asked Her Majesty’s Government:

What further adjustments they will make to their alcohol harm reduction strategy following the publication of NHS Statistics on Alcohol: England, 2008.

My Lords, the best way of reducing the kind of everyday drinking that leads to ill health and other problems is to put into action our policy of identifying higher-risk drinkers earlier and providing advice and support. Our actions are guided by the best up-to-date evidence. We hope that the “Know Your Limits” and binge-drinking campaigns launched last week along with unit and health information on labels will help people to take responsibility for their actions and to make informed decisions.

My Lords, considering that the number of children and pregnant women who drink, the number of prescriptions and hospital admissions for alcohol-related disease and the level of violent attacks by people who have consumed alcohol have all increased sharply since the alcohol harm reduction strategy was first published in March 2004, do not the Government think that further action is necessary with a view to achieving specific reductions in these indices of harm? Will they publish a detailed response to the BMA’s recommendations in Alcohol Misuse: Tackling the UK Epidemic, in particular its advice on using the levers of price and availability?

My Lords, we expect retailers to behave responsibly and to uphold the law. We also expect the alcohol industry to label and to advertise responsibly. We have commissioned an independent review of the relationship between pricing, promotion and harm to provide us with the best evidence on which to make decisions. We are also monitoring our voluntary agreement with the alcohol industry. If we are not satisfied that the industry is behaving responsibly, we will take further action.

My Lords, has my noble friend considered the Scottish Government’s recent initiative to disallow supermarkets and off-licences to sell alcohol after a certain hour of the night?

My Lords, I thank my noble friend for that question. He will not be surprised to hear that we shall follow the Scottish consultation with great interest. We will shortly report on the results of independent reviews on alcohol and price promotion, as I mentioned. We have no proposals to raise the legal age at which alcohol can be purchased. The Government’s approach in England is strictly to enforce underage sales work with the alcohol industry to crack down on irresponsible promotions and to provide comprehensive information about alcohol to adults, young people and parents.

My Lords, what figures does the Minister have on the number of children whose welfare is adversely impacted by parental misuse of alcohol? Can she provide further information on the impact on child welfare of parental alcohol misuse?

My Lords, clearly, parental misuse of alcohol has a great impact on children. I do not have those figures to hand, but I will be happy to provide them for the noble Earl, because they are extremely important.

My Lords, is the Minister satisfied that the alcohol industry is acting “responsibly”? I use my noble friend’s word.

My Lords, we are at this precise moment monitoring the effectiveness of the voluntary agreement that we have with the alcohol industry. As I said in your Lordships’ House when we debated the Alcohol Labelling Bill, if we are not satisfied that it is working we have every intention of taking legislative action.

My Lords, is the Minister aware that there is great disappointment in the Prison Service because, although drug rehabilitation has taken a great step forward recently, not much help has been forthcoming for the many people with alcohol problems?

My Lords, the noble Baroness raises an important point and the House is aware of her interest in prisoners. This is a local spending decision. PCTs’ choices on spending on specialised treatment for drugs or alcohol are their decision, taken in line with locally identified needs and priorities.

My Lords, I urge my noble friend to be wary of following the Scottish example. Is it not much better to enforce our existing laws effectively than to penalise 18 to 21 year-olds for the actions of 13 to 15 year-olds who drink excessively? Surely it is stupid to suggest that by penalising students you will stop young teenagers drinking.

My Lords, my noble friend makes a valid point. We want to send a clear message through youth alcohol action programmes to the minority of young people who drink in public places that it is unacceptable to get drunk on our streets or in our parks and to behave in ways that make other people feel unsafe. I recommend that noble Lords look at the adverts that are on between 9 pm and 10 pm, during programmes such as “Big Brother”. They are hard-hitting adverts aimed at that age group. We are informed that they are having some effect.

My Lords, is the Minister aware of the World Health Organisation report that shows that, in Europe and North America, Wales is the worst place for underage drinking, followed by Scotland, with England in fourth place? What overall UK-wide strategy does the Minister have in mind to tackle this problem seriously?

My Lords, the noble Lord will be aware that we take this extremely seriously. The good news is that the number of young people who have tried a drink is falling; it fell from 62 per cent in 2001 to 54 per cent in 2006. The proportion of 11 to 15 year-olds in that category is also falling, but the bad news is that those who are drinking are drinking more. We have to raise public concern and it is absolutely right that the public are concerned about this. The issue is not just young people buying alcohol illegally; it is more broadly about young people’s access to alcohol. We need the industry to refuse to sell to young people. We need to be clear that unsupervised drinking by young people is unacceptable. We need to work closely with parents, schools, health services and the police.

My Lords—

My Lords—

My Lords, we have had three speakers from each side—the Cross Benches and the government side—but in strict rotational terms it is the turn of the Cross Benches.

My Lords, is it the Government’s duty to deal with underage drinking? Is it not the parents’ responsibility to know where their children are, what they are doing and how much money they have so that they cannot go out drinking? Is it not time that we enforced this with the parents rather than the children?

My Lords, the noble Countess makes exactly the right point. Young people, with their parents, are best suited to take action, but the Government’s role is to make sure that the information is right. There is a lot of confusion about units of alcohol, for example, so it is important that we make it clear. Young people need to grow up learning how to drink sensibly and to know their limits. Parents know at what age people may drink, and the noble Countess is correct that they have to take responsibility.

asked Her Majesty’s Government:

Why electricity supplies were disrupted on 27 May, in consequence of which the National Grid issued a “demand control imminent” warning.

My Lords, the precise causes of the disruption are being investigated by National Grid. The immediate causes were near-simultaneous, unscheduled outages at Sizewell B and Long Gannet power plants. The resulting disturbances to the supply/demand balance triggered an automatic response designed to cut demand and preserve the integrity of the system as a whole. The action was sufficient to stabilise the system, but supplies to about half a million customers were cut off. Most were restored within an hour.

My Lords, I thank the noble Baroness for her reply. With the enormous rise in energy prices, coupled with our need to buy from abroad because of our short supply of gas storage and the imminent loss of nearly 90 per cent of our nuclear capability, will she explain how we can avoid such a thing ever happening again? When will the Government proactively consider and encourage new nuclear build so that we never again have to go abroad with a begging bowl because we are short of supplies in this country?

My Lords, perhaps I should explain that the outages were not related to generating capacity. The generating margin, which is the capacity over peak demand at any time, is currently 26 per cent, which is historically very high. It was 19 per cent in 1997. The outages were caused by system and other outages and errors that are currently being investigated. Nevertheless, the noble Baroness makes a valid point about the need to ensure that we can have new nuclear on stream effectively and efficiently. I assume that the noble Baroness and her noble friends will be supporting the Planning Bill, which is essential to ensure that we can get planning support.

My Lords, does not my noble friend welcome the Question asked by the noble Baroness, Lady Miller? It is the first time that I have heard a prominent speaker from the Conservative Benches asking us to go forward with nuclear as quickly as we can.

My Lords, I was delighted to hear the unequivocal support for nuclear, which the Leader of the Opposition is unable to provide.

My Lords, from these Benches we do not give unequivocal support for nuclear. Was it not the outages in the nuclear power stations that led to the problems in May? Considering the problems with new build on nuclear, is it not unlikely that a significant amount of general electricity will be generated by new nuclear build until the 2020s? If so, what are the Government’s plans for meeting the shortfall?

My Lords, new nuclear is anticipated to come on stream by 2017 to 2020—not the 2020s. The shortage was caused by two plants having an outage within two minutes of each other, which has never occurred before, and which has a probability rate of 0.01 per cent. Sizewell B was one of them but that plant has been running for three and a half years without any unanticipated outages, and no generating technology is immune to outages.

My Lords, will my noble friend explain to the House what is an outage? Is it the same as a power cut?

My Lords, as many noble Lords will learn, outage is a generating plant going offline.

My Lords, why on earth cannot the noble Baroness speak English and say “power cut” so that we can all understand?

My Lords, I apologise if I was not speaking English. I was using the technically correct language.

My Lords, is that not an outrage?

Very witty, my Lords.

My Lords, if, as the Minister tells us, there is 26 per cent surplus capacity, why did it not cut in when the two power stations broke down?

My Lords, at any point in time a reserve is held. As the event had never previously occurred, the capacity held in reserve was not sufficient for two plants going down at the same time. Furthermore, as it takes between four and 12 hours for new plants to come online, it was not possible to deal with that amount of generation capacity going offline at that time.

My Lords, is not the real criticism of the Government that they took 10 years to make up their mind about nuclear power?

My Lords, this issue has troubled all sides of every party. It has been a courageous decision to ensure that we now have a nuclear programme that will be one of the first in the world in the new generation of nuclear. We are fully supportive and are doing everything that we can to ensure that it comes on line in time.

My Lords, have the Government had discussions with the National Grid about its policy of building thousands of wind turbines? Is not the National Grid concerned about the connection of these wind turbines and will it not require additional conventional capacity to be built to cover the time when the wind is not turning them?

My Lords, my noble friend makes a valid point. In answer to the question that was asked earlier, wind generation is intermittent and therefore needs—may I use a technical term?—base-load capacity, which means we need to build for coal and gas to back up the wind. That is why it is not the most effective source in terms of energy security of supply, but it is very effective for climate change.

asked Her Majesty’s Government:

What measures they are taking to maximise the use of digital technologies to improve the individual social and economic well-being of children and the elderly whilst minimising the potential risks.

My Lords, the Minister with responsibility for digital inclusion, the right honourable Paul Murphy, leads a new cross-government Cabinet committee to co-ordinate and promote policies that will ensure that all citizens, especially disadvantaged people, will benefit from the use of digital technologies. A digital equality action plan is due to be published shortly.

My Lords, I am grateful to the Minister for that reply. Is she aware that almost one-third of adults in Britain have never been online through any platform? Does she agree that the Government’s current strategy for digital inclusion, to which she referred, has made no discernable difference to the take-up of digital technology? Will she explain why the headline statistics for the use of digital technology, recently published by the ONS, have remained virtually unchanged, at around 65 per cent for individuals and 45 per cent for households, over the past two years?

My Lords, I agree that one-third of people are not accessing the internet. It is very serious because they are the people least likely not to benefit. By and large, they are in the lower income strata. For example, the figure includes half of people with an income under £10,400. That is serious. I do not agree with the noble Lord that nothing has happened. For example, over the past few years, we have seen a significant expansion of UK online centres. We have put £580 million into 6,000 centres, which can be accessed anywhere by people who have no knowledge of computing. We are working to develop in the new strategy a coherent equality programme for hard-to-reach people, including some young people.

My Lords, I must declare an interest as having a brother-in-law who is severely partially sighted. Is the Minister aware of the frustration felt by blind and partially sighted people who have heard, and sometimes seen in part, advertisements on the television for audio description but find that only 10 per cent of programmes actually have it? What do the Government intend to do about that?

My Lords, the target is certainly 10 per cent, but I understand that most channels are programming for a higher figure. I take the point very seriously. In addition, Digital UK is distributing the Good Neighbours Guide to charities and community groups, which can then inform their clients about what help is available to users with particular needs when they switch over to digital TV. The Digital Switchover Help Scheme will also assist people with disabilities. I hope that they will be able to access that.

My Lords, I declare an interest as chairman of Age Concern Surrey, which runs a computer drop-in centre. Is the Minister aware that increasingly such things as booking tickets have to be done online? Does she think that the library service in this country provides enough help to those who do not know how to access online information and make such bookings?

My Lords, I agree with the noble Baroness. It is interesting that 35 per cent of people over 65 use the internet—they are among the most intensive users. I suspect that many in your Lordships’ House qualify as silver surfers; in fact, seeing the e-mail traffic, I am sure of that. As everything is online these days, it is precisely people with leisure time who could get most benefit from internet access. It helps to reduce the isolation of older people and, critically, connects them via e-mail with their friends and services such as doctors. We have a big job to do.

My Lords, in view of the speed with which things have moved on since the Communications Act 2003, does the Minister think that Ofcom has enough responsibilities, interests and power in this area?

My Lords, as far as I am aware, it has. Given, for example, the risks that children are exposed to through access to the internet, we need to challenge the industry to do more. One outcome of the Byron report on child safety on the internet was the setting up of a UK council, including people from the industry, to address these issues.

My Lords, the Government are to be praised for increasing computer involvement among the community. However, the fact remains that they have a very unfortunate record on computer security. Computer communication is a two-way system. Can the Minister assure the House that nobody who communicates with the Government increases the risk of their computer identity being moved elsewhere and possibly abused as a result of that contact?

My Lords, there are strict protocols for handling government data and security. I refer the noble Lord to the Statement made in December last year by the Minister for the Cabinet Office, announcing the data handling review, about which we will inform the House when we can.

My Lords, what is being done to ensure that every young person receives training in digital literacy? Is the Minister aware of the CBI survey which found that 50 per cent of employers interviewed thought that their young employees’ digital literacy was very poor?

My Lords, we tend to think that all young people are computer literate, but they are not. The UK online centres and the myguide introduction to computer literacy are extremely helpful and targeted at young people as well. The noble Earl will also be interested to know that, between 2006 and 2008, Computers for Pupils put computers into the homes of 100,000 of the poorest families, so that children who did not have a computer could access one. That is the answer to the question. It is also important to share skills. We have lots of marvellous examples, particularly in the third sector, where young people have helped older people to understand and use their mobile phones and computers. It can work the other way round as well.

asked Her Majesty’s Government:

What was the scientific basis for the National Health Service’s recent announcement that self-testing of blood sugar levels by type 2 diabetes patients is unnecessary.

My Lords, as the noble Viscount may now be aware, the National Health Service has not made an announcement advising people with type 2 diabetes to stop self-monitoring their blood glucose, although media reports were ambiguous. In May 2008, the National Institute for Health and Clinical Excellence—NICE—issued guidance on the management of type 2 diabetes, which includes advice on the self-monitoring of blood glucose. NICE guidelines continue to advise that, as part of an integrated package that includes patient education, the self-monitoring of blood glucose can have benefits for some patients.

My Lords, I thank the noble Baroness for her Answer. Diabetics such as me will be reassured that NICE has come out with the decision that she has announced. NICE is not known for making hasty decisions. The decision is certainly in conflict with what was reported in the press. I am sure she is aware that diabetics have a difficult job combining exercise, diet, medication and monitoring, which is absolutely essential, to see that what they are doing is correct. Are we not seeing here a cost-benefit exercise, where the costs are too well known and the benefits not truly understood?

My Lords, as I said in my Answer, we have not advised people with type 2 diabetes to stop self-monitoring. However, the recent publication of two blood-glucose monitoring trials in the British Medical Journal has given rise to a debate about the benefits of self-monitoring. This is a useful addition to the debate, but the key point about self-monitoring is that it should be suggested on a patient-by-patient basis. It should include structured patient education so that the patient understands what to do with the information that they are collecting. I think the noble Viscount will agree that that is absolutely the key point. However, prescribing decisions about blood-testing strips are for local determination. Primary care trusts should not impose a blanket policy on testing strips for people with type 2 diabetes. Healthcare professionals should work with people with diabetes to make joint decisions about the value of self-monitoring blood glucose and prescribe accordingly.

My Lords, like the noble Viscount, Lord Falkland, I declare an interest in that I have type 2 diabetes, as no doubt do many other noble Lords. Is my noble friend aware that I am terrified of blood and machines? However, when I started testing, I persevered, and like the noble Viscount I now find blood testing an invaluable guide. This morning, my test was high. I realised that I had eaten too many boiled potatoes last night and will not do so again. Will my noble friend do all she can to publicise—I do not think that she stressed this point—the potential benefits of blood testing to type 2 diabetes sufferers?

My Lords, I am very sorry to hear that my noble friend ate too many potatoes.

Boiled, my Lords.

Boiled or whatever, my Lords, I am glad to hear that my noble friend is aware of that. He makes the point about the programme that he is part of. It was set up by the Department of Health and is called DESMOND—Diabetes Education and Self-Management for Ongoing and Newly Diagnosed—and it is vital for supporting people to manage their condition. It is about people with type 2 diabetes getting the right kind of education to ensure that they can self-monitor in the way that my noble friend referred to. The department recently issued further guidance to PCTs to the effect that they should use this as part of their ongoing programmes to support diabetes sufferers.

Nevertheless, my Lords, there is some confusion here. NICE has said that self-monitoring blood glucose should be available to all on the basis of individual need and not on the ability to pay. Yet PCTs in some areas, as we have just heard, are restricting or denying access to that test for type 2 diabetics. Will the Minister therefore tell us whether the next stage will be to deny NHS treatment for diabetes to people using private means to monitor their own blood glucose?

My Lords, the noble Baroness is stretching the points of various debates but the point is well made about local decision-making, which indeed is the point. Blood-testing strips are costly and make up a significant proportion of the total number of diabetes items prescribed. However, notwithstanding my noble friend’s squeamishness, for some people with type 2 diabetes the use of blood-testing strips for self-monitoring will help them to understand how diet, exercise and medication can impact on their glucose levels. Primary care trusts should ensure that where people with type 2 diabetes are self-monitoring they fully understand those results. They do form a part of the free overall care package which includes structured education in this matter.

My Lords, is the Minister aware that high blood sugar can be exceedingly dangerous and trigger a stroke? Can she say why these testing strips are so expensive? My late husband had diabetes, so I know a lot about it. The condition is extremely complicated.

My Lords, I cannot say why they are so expensive, but I will endeavour to find out. They are very important. They are not only about identifying glucose levels but about the whole health of the person with diabetes and all the related ailments that might go with it. The noble Baroness is perfectly right.

My Lords, I declare an interest as having just recently completed my first 40 years as a type 1 diabetic. Does my noble friend take with alarm the report in today’s Times about the high incidence of diabetes in children? Does she further recognise the important role of specialist diabetic nurses who advise on the regime that we diabetics observe and who can give advice on monitoring systems? Given the news that diabetic specialist nurses have on average some 300 patients when the ideal number is 70, is she not worried about advice for diabetics on maintaining good, healthy regimes?

My Lords, given my noble friend’s youth, he will know that managing diabetes in children is much more complex than it is for adults. The role of specialist nurses is important. We have urged PCTs to recognise the importance of specialist diabetes teams, including specialist nurses, and the role that they play in reducing hospitalisation and improving outcomes and the support that they can give to young people and their families and carers in enabling them to handle the complex juggling act that is required to manage their condition.

My Lords, with the leave of the House, we will have two Statements repeated this afternoon. The first is entitled “European Council” and will be repeated by my noble friend the Lord President at a convenient point after 3.30 pm. The second is entitled “Zimbabwe: Elections” and will be repeated, immediately after the first Statement, by my noble friend Lord Malloch-Brown.

My Lords, I beg to move the Motion standing in my name on the Order Paper.

Moved, That Baroness Hamwee be appointed a member of the Select Committee in place of Lord Oakeshott of Seagrove Bay, resigned.—(The Chairman of Committees.)

On Question, Motion agreed to.

My Lords, I beg to move the Motion standing in my name on the Order Paper.

Moved, That the draft regulations laid before the House on 21 May be approved. 21st report from the Joint Committee on Statutory Instruments, Considered in Grand Committee on 17 June.—(Lord Bassam of Brighton.)

On Question, Motion agreed to.

My Lords, I beg to move the three Motions standing in the name of my noble friend on the Order Paper.

Moved, That the draft orders laid before the House on 12 and 14 May be approved. 20th and 21st reports from the Joint Committee on Statutory Instruments, Considered in Grand Committee on 17 June.—(Lord Davies of Oldham.)

On Question, Motion agreed to.

My Lords, I beg to move the Motion standing in the name of my noble friend on the Order Paper.

Moved, That the draft order laid before the House on 15 May be approved. 21st report from the Joint Committee on Statutory Instruments, Considered in Grand Committee on 17 June.—(Lord Davies of Oldham.)

On Question, Motion agreed to.

My Lords, I beg to move the Motion standing in my name on the Order Paper.

Moved, That the draft order laid before the House on 2 June be approved. 21st Report from the Joint Committee on Statutory Instruments, Considered in Grand Committee on 17 June.—(Lord Davies of Oldham.)

On Question, Motion agreed to.

My Lords, I beg to move that the House do now again resolve itself into Committee on this Bill.

Moved accordingly, and, on Question, Motion agreed to.

House in Committee accordingly.

[The LORD SPEAKER in the Chair.]

Clause 13 [Review of qualifying earnings band]:

moved Amendment No. 43A:

I am not one to resist a challenge, especially from the noble Lord, Lord Oakeshott. My first reaction to this amendment is that it is starred; in other words, it was put down at the last moment before the Marshalled List was assembled. Although I have a complaint on the amendment, it is not for that reason. I can hardly object to starred amendments when my noble friend Lady Noakes and I have put down some ourselves, which we hope will be debated today. We will see how the day pans out with the Statements and anything else that may occur. I note too that the Minister has littered today’s Marshalled List with amendments over and above those on the first Marshalled List, although, admittedly, none of those appeared to be starred when I glanced through them this morning.

My complaint is that this is a totally unnecessary paving amendment for Amendment No. 136. The noble Lord, Lord Oakeshott, might have said, although I do not think that he did, that the reason for this amendment is that Amendment No. 136 will come so late in the Bill that he would not be able to divide on it successfully at what may well be late at night. I do not know whether he intends to go to a vote now, although as a former Whip I am more than suspicious. The Government have said that they fully intend personal accounts to come into operation in 2012, which I assume means at the beginning of the financial year 2012-13. I should be grateful if the noble Lord could confirm that this is a correct interpretation of events to come.

This Committee can be in no doubt that two things are inextricably entwined with personal accounts. The first is the freezing of the second state pension; the second is to uprate the state basic pension by earnings rather than the RPI. Last year, in our debates, the Minister said that the latter would be done during the next Parliament. But the noble Lord, Lord Oakeshott, is right. No date was set and, although he and I tried to firm this up, we failed for the very good reason that no one could know when in the next Parliament such a commitment would be affordable. I was eventually, and am now firmly, persuaded of this.

Since last July when the 2007 Bill arrived on the statute book, the nation’s finances have gone from bad to worse. Not only have the Government had to bail out Northern Rock, we have also seen the fiasco of them seeking to remove the 10 per cent income tax band. They have had to increase the upper earnings limit of national insurance and have brought forward the freezing of the second state pension, which, I might remind the Committee, was supposed to help pay for the uprating of the basic state pension by earnings.

Not only that, but in order to do anything extra—equipment for our troops in Afghanistan, more money for local authorities and housing associations’ social housing schemes or the National Health Service—the Government’s only recourse seems to be to borrow yet more money. Why do Labour Governments—there have been two while I have been in your Lordships' House—always finish their term in government with huge borrowings, which then take many years for a Conservative Government to get down again to a realistic level? That is exactly the case today, but we must wait for perhaps as long as two years for a general election before we can start to repair the damage that has been done to the British economy. I defy the Minister to repeat the words of the late Lord Callaghan, “Crisis, what crisis?”.

Having got that off my chest, it is a fact that no one in any party or none—even the noble Lord, Lord Oakeshott—knows when it will be possible to afford to uprate the basic state pension by earnings. Somehow, though, by hook or by crook, there is a commitment by this Government, in the rather unlikely event that they are still in power, to do it by the end of the next Parliament. I have to say to the noble Lord, Lord Oakeshott, that to put a date on it that may possibly be even in this Parliament is just not on.

The noble Lord challenged me to give a commitment on behalf of my party that we would uprate by earnings. I have to remind him that in the last Conservative manifesto we did indeed give that commitment. I cannot say exactly when that will be—that is the whole point of my complaint about the noble Lord’s amendment—for the simple reason that it will be some time before we are allowed by the conventions to look at the full Treasury figures. At that point we will be able to make a decision and I am sure it will be announced then.

For all these reasons, I cannot support this paving amendment or Amendment No. 136.

As my noble friend the Minister will be aware, I have long supported the idea that the basic state pension should be increased via the wages index. I and a number of other colleagues raised the issue at Second Reading. We received a fairly firm assurance from our Front Bench that the Government were committed to paying the increase via the wages index with effect from 2012. I would have liked it paid immediately but nevertheless we did have an assurance from the Front Bench and I was prepared to accept that in the prevailing circumstances and I am prepared to accept it again. I want the wages index to be used as soon as possible. We did have that assurance, however, and I am prepared to accept that.

No one doubts the Government’s intention to restore the link with earnings. Indeed it is enshrined in statute already, as my noble friend has said. However, a legitimate question for Parliament and the public to ask is “When has a Government promise been fulfilled?” Is it when the promise is enshrined in statute? Is it when the relevant section of an Act has been triggered by the publication of a statutory instrument bringing the promise into operation? Or is it when the Government have announced a firm starting date? In the other place the Minister said that the Government’s objective was,

“subject to affordability and the fiscal position”,

to restore the link in 2012 or by the end of the next Parliament at the latest. However, this still leaves pensioners, current and future, in the dark. I urge the Government to take this opportunity to put the matter unequivocally beyond doubt.

I should like to support my noble friend Lord Oakeshott. Amendment No. 136 and the paving amendment that stands with it in this group relate to one of the most important aspects of the Bill—the long-term incomes of pensioners. More than any other group in the country, pensioners are affected by uprating policy because they are exposed to it for longer. I have often felt that the ramifications of upratings policies across the benefits field are not given the degree of care and attention that they should be given by the House of Commons and by your Lordships’ House. From year to year, although the changes may be apparently slight in terms of the figures of the annual increases, over periods of time they have profound effects on policy. The most important thing Mrs Thatcher’s Conservative Government did in relation to benefits was to de-link the pensions uprating from earnings in 1981. By a margin, it was the most important thing done by that Government.

I want to clothe my noble friend’s robust and sound arguments with one or two examples of what can happen over a spread of years. For example, if the 25 pence age addition that 330,000 pensioners who reach the age of 80 each year are blessed with—the 25 pence that was first introduced in 1971—had been uprated in terms of earnings since 1971 it would now be worth nearly £5 per week. As my noble friend rightly pointed out, the evidence is that £5 a week would be worth having if you were 80 and reliant on benefits; in that case, people would welcome such a pension addition.

Let me give two other figures at random to illustrate how big an impact this would have. Between 1997, when the Labour Government first came into office, and 2008—roughly 10 years—the retail prices index went up by 37 per cent. Over that same period, the pension level went up by 45 per cent, but the increase in average earnings was 54 per cent. Translated into a single pension, that is £5.60 per week—again, an increase of £5 per week had uprating been linked to earnings during that period. That is £290 per year. The Prime Minister would need to go about the United Kingdom making special one-off payments of £200 a year for fuel and £200 for health checks for young people if there were consistent benefit policies that uprated the benefits available to people in relation to the increase in earnings and not, as happens currently, to the RPI.

Let us look at the broader sweep. If the basic pension had kept pace with average earnings since 1980, it would have amounted to £137 per week for a single pensioner. That is nearly at pensioner credit levels. We could deal with all the means-testing difficulties that we have rehearsed over many debates. That sum is calculated in a recent publication by the Joseph Rowntree Foundation called The Impact of Benefit and Tax Uprating on Incomes and Poverty, which I commend to the department and the Minister as making instructive reading.

For the reasons I have outlined, the uprating policy can, over a period, have a dramatic impact on pensioner poverty and across the whole benefits structure. The noble Lord, Lord Skelmersdale, is right to be careful about the cost of such a change; it would not be cheap and would involve making a principled decision about whether to allow pensioners to share in the increasing prosperity of the nation. The Rowntree Foundation report makes the very positive suggestion that we should be looking at some of the increases that fiscal drag brings into the Treasury over these periods; where the tax thresholds are not indexed to the same extent and more people are brought into taxation, the Exchequer benefits. The report makes some compelling calculations which demonstrate that there is some comfort for the noble Lord, Lord Skelmersdale, and others who rightly think that this has to be paid for and that the money cannot just be conjured out of thin air.

This is one of the most important amendments to the Bill and one of the most important debates. I encourage my noble friend to seek what comfort he can from all sides of the Committee, but I would press the amendment to a Division at some stage in our proceedings; it is a core issue which needs to be decided. People need to be asked on which side of the divide they stand. I do not think it is fair to do anything other than attach the uprating to average earnings in April 2012—nothing less will do.

Earnings uprating was a key issue of discussion on the last Bill and is essential to the reforms to state pensions made in the Pensions Act 2007. The reforms already made, to which earnings uprating of the basic state pension is fundamental—we agree on that—will provide a more solid foundation on which to make private pension saving. I am not surprised, therefore, that this subject remains an area of interest in this Bill.

The two amendments under discussion relate to earnings uprating and the annual review of the qualifying earnings band. Amendment No. 43A would tie the annual review of the qualifying earnings band set out in Clause 13 with the annual review of the basic state pension and other amounts once earnings uprating is introduced. Amendment No. 136 would ensure that earnings uprating of the basic state pension happened no later than April 2012, as we have heard.

The amendments provide me with a further opportunity to set out the Government’s commitment on earnings uprating and how that will be carried out. My honourable friend the Minister of State for Pension Reform said in the other place:

“Let me put beyond doubt our commitment to reinstate the link. That is not just my guarantee; there is a legal obligation, and we will stick to it”.—[Official Report, Commons, 22/4/08; col. 1252.]

We have legislated to restore the earnings link to the basic state pension in the Pensions Act 2007. In fact, Section 5 was brought into force by Section 33 of that Act. During the next Parliament, we will link the uprating of the basic state pension to average earnings. Our objective, subject to affordability and the fiscal position, is to do that in 2012, but in any event by the end of the next Parliament at the latest. Let me make it clear: our aim is to restore the link in 2012. That timing strikes a balance between making reforms that are affordable in the long term and tackling the problems identified by the Pensions Commission. The commission’s view is that a short delay in introduction, from 2010 or 2011 as originally suggested, would not unduly affect outcomes or undermine the overall thrust of our reforms.

The current arrangements allow for some flexibility on timing. If, for example, economic conditions prove uncertain, we have some flexibility to consider timing and affordability in light of the circumstances. That is nothing more than a sensible safeguard. Understandably, noble Lords, like many others, are keen to find out the timing of the earnings link as soon as possible. To that end, we will make an announcement, as we have said before, on the precise date at the beginning of the next Parliament.

On the process for earnings uprating, Section 5 of the Pensions Act 2007 sets out the arrangements to be followed in determining whether pension amounts have retained their value in relation to the general level of earnings. That requirement and the subsequent arrangements for uprating these amounts will be carried out as part of the annual process for uprating pensions and benefits. Those arrangements were debated in depth during our consideration of the previous Bill.

The amendments are not needed to strengthen the commitment on earnings uprating or the arrangements in place to carry it out. We have been clear in setting out our commitment on earnings uprating as part of a complementary package of reforms that follow the thrust of the Pensions Commission’s proposals to develop a solution for the future. Earnings uprating of the basic state pension will happen by the end of the next Parliament at the latest. However, our objective remains for the link to start in 2012 and we continue to plan on that basis.

The noble Lords, Lord Oakeshott and Lord Kirkwood, suggested that we have not done anything to support pensioners since 1997, but our strategy since 1997 has been to target help on the poorest pensioners while providing a solid foundation of support for all. In fact, we are spending around £12 billion more on pensioners in 2008-09 than we would have been had the 1997 policy continued. Around half of that extra spending is going to the poorest third of pensioners. Today, no single pensioner has to get by on less than £124 a week, compared with just £69 in 1997, which is a rise of over a third in real terms. Pension credit has been upgraded in line with earnings since it was introduced in October 2003. In April 2008, it increased by more than earnings. Since 1996-97 all pensioners have seen similar rates of income growth. Net pension incomes have increased by 29 per cent since 1997 and all pensioners have seen similar rates of income growth. That is in contrast to 1996-97, when the incomes of the richest pensioners grew much faster than the incomes of the poorest. We have put in resources, particularly in seeking to protect the poorest pensioners.

The noble Lord, Lord Skelmersdale, asked about the introduction of personal accounts in 2012. We debated that point last week. I confirmed that 2012 is still the year in which we are planning for their introduction. We have not given a precise date within that year, as there is clearly a great deal of work to be done. As we discussed, Tim Jones did an update on the timing and his report was put in the Libraries of both Houses.

The noble Lord said that we had brought forward the flat rating of S2P. We have not. The changes that we are making via the National Insurance Contributions Bill are to make sure that the flat rating of S2P keeps on track to where it was designed to finish and to take place when the pensions proposals were put together. The noble Lord berated this Government for their borrowing, but I believe that this Government’s economic record bears strong comparison with that of their predecessor. My noble friend Lady Turner gave her support to linking the basic state pension with earnings as quickly as possible. I acknowledge that she has been a long-standing campaigner on this issue.

We could debate endlessly the challenge that the economy faces and the Government’s record, of which I am proud. However, we do not need the amendments because we have already set down clearly in legislation our determination to relink the basic state pension with earnings. The amendments are unnecessary and I ask noble Lords not to press them.

I thank all Members of the Committee who have spoken in this short but crucial debate. I accept that legislation has been passed to restore the earnings link, but how do we ensure that that happens and when? The Minister says that we may have to wait seven years, but that is far too long. Millions of pensioners do not have flexibility on that because they will not still be alive when that day comes.

The noble Lord should know better. It is not fair to say that my noble friend Lord Kirkwood and I were saying that the Government have done nothing for pensioner poverty. We accept that they have done a great deal. We were pointing out that, despite all the money that has been spent, many pensioners are still falling through the means-test net and many are still in poverty. That was the substantive point that we were trying to make. As long as the basic state pension continues not to be linked to earnings, that situation will grow worse. As we all know, pensioner poverty on the Government’s official figures grew worse last year, so the policy is not working.

In response to the points made by the noble Lord, Lord Skelmersdale, I say that we have moved this paving amendment today because we do not want an issue of this importance to be considered late at night with few Peers here. We want to have the debate now. On the question of commitments, when George Osborne became shadow Chancellor, the first tax pledge that he made was to abolish stamp duty on share dealing in the City. Pensioners will notice that the Conservatives have the money to pledge a £4 billion a year handout on share dealing but are not prepared to pledge a penny to give a firm date for restoring the earnings link.

I thank my noble friend Lord Kirkwood for his encouragement to test the Committee’s opinion, which I had every intention of doing. I should like to do so now.

I beg to move that the House be now resumed.

Moved accordingly, and, on Question, Motion agreed to.

House resumed.

My Lords, with the leave of the House, I shall now repeat a Statement made in another place by my right honourable friend the Prime Minister. The Statement is as follows:

“With permission, Mr Speaker, I would like to make a Statement about the European Council held in Brussels that I attended with my right honourable friend the Foreign Secretary on 19 and 20 June.

“The main business of the Council on Thursday and Friday evening was to focus on the economic challenges ahead: the triple challenge of rising oil prices; rising food prices; and, because of the credit crunch, the rising cost of money; and in the wake of the US downturn, measures to keep the European economy moving forward. Important conclusions were also reached on the Irish referendum, climate change, the millennium development goals and the European response to the deteriorating situation in Zimbabwe.

“On Thursday evening in the discussion on the Irish referendum vote, the Irish Taoiseach, Brian Cowen, offered to the Council meeting in October a report on the next stage for Ireland. The Council agreed that other member states should continue with their ratification process, and I was able to report for the UK that, as with 18 other countries, the Lisbon treaty had completed its parliamentary process and that the Bill had received Royal Assent on Thursday. Once we have received the judgment in an ongoing legal case, we will move to ratification.

“This time last year, the price of oil was around $65 dollars a barrel. At the previous EU Council in March, it stood at $107 dollars a barrel, and at the June Council, the oil price had risen further still to more than $135 dollars a barrel. The global challenge that we face is a rising demand for oil, particularly from China and the other emerging economies now and into the future, which has so far been only partly met by an increase in supply, driving up fuel bills for families across the whole of Europe. Governments are taking action domestically to help, but we know that these are ultimately global problems requiring global solutions. The shared European view is that we must take action to reduce our dependence on oil and to improve our energy efficiency.

“The new technology of carbon capture and storage will help us continue to use coal, oil and gas in a way that avoids harmful carbon emissions. So earlier this year we reiterated our commitment to move forward with up to 12 commercial-scale carbon capture and storage plants in place by 2015, and last week, accepting UK arguments about the importance and urgency of this, the Council called on the Commission to bring forward an incentive mechanism to achieve this goal.

“Transport will account for two-thirds of future increases in oil demand, so improving fuel efficiency and exploring alternatives to petrol and diesel is essential. To incentivise innovation among car manufacturers, the UK will continue to push for a definitive commitment to an EU-wide car emissions target of 100 grams per kilometre by 2020, down from 160 grams, and a 40 per cent reduction on levels today, saving the typical British family around £500 a year in fuel costs.

“At Britain's urging, the Council also agreed to explore the scope to accelerate the introduction of commercially viable electric vehicles, and the infrastructure that their widespread use would require, in the European Union. Generating the electricity needed for electric cars is significantly less carbon- intensive than using oil. With almost all major car manufacturers, including UK-based ones, now close to developing commercially viable hybrid and electric vehicles, they have the potential not only to reduce our oil dependency and carbon emissions but to create thousands of jobs in Britain's automotive industry as well.

“All these measures will help to meet our overall EU target of reducing carbon emissions by 20 per cent by 2020, or by 30 per cent as part of a wider international agreement, but these decisions are made in the context of a dialogue between oil producers and consumers where both commit to greater transparency and a better balance between supply and demand.

“The Council welcomed Saudi Arabia's high-level meeting between oil producing and consuming states that I attended in Jeddah this weekend, and I am today writing to all European leaders informing them of the results of the Jeddah process, which will lead to a follow-up summit in London later this year.

“I can tell the House today that the Jeddah summit discussed measures to deliver a more sustainable global oil price, reduce the risks and uncertainties that can increase prices and ensure greater investment in new oil production, as well as in energy efficiency and alternatives to oil.

“I proposed that Britain and other oil consumers should open up our markets to new investment from oil producers in all forms of energy, including renewables and nuclear, providing oil producers with a long-term future in non-oil energy. In return, oil producers should be open to increasing funding and expertise in oil exploration and development, through co-operation with external investors and providing increased oil supply in the medium term, while growing economies adjust to a less oil-intense long-term future.

“I turn now to the related problem, also discussed by the Council, of high global food prices and the need to do more to combat price inflation. The prices of rice and wheat are now double what they were only a year ago. Higher food prices cause concern to many of us here at home, but in poor countries, where food often accounts for more than half a family’s spending, they can be even more devastating.

“So to tackle rising prices both here and overseas, and to help boost agricultural production, the Council agreed to implement the conclusions of the Rome food summit earlier this month. The EU also agreed to assess the evidence on the indirect impacts of biofuels. The UK’s Gallagher review of the indirect impacts of biofuels, which is due to report shortly, will be part of this process.

“We committed to work towards a successful outcome to the Doha trade round, where eliminating trade-distorting subsidies and import restrictions could increase global GDP by as much as $300 billion a year by 2015. This is something that I have discussed with President Bush, President Lula, Chancellor Merkel, President Barroso, other world leaders and trade commissioner Peter Mandelson in recent days, and I believe that, while we are at the eleventh hour, a deal is within our grasp.

“The EU must also take tough action on elements of the common agricultural policy that raise the cost of food for consumers across Europe. Removing incentives for taking arable land out of production, for example, could reduce EU cereal prices by up to 5 per cent. The Council agreed to re-examine the issues of fair competition and sustainable agriculture.

“As part of this year of action on the millennium development goals, and ahead of the G8 in July and the United Nations meeting in September, the European Council signed up to an agenda for action that reaffirms EU aid targets and sets specific milestones to be achieved by 2010. On education, there will be increased EU investment of €4.3 billion to recruit 6 million more teachers globally. On health, there will be an extra €8 billion to help to save another 4 million children’s lives and to provide for 75 million more bed nets in Africa. I will be pushing the G8 in July to ensure we have the 120 million nets that we need so that every child and family in the world is able to sleep safely at night.

“The Commission has also agreed to establish pioneering millennium development goal contracts, linking EU spending on aid to specific outcomes by developing countries. I am pleased to announce a British contribution of £200 million to be channelled through this new mechanism.

“The Council also discussed the deteriorating political and humanitarian situation in Zimbabwe. In recent weeks, under Robert Mugabe’s increasingly desperate and criminal regime, Zimbabwe has seen at least 84 killings, 2,700 beatings, the displacement of 34,000 people and the arrest and detention of opposition leaders, including Tendai Biti and Morgan Tsvangirai.

“In the face of this unacceptable situation, the European Council reiterated its readiness to take further measures against those responsible for the violence. We will seek to impose travel and financial sanctions on those in the inner circle of the criminal cabal running the regime. The House knows that since the Council met last week the situation has deteriorated further still. As a number of African presidents and prime ministers have already stated, the regime has made it impossible to hold free and fair elections in Zimbabwe, and state-sponsored terror and intimidation have put the opposition in an untenable position.

“Our thoughts are with the people of Zimbabwe, who are facing an unprecedented level of violence and intimidation from this regime. The world is of one view; that the status quo cannot continue. The African Union commission has called for violence to end. The current Government—with no parliamentary majority, having lost the first round of the presidential elections and holding power only because of violence and intimidation—are a regime that should not be recognised by anyone. The UN Security Council will meet today, and the Foreign Secretary will make a detailed Statement in a few minutes, after discussions he, I and the Minister for Africa held with African leaders today.

“SADC and the African Union leadership should meet to discuss the emergency. We understand that there are plans for SADC to meet very soon and we support the plans for that happening quickly. We urge that SADC’s observers’ evaluations of the seriousness of the situation on the ground be made public. We urge that the UN and the African Union work together with SADC to send envoys and a mission to Zimbabwe to discuss the situation on the ground and the way forward. We believe that the UN envoy should be allowed to return. The international community must send a powerful and united message; that we will not recognise the fraudulent election rigging and the violence and intimidation of a criminal and discredited cabal, and that we are ready to offer help to the reconstruction of Zimbabwe once democracy has been restored.

“The Council also expressed its ongoing concern about the humanitarian situation in Burma in the aftermath of Cyclone Nargis, and called for a return to democracy and the immediate release of Aung San Suu Kyi and all other political prisoners. We made clear our continued determination to play a leading role in ensuring peace and stability in Kosovo. Our national interest remains a strong Britain in a strong European Union, and we will continue to focus on an outward-looking European agenda that tackles effectively the issues that affect us all: the global financial crisis; the rising cost of food and fuel; combating climate change; and supporting people in the poorest countries in the world. That is what the Council did at its June meeting, and that is what this Government will be doing in the run-up to the French presidency in July. I commend the Statement to the House”.

My Lords, that concludes the Statement.

My Lords, I thank the noble Baroness the Leader of the House for repeating the Statement.

When the Prime Minister arrived at the summit he was greeted as saviour of a treaty that he was ashamed to sign with others only a few months earlier. No doubt on this occasion he enjoyed being popular; but how can we possibly expect any clarity or consistency of purpose against such a background? It was clear in your Lordships’ House last week the course that the Government have set. They have ruled out declaring the Lisbon treaty dead. They have ruled out the referendum they once promised, even now that the only people in Europe allowed to vote have rejected the treaty. The Government have lined up with those pressing for an unchanged treaty, thereby bullying and cajoling the Irish people to change their vote. They have ruled out Parliament having any lock on what may now be cooked up in the EU to get round the Irish vote. Those are four critical choices, and four wrong choices. The Government are stubbornly clinging to a European past, when what we need is to chart out a new course for a more open, less regulatory European Union.

We were told in this Chamber last Wednesday by the noble Baroness that we had to sign away our freedom of manoeuvre and ratify the treaty in order to secure more influence in last weekend’s talks. That sounded then like an insider illusion, and now it is shown to have been an insider illusion. Not a single change is signalled in 25 pages of conclusions. Instead the communiqué talks arrogantly of,

“continuing to deliver concrete results in the various policy areas of concern to the citizens”.

That, of course, does not include the citizens of Ireland.

So, work goes on—on the European External Action Service, on the borders agency, on a common European asylum system, and so on. But perhaps the noble Baroness can tell us the legal basis for such work. Is there one? Can she give us one feature of the Lisbon treaty that she would like to see modified in the negotiations following the Irish vote?

When will the Government and those in Brussels see that nothing divides the European elite from its people more than the repeated evidence that whenever they vote no, they are treated as having said yes? Did the Prime Minister by any chance have a bilateral discussion with the Prime Ministers of the Czech Republic and Ireland during the summit? If so, what was his message to the Czech Republic and Ireland?

Can the noble Baroness also explain a number of resolutions in the communiqué? In paragraph 10, it says:

“Modern technologies must be harnessed to improve the management of external borders”.

It talks of,

“legislative proposals on an electronic system for travel authorisation”.

In paragraph 15, it invites the Commission,

“to present possible solutions for the long-term management of large-scale IT systems in the areas of Freedom, Security and Justice”.

What technologies are those? Is it the taking of DNA? Is it mass fingerprinting, or iris records? Are the Government seriously proposing that UK citizens should get EU computer authorisation before being allowed to travel? If it does not mean that, what on earth does it mean? What is the large-scale IT system proposed? Perhaps it is a Euro-ID card. Should not the Government sort out the handling of top secret data on al-Qaeda before they even contemplate European-wide databases on our own citizens?

The Government invited the EU Commission, or so it appears, to work on family law and an EU proposal on inheritance and wills. The English law of property succession is substantially different from that of most European countries. What benefit for us can come from a common approach here? Can the noble Baroness assure the House that the Government will veto any proposal—that is, if we still can—for a common EU policy on inheritance tax?

There are fine words about the troubling rise in food prices. But is not the truth that there has been a dismal failure to act on free trade or reform of the CAP, something for which the Government gave away £7 billion of British taxpayers’ money and got nothing in return? Can the noble Baroness tell the House of one reform in the CAP, however modest, that was agreed last weekend?

The EU has been one of the prime cheerleaders of the race into biofuels, an acknowledged factor leading to food price increases, disastrous rain forest destruction and food shortages. Last weekend, the summit said that there is now a need “rapidly” to reassess this. What is the UK Government’s policy on this? Should more biofuels be planted, or less? Can the noble Baroness tell us?

We welcome the fine words on the problems of rising energy prices, and indeed the Prime Minister’s efforts in Saudi Arabia, but is not the truth that the UK Government and the EU have wasted the past 10 years in ensuring future energy security? What is the Government's best forecast for the price of oil and gas six months out as a result of the weekend's initiatives? If it helps the noble Baroness—she is, I know, no great expert on this—I would settle for an answer saying whether it will be up or down. If they acted a bit faster, we would not be in the state we are in.

Finally, although I know that we are awaiting another Statement after this one, I must comment on the shocking situation in Zimbabwe. It shames our Government, shames the EU and shames the dismally weak leadership given by the UN bureaucracy, even before the red-carpet treatment lately given to Mugabe at a UN conference in Rome. It also tarnishes the name of President Mbeki of South Africa, who has walked by on the other side and watched tyranny thrive.

At long last—but when it is far too late, with Mugabe reducing his country to a desert of hopelessness, starvation and torture—we see this subject placed on the agenda for the EU summit. Time and again, we have demanded at this Dispatch Box action on Zimbabwe. Time and again, the noble Baroness and her predecessor, the noble Baroness, Lady Amos, have said that any action would be counterproductive and that there has to be an African solution. Is it not now obvious that wringing our hands in that way has been a political and humanitarian disaster? I welcome the belated words in this Statement but they cannot bring back homes for the exiled, food for the starving, dignity for the beaten or fathers to the orphaned.

The bureaucratic pap of last weekend’s presidency conclusions is dismally behind the game. It is long on regrets and loud on calls but silent on action. Pathetically, 250 fine words boil down to the EU saying it,

“reiterates its readiness to take additional measures against those responsible for violence”.

I bet that that had Mugabe and his thugs shivering in their palaces. Can the noble Baroness tell us one concrete EU step against Mugabe that was agreed at the summit? When will the Government apologise to this House, which has been so tireless in its efforts in the cause of Zimbabwe’s suffering people, for the failure of the UK and the failure of the EU to act earlier and far more firmly than it has done to date? We await the next Statement and hope that it will answer some of those questions.

My Lords, I think that our responsibility today is to discuss what happened at the European Council at the weekend, not to carry on debates that we have had at considerable length over recent weeks.

On the loss of the Lisbon treaty—if it is lost, though we are still a long way from that—we on these Benches hold to our position that it would remove a number of useful improvements to the European Union’s current structures, certainly in foreign policy; in a number of issues in justice and home affairs, such as migration and crime; and in parliamentary scrutiny. Can the Leader of the House say how far some of the discussions we have had on improving national parliamentary scrutiny could, at least as far as the UK Parliament is concerned, be put into operation by this Parliament because they are valuable in their own right? It would be a gesture of confidence in strengthening the role of national Parliaments if the British Government were willing to put into effect some of those improvements in parliamentary scrutiny and to work more closely with other national Parliaments, even while we are waiting to see what may or may not happen with the current amending treaty.

We also recognise that the European Council had to discuss a number of urgent policy issues, whatever the institutional setback. I note with interest that those on the Conservative Benches alternate between discussing how appalling the European Union is and complaining that it has not been effective enough on a range of subjects. On the subject of future oil and energy prices, I read the Financial Times every day and note the range of predictions. Of course, we all expect the British Prime Minister to be far more of a guru than bankers and others who predict prices, and I look forward to hearing what the Government will say.

The Statement said a certain amount about climate change and foreign policy. I was rather puzzled that it did not refer to the eastern neighbourhood policy, on which there is a great deal of work to be done, or to relations with the Mediterranean countries, on which the French have put up some rather badly thought-through proposals. There are real issues at stake with the Mediterranean countries.

I was also disappointed that the Statement does not stress the important work that the European Union is attempting to undertake on migration policy and border management, where there clearly are active British interests at stake since so many migrants who enter the European Union are trying to get to the United Kingdom. The idea of a closer dialogue with sending and transit states is therefore actively in Britain’s interest. As for the issue of family breakdown, divorce law and inheritance law, I am conscious that a number of people, including Lady Meyer, have actively argued that in a world where cross-border marriage and cross-border living are increasingly common, we need more active European negotiations on access to children, divorce law and the like.

We welcome the comments on Doha. One of the things that we on these Benches would like from Her Majesty’s Government from now on is more straight-talking, not only to the British public but to some of the member states, about where interests lie in closer European co-operation. The remarks of President Sarkozy on the Doha round and the role of Commissioner Mandelson were extremely unhelpful. They played to populist French politics rather than constructive European co-operation. The recent remarks of the German Foreign Minister on why we need the European army and why he also wants to cut German defence spending also show the huge gap between the illusions in the debates of other nations as well as our own.

We on these Benches want a Government who not only play an active and constructive role in Europe but explain to their own domestic public the role that they are playing in Europe and to other member Governments the objectives that they think should be European priorities.

My Lords, I am grateful for the detailed questions that both noble Lords have put to me. The noble Lord, Lord Strathclyde, talked in his opening remarks about referendums and the bullying and cajoling of Ireland. All I can do, rather than taking the time of the House now, is refer him to the many, many answers that I gave earlier to these questions. I have done that bit.

It was important to finish our parliamentary process. Noble Lords who had, as I did, the privilege of being part of the debates last Wednesday will know that the House agreed that it was important that our Prime Minister should go into the discussions aware of the British parliamentary view and able to continue some of the detailed discussions to which the noble Lords, Lord Strathclyde and Lord Wallace of Saltaire, have referred today. My right honourable friend did indeed have bilateral meetings with both the Irish and the Czech Prime Ministers to talk about the current European situation and other issues on the European Council agenda. I hope that the noble Lord, Lord Strathclyde, is pleased that he did so.

The noble Lord, Lord Strathclyde, kindly went through a number of issues that were of particular concern. I will try to cover as many of them as possible in the time allotted to me. We have had many discussions both in the committees of your Lordships’ House and on the Floor of your Lordships’ House about data sharing and its relevance and importance to tackling serious organised crime, people trafficking, terrorism and so on, and I will not repeat them. I will say, however, that it is right that the European Union should continue to discuss with its member states how best to ensure that we share information appropriately and with safeguards—this concerns the noble Lord, Lord Strathclyde, as it does us all—to enable us to continue to tackle these important issues.

On property and wills, a relevant issue is understanding that members of our country who choose to own properties in other countries will be subject to the conditions on properties and wills of those countries. Noble Lords who have looked into this will know that there is quite a difference between the property laws and inheritance laws of France and those of the UK. It is therefore right and proper that, without suggesting in any way that we give up anything, we should have dialogue and discussion about how that might work as more and more people from this country choose to buy properties not only in France and Germany but further afield—for example, increasingly in Estonia.

I can tell the noble Lord, Lord Wallace, that we did not opt in to the divorce proposals. As he will know, after extensive consultation with the judiciary, we felt that it was not appropriate to do so because of our unique and distinct system. However, there are issues that we need to discuss, particularly when it comes to children and maintenance. We have signed up to the Hague process, which is very important. We can also veto any inheritance tax suggestions, as the noble Lord says. That, too, is important.

I said in the Statement and I have said before in your Lordships’ House that we have invited Professor Gallagher to review biofuels. I also alluded to this in my answer to questions about the results of the EULAC conference in Peru, which I was privileged to attend on behalf of my right honourable friend. It is important that we look sensibly and sensitively at food and fuel needs. As soon as we have the results of that review, I am sure that we will bring them to your Lordships’ House and another place to discuss them properly.

I will say little on Zimbabwe, as there will be a full Statement by my noble friend, who has led and discussed these issues right the way through the process that we are engaged in. I understand that he has been in discussion with other leaders today. I do not accept the tone of the suggestion made by the noble Lord, Lord Strathclyde, that somehow this Government have not done enough. I hesitate to ask but I am interested to know exactly what the noble Lord thinks that we should have been doing. To solve this problem, we have to work in partnership with the European Union. I take the point made by the noble Lord, Lord Wallace, about the number of times that opposition Members in both Houses have said, “We don’t like the European Union that much but, when it comes to these issues, why are you not doing more together?”. The action that we are seeking to take is the most effective that we can find. However, we all recognise how desperate the situation is. My right honourable friend the Prime Minister has done everything that he can think of. He continues on a daily basis to concern himself with trying to find ways of tackling these issues and—with support from the European Union and other world leaders—to put pressure on Zimbabwe to try to resolve this as peacefully as possible.

The Council conclusion makes it clear that we need further reform of the common agricultural policy to continue to improve the market orientation of agriculture. The budget review will also look at the CAP. The noble Lord, Lord Strathclyde, is right that there is more to be done. We need to make sure that there is pressure to do that, but it is clear from our perspective that we wish that to happen.

There is—I address this point to the noble Lord, Lord Wallace, in particular—a reinvigoration of what is called the Barcelona process for a union of the Mediterranean. I hope that we will see that work continue. We are pleased that the proposals on the eastern partnership are included in the conclusions. We are in favour of improvements to partnerships with all our European neighbours. This will help to balance the outreach south through the French-proposed Mediterranean union. I hope that the noble Lord will welcome that and see it as a greater benefit.

Finally, I agree with the noble Lord, Lord Wallace. We talked quite a lot during the passage of the Bill about the fact that it is important to explain properly the work of the European Union, particularly where concerted action can play an important role. I am thinking not only about issues that affect us all across the European Union, such as those that I have already discussed, including serious and organised crime and so on, but about those areas that enable our citizens to live, work, travel and study in the European Union and enjoy the benefits of so doing.

My Lords, the Statement covers many issues but I will just ask my noble friend about oil. I will not, unlike the noble Lord, Lord Strathclyde, ask her what she thinks the price will be in six months or even six days, because I doubt whether she, or anybody else, really knows at the moment. However, I gather that at Jeddah there was some difference of opinion about whether at least an element of the huge increase in the price of oil was caused by speculation. I understand that the Government themselves are not of the view that there has been speculation. While I doubt whether it would have been wholly the cause, does my noble friend have any evidence on whether speculation has or has not been part of the cause of the increase in the price?

My Lords, the critical issue is that we stay vigilant in this country and have the right approach to ensure that financial investment takes place with the right level of transparency. That is critical to the point that my noble friend is making. Across Europe there is an issue of looking at the regulatory approach to the commodities and derivatives markets, which again may have an impact on the issue that my noble friend raises.

My Lords, I want to ask about the aid programme. In the announcement that the noble Baroness made about the agenda for action, her first paragraph on education can be read in two ways. The phrase,

“increased EU investment of €4.3 billion”,

can be read as increased by €4.3 billion or increased to €4.3 billion. That is a significant difference and I would like to know which is the case. Secondly, we come to health and the €8 billion. Is the investment programme as a whole a net grant, or are we, as has happened in the past, being given figures that include soft loans that have to be repaid or grants that can be made only if they are spent in the donor community or country? Are the figures that she gave inclusive of what is intended for Zimbabwe or in addition to it? On the question of net grant or soft loan, how will the British contribution of £200 million be denoted? Will it be a straight grant or some other form of money? Perhaps she will write to me.

My Lords, inevitably the noble Lord has asked some detailed questions, to which I do not have all the facts at my fingertips. I shall write to him, particularly on how our additional £200 million is used, as I suspect that it may still be the subject of discussion to see how it would be most effective. My understanding is that the totals include Zimbabwe. However, depending on what happens, there is an additional commitment in the Statement to look further at what might be done. I will wait for my noble friend to talk further about that in the context of his Statement.

My Lords, I declare an interest as the secretary of the All-Party Group on Croatia, because I will ask a question about enlargement. The presidency conclusions contain four and a half pages devoted to the western Balkans, including a detailed two-page declaration as the only annexe to the conclusions. However, there is no mention of Croatia. Before the Council met, the Commissioner in charge of enlargement, Olli Rehn, said that the result of the Irish referendum would have no effect on progress towards further enlargement. However, it appears that both France and Germany contest that and say that there can be no further enlargement until the necessary institutional reforms have been put in place to accommodate it.

Croatia has made significant progress in its negotiations towards accession and is now close to it. It is far ahead of any of the other western Balkan states. Would it not send a negative message to the whole region if Croatia’s progress to accession were put into cold storage or blocked at this stage? The Government may have taken a position on that; I wonder whether they have. Do they agree with France and Germany or feel that the negotiations should stay on course now that Croatia has come so close to accession? Maybe the noble Baroness the Lord President would prefer to write to me if she does not have the answer, but it is an issue on which we would like clarification.

My Lords, I shall be as clear as I can. As the noble Lord says, the Irish voting no should have no impact on the progress on technical negotiations for Croatia or for anybody else. Croatia set a target to complete negotiations in 2009; that target has been acknowledged by Commission President Barroso. I think—it is also the Government’s view—that enlargement is the greatest success of the European Union. We all know that it is an effective lever for peace and prosperity in the western Balkans and for a Turkey that is a partner in reform and positive regional influence. I hope that that says enough for the noble Lord to be in no doubt of the UK Government’s position on the issue.

My Lords, the penultimate paragraph of the Statement states that the European agenda,

“tackles effectively the issues that affect us all: the global financial crisis; the rising cost of food and fuel; combating climate change; and supporting people in the poorest countries in the world”.

Are not all those issues real ones for real people, whether in Ireland or in Burton upon Trent? However, it is difficult to get people to understand why the EU is relevant. If one could take party politics out of this, would there not be a strong case for doing more to explain to people why this is true? We have not succeeded in doing that. I do not think that this should be a party-political matter, but is it not incumbent on us to say why that statement is very true?

My Lords, my noble friend is absolutely right. One of the issues that arose during the discussions on the treaty was how best we could make sure that people understand the benefits of our membership of Europe and the benefits of being able, as 27 countries—and, we hope, eventually more—to work collaboratively together, whether that be around issues such as trade and development or around issues of justice and security.

My Lords, I was interested in the mention of the CAP and the sweeping away of all the restrictions that have been imposed for the past 20 years. That would be easy to do, but the CAP could be extremely useful and could do a very good job for something else. If it rains over the great plains of Australia, China or wherever, there will be surpluses of grain. Under the CAP, there is a lot of storage. To buy in times of surplus and to release in times of shortage would be a good function to promote.

My Lords, the noble Lord puts forward an interesting idea, of which I shall make sure that my colleagues in Defra are aware.

My Lords, I refer the noble Baroness to one sentence in the Statement. She said that the Government have not yet received a judgment in Mr Stuart Wheeler’s ongoing case and that when they have received it they will proceed to ratification. Let us suppose that the judgment is in Mr Wheeler’s favour and that his legitimate expectation of a referendum on the Lisbon treaty has not been met by the Government. How will the Government react? Will they proceed to ratification or will they grant a referendum? Secondly, on environmental policy, let us suppose that it becomes clear that, as many scientists believe, global warming has been caused almost wholly by the activity of the sun and hardly at all by human CO₂ emissions and that, therefore, the planet may now be cooling down. What effect would that have on our environmental policy and that of the EU? The noble Baroness looks at me askance, but there are thousands of scientists who believe that now.

My Lords, in answer to the noble Lord’s first question, I will not venture into hypothetical questions about a court judgment that we have not yet formally received. The noble Lord must forgive me, but I certainly will not do that in your Lordships’ House. On his second question, he raises the point that he thinks that the greatest bulk of scientific evidence is in one direction, although there may be evidence or views in another direction. Part of the purpose of working across the European Union is to keep a careful watch on what is happening to the planet and to make judgments on what we do about climate change in that context.

My Lords, on the revised EU reform treaty, which people are working on at the moment, have the Governments of the member states been informed that, in accordance with Article 6, our constitution means that our participation, if we participate, is subject to ratification in Parliament? It is not the same qualification as the Irish vote, but it is the same concept. Are the member states aware that that is our position in law?

My Lords, I think that I understand the noble Lord to say that, should there be any kind of amendment to the European treaty as it currently stands, that would be subject to parliamentary processes. We discussed in some detail on Wednesday that, if there were a new amended treaty, it would indeed have to come before your Lordships’ House and another place. I hope that that clarifies the position.

My Lords, the second page of the presidency’s conclusion refers to the area of freedom, security and justice. Presumably justice means obeying the law, even laws that you do not like. Is it just that there should be any doubt at all, following the Irish referendum, which said no to the Lisbon treaty, that the treaty should continue to be ratified instead of being declared dead? That surely is not justice. Various reports in the newspapers, both yesterday and today, suggest that the Irish are being put under great pressure from the various countries of the EU, particularly France and Germany. Apparently, the Irish are being threatened with expulsion from the EU unless they go back and reverse their decision to say no to the Lisbon treaty. I would like the noble Baroness to tell me, and I am sorry to take a little bit of time about this—

There is not time, my Lords.

My Lords, there is time, as no one else was standing. The noble Lord, Lord Richard, was not standing when I got up and he is only wasting time by heckling me. He ought to know better. Let me come back to the question that I was going to ask the noble Baroness. Will she assure me that the British Government are not involved in any pressure being put on the Irish people to reverse their decision about the Lisbon treaty?

My Lords, my right honourable friend attended the two days with my right honourable friend the Foreign Secretary and there is no report that I have been given of any possible bullying. There was a great deal of discussion and understanding from member states in talking with the Irish Taoiseach and with the Irish Foreign Minister. I understand that the Irish asked for some time—in other words, until the October Council—to come back with their views and that that request was surely granted. I do not accept, therefore, that there was any bullying. I made it perfectly clear that, as far as the UK position is concerned, we are absolutely and totally against any idea of any bullying of the Irish, but there is no evidence to suggest that it is happening. On justice, we discussed this issue at great length and I am very clear that it is right and proper for each member state to determine its own position on this treaty and not be bullied by anybody else into stopping or starting or not continuing a process that is well advanced, which was the position that we were in last week.

My Lords, I wonder whether my noble friend the Leader of the House shares my amazement at the fact that the one thing that the representative of UKIP sitting on the Back Bench over there and, indeed, the representative of UKIP sitting on the Bench behind me—

My Lords, I am not a member of UKIP.

My Lords, I can only say that that puts me in mind of an old American professor whom I used to know, who said, “If he is not a member, he is cheating them of their dues”. Does my noble friend share my amazement at the fact that various people in this House who are critical of the British position on the treaty seem to be saying that we should take a position different from that which the Irish Government are taking? The Irish Government seem to be getting set on a clear policy. If that is their policy, surely we should allow them to do it.

My Lords, my noble friend is right. It is for the Irish to determine the Irish position and it is for the British Government to determine the British position, and so on across 27 member states. I could not agree more. For the record, I should add that the noble Lord, Lord Stoddart, is not formally a member of UKIP.

My Lords, the opinion that I have heard this weekend from some very considerable experts, not necessarily in this House, is that in practice the EU is likely to chug along without the Lisbon treaty. When Croatia is ready to accede, there will be some cherry picking from the treaty; things will be put into the Croatian accession treaty that will enable the Union to operate more effectively. Would an alternative not be for the Government to advocate one change in the Lisbon treaty that would remove a lot of the worry and concern: the removal of the self-amending provisions? People do not want their sovereignty to be able to be decided without further treaty change by unanimity merely in the Council of Ministers. If the passerelle clause were removed, would we not be able to make progress? Will the Government at least consider that possibility?

My Lords, the Government’s position is clear; we have debated it at great length in your Lordships’ House. It remains exactly the same as it was last Wednesday night, Thursday morning, over the weekend and today. We believe that the treaty is a good deal for the European Union and a good deal for this country. The noble Lord may not like what he describes as the self-amending provisions or the passerelle—the footbridge. There are other noble Lords across the House who have not liked parts of the treaty and no doubt parliamentarians in other member states do not like parts of it. The treaty was a good deal; we stand by the fact that this House supported it, with a good majority at every Division. Our objective now is to see what the Irish position will be and then to consider our position. When Croatia is ready, and if the EU expands from 27 to 28 member states, there will need to be some routine changes in the institution’s arrangements with regard to the number of MEPs and so on. We will have to look at that situation then.

My Lords, with the leave of the House, I shall now repeat a Statement made in another place on the situation in Zimbabwe. The Statement is as follows:

“I am sure that the whole House will unite in its condemnation of the depravity of the Mugabe regime; in grieving at the needless loss of life; in wanting to send a clear message of support and solidarity to the people of Zimbabwe at this time; and in supporting new African efforts to find a resolution to the crisis. We share both their demand for a democratic future and their belief that they should not be denied this by violence or intimidation. Our primary concern has always been for them.

“Since 29 March and the extraordinary scenes of courage shown then by those ordinary people who put their faith in democracy and the ballot box, we have seen a regime that has reverted to type. President Mugabe and his key generals use changes to the law as a means of identifying people who chose to vote for change. From then onwards, a campaign of violence was inflicted on those people, intend to punish them for having the temerity to say no to Robert Mugabe and no to ZANU-PF. We know that 34,000 people have been displaced, 2,700 injured and 84 murdered since that day. Two thousand of those people are sheltering in Harare, in MDC headquarters.

“This is not British propaganda. NGOs have documented the existence of torture camps. Independent media have published the names of those who have directed and orchestrated that violence. African election observers have seen the violence with their own eyes. Thousands of teachers and public servants had volunteered as presiding officers in the first round but have withdrawn their names for fear of violence and intimidation.

“By Sunday, only 84 local election observers had been accredited when more than 10,000 had applied. It is a matter of public record that Morgan Tsvangirai has been detained five times in the past 10 days and that MDC Secretary-General Tendai Biti has been in prison and charged with a trumped-up treason offence since arriving back in Harare. The stage was set for the most rigged election in African history.

“Robert Mugabe and his thugs have made an election impossible. It is clear that the only people with democratic legitimacy are those who won the parliamentary majority on 29 March and took most votes in the first round of the presidential election—the Opposition. Zimbabwe needs a Government who are broad-based and command the confidence of the majority of Zimbabweans. In addition to stopping the violence, that must be the focus of regional and international efforts. Since the announcement yesterday, the Prime Minister, Lord Malloch-Brown and I have spoken to Foreign Ministers and key figures in southern Africa and around the world. This is a crucial moment for Africa and the region. Ahead of the election, 40 senior Africans underlined their concern at the conditions in Zimbabwe.

“The AU Commission has called for violence to end. The head of the Pan African Parliament Observer Mission said that violence was now at the top of the agenda of this electoral process. Zambian President Levy Mwanawasa, who is currently chair of the Southern African Development Community, has said that,

“the current political environment in Zimbabwe falls far short of (SADC's) ... principles and guidelines”.

He said yesterday that the situation was scandalous and that what was happening in Zimbabwe was embarrassing to all Africans in the region. It is now for SADC and AU leaders to convene in early session and to establish a clear basis for regional engagement on the issue.

“At the European Council last week, the Prime Minister and other leaders underlined their readiness to take further measures should President Mugabe attempt to steal the election. On behalf of the EU, the Slovenian Foreign Minister has issued a clear statement condemning the violence and the conditions which forced Morgan Tsvangirai to withdraw from the election. I spoke to Foreign Minister Rupel last night to welcome that statement and to discuss with him now the need to consider urgently how we can put further pressure—a widening and deepening of the EU visa ban and targeted financial measures—on Robert Mugabe and his elite which can be actioned at the next meeting of EU Foreign Ministers. Javier Solana and Commissioner Michel have both now issued statements condemning the violence and supporting Morgan Tsvangirai's decision.

“I have spoken to UN Secretary-General Ban Ki-Moon and I welcome his statement yesterday. Later today, the Security Council will discuss Zimbabwe. I am sure that our permanent representative will speak for the whole House when he says that the UN must contribute to the resolution of this crisis before the entire region is destabilised further. It is right and it is necessary that the Security Council, the African Union and SADC work together on this. The UN agencies have prepared for the many more refugees who may now flee Zimbabwe.

The UN Secretary-General’s envoy remains in the region and should be allowed to return to Zimbabwe. But the burden will still be borne by the region and by Zimbabwe's neighbours, and the role of their leaders is vital. Britain has long and historical links with Zimbabwe. I have never believed that the rights and wrongs of history should prevent us from speaking clearly and frankly about the situation today. Robert Mugabe's misrule does not invalidate the struggle for independence: our colonial history does not mean we cannot denounce that which is wrong. The test at all times should be whether our commitment and action can help the people of Zimbabwe.

“The cynical decision to suspend NGOs delivering vital aid shows how far Mugabe has gone in abandoning Zimbabwe's people. Our foremost duty is still to press for humanitarian space to be re-opened and for those NGOs to be allowed to restart operations. One and a half million people have been affected by the ban. As the second largest bilateral donor, we will continue to provide aid and assistance as we can. The Secretary of State for International Development has chaired a meeting this morning to consider what more we can do to support urgently those in Zimbabwe. I have spoken to our ambassador and he and his staff are working hard to maintain a full suite of diplomatic amenities. Travel advice remains under review and recommends against all but essential travel.

“We will continue our efforts publicly and privately press for a solution to this crisis that reflects the will of the people in Zimbabwe. I am sure that honourable Members will agree with me that such a solution cannot come quickly enough. Mr Mugabe says that only God can remove him from office. Let us hope that the people of Zimbabwe get there first”.

My Lords, that concludes the Statement.

My Lords, I am grateful to the Minister for repeating the Statement on Zimbabwe, a subject on which we touched a few moments ago in the earlier Statement.

I hope that the Minister will forgive me if I say that, having listened to the Statement and recalling the long list of Statements by his predecessors over the past seven or eight years, I am visited by an overwhelming feeling of it all being too little and too late. Have we not now reached the point at which quiet diplomacy is finally at an end and where the UN and/or the democracies working together should finally move decisively? Is not the terrorising and murder of MDC members, of which the abduction, torture and murder of the young wife of the mayor of Harare is perhaps a hideous apogee, the ultimate call for more decisive collective action? Have we suggested, for instance, that the UN set up a commission of inquiry into the atrocities of Mugabe’s criminal regime? Can there be a referral to the International Criminal Court for crimes against humanity? Was not that the purpose, among others, of setting up the court?

Is the Minister aware that South African lawyers have now pointed out that under Zimbabwe’s own laws, since there is no run-off election within 21 days of the previous presidential elections, Robert Mugabe is holding office unlawfully, having not had a voting majority first time round? By this clear law the first round winner, the courageous Mr Tsvangirai, who is now sheltering, I understand, in the Dutch embassy in Harare, and whose life is in danger from the ZANU-PF mobs, should now be declared president. Is the noble Lord aware that the clear illegitimacy of the Mugabe regime requires SADC by its own rules to disbar Zimbabwe from membership? Has that point been discussed with the President of Zambia, who is chairman of SADC? Should not the UK now consider, first, the withdrawal of recognition from what is clearly a gangster regime? Secondly, should not the UK urge much tougher sanctions and a tougher application of existing EU sanctions against Zimbabwe and individuals and extend the visa ban to families and relatives of regime leaders, as we have repeatedly urged? That seems to have been ignored the other day when Mugabe turned up at the FAO meeting in Rome and where a UN official had the temerity to say that Mr Mugabe stood “in good stead” with the UN? Thirdly, should we not start putting together clearly and visibly the post-Mugabe programme of rescue and support for recovery which the people of Zimbabwe—it was once a prosperous country and could be again—will urgently need?

No one pretends that any of those moves is easy or can be undertaken unilaterally—that would be absurd. Is it not essential to ensure that China, which is also involved in the area, faces its responsibilities in southern Africa and that Beijing, Moscow and Tokyo are just as necessary a part of the collective action needed as Washington or Brussels? I hope that our diplomats and policy makers have grasped that point at least and that we shall go forward from here in a positive direction to prevent an even greater tragedy.

My Lords, I thank the Minister for repeating the Statement made in another place. Before I comment on the remarks of the noble Lord, Lord Howell of Guildford, perhaps I may say that the noble Lord, Lord Malloch-Brown, has gone to the limits of his endurance and capacity in trying to find some answer to Zimbabwe’s problems. When I speak about the limits of his capacity, I have to say that that is very great indeed. I do not believe that any single individual could have done more. Having said that, I agree with the noble Lord, Lord Howell, that there is a case for declaring loudly and clearly the election of Mr Mugabe when it happens, which will be soon—in the next few days—to be unlawful and to consider withdrawing our recognition of Zimbabwe in the light of that illegal position.

We could and should take further the issue of freezing the bank accounts of families and relatives of the regime and of making it clear that we will not help them in obtaining educational positions for their children in the universities of the western world. It is not unusual—I say this in my capacity as a professor emerita—to find the sons and daughters of some very disagreeable international figures benefiting from their parents’ position in order to obtain what one might call plum situations in the best-known universities of the world. The universities have a certain responsibility in that regard.

I have two other points. First, we might consider whether there is room for a Commonwealth meeting with SADC. It is striking that, of those African countries which have clearly spoken out about the dreadful situation in Zimbabwe—such as Tanzania, Zambia and Botswana—all but Angola are members of the Commonwealth, which has not had the kind of problem that the UN has had with Russia, China, and South Africa defying attempts to debate the situation. South Africa would undoubtedly be isolated in the Commonwealth, but that might currently be no bad thing.

Secondly, it is easy for us to be eloquent without always following actions we might take. I plead once more for the Minister and the Leader of the House to consider whether we should not look again at the absolute ban on Zimbabwean refugees being allowed to work in this country other than in the most exceptional situations. We now know that they cannot be sent back for some time to come; I wish that I could say that it will be next week but, as realists, we recognise that it will be at least several, perhaps many, months before Zimbabwean refugees in this country can be safely returned to a country that will otherwise undoubtedly torture and kill them if they are. In those circumstances, we cannot continue to refuse to allow Zimbabwean refugees to find some way to sustain their livelihoods and families. In the light of the Prime Minister’s statement, I ask that the refugee situation be considered case by case and that such people, many of whom have been persecuted and tortured, should be allowed to work in this country and to return to their own in some better future to give the benefit of their education and experience in this country to their long-suffering people.

My Lords, I thank the noble Baroness for her first remarks. I say to her and to the noble Lord, Lord Howell, that we all share the frustration that we have not been able to do more. This unites us; it is not a matter of pride that we should still be discussing President Mugabe as an individual in office, despite all that has happened. Use though he does the word “decisively”, I suspect that the noble Lord, Lord Howell, does not envisage military action. No parties in Zimbabwe have asked for military action. There is a full understanding that at this time that would be counterproductive for all sorts of reasons. We are discussing the most effective way to bring pressure on a rogue regime, the illegitimacy of which is quite beyond doubt. In that regard, we are probably in much the same place and can learn from each other what we might do to enhance those pressures.

First, during the end of last week and the weekend, Zimbabwe’s neighbours in southern Africa went to the press one after the other and said that the intimidation level was making open and free elections all but impossible. That has created a potential coalition of SADC, the AU and the UN to allow us to take action against Mugabe on a scale that was previously impossible. For all his talk of sanctions, they were, as the noble Lord, Lord Howell, says, actually quite limited, against a handful of 130 individuals, and not particularly deep and wide. We now have the opportunity, first in the European Union, to dramatically deepen those sanctions and target bank accounts held not just in Europe, but globally, and look at the possibility of preventing the families of those who have committed these crimes being able to enjoy scholarships or travel aboard.

Each individual who has had a hand in this illegitimate second round must realise that they are open to the possibility of European and other international arrest warrants. None of them can travel easily without the possibility, at a customs point somewhere, of the hand of the law coming down on their shoulder and their being told that a European or other arrest warrant has been issued for them. Their actions are making them isolated criminals who have very few places to go outside Zimbabwe.

I reassure the noble Lord that this is an illegitimate regime in the view of this Government. As I said to the press this morning without the benefit of knowing what the South African lawyers said, by going beyond the constitutional requirement for a second round within 21 days because of efforts to manipulate the result, President Mugabe was governing on borrowed time and no longer within the bounds of his own constitution. He now faces the fact that the African Union does not under its own rules allow presidents who are not elected by democratic means to take their seat. President Mugabe faces the fact that most of his SADC neighbours have confirmed that his conduct of this election has not been within its own principles. We therefore face a different context, where the possibility of new pressure is real.

There remains the prospect of Commonwealth discussion of this matter. I have been in repeated contact with the Secretary-General of the Commonwealth, but as I have said previously, we are a little impaired by the fact that Zimbabwe is not suspended from the Commonwealth, as are, for example, Pakistan or Fiji, but has resigned from it. African countries hesitate to bring the Commonwealth back into something that they think is better solved by SADC, the AU and the UN.

We are looking at the support that we may need to give Zimbabweans in this country, particularly at the ban on refugees taking up work.

My Lords, does the Minister not agree that, although we speak of Mugabe as the author of this outrage, he may be little more than a front for the joint operations council—the military junta—that may effectively be in power in Zimbabwe? Does he not agree that, although exasperating difficulties are involved in international intervention, be it by way of blocking electricity supplies, the restriction on foreign currency flowing into Zimbabwe, or the indictment of Mugabe or others before the International Court of Justice, the very worst consequence of this tragedy could be that the world took away the message that tyranny and murder had succeeded in Zimbabwe? I echo the Minister in asking whether, as the former colonial power in that country, we do not have a massive moral responsibility to do whatever we can within justice and reason to help those people who are so oppressed and enslaved.

My Lords, I affirm that everyone in Britain feels that sense of moral responsibility and desire to see the people of Zimbabwe able to choose their own Government, live in peace and recover the prosperity that was previously theirs. On whether power resides in the hands of President Mugabe or the members of the joint operations centre, our suspicion is both. We look at President Mugabe as still very much responsible for the actions taken in his name, but it is undoubtedly the case that it is the joint operations centre, rather than the ZANU-PF party apparatus, that has run the second round of this election in such a brutal and militarised way.

My Lords, I join the noble Baroness, Lady Williams, in congratulating the Minister on his forceful leadership on this issue. We are looking for that kind of leadership across the whole of southern Africa. Would it not be helpful if ex-president Nelson Mandela, who is in London this week to celebrate his 90th birthday—for which I am sure the whole House will send its good wishes—could speak out about the appalling situation in Zimbabwe? His authority would surely carry some weight, even with the dreadful regime there.

My Lords, I thank my noble friend for her kind remarks. I am sure she has noticed that Mr Mandela’s wife, Graca Machel, was one of the signatories to the open letter published last week. We need to be very careful not to appear to put pressure on Mr Mandela to come out publicly while he is here for his 90th birthday celebrations. He must be fully conscious of how powerful his words would be if uttered at the right time. Despite his extreme reluctance to involve himself in political issues at this stage in his life and career, I have no doubt that he must be weighing the pros and cons of this. However, were he to deliver a statement in London, apparently as a result of pressure from us, I think that it would lose a lot of the force that it might otherwise have.

My Lords, on the radio this morning, the Minister said that Australia had expelled the children of one of Mr Mugabe’s henchmen and confiscated money. Will we follow suit?

My Lords, one of the proposals we shall make to the EU is that we should adopt a similar regime of sanctions against not just individuals but their families.

My Lords, last week we heard about election observers who were lined up to be sent to Zimbabwe, and we discussed their paucity. It seems to me that observance should still take place. Does the Minister have any insight about whether those election observers will now observe what is happening, or will they be banished?

My Lords, more than 200 international observers have arrived in the country. Some of them are expected to report on what they see to a meeting of SADC leaders later this week and possibly to the AU summit at the weekend. It is important to keep as large an international observer presence in the country as possible because this violence is not at an end, as is clearly demonstrated by the fact that Morgan Tsvangirai had to seek asylum in the Dutch embassy this afternoon.

My Lords, I add my compliments to those offered by the noble Baroness, Lady Williams of Crosby, and my noble friend Lady Jay of Paddington, to my noble friend, who has proved such a great asset in regard to Zimbabwe since he came to this House and to government. He pointed out how crucial SADC is in the present situation. I have already described him as a great asset; I cannot do better than that. Will he consider visiting South Africa in person—not forthwith, because that is a dangerous word, but very soon—and as many other SADC countries as possible to co-ordinate policy and to use his own standing with SADC to achieve something better from South Africa?

My Lords, I am grateful to my noble friend. Rarely has a Minister received so many congratulations when his policy has failed to deliver results. I hope that my noble friends will be as generous when we finally bring this terrible regime to an end and Zimbabwe gets the Government it deserves. As I reported in the Statement, I, the Foreign Secretary and the Prime Minister are in frequent touch by telephone with all the leaders of southern Africa. It is our judgment at this point that that discreet, private contact is more effective than a formal trip to the region, but I will certainly keep it in mind. My noble friend has my word that, the moment it seems opportune and unlikely to backfire, I will be on the plane.

My Lords, there is one person who, by virtue of his position in his own country and its geographical situation, could have prevented this whole terrible saga if he had acted decisively and with determination years ago, and that is President Mbeki of South Africa. He could have prevented the whole thing happening. Why did he not do it? It was he who said that Africa’s problems should be solved by Africans, so the rest of the world backed off. I remember it happening a few years back; we did what he suggested.

The role that he has played has not been helpful in any way. His quiet diplomacy became a sort of mirage behind which a lot of things were suggested to be happening, when not very much was actually happening. If people agree, we should bear that in mind, and we should in some way show that this is our belief; it is certainly my belief. The G8 is about to hold a conference, to which he has probably been invited. If that is the case, could not the invitation be withdrawn?

My Lords, the noble Lord, Lord Blaker, deserves some of the commendations that I have received today, because he has been at least as dedicated a supporter of change in Zimbabwe. I hope that there will be a further opportunity one day to exchange compliments when our policy has succeeded.

Obviously, here in this House and elsewhere, we have expressed our frustrations with the lack of results from President Mbeki’s mediation, but this is probably not the moment to go further than that. He has once more inserted himself into the dialogue in Zimbabwe, and he is part of various proposals that are being made. We have to see how that goes. We are very determined to see fuller involvement by the AU and the UN to make sure that a fuller set of players is engaged in trying to bring change in the country.

My Lords, may I take the Minister back to two questions that the noble Lord, Lord Howell of Guildford, put to him earlier? The reports that said that Morgan Tsvangirai has been taken into refuge in the Dutch embassy in Harare also said that more than 60 people, including women and children, had been arrested at the MDC headquarters today. What do we know about their safety and about the events that occurred earlier? Can the Minister tell us more about that?

The noble Lord, Lord Howell, also asked about a referral to the International Criminal Court. Is the evidence that is already available being systematically compiled with that view in mind? The noble Lord will recall the example—he mentioned it earlier—of the six year-old boy who was incinerated only a week ago because he was in the home of his father, who was an opposition politician. Since then, there have been appalling reports of the systematic mutilation of members of the opposition, with many atrocities occurring. Surely, enough evidence is there already for a referral to the ICC, as the noble Lord intimated.

My Lords, on the first point, we are trying to follow the fast-changing developments in Harare. I cannot comment on people being removed from the MDC headquarters, because I do not know the facts. We do know that Mr Tsvangirai is secure in the Dutch embassy. Both events make clear that the violence has not stopped but is continuing, and the need for monitoring and documenting it for later action remains as important as ever.

On the second point about the ICC, I did not answer that point earlier only because it is a complicated and long answer. Because Zimbabwe is a non-signatory, it would require a referral by the Security Council. My view is that that is by no means impossible, but it is likely to come only at the end of a process where the Security Council despairs of an early, speedy political resolution of the issue and feels obliged to move to an ICC indictment. Even without an ICC indictment, the possibility of European arrest warrants and other legal proceedings internationally against the regime grows closer by the day. Let me reassure the noble Lord that there are many NGOs and others, including our embassy, that are documenting abuses as they occur.

My Lords, on the last point, about the relationship between the Security Council and the various members—China, Russia, and so on—does my noble friend recall that in the African Union-European Union communiqué from Lisbon at the end of last year, there was a lot of strong language about governance and criminality? There was much less of such language in the communiqué from the African Union and the Chinese. Would not a campaign to take this to the Security Council, with a view to a reference to the ICC, be a way of engaging with the Chinese on this question? When the vice-premier was here, he said he thought that that would be a useful way of establishing a better dialogue on Africa between the European Union and China.

My Lords, let us be clear: in the case of Darfur and Sudan a similar path had to be followed for ICC indictments, and it happened. It is not an impossible path to proceed down. There is a possibility of winning Chinese acquiescence as well as Russian acquiescence—to take the two countries which have at times shown diffidence and resistance to these approaches. We have had success with China on Zimbabwe. As noble Lords may remember, I was able to secure a commitment from the Chinese last year in Beijing to cease development assistance to Zimbabwe. This year we received a commitment from the Chinese that the arms on the Chinese arms shipment provided by a state company would not be unloaded but would instead be returned to China rather than used for internal repression in Zimbabwe. So this is not a dialogue of the deaf; it is a dialogue where we are making progress. But my noble friend is correct. We need to make a lot more progress to try and align China with our vision of good governance and human rights in Africa.

My Lords, earlier today the Prime Minister said that no one should recognise the regime in Zimbabwe. If the European Union acts in unity on that policy, would it mean the closure of the Dutch embassy, and thus put at risk the leader of the opposition?

My Lords, the noble Lord makes an extremely good point. It is a reason why—as noble Lords may remember from the case of Kenya at the beginning of this year—we do not recognise Governments, we recognise states. When there is a Government whose legitimacy we do not accept, we make it clear that we do not accept that Government as representative of the people of the country and therefore that we will not do business with them. That is the formula that we are seeking here. I would just ask whether, in addition to the case of Mr Tsvangirai and the Dutch embassy, we would really want to close our embassy and leave the 14,000 British nationals in Zimbabwe unprotected?

My Lords, first, can the Minister confirm that there are now more Chinese than British nationals in Zimbabwe? Secondly, he said that the heavy arm of the law may very well pick up the people in Mr Mugabe’s regime when they come to Europe. Some of us heard that with a little cynicism, because Mr Mugabe seems to go to the rest of Europe with impunity. He has been there recently and has been welcomed.

My Lords, I am sure that the noble Earl is right: there are certainly more Chinese than British citizens in Africa. I therefore suspect that there are more Chinese in Zimbabwe. There are 1 million Chinese in Africa today.

On the second point, it is worth saying that President Mugabe was not in Europe on a state visit to a European capital; he was there under the same provision which has allowed Fidel Castro, Yasser Arafat and President Ahmadinejad to go to UN headquarters in New York at a time when they were not on good terms with the United States. It is just part of the terms and conditions—the agrément—of UN offices. As a membership organisation available to all countries, the heads or official representatives of those countries can travel through the national territory of the country where the UN headquarters is located to attend a meeting. So please do not believe that there was support in that case. At the EU Lisbon meeting at the end of last year, there was a judgment that letting him come was a lower profile way of handling the situation than having a confrontation around it. It was not necessarily a judgment we shared, which is why our Prime Minister did not attend the meeting.

My Lords, I, too, join noble Lords in welcoming the Statement. I also wish to record my recognition of the Minister’s work over a long period on finding some sort of solution and a degree of international support.

In the light of the MDC’s decision not to contest what will be a bogus election, the thoughts of this House are not so much on the Government of Zimbabwe as for the people of Zimbabwe. The current situation is damaging not just the people of Zimbabwe but the reputation of the international community, which is seen as impotent and over-reliant on South Africa, for example. However, we have drawn some strength from the way in which we as a country have dealt with African dictators in the past. When Idi Amin evicted the Ugandan Asians this country gave support and, in many instances, shelter to those who lost their homes, their community and their citizenship.

As we celebrate this week—

My Lords, I am sorry to interrupt my noble friend, but I wonder whether he could come to his question.

My Lords, I will do so. I want particularly, as we celebrate refugee week, to commend the statement of the noble Baroness, Lady Williams, that we should afford to Zimbabwean refugees at least the right to have a job and to support their families.

My Lords, I confirm to my noble friend Lord Morris that we will look into this to see what can be done. I thank him for his long and hard work on this same issue of Zimbabwe and particularly on workers’ rights.

My Lords, from these Benches—

I am sorry, my Lords, but questions have to end now. The 20 minutes are up.

Before calling the first amendment, I have to announce an amendment to the figures announced for the Division earlier today. The number of noble Lords voting Content was 53, not 55.

moved Amendment No. 44:

I shall make just a couple of brief comments. It is important to recognise that the band of earnings represents part of the compromise and the consensus on the whole pensions settlement and that any radical departure from that may undermine the consensus. The limits, particularly the upper limit, have the effect of controlling employers’ costs as well as ensuring that the personal accounts scheme stays on the target market and does not compete unduly with alternative pension provisions. We completely understand that the band may need to be changed occasionally, but I am not sure that the noble Baroness’s amendment, which does not even have the affirmative procedure attached to it, is the right way of going about things. As such changes could be quite significant, we see primary legislation as perhaps the right way of realigning the scheme.

We are probably a little more sympathetic to the noble Baroness’s amendment, but I would like to hear the Minister’s reply before committing myself any more firmly.

I thank my noble friend for this amendment. The reforms that we have discussed have been structured to set a median earner with a solid state entitlement on course to achieve an income in retirement of around 45 per cent of their working life earnings, in line with the recommendation of the Pensions Commission. The qualifying earnings band establishes the link between working life earnings and pension saving. As the noble Baroness, Lady Noakes, said, this is part of the consensus that was reached. Having made this important link, we need to maintain it. We will do this by reviewing the limits of the band every year to see whether they have maintained their value. Depending on the outcome of that review, we expect to uprate the limits in line with changes to average earnings.

Ensuring that the limits of the qualifying earnings band keep pace with changes to average earnings will ensure that the contributions of jobholders also keep pace. This is important if we are to maintain the balance between working life income and income in retirement. Uprating the lower limit of the qualifying earnings band in line with changes to average earnings will also avoid enrolling increasing numbers of workers on very low earnings, for whom state provision already offers high income-replacement rates. It is crucial that we retain the flexibility necessary to ensure that the earnings band is uprated appropriately. As my noble friend said, pensions are a long-term issue. However, the clause as drafted already provides that flexibility. I do not believe that these amendments would provide any additional flexibility when it comes to reviewing and uprating the limits of the qualifying earnings band. Accordingly, I ask my noble friend to withdraw her amendment.

I thank my noble friend the Minister for that response and I note his reference to flexibility, which is what the amendment is all about. I am also appreciative of the fact that this is part of the general consensus—something that the TUC also understands. Consensus is necessary if we want the new legislation to have viability for the future, with everybody agreed that this is what should happen. However, in view of what he says, I do not intend to press the amendment to a vote this evening. I shall look carefully at what he said in Hansard to see whether it should be pursued further, but I am grateful for the assurance that flexibility is within the sights of the Government so far as this is concerned. On that basis, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

moved Amendment No. 45:

I should point out that if the amendment is agreed to, I cannot call Amendment No. 46.

I just explained in response to the amendments from my noble friend Lady Turner our approach to uprating the earnings bands, and in particular the importance of maintaining flexibility. However, these amendments would do away with that flexibility by removing the possibility of uprating by any method other than earnings bands. We must remember that these reforms are for the long term. While we fully expect to uprate the limits of the earnings band in line with changes to average earnings, we do not have 20/20 foresight. The clause avoids tying the hands of future Governments when it comes to ensuring that the earnings bands maintain their value. It is crucial that this remains the case.

We always have this dilemma where we have a clear policy and objective and believe that uprating by earnings is the right way forward. However, given that we are setting down reforms for decades to come, there must be a strong argument in favour of flexibility. That is why the clause is structured as it is, as I explained in response to the previous amendments. I hope that, on that basis, the noble Baroness will feel able not to press her amendment to a vote.

I am not quite sure what this flexibility is all about. We have earnings bands, and we have to ensure at least that they maintain their value over time. We accept that they might have to be realigned, which was the purport of the amendment of the noble Baroness, Lady Turner, although there should be a special procedure if that is to be the case. However, the flexibility that the Minister wants is merely to say what kind of revaluation it is, because Clause 13 talks only of the Secretary of State determining whether the earnings band has maintained its value. As this is in essence about earnings leading to replacement income in retirement, I cannot see any other logical basis on which to determine value, and I struggle to see what kind of flexibility the Government seek.

It is by definition almost impossible to be specific when providing flexibility that might be needed over the long term. The noble Baroness may recall our debates during consideration of the Pensions Act 2007 on upratings and the factors that would be taken into account, such as which earnings index would be the appropriate one and whether the current indices would still be in place in 20 or 30 years in their current format. We are simply creating a little space to have flexibility. It is not unreasonable for government to ask for that. I know that the noble Baroness always sees the most horrendous plots when the Government seek flexibility, but it is not that. We have made very clear our intention to maintain the link between lifetime earnings and replacement income and the proposition that the bands are set to get that replacement rate of 45 per cent at the start. We expect to uprate them by earnings, and we hope and believe that this regime will remain in place for 20, 30 or 40 years with the consensus that has been built, but we cannot be absolutely certain. That is the reason.

Will the Minister make it quite clear that he is asking for flexibility only in the definition of the word “earnings” over a long period, or is he asking for something else?

The Bill is not specific. Again, we simply do not have 20/20 foresight over the long term, and we cannot predict quite what will crop up over the long term. Therefore we need to have a little space rather than to have to come back with primary legislation again. That is an entirely reasonable proposition, and I do not see why it is creating so much difficulty.

No one has 20/20 foresight. I was simply asking which way it is looking. Is it looking at the definition of earnings or at something else?

The clause is entitled “Review of qualifying earnings band”. That is the thrust of the provision and how we go about it. That is the subject of the detail.

I thank the noble Lord, Lord Oakeshott, for attempting to get a little more clarity. We received none; all we got was one of the Minister’s favourite mantras for the Bill—he wants flexibility. This is when the Government either do not know the answer or do not want to tell us what they are going to do with the Bill. It has been relatively clear from the outset. The Pensions Commission recommended that the bands be uprated in line with earnings. The Government, in their White Paper, accepted that recommendation. The Minister has said that he accepts it on more than one occasion at the Dispatch Box. However, when we seek to get that reflected in the Bill we are confronted with complete obduracy for reasons that have not been articulated, except to say that it is for flexibility. That is not satisfactory, and I seek to test the opinion of the Committee.

moved Amendments Nos. 47 and 48:

moved Amendment No. 50:

Not being a tax expert like the Minister or my noble friend Lady Noakes, I am afraid that I have a few questions. I readily understand that there should be minimum requirements for pension schemes to be tax registered where they are indeed tax registered, but he said towards the end of our proceedings last week that the Government were interested in the total amount of money going into the schemes as a primary test. I think that that was at col. 1018; I am speaking from memory. I shall go into that in a bit more detail in a minute or two. Given that, it does not particularly matter whether you have a tax-registered scheme, so long as the total amount of money is at least equal to the minimum that the Government have set out in the Bill.

Another point occurred to me in listening to the noble Lord. I understand that the schemes that he is interested in under the amendments are not regulated by the Financial Services Authority. However, the regulatory part of the Bill is all about the Pensions Regulator. To what extent, if any, might they be regulated by the Pensions Regulator?

The noble Lord raises two points about whether it matters if tax relief is available to a scheme. The starting point for having qualifying schemes is that they are registered under the Finance Act 2004. The getting of tax relief is not the only important thing, obviously; that tax relief is available only if the structure of the scheme fits certain criteria. That is why the provision is there.

When we are talking about satisfying the quality requirements of money purchase schemes, the noble Lord is right in one respect. We are interested in the amount that goes in, not the basis on which it is calculated. However, that is a separate point. We are providing for schemes that expats might routinely be signed up to when they come into the UK. They are not registrable under the Finance Act 2004. Typically, there might be arrangements if there are corresponding schemes under which UK tax relief can still be available on contributions, but the provision that a qualifying scheme should be registered under Part 4 of the Finance Act 2004 is an important building block in the definition of qualifying schemes generally.

We are simply taking out and enabling a further qualifying arrangement by taking the power to look at circumstances of specific schemes that would not fit the criteria. If we do not do that, we could end up with a situation in which, when an expat was seconded into the UK to work and remained a member of their home-country scheme but that scheme could not be a qualifying scheme, there would be an auto-enrolment duty on the employer. That would not make much sense if the scheme that they were in were good quality. We are carving out an opportunity through regulation to be able to bring forward other criteria to facilitate that. It is no more or less than that.

The noble Lord also asked what, if the schemes were FSA registered or came within the FSA’s ambit, the powers of the Pensions Regulator would be. The new clause is wide enough if necessary to safeguard members’ interests by including regulatory requirements as part of the qualifying requirements. Those might include requirements relating to the regulatory jurisdiction that a scheme falls under. It is a process by which one can seek to ensure effective regulation, even if it is not regulation under FSA and UK arrangements. That is the purpose. I hope that that deals with matters satisfactorily for him.

I am grateful to the noble Lord for answering questions that I sprung on him. I confess that I sprung them on myself, because I thought of them as he was speaking.

On Question, amendment agreed to.

[Amendments Nos. 51 and 52 not moved.]

Clause 15, as amended, agreed to.

moved Amendment No. 53:

I shall not detain the Committee for too long in lending my support to what is a probing amendment. As my noble friend was speaking, my mind went back some years to a time when people could draw the whole amount out of their pension funds and pay for it at the end of their lives. They could draw the whole amount out of the occupational funds. It was mainly women who did this simply because of crises during their lives—they drew it out for their children or for whatever purpose. If we want to have a saving culture that covers both men and women, this idea is certainly worth looking at. It is a probing amendment but it is something we need to pause and think about. It may or may not work but I certainly think it is worth examination. That is why I lend my support to the amendment.

I congratulate the noble Baroness, Lady Hollis. This is an interesting idea and potentially a rather valuable one. From memory, in the United States there was a similar scheme a few years back. It had both advantages and disadvantages. It illustrated the scope of what people might require and how they might be helped in this way.

It seems to me that it makes the whole concept more attractive. That is important because if we are going to have more people covered by pension saving we have to make it as obviously attractive as we can. It also means that the tax-free sum could help women in particular at particularly difficult and crucial times of their lives. The noble Baroness, Lady Hollis, said that this does not mean that your pension savings are simply locked away for life. That is a rather important point to hang on to. It recognises that many women are not able both to have a pension and to save in addition to that pension. That is the crucial point. I should have thought that anything that could be done to help in that regard should be done and is obviously of particular importance to women. This is an imaginative idea that deserves study and I hope that the Government will give an assurance that they will at least think about it and examine its potential.

I share the view of the noble Lord, Lord Fowler, that the concept is a good one. The analysis is understood and shared and the objectives are laudable and fine. This may sound like a bureaucratic point of view from the Opposition Benches, but anybody who has listened to Mr Tim Jones of the Personal Accounts Delivery Authority will know that he is absolutely fixed with the notion that this has to be a quintessentially simple scheme without any kind of embellishments—I do not mean that in a derogatory way as I think this is a fundamentally important idea.

The Personal Accounts Delivery Authority is trying to keep the administrative costs to a minimum—I understand that the tax regime would not be that different because the provision for the lump sum is already there—and I cannot help thinking that this idea would make personal accounts more expensive to deliver. If this provision were as seductive as the noble Baroness sets out, lots of people might take advantage of it. Notwithstanding that I agree with the concept, might we not find that it would be so seductive that a lot of people would go for this and we might end up with a level of expenditure and administration behind the personal accounts that would put the whole scheme in jeopardy?

I do not want to base my case on the notion that I am against this idea because I think it would cost too much but I certainly think that, if it is a probing amendment, we should be very careful in looking at the background to the costs if we pursue this idea, as I hope we will, in further proceedings on the Bill.

Having listened to the noble Baroness, I am very attracted by this concept. As a probing amendment, it has that flexibility, which anyhow is reflected throughout the Bill and, indeed, throughout the Turner report, that makes life so much easier, particularly for women, who have this rather different lifestyle. I hope that it will be looked at very sympathetically.

I have a query as to how often this could happen for one person because presumably it would be tax free. If you went out and, if you were lucky enough to be earning enough, came back into the scheme and opted out again for another crisis, how often would this be allowable? If those queries can be answered, and with the support one hopes it would get from industry and commerce, it would indeed be a very interesting concept to float and to try to get some answers for.

In welcoming the opportunity that this amendment has given for a wider ranging debate than just the element of PADA, I once again declare my interest as a partner in the national commercial law firm of Beachcroft. I also have the honour this year to be president of the Chartered Insurance Institute.

I congratulate the noble Baronesses, Lady Hollis of Heigham and Lady Dean of Thornton-le-Fylde, on giving us an opportunity to debate this issue. Pensions have always been a poor fit for the risk and realities that women face. I very much welcome their support for what was an initiative by David Willetts in launching four years ago a consultation on the paper Towards a Lifetime of Saving written by the Conservative Research and Development Policy Unit. LiSA—the lifetime savings and pension account—is a new approach which is extremely simple, clear and flexible and supports both life cycle and retirement saving. It is very much a wrapper not a product in itself and, after the consultation last August, John Redwood’s Economic Competitiveness Policy Group report endorsed the idea of a flexible lifetime savings account.

I agree with my noble friend Lord Fowler that this in an interesting and valuable notion. His reference and the reference by the noble Baroness to the Section 401 scheme in the United States gives us an example of how one can turn the cycle of what has now become a system in which it is very easy to borrow but very difficult to save. That is one of the problems the Government are now facing in bringing forward the Bill. I agree, however, with the noble Lord, Lord Kirkwood of Kirkhope, that although the concept is good, we are a little concerned that it might make the objective of PADA and Mr Tim Jones more complicated. Although it is a very good idea, attaching what one might describe as bells and whistles to the concept might make it a little more difficult to introduce and delay its implementation. However, it is important to know where the Government stand on the idea. There is no doubt that the noble Baroness is right—something needs to be done to meet the particular circumstances faced by women as well as a number of other groups in society. It is easy to regard investment in a home as the opportunity to build up resources for retirement. Indeed, we have seen a shift towards greater emphasis on property investment in the main home rather than in a more flexible savings account.

We shall be dealing with the right to access tax-free lump sums when we come to the amendments on annuities. I do not really want to go down that road although John Redwood said in his Economic Competitiveness Policy Group report that it was essential to abolish the age requirement of 75.

The noble Baroness has given us an excellent opportunity to reflect on how we can ensure that the particular circumstances of certain groups, especially women, are met much more adequately and positively by new concepts and by moving forward in a way that will positively encourage the sort of saving that we would all like to see. I hope that the Minister will come forward with some constructive proposals in response to this most interesting debate.

This has been an interesting debate; the noble Baroness has done us all a service by raising this issue. The more I listen, the more I think about it. When she introduced this probing amendment she, very fairly, asked where the Conservatives stood on this. They are not exactly progressing very fast. I remember the major initiative by David Willetts four years ago—that is quite a long consultation. I was not quite sure, listening to the noble Lord, Lord Hunt, where the Conservatives stand, even though they are keen to hear where the Government stand.

I am a bit sceptical, to be honest. The noble Baroness has rightly highlighted the problem of poorer women in particular, but whether this is the right way to solve it I do not know. It raises the question of whether a revolving pension pot, which is what she is talking about, should enjoy tax relief. In principle, it also raises the question of whether the tax-free lump sum is ultimately defensible and is the best way of dealing with pensioner poverty. It is very interesting that this debate has highlighted that possibility; the noble Baroness might say that as long as you have the tax-free lump sum, you should be able to withdraw it.

The point made by the noble Baroness, Lady Howe, about amounts going in and out and complications arising is important. I agree with my noble friend Lord Kirkwood that anything that would complicate personal accounts or make them more difficult or costly to administer at this stage is not the right way to go. I am sorry to sound a bit ministerial, but I look forward to hearing whether the Minister will be more ministerial than me.

I congratulate the noble Baroness on raising this issue. There is a government interest in this in that the more they can extend the will to save and to provide for the future more widely than at present, the less in the long term will be the cost of supporting people later on.

I am all in favour of this savings initiative that will spread the breadth and practice of saving. The Minister should not be shy about the Government encouraging such things. Long ago, when the poor did not save, a government department, called the Post Office, introduced insurance for the poor and the Post Office Savings Bank. It had a good run and provided a useful service. Regrettably, on insurance, when the private sector showed far more enterprise than the Post Office, and did good work for the poor thereby, the secretary to the Post Office, when encouraged by colleagues to employ salesmen to promote his product, wrote:

“To recruit an army of ingratiating salesmen would not be compatible with the traditions and dignity of the Post Office”.

I say to the Minister, don’t have dignity—do the business.

I thank my noble friend for a typically thought-provoking contribution; I also thank all other noble Lords who have spoken in this short debate. I understand the basis on which the amendment has been moved; it is a probing amendment to get reaction to the concept, and I will seek to set out as clearly as I can the Government’s position.

As my noble friend explained, the amendment proposes to allow individuals to access their pension savings, as a tax-free lump sum, at any point before they retire in order to encourage more individuals to participate in pension saving. I am sympathetic to my noble friend’s concern that some individuals, particularly the low paid and women, may be reluctant to commit to saving in a pension because their money would be “locked away” until their retirement. I was interested in what my noble friend said about less emphasis on smoothing income from women who are in work to retirement, and should like to reflect further on that component of her contribution. However, from a policy perspective and an operational viewpoint, this proposal goes against the underlying principles of reform at a time when it is paramount that we make pensions simpler and clearer.

Pension saving in the UK is privileged through the tax system. Tax relief is worth up to £17.5 billion per annum. The Government provide generous tax relief to support pension saving and are able to do so because pensions are less flexible than other saving products. Tax relief in pension saving is not provided to support pre-retirement income, asset accumulation or inheritance. The trade-off for individuals making pension contributions is that from the age of 50—or 55 from 2010—they can get a tax-free cash lump sum of 25 per cent of their pension fund as well as an income in retirement. That is the deal—saving for retirement is a long-term investment. I acknowledge my noble friend’s point that access to the tax-free lump sum does not have to be accompanied by retirement or indeed by a pension at that time, but I suggest that it is the start of the decumulation process. The age has been changed from 50 to 55 because at age 55 it was increasingly difficult, given longevity, to sustain pensions. Given the demographic pressures facing the UK and a tendency by individuals to underestimate their longevity, increasing retirement incomes is very important. It is the central objective of all our reforms.

Allowing individuals to withdraw some of their funds prematurely could not only undermine the purpose of providing tax relief for pension saving but reduce individuals’ income in retirement. It may also increase the risk of reliance on means-tested benefits in retirement.

In addition to this fundamental objection to the proposal, I am concerned about the practical implications and repeat what others have said. Any pension schemes used under the employer duty would have to absorb the costs of this extra functionality, particularly if access were to be restricted to prescribed circumstances. That might involve costly changes to scheme rules and there would be additional processes around transactions, payback periods, deciding on the reasons for access, verifying those reasons for access, pursuing outstanding funds, and so on. This would lead to greater costs for employers or scheme members depending on how the scheme administration was paid for. This is not just an issue for personal accounts. If you had this facility, you could not just focus it on personal accounts, and how it would work for a defined benefit scheme would be a particular challenge.

“Campaign” may be putting things too strongly. First, I thank noble Lords. I am grateful for the range of contributions; they were thoughtful and helpful. Perhaps I may comment on the concerns that people raised over and beyond the support from the noble Lord, Lord Fowler, and my noble friend Lady Dean. The noble Lord, Lord Kirkwood, said that PADA offered essentially a simple product, a point reinforced by my noble friend the Minister, and that this amendment might add bells and whistles that would make it more expensive to deliver. I accept that it would make what is currently a simple product more complicated. My argument is that it would make it more attractive and would produce greater staying power and robustness in the longer term as a result.

Much of my noble friend’s speech seemed to miss the point: “Pensions are for retirement; therefore retirement savings are for retirement”. Yes, we know that. The problem arises when people feel that they cannot afford retirement savings because they may face a higher risk in their pre-retirement age. How do you manage to persuade them not only to auto-enrol, which I think they will do, but to continue to save at points of crisis? The alternative may be to go for high rates of debt, rates of 15 per cent or 20 per cent, when the CAB will say, “Stop making your pension contribution”. My noble friend has not begun to think about how we keep women in auto-enrolled schemes when the first financial crisis begins to hit. They will auto-enrol—inertia will see to that—but they will not necessarily stay in. Currently, half of all women drop out of a pension scheme on the birth of their first child. It will be even higher with auto-enrolment because they did not make a conscious choice to join in the first place, unlike today's schemes.

I heard what the noble Lord, Lord Hunt, said, and I thought that his words were very elegantly phrased. He said that pensions were “a poor fit for the risks and realities that women face”. One of those risks and realities is the rollercoaster of risk through lone parenthood and financial problems. A product such as this would simply add a top slice of liquidity to a pension pot. That is all that it is doing. We have that top slice of liquidity now and it is called the tax-free lump sum. It is already divorced from pensions and payment. You can take it at 50 though you may not take your pension until you are 75. All I am trying to do is to remove the age bar.

I accept that that complicates the product and that PADA would therefore not want it now. I accept that without industry support it will not go anywhere, and I accept this may be an appropriate subject to return to in the 2017 review if, as I hope, industry and Governments of any and all persuasions follow this through. But I think that we will have a problem of staying power with auto-enrolment when women hit their first financial crisis and cannot access their savings. This product might help to keep them in when otherwise they would opt out. As for how often, I would not put a limit on the circumstances in which you could access the funds. That would be unnecessarily intrusive, as my noble friend suggested. You might wish to limit the number of times you could access them in order to keep the tracking mechanism simple, but I would not want to prescribe the circumstances.

As I say, I think that my noble friend missed the point. He talked about how much we have done for women’s income in terms of the changes in pensions in retirement. That is precisely my point. Women will do relatively much better in retirement as a result of all the changes that the Government have made. But we have not helped them fully to address the risks pre-retirement. If we do not, that may damage the very agenda that my noble friend has for post-retirement issues. There is still a failure of mindset to engage in the risks and realities for women which the noble Lord, Lord Hunt, described.

This may not be the right solution and I do not expect industry to be enthusiastic. Why would it be? This would be a product sold to very poor women, with poor returns. The Government should realise that, if women have to choose between current rainy-day savings or money in an emergency and longer-term pensions, most women—and there is plenty of DWP research to support this hypothesis—will cut back on pension saving. They, and we, will be the poorer as a result.

I have said enough. I am grateful for noble Lords’ contributions to this short debate. I hope that my noble friend will take this away. I would like to see the department beginning to carry out some research on this, possibly on an all-party basis, to see whether there is a market and a need and whether it is structurally viable. Some time down the road—and I take the point about DC schemes, DB schemes and all the rest, so it is a longer-term haul—if the Government are so minded, when we come to the review in 2017, perhaps such a project could be added to the Bill that will be winding its way through your Lordships’ House. Under those circumstances, and again with gratitude for the contributions, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 16 [Automatic enrolment schemes]:

moved Amendments Nos. 54 and 55:

moved Amendment No. 56:

Notwithstanding what the Minister said I should like to speak briefly to Amendment No. 60 in this group in the name of my noble friend Lord Oakeshott and myself and Amendment No. 78 in the name of the noble Baroness, Lady Greengross. As the Minister said, the amendment continues the debate about the quality criteria for workplace pension schemes, both money purchase schemes and personal pension schemes. In particular, it is important that workplace pension schemes should be low-cost, have no transfer penalties and have an appropriate choice of funds, including a good default option. The amendment would ensure that total employee and employer contributions in workplace pension schemes, net of all costs and fees, will be at least equal to the level of default contributions in personal accounts. It is worth noting that the Pensions Commission’s second report recommended that auto-enrolment into an employer DC scheme—I think that the Minister alluded to this—should be permitted if,

“the employer's contribution is at least the same level or greater than the minimum compulsory match in ... Personal Accounts, or if the combined employer and employee contribution exceeds the combined level in the scheme, taking into account the level of charges”.

This amendment is supported by, among other groups, Which? and the Equality and Human Rights Commission. I look forward to further comments from the Minister.

I support this amendment, to which my name is added, and would also like to speak briefly to Amendment No. 78. As we know, the amendments seek to ensure that auto-enrolled pension schemes meet additional quality criteria beyond the 3 per cent. I am pleased that the Minister has brought forward his own amendments on this important issue. Much of what I want to say has been covered in the debate, so I welcome the Government’s recognition that they must take account of the quality of workplace pension schemes if workers are auto-enrolled into them. Now that the European Commission has provided reassurance that auto-enrolment does not break the distance marketing and unfair commercial practices directives, the Bill has already been amended to enable this to happen.

Before I turn to the other amendment, perhaps I may briefly say something about levelling down. We have read quite a lot in the media over the past few days that personal accounts could represent a threat to existing pension provision. I do not think that that will be the case. It would be very serious if it were the case. It is certainly an unfortunate and bad message to be promoted. It could mean that employees—the very people we are trying to help to improve their pension provision—lose confidence in personal accounts before they have begun because of negative media coverage.

It is suggested that employers will level down their contributions to 3 per cent, the minimum required by personal accounts, or, even worse, stop providing pensions for their employees altogether. I am not sure why they would do that as a result of this Bill. I cannot understand that. My view is that the threat of levelling down could be one that we have to face in any event. But the threat is not created by this Bill or personal accounts, because employers can reduce pension benefits. As we know, regrettably, some have done so. It is one of the reasons why my noble friend Lord Turner was asked to chair his review and why he recommended what have become personal accounts. It would be a strange unintended consequence if the very thing that the commission recommended was the cause of declining pension provision. I very much hope that rather than levelling down, employers will increase pension benefits for all the reasons that we are debating the Bill, such as taking into account rising longevity.

Just prior to Second Reading I hosted a briefing session on the Bill on behalf of the People’s Pension Coalition which was attended by all the major stakeholders and many noble Lords, including the Minister. I recall that my noble friend Lord Turner—I send him my congratulations on his new role—argued that personal accounts were carefully targeted at those who make little or no pension saving or have no access to a good employer scheme. We know that this is the group that is currently not well served by the pensions industry. I therefore see personal accounts as an add-on to existing provision, not a threat.

That is relevant to my other amendment because the threat, if any exists at all, may turn out to be to personal accounts rather than to existing schemes. I assume that auto-enrolment into workplace pension schemes will reduce the number of people who would otherwise have become members of personal accounts. That is a debate for another time, but can the Minister tell me what impact it may have on PADA’s planning assumptions? This matters because auto-enrolment into workplace pensions means that the existing non-occupational contract-based providers are likely to get many new members without much, if any, effort at all—probably at zero marketing cost. I support that, as have all the main stakeholders; they all recognise that this should increase pensions saving.

As Members of the Committee will know, the stakeholders wrote to the European Commission to support auto-enrolment and the broad thrust of the Government’s pension settlement following the Turner commission. I have seen a copy of that letter, which said:

“It is important to ensure savers get a fair deal. The legislation currently being discussed by the UK Parliament (the Pensions Bill) gives the UK Government wide powers to establish a quality threshold that can effectively protect consumers. The Government has committed to consult and seek consensus from all the stakeholders, including the Financial Services Authority, about this”.

The amendments with my name to them were tabled to ensure that this happens and that the other schemes into which consumers may be auto-enrolled are at least as good as personal accounts. We do not want employees enrolled into high-charging schemes with poor investment choice and unfair transfer penalties.

The wording of my Amendment No. 80 is carefully chosen. The words are used by the Pensions Commission itself. On page 306 of its second report, it recommended that auto-enrolment into an employer DC scheme should be permitted if,

“the combined employer and employee contribution exceeds the combined level in the scheme, taking into account the level of charges”.

The “scheme” now means “personal accounts”. This was an implicit acknowledgment of the negative impact of charges. Yet the Bill is silent on what additional quality criteria there should be, although I know that the Minister has spoken on that. We do not want to go back to the bad old days of high-charging, poorly performing and ineffectively governed private pensions, especially if workers have not really chosen to join them but have been auto-enrolled.

I know that the Minister will be unable to accept the amendment, but I hope that he will accept the principle. The reassurance that we sought was that a comprehensive survey of existing workplace personal pensions will take place—the Minister has said that there is one—and that they will be monitored by the Government in the run-up to 2012, with the involvement of the FSA and the Pensions Regulator. The Minister has indicated that the Bill will allow the Government to make regulations to set additional quality criteria if that is necessary, as I think it may well be.

I support both Amendments Nos. 60 and 78 and the arguments put forward by my noble friend Lady Thomas and the noble Baroness, Lady Greengross. In confirming the noble Baroness’s fears over some of the levelling down, the important PricewaterhouseCoopers report, reported in the financial pages of today’s Guardian, is significantly worrying to me. Although colleagues across the Committee are accustomed to the trend of closing defined benefit schemes to new employees, the report clearly demonstrates that 16 per cent of participants have closed their DB schemes to future accrual by existing members and that another 11 per cent expect to do so. That is a worrying degree of change in a short time and I hope that the Government are actively considering it. It supports the argument and adds detail to the important points made by the noble Baroness. I hope that the Government have something to say on that trend, which, if sustained, will be extremely worrying.

However, having listened to what the Minister said, I am particularly concerned about the impact of Amendments Nos. 60 and 78 on small—I mean small—enterprises: the kind of businesses that are the mainstay of the economy of my home region of south-east Scotland, in the Borders. If the Government are doing this work—I am glad that they are—can we have some assurance that specific parts of it will address micro-businesses and not just small enterprises in the normal sense of the phrase? The Minister was reassuring in that he said that this work is being done. My worry is that most of his approach addressed much bigger enterprises and companies of a scale that are more realistically able to limit administration costs. I am thinking of family businesses with five or six employees, maybe 12 at most. I hope that, in any work that the department does in investigating these important matters, it has a special section that satisfies itself that the condition applying in those circumstances will be adequately addressed, as well as the conditions for the bigger, more professional schemes with teams of accountants who can more easily deal with these things administratively.

I shall make a brief response. The noble Baroness, Lady Greengross, hopes that levelling down will not occur. We will return to that as we go through our Committee stage. Certainly, some of the evidence that is starting to come from organisations such as the ABI shows that employers are increasingly concerned about how compliance with the personal accounts scheme—we will come to this again, probably later this evening—and how definitions work in the current scheme are pushing them towards levelling down, because it is too much like hard work to comply. We will return to that theme. We cannot regard it as an idle threat. It is a real problem, which we must bear in mind.

The Minister prayed in aid his friend flexibility when he introduced his amendments. I hope that flexibility will not accompany him to the Dispatch Box for every amendment that he moves today, but we shall see.

I have one comment on the amendments on charges that the Liberal Democrat Benches and the noble Baroness, Lady Greengross, have spoken to. When the Pensions Commission report came out, there was a great focus on charges. A criticism of the report was that charges are just one side of the equation and that the report did not look at returns. If we simply concentrate on whether charges are higher or lower than the eventual level in the personal accounts scheme—we do not know what that is, or whether we will achieve the aspiration of 0.3 per cent—and do not look at returns, we will mislead ourselves. Looking only at the charging levels is a narrow approach to comparability. I accept that charging can have a big impact on net returns if gross returns are equal between investment opportunities, but they are not. I therefore hope that that will be taken into account when those who have tabled these amendments consider what to do with them.

The noble Baroness, Lady Noakes, should accept that charges are exceptionally important in the case of personal accounts. Almost by definition, personal accounts will be a simple—I expect an index-tracker—type of product. Uniquely—this applies more for personal accounts than for any other form of investment medium—charges are critical. Returns obviously matter, but charges are particularly important for personal accounts.

I thank all noble Lords who have contributed to the discussion around the amendments. I think that we agree that the level of charges is an important component in making sure that auto-enrolment and personal accounts work. I confirm to the noble Baroness, Lady Greengross, that the power that we are taking in our amendment will provide the flexibility to address that issue if our research shows something untoward or difficult in how charging is undertaken in workplace personal pensions. The issue has not reared its head as a problem thus far, but we need to do the research in relation not only to that but also to how default investments work. We need to address that, which is the purpose of the government amendment.

The noble Lord, Lord Kirkwood, said that he hoped that we would focus particularly on micro-businesses. The research is focused on industry practice around these products and opportunities, although I take the point that the issue of how industry practice relates to different sizes of business should be covered.

The noble Baronesses, Lady Greengross and Lady Noakes, and the noble Lord, Lord Kirkwood, referred to levelling down. That is an important issue. Our reforms are designed to complement and not to replace existing employer provision. A number of key measures will help to focus the personal accounts scheme on those without access to existing pension provision and to discourage levelling down. These will include a ban on transfers between existing pension schemes and personal accounts, as well as an annual contribution limit for the personal accounts scheme, which was set at £3,600 in 2005 earnings terms. Employers with existing good schemes will be encouraged to continue offering them via a straightforward qualification test, which we will discuss shortly. New minimum contribution requirements will be phased in over three years. PADA must have regard to the impact on existing qualifying provision.

Our research shows that most employers with good schemes support our reforms and that the majority, particularly the larger employers, plan to maintain their schemes at current levels. However, we are not complacent and we need to continue to track employer attitudes and likely reactions to the reforms as we move towards 2012. There is a worldwide decline of DB schemes for reasons that we have discussed on a number of occasions. We have taken care to ensure that qualifying tests for DB schemes are workable. We have also put in place phase-in arrangements.

It is too early to say precisely what the charging structure will be for personal accounts and what levels can be achieved. PADA does not yet have the full authority—I hope that it will do as a result of the Bill—to complete its work in designing the scheme to engage with providers of various services. It has launched consultation on how charging might take place, so that is very much work in progress. Personal accounts were predicated on low charges, because over the lifetime of a pension scheme they can make a significant contribution to the end result, as can investment policy. I hope that noble Lords will feel reassured and not press their amendments, because we are taking a power to deal with the issues on which we have focused.

On Question, amendment agreed to.

moved Amendment No. 57:

moved Amendment No. 58:

moved Amendment No. 59:

Clauses 19 and 20 set out the quality requirements for UK-administered money purchase and defined benefits schemes acting as qualifying and auto-enrolment provision under the employer duty.

Amendments Nos. 59 and 66, spoken to by the noble Lord, Lord Skelmersdale, would extend the scheme quality provisions to include qualifying money purchase and contracted-out defined benefit pension schemes administered anywhere in the world. It is very much our intention to enable employers who wish to use occupational schemes based outside the UK to do so under the duty, provided they meet the necessary regulatory and quality standards.

However, while we are confident that all UK schemes fall within the categories of defined contribution, defined benefit or hybrid schemes, we cannot make the same assumption about schemes based elsewhere. It is possible that overseas schemes will have different benefit structures that will not be assessable against the quality requirements we have put in the Bill. Given the potential diversity of occupational pensions arrangements around the world, it is not possible to set out global standards in the Bill. That is why we have taken regulation-making powers, at Clauses 16 and 24, to set out additional regulatory and quality requirements for overseas schemes and to respond should new types of scheme emerge in the future.

The noble Lord asked about contracting out. The commitment to abolish contracting out is to be introduced by the end of the next Parliament. In the event this did not happen before the duties came into effect, we need to ensure that contributions in contracted-out money schemes are appropriate. However, there is no intention to change contributions through primary legislation. I may need to come back to that point after reading the record. As regards the point the noble Lord raised on Clause 17 and occupational pension schemes, he is right that an occupational pension scheme is defined under paragraphs (a), (b) and (c) of that clause. Paragraphs (b) and (c) concern those administered elsewhere than in the EEA and those that come within the IORP directive. Incidentally, as regards the point about drafting and the terminology, we shall wish to consider whether this is appropriately described.

I direct the noble Lord to Clause 24, which states:

“The Secretary of State may by regulations make provision as to the quality requirement to be satisfied in the case of an occupational pension scheme within section 17(b) or (c)”.

Therefore, we are dealing with occupational schemes here, not personal pensions. Clause 24 picks up the point about schemes that fall within Clause 17(b) and (c).

I should like to reflect on the issue that was raised about contracting out and what that means in terms of contributions and write to the noble Lord as I am not sure that my explanation was particularly coherent. I hope that that enables the noble Lord to withdraw the amendment at this juncture, but if he is not satisfied he can return to it at a later stage.

I am very grateful to the Minister. He will be relieved to hear that this is one occasion when I approve of flexibility. Therefore, I do not intend to seek the Committee’s opinion on the various matters that I set out.

The Minister said that he would write to me. I am very willing to accept a letter, which may result in a little chat with some of his advisers. I have no doubt that as we go through the Bill other matters will arise on which a little chat will be desirable and save a lot of time. He said that the commitment given during the passage of the 2007 Bill, now the Pensions Act 2007, concerned the alterations to be made to contracting out by the end of this Parliament. This Parliament probably has another two years to run. As the Government are determined to do this, I can see no good reason why they should not do it in that time, but perhaps the Minister’s letter will answer that point. I rather hope that it will.

The other matter concerns the regulatory requirements for those schemes registered in jurisdictions that are not in an EEA state. I hope that the Minister’s letter will also respond to that point. I cannot take this matter any further tonight and the Minister is devoid of ideas in that regard. Therefore, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 60 not moved.]

moved Amendment No. 60A:

I indicated where we stand in general on these amendments in my comments on Amendment No. 42 on the previous Committee day, so I do not propose to say much more at this stage. I reiterate how grateful I have been for the representations and meetings that we have had with people such as the EEF and the NAPF and providers such as Norwich Union, Scottish Widows and Standard Life. They make a fair point. I quote the Norwich Union, saying that accepting fluctuating contributions, including bonuses and overtime,

“is not standard industry practice and would therefore increase the costs of running pension schemes by tens of millions of pounds, reduce returns for savers and add complexity to employers’ decision making and administration”.

The response that we heard at the end of the previous Committee day did not encourage me that the Government were thinking hard enough about how they could deal with these points and ensure that unnecessary costs were not imposed on good quality existing schemes.

I do not share the rather extreme concern of the noble Baroness, Lady Noakes, who asked whether the Government were set on the destruction of the remaining vestiges of defined benefit pension schemes. That is rather alarmist, and if the Government are having that effect it is by not really thinking things through properly. I do not think that it is deliberate. This is a genuinely difficult problem on which we all need to work together to find a solution. Again, I stress that I thought the People’s Pensions Coalition had some good points when it was concerned to maximise the effective employer contribution in schemes, particularly for lower earning employees who are obviously most at risk. If they do not build up their pension enough, they will fall into the means-test trap.

I am sorry if I sound rather on the one hand and then on the other, but these are genuine points. Grandfathering is a possibility but I am afraid—this is where we are lucky that there will be several months between the Committee stage and Report—it is incumbent on the Government to think long and hard, and to come up with some limits themselves. We would much rather that they did that. I do not know the answer but I know that the Government do not have it right yet.