following the consultations and the approval by the other House. The order makes Ofgem responsible for overseeing the delivery by monitoring suppliers’ progress towards meeting their obligations. Suppliers’ proposals for meeting their targets must be approved by Ofgem, which will determine the reduction of carbon emissions that will be attributed to them. In August last year, Ofgem issued a consultation paper on its supplier guidance for the operation of the CERT and expects to issue its final administrative arrangements as soon as this order comes into force.

The noble Earl also asked what happens if a supplier fails to meet the obligation. Ofgem will be responsible for the enforcement of each supplier’s CERT obligation. It has the power to impose on a supplier a financial penalty of up to 10 per cent of company turnover if it fails. The Electricity Act 1989 and the Gas Act 1986 are the primary legislation that requires Ofgem to be the administering body. Article 16 requires Ofgem to submit annual progress reports to the Secretary of State—that goes without saying, but you always have to say these things. Those reports will also be in the public domain.

The noble Earl said that the issue depends on individual consumers taking action. I admit that there will be some difficulties. We are talking about what household consumers in this country can be persuaded or incentivised to do. In the past six years of the energy efficiency commitment, suppliers have shown that they can work effectively and creatively to deliver action from individual customers. The Government are committed to helping individual consumers to overcome real and perceived barriers to action, such as poor information, high upfront costs, apathy and the hassle factor. We intend to build on the successful Act on CO₂ campaign with TV, online and press advertising, and we continue to work at local and grass-roots level. In November, the Prime Minister announced that the Government would provide £100 million to the Energy Saving Trust to transform its energy efficiency advice centre network into a proactive green homes service.

The level of the target is based on an analysis of an illustrative mix of a balanced selection of possible measures generally regarded as cost-effective. The analysis is informed by information and data provided by energy suppliers, representatives of the industries concerned and experts, including the Building Research Establishment and the Energy Saving Trust. We recognise that the costs to suppliers of achieving their CERT obligations are passed on to consumers through their bills. The Government have sought to ensure that the cost to consumers is kept at a reasonable level.

The Minister mentioned the Energy Saving Trust, which was one of the bodies I got in touch with. I am glad to hear of the additional grant going to it. I found it quite difficult to get any information. When I started asking it how it thought this identifying would work, it said, “Well, working with the local authority and NGOs can give details up to a point”. It declined to go any further than that. I wonder whether the Energy Saving Trust is doing all it can to alert people to what is necessary if there is going to be any chance of the industries getting their 40 per cent targets.

I shall come to the issues the noble Lord raises separately, in a moment.

The noble Lord, Lord Redesdale, raised the issue of boilers. They are not eligible for the CERT because efficient boilers are required under building regulations. You cannot buy an inefficient boiler today anyway. It would therefore not provide additional activity under the CERT. We are, however, promoting the early replacement of boilers through the energy performance aspect of the building directive. There is an issue with boilers and, as the noble Lord has rightly said, with inefficient ones the energy is going straight up the chimney. More and more are being replaced.

The noble Lord, Lord Jenkin, was kind enough to give me some advance warning of the point he wished to raise. I therefore have some detailed responses. If they are not sufficient, I will follow them up. The noble Lord asked what is the point of setting targets for gas and electricity suppliers to help families in fuel poverty if they are denied information about who they are. He also asked what Defra is doing to find people in the priority group. Under the CERT, energy suppliers will be required to direct at least 40 per cent of carbon savings to a priority group of low-income and elderly consumers. They are not necessarily the same—I made that point about the over-70s—but nevertheless a large element of the low-income target group is the over-70s. The priority group is defined as those in receipt of certain income-related or disability benefits, tax credits or pension credit, as well as those aged 70 or over. Suppliers may use a variety of methods to identify that group of customers. They include setting out the priority group criteria in promotional material; partnership arrangements with bodies such as housing associations or charities that work with priority group consumers, such as Age Concern, to take one at random; and showing consumers the priority group criteria when giving out measures person to person, which they do when conducting inspection checks. More generally, we are committed to using knowledge of those who are likely to be in fuel poverty to ensure that they can get help. We are considering a number of options with the energy suppliers and fuel poverty programme managers. They include the Government writing to benefit recipients on behalf of those offering the help or providing information where there is a high propensity for people to be on benefit.

Although it was said in jest, there was a serious point behind what the noble Lord said at the end of his speech. I take his point because what has happened with the recent information lapses has been nothing short of a disgrace and complete lapse in good standards in public administration. But there are serious issues about individual names, addresses and personal information. This winter, for example, we are going to support a mail shot to 250,000 pension credit recipients offering free insulation and help to install central heating. We want to look at these options before we consider fully sharing the personal data of millions of people, most of whom will not be fuel poor or eligible for assistance. We are continuing our large-scale Keep Warm Well campaign, aimed at vulnerable households in England, which gives information on the health benefits of keeping warm in winter and details of the grants and benefits available. That brings together cross-government communications that are, I hope, co-ordinated and accessible.

The noble Lord was quite right when he asked the question, and gave the answer, about Warm Front savings contributing to the 40 per cent target, which is surely impossible. As he said, the figures in the note to the statutory instrument do not take that into account. In the consultation proposals on how it would administer the CERT, the regulator, Ofgem, made it clear that where a supplier undertakes action in conjunction with the government programme, there should be no double counting of carbon savings. Ofgem will shortly issue its supplier guidance on the carbon emissions reduction target, which will set out the criteria for ensuring additionality. We are obviously very keen to encourage interaction, where possible, between the CERT, Warm Front and other government programmes, so that they support the arrangements between the CERT energy suppliers and the Warm Front scheme manager as private companies to maximise the benefit to vulnerable people.

The noble Lord asked what Defra expected a householder on the Warm Front scheme to do about microgeneration. Although Warm Front does not currently offer microgeneration technology as part of a portfolio of measures, it can provide, and has mechanisms for assessing, alternative technologies that could be brought into the scheme. In this light, Warm Front is undertaking a pilot exercise of solar-thermal systems, which will assess whether that technology is suitable for inclusion as a main Warm Front measure. It is also useful to note that, since the summer 2007 consultation, we have expanded the scope of the CERT priority group; the over-70s were not in the original consultation. The supply target has therefore increased by some 2.5 million households. The assumptions on which the CERT target is based recognise that the priority group consumers will receive the measures at little or no cost.

That gives rise to another question, which the noble Lord did not touch on but alluded to. It is generally known that those in some of the severest fuel poverty in the country pay more for their electricity and gas than the rest of us because they are still on coin meters. There is no doubt that that is a massive attack on the marginal cost of electricity. That issue is not part of this, but it will have to be dealt with in due course because there must be fairness between one section of society and another. There is no sense in targeting low-income, fuel-poor people with all these schemes but penalising them because they are still on coin-operated meters, which is what the utilities do. That issue is not in my brief, but I offer it from my experience as a constituency Member of Parliament. It is a paradox because the Government can be accused of promoting schemes to assist those people when other measures could be taken to help them directly with the cost of electricity. The hassle factor and the upfront costs of investing even in such things as energy-saving bulbs are what put people off.

There is another major issue. We currently have no proposals in legislation to allow energy suppliers to have the names and addresses of people on various benefits. That is not part of the operation. It might have been thought a good idea to do it that way around, but it is not being done that way. We must find other ways of doing it and must find out whether we can be successful. Before any Government ever submitted such a proposal, they would have to win acceptance in both Houses, let alone among the public, of what would, in effect, be a massive and intrusive measure that would require information that is got for one purpose to be given to the private sector for another. You would have to have a very good case that you had tried every other conceivable, reasonable way of targeting those people for their own benefit to lower their bills and their carbon footprint, thereby assisting us to meet our national targets. I am not saying that that is not somewhere down the road, but it is certainly not on the agenda at present. It might have been thought to be on the agenda in the past, but it is not a route. As the noble Lord will appreciate, given his former role, passing information about benefit claimants, let alone tax credit claimants, to the private sector would be highly sensitive, and is not a route that we will use at present. I am not saying that it will be ruled out in future, however.

The noble Lord did not comment on the pilot scheme, of which I gave some details. Last year, 250,000 people were involved, and there was a proposal that it should be redone for 250,000 people this year. The essential part is that the Department for Work and Pensions has the names and addresses, and the DWP sends the document out to householders. The documents are printed and paid for by the energy companies. But, as the noble Lord has said, I entirely understand the arguments about why large numbers cannot just be handed over. Is that not the way ahead? Could not other authorities perhaps do the same, so that they could be the channel through which the energy companies would eventually reach the target audience which they need to have if they are to get their 40 per cent?

That is exactly so, and I did answer that. This winter, the Government are just about to send a mail shot to 250,000 pension credit recipients. We will send out the information as regards central heating and insulation, but we need to know the results of that before we can go further. That is the answer: the Government are sending out the information from the suppliers because we hold the information. It is quite legitimate for the Government to target because that is the information we have. We know who the pension credit recipients are. As I said, we are about to do that this winter. We need to test the process to see what the value, the results and the benefits are of doing it that way around, so we are doing that.

I am sorry, but the noble Lord speaks rather fast and it is not always possible to follow him exactly. I apologise if I suggested that he did not deal with that, but there has already been one pilot scheme last year. I am told by the Energy Retail Association and by those who participated that the result was regarded as a success. It may be that the Government are thinking that they may need another pilot in perhaps a district. If that is happening, it will take some time. Three years starts next April. Presumably, this will all count towards the 40 per cent target. I just do not see these things adding up or how they hang together.

The noble Lord reeled off a long list of other initiatives, and one is getting the impression of a system which will simply collapse under the weight of its own bureaucracy. Yet, in the mean time, we wait for what seems to be the most hopeful approach on this, which is what the first pilot has already successfully achieved.

All that I can say is that the first pilot was obviously done under the other scheme. This pilot is being done under this scheme. I freely admit that the Government work incredibly slowly. That is my experience of the past 10 and a half years. You get an idea and you imagine something happening, but three or four years later, you think, “Where are we?”. The money does not flow through the system very fast, except to Northern Rock—which I should not have said! Once Ministers allocate expenditure, it is an incredibly long time before you see the flow through the system and the output. I can only apologise to the noble Lord. Frankly, we are now targeting this group for pension credit for this period, and it is probably not the same group as last time. But it is a good lesson to pilot things before letting millions go. The lesson of history is that if you have an idea like this which you want to roll out, try it out either by benefit or area first, rather than going the whole hog across the country. There may be a benefit with that in the long term. It is frustrating to the noble Lord, as it would be for those who are running the schemes, that it all appears to be so slow. I apologise for that.

I am grateful and I acknowledge that. I can also sympathise with the noble Lord, having been, if not in exactly the same position, at any rate in what was the same department some years ago, and these things do take time. But, in the mean time, we have a scheme starting under the order on 1 April. The 40 per cent obligation starts then. However, until these pilots have been properly appraised and it has been decided how to roll them out, British Gas will have to go on playing municipal hide and seek. That does not seem very satisfactory. The fact that the noble Lord’s explanatory memorandum did not have a single word to say about this fills me with some dismay. It gives the impression that Defra either does not know about it or, if it does know about it, does not care. That might be an unfair judgment, but anyone reading 79 pages of that explanatory memorandum is likely to draw that conclusion.

If I remember rightly from one of the notes that I read, Ofgem is waiting for this order to become law to get cracking on the advice to the suppliers. I hope we will not delay the order because Ofgem is waiting to issue its guidance to suppliers about how they will be measured and tested, as there will be a challenge at the end of it.

The pilot scheme—this is probably more bad news for the noble Lord, but I want to be as open as possible—is a general invitation to reach fuel-poor consumers. It is not necessarily a CERT invitation, but it is the same targeting. We use government information on people whom we know—in this case, the 250,000 on pension credit—to send out the information on the schemes for insulation and central heating. Once the order is passed, Ofgem will run the scheme, so the pressure is on Ofgem. I realise it is slow and the 40 per cent target starts from 1 April. The other scheme folds and the new scheme starts. I accept that three years is not a long time. This time next year, looking at the review of the first year, it will be fair to ask: are we on a trajectory that will deliver? I am not in a position to say at the moment. I just hope we are.

I am grateful for that information and for the noble Lord’s acknowledgement that there are considerable problems. I will not ask him to deal with this now, but perhaps he would be kind enough to write to me explaining which of the many other schemes that he mentioned in his reply will enable the supplier industries to count them towards their 40 per cent. He quite rightly said—I expected it was so—that the savings from the past Warm Front expenditure do not count. So be it. What about future Warm Front expenditure? What about other programmes that the noble Lord announced he was rolling out? Could he write to me explaining which of those will be allowed to count towards the suppliers’ 40 per cent obligation?

Many fuel-poor people do not respond very easily to mailshots. The Minister and I know from previous experience that a knock on the door and speaking face to face with someone who really understand the situation is always more likely to produce results. Is it possible for the fuel companies to fund staff employed by the government agencies so that those agencies with the information on fuel poverty could then knock on the doors? They would know which doors to knock on. Would it be possible under this or other schemes for fuel companies to pay for staff who would be employed by the government agencies—not by the fuel companies—and for that to count towards their achievement of the target? It seems that that is more likely over time to avoid a situation in which leaflets are sent out encouraging people to apply or to respond but the very poorest and those most at risk do not take up the opportunity. That is the tragedy for those whom we are talking about.

I shall certainly take some advice on that. I am more than happy to write to the noble Lords who have participated in the debate. I am not sure how they will operate with the companies or whether that will be dependent on waiting for the Ofgem programme once the order has been passed. As soon as I can get some information I shall write to the noble Lord.

The issue of the other schemes is quite important: what can be counted and how they go about trying to find the information, as I said, through social housing landlords and others. To my noble friend I say that I will get an answer, but I am not sure. In the past couple of years, I have come across schemes where there has been incredible difficulty, even within government, of one department using another department’s personal information to facilitate what is public-good policy, simply because of data protection. There is an example—nothing to do with fuel and energy—where only government departments were involved, but the information had not been given for the original purpose. It is incredibly difficult and yet it seems so obvious.

On the other hand, the objective is to try to find these people and target them. You may know that they are poor in a financial sense, but they may not be in fuel poverty. We do not know how people spend their money. People do not take kindly to someone knocking on their door and saying, “We’ve discovered that you’re poor and we’ve come to help”. The last thing people need to be told is that they live in a slum or that they are poor. One has to be incredibly sensitive when dealing with this, as my noble friend will be aware. His suggestion about those who have the information being seconded or paid by those who need the information to deliver this public-good policy seems so sensible. I shall certainly get information on that and write to noble Lords.

I cannot resist passing on the three famous untruths: first, “The cheque is in the post”; secondly, “Of course I will still love you in the morning”; and thirdly, “I’m from the Government and I’m here to help”.

I never say that.

On Question, Motion agreed to.

rose to move, That the Grand Committee do report to the House that it has considered the Northern Ireland Arms Decommissioning Act 1997 (Amnesty Period) Order 2008.

The noble Lord said: First, I want to acknowledge and welcome the noble Lord, Lord Trimble, to his Front-Bench position.

Before I turn to the substance of the order, a draft of which was laid before the House on 4 December and which is well known to noble Lords, I shall set out the Government’s position on decommissioning more generally, which I hope the Committee will find helpful. Decommissioning is a matter of considerable public importance and it has played an essential role in achieving political progress in Northern Ireland. It is vital that we ensure it can continue so that paramilitary weapons can be put beyond use. In September 2005, the Independent International Commission on Decommissioning reported that it and independent witnesses had determined that the Provisional IRA has,

“met its commitment to put all its arms beyond use in a manner called for by the legislation”.

That position has been supported by subsequent reports by the International Monitoring Commission, which have illustrated the progress made by this organisation. At one point, the IMC considered the Provisional IRA to be the most sophisticated and potentially most dangerous of the terrorist groups in Northern Ireland. In contrast, in April 2007, the International Monitoring Commission reported that the Provisional IRA was firmly committed to a political path. None of us can deny the progress that has been made and the part that decommissioning has played in that. We now want to see a determined effort from other paramilitary organisations, including loyalists.

We have seen some progress over the past year with statements by the UVF and UDA acknowledging that the war is over and calling on all active service units to stand down. However, the Secretary of State was right to say at the time that,

“they will be judged by their actions, not their words”.

Engagement with the Independent International Commission on Decommissioning and the decommissioning of its weapons is vital. This order enables decommissioning to take place.

I turn to what the order does. The current amnesty period identified in the non-statutory decommissioning scheme is due to end on 20 February this year. This order would extend that deadline for a further year to 14 February 2009. The amnesty period is the time during which firearms, ammunition and explosives can be decommissioned in accordance with the scheme. The amnesty provides immunity from prosecution for the offences set out in the schedule to the 1997 Act; offences that might be committed during the decommissioning process. Most such offences relate to the possession of weapons, but others may stem from a person’s participation in decommissioning, not necessarily centred on the weapons involved but on the behaviour that may accompany participation, such as the withholding of information or making arrangements with terrorists.

Section 2 of the 1997 Act, as amended by the Northern Ireland Arms Decommissioning (Amendment) Act 2002 and the Northern Ireland (Miscellaneous Provisions) Act 2006, requires that a scheme must identify the amnesty period, and that it must end before 27 February 2010, unless the Secretary of State by order appoints a later day. The purpose of the order before the House is to extend that period for a further year.

The extension of the decommissioning amnesty period had become something of an annual event. I think this is the third one I have brought to the House. However, the amnesty will not and should not continue indefinitely. The Independent International Commission on Decommissioning’s last report confirmed its assessment made in September 2005 that the Provisional IRA had met its commitment to put all its arms beyond use in a manner called for by the legislation—an assessment that it has since confirmed.

The Independent International Commission on Decommissioning’s report also observed that the arms of loyalist paramilitary groups, as well as that of other paramilitary organisations, remained to be addressed. Its January 2006 report emphasised the concentration on loyalist paramilitary groups and the desire to attempt to engage with them in the pursuit of their mandate. We are introducing this order because the Government are committed to securing the decommissioning of all paramilitary weapons, and because in our judgment it would be premature to close off this route to achieving that objective. To that end, discussions continue to secure decommissioning proposals with the UPRG. Those discussions have included representatives from the UDA. The Independent International Commission on Decommissioning believes that this represents a willingness to address the issue of arms.

It is important to emphasise that work with these groups is ongoing with a view to helping them to make the transition from conflict to peace and to bring about their desire to transform not only themselves but their communities. We must acknowledge the UVF statement of 3 May 2007 and the progress that may produce. However, the statement needs to be supported by clear and visible action, including decommissioning and, to that end, continuing contact between the UVF and the Independent International Commission on Decommissioning. Decommissioning is a crucial feature of that transition. The LVF has not resumed formal contact, but it has authorised informal discussions with intermediaries.

It is essential that we build on the progress already made by the Independent International Commission on Decommissioning next year. In order to achieve that, it is essential that we continue to provide the statutory framework necessary to make decommissioning a reality. This order does exactly that. Its extension for one year is a measured and prudent response to the current situation. I beg to move.

Moved, That the Grand Committee do report to the House that it has considered the Northern Ireland Arms Decommissioning Act 1997 (Amnesty Period) Order 2008. 6th Report from the Statutory Instruments Committee.—(Lord Rooker.)

I thank the Minister for his comments about my presence here. I reassure him about this; I carry with me the apologies of my noble friend Lord Glentoran, who is otherwise engaged. I am merely spelling for him on this occasion. One should not read too much into that.

As the Minister has said, this is a routine order which is necessary for the functioning of the IICD in the event of there being decommissioning, and it is necessary that this is made available to the IICD. I know that, in some quarters, people get excited when they see this order because of the word “amnesty”, but the provision that can be described as such within this structure is very limited, is for a specific purpose and is clearly necessary to facilitate decommissioning. It is a usual, routine event which enables us to comment on progress or otherwise regarding decommissioning generally and with regard to paramilitaries.

The Minister has done so by recording how mainstream republicans have completed their process, but unfortunately he has had very little to report regarding loyalist paramilitaries. I noticed that the farthest he could get was to say that the present interaction between the IICD and the UPRG—and whatever paramilitary representatives that are contained in that—is seen as, “willingness to address the issue of arms”. That is a very limited and cautious statement, which does not disclose any serious engagement. That is how I interpret that phrase. While they might be meeting and having a little discussion, there is not yet serious engagement on the issue.

It is necessary to spell that out and to say very clearly to the loyalist paramilitary organisations, to the UDA and the UVF—which have come out with some encouraging statements about their general orientation but which have not carried it through with the appropriate action—that it is very difficult to be patient with this situation. Considerable efforts have been made by a wide range of people over the past few years to try to encourage and facilitate the loyalist paramilitary organisations’ transformation, but the progress is very disappointing indeed. Those organisations cannot expect society and the Government to continue to tolerate that slow progress. That must be said.

I observe parenthetically that, by not decommissioning, the loyalist paramilitaries are delaying the point at which the IICD publishes its inventory of decommissioning, which enables a certain cloak of privacy to be cast over the republican decommissioning events. It is ironic that the loyalist paramilitaries, by their dilatoriness, are saving the republicans from the embarrassment of having the extent to which they decommissioned clearly seen.

The present situation goes further than just slowness in terms of engagement with the IICD. We saw just a few weeks ago action by a paramilitary organisation on the Shankill which indicates that rather than making progress we are going backwards. That incident was where two persons who were alleged to have been involved in crime were publicly paraded and humiliated on the street. We were told by the Belfast Telegraph yesterday that the organisation that was responsible was the UDA. That might or might not be accurate; it probably is. But that action was a most retrograde event. I noted that, unfortunately, the Police Service of Northern Ireland arrived on the scene but later departed, saying that no further action would be taken because the persons concerned did not make a complaint. That does not seem to be an appropriate approach to policing. The events clearly demonstrated that something untoward and probably of a criminal nature had occurred. I would have thought that it would have been incumbent on the police to investigate further. I notice also the silence of the human rights lobby. Clearly, the human rights of those individuals were trespassed upon, but we hear nothing said about that.

It is like the bad old days, when paramilitaries were acting with impunity. We do not want to see those bad old days come back, and we do not like the sight of a paramilitary organisation flexing its muscles to intimidate the general population of an area. That may not be seen to be directly relevant to decommissioning, but it is relevant to the state of mind in that paramilitary organisation or grouping. If that is their state of mind, it does not encourage us regarding the decommissioning process.

It is incumbent not so much on the IICD, the remit of which is very limited, but on the Government, in the direct or indirect contacts that they may have with such groups, to ensure that our impatience and displeasure are made known to them. It is also incumbent on the Independent Monitoring Commission, which has done so much good work over the past number of years, to clearly highlight this situation, as it can in the report that is coming in April. We look forward to that IMC report in the hope that it will vindicate its reputation, point the finger and perhaps indicate what the Government can do to increase the sanction on the paramilitary organisations which have not yet taken advantage of the opportunities available to them to move into normal, peaceful operation and to leave behind the paramilitarism and criminality that has been such a disgrace to them and those who would identify with them.

Hear, hear!

I, too, thank the Minister for setting out the order. I also congratulate the noble Lord, Lord Trimble, on his first outing as a Front-Bencher with his new cause, even if it is in well-worn territory; I know that he is moving on to other pastures before the day is out.

The only constant thing in our consideration of Northern Ireland matters is our need for patience. There is something inevitable about this order being brought before us. In a couple of months’ time, it will be 10 years since the Good Friday agreement; I am amazed by how time flies. The noble Lord, Lord Trimble, referred to the IRA decommissioning, as did the Minister, which goes back to September 2005. Yet we have the latest monitoring report of the present position stating that, although there appears to be willingness, decommissioning is not happening at present on the loyalist side. What pressure are the Government bringing to bear on the paramilitary organisations in Northern Ireland that still have not got on with the show? Is there anything that the Minister can do?

The noble Lord, Lord Trimble, spoke about “state of mind”. One of the problems is what is the future for people who have made it just about the career of their adult lifetimes to be involved in paramilitary activity? I have heard it expressed that perhaps there should be some old comrades’ organisation set up—a billiards saloon or whatever. It may well be that something must be done, but that would be down to the devolved Assembly. Is that which the Minister and his colleagues have to do in representing the Northern Ireland Office, and that which could and should be done by the devolved Assembly and its Ministers, properly working in parallel to achieve the objectives that we all wish to see? Clearly, shuffle diplomacy and patience are still required. I hope that there are some answers to that.

We urge the Government to put pressure on the loyalist paramilitary groups to move away from crime and to decommission their weapons. Can more be done by the Government and the devolved Assembly, working together, to make another move forward? We support the order, which has to happen, but I would not mind teasing out whether things could be pushed that little bit further.

I thank the Minister for bringing forward this order and for the information that he has given us so far. However, I would have liked to have seen a little bit of hard information. We are talking about something as serious as guns, bombs and the means of detonating bombs. I remember raising this issue well over 20 years ago in another place, when I talked about having seen what was happening in South Africa. I talked about the need for disarmament if we were to move back towards a stable society. At that time and, indeed, up until very recently, the leader of another unionist party in Northern Ireland used to think that I was quite mad to suggest disarmament. “There’ll never be a gun or a bullet decommissioned,” he would say. Thanks to the efforts of a lot of people but, in particular, the efforts of my friend the noble Lord, Lord Trimble, we moved in 1998 to a situation where progress has been slowly, sometimes almost imperceptibly but none the less steadily, made over the past 10 years— I sometimes cannot believe that it is 10 years since the Belfast agreement.

I was an officer in the Army 30 years ago, and I knew roughly what weapons the IRA had and what weapons the loyalist paramilitaries had. We talked about the substance of the problem. Now it is almost unheard of to talk about the substance of the problem. I no longer have any idea of the extent of the arms the paramilitary organisations hold. Do we know the number of weapons still outstanding? Do we know the types of weapons? Do we know how much bomb material and detonators we are looking for? If the Minister could reassure us that the present Police Service of Northern Ireland has any idea, as we used to have, that would be some reassurance.

I shall address two other issues. The first is the punishment fitting the crime. I would like the Minister to tell us how many people have been charged with the possession of weapons and how severe the punishment has been. If we create the opportunity for people to get rid of these weapons and move to a normal life, we should ensure that failure to do so is punished—and I make no apology for saying punished most harshly. How many people have been punished for possession of weapons in the past year or so, and what were the lengths of their sentences? Are they a deterrent? I have a strange feeling that the answer to that may be embarrassing.

To follow what the noble Lord, Lord Maginnis, has said about the people on the loyalist side who still have weapons, we should think about how we are dealing with this, because we have dealt with widespread terrorism through the measures that we have had. Right now, we do not have that terrorism. On the republican side, we are dealing with dissidents. On the loyalist side, we are dealing with a group of leaders who we believe would like to come out of terrorism, but there are enough dissidents and active people to restrain them from doing so. I am not sure that the measures we are taking and the way in which we are approaching dissidents is quite right, because if the loyalists live in fear of their ranks, which are still dissident enough to put the fear into them, they will look at republicans and say, “What have the republicans done? They have disarmed. They have done all that”. But they have got dissidents and we have not found a way of resolving the problem of those dissidents.

Should the loyalists go down the same route, they can see that we still have not found a way to help such a leadership resolve the problem. Things are so well advanced in Northern Ireland compared with the way they were that I by no means criticise the Government for not having the right answer or an answer to it. But there must be something in the fact that we have not found a way of dealing with the dissidents on the republican side, who I realise are a very small problem compared with those on the loyalist side, and either bringing them in or punishing them well enough to stop them, and they are still active.

In an extreme way, I believe that there is a way to resolve this, but I realise that our current politicians will not take that way. For instance, if one takes the republican side, the politicians, who know who the dissidents are because they were on their books years ago, could quite easily say, “Okay, listen boys, we will not bother you for three months, but you must stop in three months. We support the police. We support law and order and we support the constitution”—we hope—“and, if you do not give up, we will do something about it”. I do not believe that we are giving them enough support to enable them to do that, even if that is a consideration.

I definitely do not think that the loyalists have a clue about how to bring in their grass roots. It is a social problem and an employment issue. As someone said, it has become their lifestyle. Are we really doing enough to bring those groups with us? This is part-punishment, part-carrot. Perhaps the carrot is not good enough. We do not have quite the right approach to this, because we have suppressed the terrorism but we do not have a dissident policy.

I join other noble Lords in thanking the Minister for his explanation of the order. I underline my support for it and for total decommissioning. We have waited a long time—perhaps longer than we should have, as we know—but things are getting there. I acknowledge the efforts made by people, some of whom are in this Committee tonight, in the whole area of decommissioning.

I also join my noble friend Lord Maginnis in his plea about the potential for the devolution of policing and justice to Northern Ireland. It is clear that arms and arms decommissioning are only one issue. There must be more than that which allows the devolution of such important topics. I have yet to be convinced that there is much support from Sinn Fein for the Police Service of Northern Ireland. There is a lot of talk, but I ask noble Lords to cast their minds back to the dreadful murder of Robert McCartney several years ago in a pub in the centre of Belfast. That murder has destroyed the McCartney family, and his sisters have been uprooted and intimidated out of the area. Somewhere between 70 and 80 members of Sinn Fein were drinking in the bar that night and witnessed the murder, yet none of them has come forward.

Then there was the Quinn murder on the border, when a team of 20 people went out and battered the poor, hapless young gentleman to death. Now the Sinn Fein people are suggesting that if you want to co-operate with the police on either side of the border, you must go through a solicitor in Dundalk. That is the same system of vetting information and the same formula that they used in the case of the McCartney murder. It is interesting to note that Conor Murphy, a Minister in the Executive, had a meeting with the IRA a few days after the murder. The IRA informed him that they were not involved. I just wonder who drove him to that meeting, and what the topic of conversation was on the drive there.

I am very much taken with the Minister reminding us of the old saying of judgment on actions, not words. I am totally opposed to the concept of devolving policing and justice to Northern Ireland this year. We are not ready for it by a long chalk, and I think noble Lords will find that most people in Northern Ireland believe that. We need actions, not words, from Sinn Fein. When will it support the police by actively giving information and putting some of these dreadful murderers behind bars?

Notwithstanding the fact that we are dealing with this narrow order, I have heard the voices on the devolution of policing and criminal justice, and I will ensure that my ministerial colleagues hear them. I appreciate that not much Northern Ireland business goes through your Lordships’ House at present, and that noble Lords are relieved of the duty of listening to me drone on. However, I do realise that this issue will be up front. A message has been given tonight, and I will ensure that my ministerial colleagues are well aware of it.

The noble Lord, Lord Trimble, referred to the incident on 11 January, of which I am aware. I check the BBC website on Northern Ireland every day. It is curiosity, but I try to keep myself informed. It is not always possible, and I do not have the same responsibilities that I used to have, but I must be aware of things. My answer is what he would expect; acts of criminality must be dealt with through the criminal justice system. The fact of the matter is that although the Police Service of Northern Ireland did not receive any formal complaint from the people involved—the victims, let us say—I am informed that proactive investigation is ongoing and any information that has been made available is being followed up. That is inadequate, but that is the position.

I agree entirely with what the noble Lord said about the slow pace of loyalist decommissioning, and I think that has generally been agreed. We agree with everything that the noble Lord, Lord Trimble, said about that. The IMC in its 17th report noted that the pace of change remains far too slow. We want to see progress, and we simply urge all paramilitaries involved to engage with the decommissioning commission. That is what it is there for. It is there to help them, and it is as simple as that.

The noble Lord, Lord Shutt, asked about what the Government are doing. This is a difficult one. The Government have been engaged with loyalism over many years. Throughout that engagement, the focus has been to persuade leaders to abandon criminality and paramilitarism in favour of democracy. While progress has been slow and minimal, it has been real and genuine and, as part of our engagement, we have pressed on the leadership the need for paramilitary groups to engage constructively with the IICD. Over the past year—2007—both the UVF and the UDA have taken significant steps in that direction. As I think I said, in May 2007 the UVF issued a statement effectively saying that the war was over and that it had stood down as a military organisation. It also promised an end to all paramilitary activity and criminality. While that is progress, we have called on the UVF to actually decommission.

On the UDA side, we continue to support those in the leadership who are genuinely trying to move that organisation away from violence into a peaceful existence. While decommissioning remains a matter for the Northern Ireland Office rather than for the devolved Administration, the Executive have recently agreed a programme for government that includes important objectives on building a shared future. Frankly, we are not going to get a shared future without decommissioning, but a shared future should solve a lot of problems if it is taken genuinely by a lot of organisations. There is a way forward; there is something on the table, as I have said many times before. Those who come to the table can walk away with a gain. There is no issue of victory and defeat in that language. The key here is that those who come to the table gain something from it. That remains open for those who still want to arrive at the table; there is something to gain for them in doing that. That is the lesson of history, and it is certainly the lesson in Northern Ireland.

In respect of the proposed devolution of policing and justice, we believe that the target date of May 2008 is achievable, and we are working towards that date. It cannot be forced through. The issue of all the locks remains in place. I had a vision; I thought that was a quadruple lock, but I will settle for a triple lock. I can remember it being fourfold; maybe I was thinking of two Houses. The triple lock remains in place. However, noble Lords are aware that it is the First Minister, the Deputy First Minister, the Executive and this Parliament. We do not believe that preconditions on the completion of devolution should be put in place. Indeed, the continuing confidence that would be demonstrated by the devolution of policing and justice would rightly make clear that weapons have no place in Northern Ireland. That message has to be got across to everyone.

Before the noble Lord leaves a point that he made on animal welfare, which I know we are not debating—

I should not have said that.

The Minister should not have said that, but perhaps I may take this opportunity to question this because people would wonder why I did not. We in Northern Ireland have the best animal welfare in the whole of the United Kingdom and we do not intend to subscribe to the tardiness, the through-otherness and the institutions that send animal disease into the air in the south or south-east of England.

It was not a good example, but I was in Belfast, Cardiff and Edinburgh to discuss cost-sharing and responsibility on animal disease control. I have made that lesson clear in Whitehall. I have been the spokesman effectively there for the big successes for Northern Ireland. But it is a classic case because we have discussed this. There has to be an Ireland policy on disease control. The UK has an issue here to deal with. It is right that the noble Lord, Lord Maginnis, should leap on that and use that slight chink in my armour.

My point about saying why I was there was that I wanted to share what I saw with Members of the Committee. Politics is working at a level that takes away popular support for those dissidents. We are confident that the Police Service of Northern Ireland is able to deal with that. However, our objective is to get all those dissident groups disarmed and decommissioned at the table, living useful and productive lives, and contributing to the community. I cannot go into the sort of things that the noble Lord, Lord Shutt, may want. In Belfast, from either party, there is a limit to the number of taxi rides that people could take, as I know from my friends who have been over there. But there are great economic and intellectual opportunities in Northern Ireland, and the people of Northern Ireland would be very unwise not to grab those opportunities. The message to those dissidents is to come and share the success with everyone else.

On Question, Motion agreed to.

The Committee adjourned at 6.35 pm.