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Lords Chamber

Volume 706: debated on Friday 12 December 2008

House of Lords

Friday, 12 December 2008.

Prayers—read by the Lord Bishop of Carlisle.

Dog Control Bill [HL]

First Reading

A Bill to make provision about the control of dogs and their welfare; and for connected purposes.

The Bill was introduced by Lord Redesdale, read a first time and ordered to be printed.

EU Legislation (EUC Report)

Motion to Take Note

Moved By

That this House takes note of the report of the European Union Committee on Initiation of EU Legislation. (22nd report, Session 2007-08, HL Paper 150).

My Lords, this report follows an inquiry undertaken by Sub-Committee E, which I chair. All going well, as I think I should say, I shall be the last serving Law Lord to have that privilege and pleasure. Our day-to-day work is the scrutiny of European legislative proposals so that the Government, when negotiating them, should take full account of the views of the national legislature. We also undertake inquiries on topics of particular interest. On the sub-committee’s behalf I thank all those individuals and organisations who contributed to the present inquiry. I thank the staff who supported the sub-committee as always so valuably and the members for their energetic contributions.

The formal process by which European legislation is enacted is probably well known, set out in the treaties. Leaving aside obvious crises, such as the present financial turmoil or the events of 9/11, the impetus to legislation is not always so clear, and we thought it merited research. The noble Lord, Lord Triesman, estimated in this House in January 2006 that about half of all UK legislation with significant economic impact had European origins. Our aim was to lift the veil to some extent from the process of initiation of proposals.

The first consideration is: who does that? The second is: what influences them to do so? The third is to ascertain what processes are in place to check that proposals are appropriate and to determine their character. The fourth is to consider what processes there are to ensure that legislation is easily applied or transcribed. The primary European legislator is the Council of Ministers acting under the First Pillar in co-decision with the Parliament, but neither initiates. The unique feature of Europe is the Commission’s monopoly right of initiative in the First Pillar. Only under the Third Pillar can member states also propose. The Council and Parliament from time to time have sought to oblige the Commission to bring forward proposals—for example, by writing into legislation that this should occur—but the Commission has steadfastly refused to be bound.

Who or what then influences the Commission? Are the stimuli internal or external? The Commission acknowledges that a system has emerged where legislation results from a complex interplay of different actors. We heard differing views about the extent to which the Commission’s own role and internal culture might unduly encourage European legislative proposals. The Minister for Europe detected continuing proactivist instincts, but the noble Lord, Lord Brittan, was confident that no premium attaches to a staff member who encourages an idea at the expense of practicality. The noble Lord, Lord Kinnock, believed that there had been a genuine shift towards an approach based on less is better and self-regulation. We recently reviewed a report on the future of European justice policy which has indeed the flavour of consolidation not innovation.

Both Council and Parliament increasingly influence the areas on which the Commission focuses, although they cannot bind. The Commission has undertaken to respond rapidly and appropriately to requests for proposals from either. Both have in practice often set overall strategy or general policy which the Commission has implemented. Five-yearly and annual strategies and plans are increasingly co-ordinated between all three institutions by structured dialogue. However, all three, and especially perhaps the Commission, are very open to external stimuli. They operate in Brussels in a context of highly active lobbying and also after considerable consultation. Lobbying by pressure groups is to be distinguished from consultation with interested parties. Both are useful and both, above all, need to be transparent.

The European Parliament recently estimated that there are about 15,000 lobbying individuals and 2,500 lobbying organisations active in Brussels. Since 1996 the Parliament has had a de facto mandatory requirement for individual lobbyists to register in a publicly open register if they are to get an entry pass into the building. The Commission, in contrast, has only just introduced a voluntary register, in June 2008, with a code of conduct and a commitment to review it after a year. The committee in its report doubted the adequacy of this voluntary register. Since June 2008 it has apparently had a relatively slow take-up, particularly among the large law firms that count among the active lobbyists and among think tanks. Perhaps it is still early days.

The committee was rather surprised to find that the European Union provides financial support for NGOs and think tanks, which then engage in lobbying the Commission. This involves some risks, but we were reassured that where such funding is received, it represents a relatively small proportion of the NGO’s total revenue and that NGOs in receipt of it have not been afraid to bite the hand that has fed them. Again, the key is transparency. We concluded that EU funding could assist to ensure that all viewpoints were represented and might be justified if transparent. The present register asks for disclosure of any such significant funding but, again, it will work only if all relevant NGOs sign up or it becomes compulsory.

Consultation is key to ensuring that legislative proposals are both necessary and appropriate in their character. Commission consultation may not always have been as effective as it could have been. Workshops on the common frame of reference, a project of varying aim and direction in the field of contract, in which I participated personally as a judicial stakeholder, pointed to a considerable need to learn lessons in that direction. The Secretary-General to the Commission accepted that working with large groups of stakeholders was, to quote her, “a voyage of discovery” and required the Commission to learn some new skills.

The committee’s report underlines the need for proposals to take account of differences between legal systems. The common law is one of the world’s great systems and is chosen and applied by businessmen internationally with London as a legal centre and a forum of choice but, in European terms, the common law is a small minority. There are potential differences in approach to the role and content of law and the function of courts, particularly in commerce and business, but also in areas of family, succession and criminal law. These differences need to be communicated in Brussels. The Commission, in establishing a forum of stakeholders to look at proposals in the justice field, insisted that only pan-European organisations be represented. That had the incidental effect of excluding any common law professional body. The Secretary-General assured us that, in principle, the Commission tries to involve someone with a common law background in its projects, and it is welcome that the recent expert group on the future EU justice programme, which I mentioned, has an Irish representative of the common law.

The United Kingdom’s Ministry of Justice is also to be commended for recently inviting a dozen commission lawyers to this country on a two-day visit. I believe that that was valuable to both sides, and I should like to think that it demonstrates the common law’s wish for constructive engagement with Europe. The common law also needs to continue to be represented in the Commission at every level by lawyers posted or seconded there. Government assurance of support for this, particularly at the active junior level, would be most welcome.

Impact assessments are critical to ensuring that legislation is necessary and appropriate. They should not be seen as ex post facto justifications for decisions already made. In the past, general assertions of relevance to the internal market have probably sometimes passed muster without question, but that will no longer do. In 2006, the Commission set up an impact assessment board within the General Secretariat to assess the quality and sufficiency of impact assessments. The committee welcomed this, but believes that some parts of the Commission are still more advanced than others when it comes to preparing good quality assessments. However, one has to say that this is an area where member states do not practise what they preach. Third Pillar proposals by individual member states are noted for their lack or the inadequacy of impact assessments.

The final stage of any proposal is its drafting. The committee has concerns about the drafting of some proposals. Drafting is done by commission lawyers handling the proposal. The legal service of the Commission is formally involved only at a late stage. The committee considers that consideration should be given to introducing a cadre of specialist legislative drafters along the lines of the United Kingdom’s domestic parliamentary draftsmen. On 30 September, the Government wrote welcoming the committee’s report and analysis and indicating broad agreement with many points we made. They regarded our proposal for a specialist cadre of drafters as interesting, and we await their response to our question about whether they will actively promote it.

As to the Commission’s role and right of initiative, the committee’s conclusion was that they had devolved as the European Union’s legislative system has matured. The history of the Third Pillar signals caution about breaking the Commission’s First Pillar monopoly. The committee would not go all the way with the noble Lord, Lord Brittan, in describing the present institutional arrangements as an act of genius, but the right of monopoly was designed with care and operates within a framework of checks and balances, and we concluded that it remains appropriate for the unique, multinational organisation that the EU is. I beg to move.

My Lords, it is a great pleasure for me, on behalf of your Lordships’ House, to congratulate the noble and learned Lord, Lord Mance, on his maiden speech and his clear and informative explanation of the purpose, key observations and conclusions of the report on the initiation of EU legislation. Command of the English language, which manifests itself in an ability to make every word count in speeches that flow seamlessly from one point to the next so that the whole is a focused, cogently argued and persuasive case, is a priceless skill that one associates with eminent and distinguished noble and learned Lords. The noble and learned Lord, Lord Mance, has shown in his speech that, as I am sure we all expected, he is no exception.

I am a member of the European Union sub-committee involved in the report that we are considering, and the noble and learned Lord, Lord Mance, chairs that sub-committee with great skill and authority. His wife is also a distinguished and eminent judge. They were the first married couple both to sit on the High Court Bench and the first and, I believe, still the only married couple both to sit in the Court of Appeal. The noble and learned Lord became a member of your Lordships’ House in 2005, on his appointment as a Lord of Appeal in Ordinary. It has been our loss that the self-imposed constraints that limit the occasions on which Law Lords address your Lordships’ House have until now denied us the opportunity of hearing from the noble and learned Lord. We very much hope that there will be other occasions when we will have the benefit of hearing from him.

The noble and learned Lord has drawn our attention to the key observations and conclusions in the report. I await with interest my noble friend’s speech, in which I assume that he will talk about the Government’s response. However, I shall confine my contribution to a few—“few” is the operative word—general observations and impressions.

My key feeling, having heard the witnesses and read the written evidence, is that the process by which ideas are transformed into legislative proposals is very much collective. The Commission is the body with the near monopoly of power to submit proposals for adoption as EU legislation but, as witnesses said to us and as the report indicates, it does not have the monopoly of ideas. The Commission was given the power that it has as the body representing the collective interest of the European Union and able to act impartially in that general interest. That may not always be the approach of a member state, which may consider issues with its own interests uppermost. The Commission is also the guardian of the treaties and the enforcer of the law and it follows through the policies adopted by the Union. It has to assess and cost ideas and consult on them and form a view on the level of support or otherwise among member states.

However, the Commission does not work in a vacuum. There is little point in the Commission putting forward proposals that are unlikely to find favour in the Council of Ministers and the European Parliament because, although the Commission can propose, it cannot enact any required legislation. The wishes of the European Council, the European Parliament, the Council of Ministers and the individual member states are a key source of Commission proposals, which come forward as draft legislation.

Of course, those wishes may at times be expressed in very general terms, which gives considerable scope and influence to the Commission in developing and proposing the form and manner in which those wishes and general ideas may be implemented. It would also be true to say that, with the small army of lobbying organisations in Brussels, to which the noble and learned Lord, Lord Mance, referred, pressing their particular and varying viewpoints in addition to the member states, the Commission can probably claim that just about any proposal that it decides to make reflects at least some representations made to it and that it is not simply a new initiative from the Commission alone.

However, I formed the view from the evidence that I heard and read that the Commission did not seek to impose its views and thinking on unwilling elected politicians, but rather sought to listen to the views of a wide variety of organisations and interests and to put forward proposals for legislation that were likely after consultation and, yes, compromise to attract support from the elected legislators.

In short, ideas incorporated in proposals for legislation from the Commission come from a wide variety of sources and the extent to which elected politicians, through the Council of Ministers, the European Parliament and member states, want to be the key players in originating and pressing such ideas into legislation is a matter for those elected politicians to decide and determine. Perhaps they should seek to play a bigger role, because the processes and procedures are there—and would be even more so under the treaty of Lisbon—to enable them to be the key players in influencing and shaping what the Commission proposes, in addition to being the ultimate arbiters in determining what proposals become EU legislation.

My Lords, I, too, as a member of the Law and Institutions Sub-Committee, thank the noble and learned Lord, Lord Mance, for his comprehensive explanation of and introduction to the report. Whatever the merits of the constitutional changes that we are facing, it will be a considerable loss to your Lordships’ House that a serving Law Lord will no longer be able to chair that sub-committee of the European Union Select Committee. Although the subject of the report may sound dry to some of your Lordships—and, I am sure, to the media, who have probably given little or no attention to the report—it makes interesting reading and should be compulsory reading for those who still believe that the European Union is a conspiracy led by non-elected Commissioners and their officials.

Previous speakers have addressed a number of the most important points, but I make no apology for emphasising some of them. First, the Commission may enjoy a near monopoly of the power to initiate legislation—the only exception, as the noble and learned Lord, Lord Mance, said, being matters under the Third Pillar, which is a relatively small part of European Union legislation, although very important, and, it has to be said, not terribly successful, where member states have had the right of introduction. The Commission nevertheless has the power to propose but not, as the report describes it, the power to dispose. That rests with the Council of Ministers—that is, the member states—and with the Council and the Parliament.

As the noble Lord, Lord Rosser, said, it is clear that, although the power to propose legislation is important, it is not exercised in total isolation. The European Council, the Council and the member states, especially through the medium of the presidency, have an influence. They have their programmes and produce conclusions. Although the Commission may not be bound to bring forward legislation in the light of conclusions, it does not act in a political vacuum and account will be taken of the ambitions of member states. The noble Lord, Lord Rosser, referred to the general terms in which the European Council may propose action. I suggest that, if the Commission interprets those general terms too widely, it is to the European Council—that is, the member states—that your Lordships should direct their criticism for not having been sufficiently specific.

It was surprising to learn in the evidence that we received from Sir Kim Darroch that, in his memory, the Council has only once used Article 208, which gives it the specific right to request the Commission to bring forward legislation. Perhaps that is because the Commission is sufficiently sensitive to political realities, so that the article does not need to be used. The Commission recognises that Council conclusions represent the collective and decided view of the Council—that is, and I do not apologise for emphasising this again, the member states, with all that that implies.

I also draw attention to our conclusion that the Commission operates in a very open fashion, perhaps more open than in our domestic procedures. The procedures followed before legislation is published and when a draft is produced provide considerable opportunities for interested parties to influence events. I suggest that parliaments need to ensure that their procedures enable the maximum benefit to be derived from that openness and from the Barroso initiative, which sends Commission documents direct to national parliaments. Of course I understand the difficulty in finding time and the right ways in which Parliament can make its views known at the right time on these issues, but it is a matter that clearly needs to be addressed as more legislation, in ever larger and more significant areas, comes forward. In your Lordships’ House, the main vehicle is the European Union Select Committee, but there may be times when the views of the House should be sought. The opt-ins and opt-outs on justice and home affairs matters are obvious candidates if the treaty of Lisbon comes into force.

Are there any lessons that we could learn from this report? I believe that the most important ones are to stop perpetuating to the British people the myth that the Commission is the sole arbiter in these matters, to understand that the right of initiation is not the right of disposal and that different vehicles exist for member states and citizens to make their views known on particular proposals and, indeed, to press for the introduction of measures. The member states have the opportunity to do so through the European Council and the Council; citizens have the opportunity through the lobby groups that have been referred to and through their Members of the European Parliament; and national parliaments have the opportunity if they take advantage of the information that is out there and ensure that they make their views known at the earliest time directly and through their national Governments. This may involve changes to how we carry out our business, but if we do not do it, others will. Brussels is not a secret society, but we must engage with it and not merely sit on the sidelines complaining after the event when we could have had some effect before the event.

My Lords, I, too, congratulate the noble and learned Lord, Lord Mance, on his maiden speech. It was of the excellence that all members of Sub-Committee E have come to expect of him, and it has made a singular contribution to the work of the European Union Select Committee.

I shall deal with one or two aspects of this excellent report, particularly those that relate to the Commission’s sole right of initiative. This so-called sole right of initiative is so frequently misdescribed, not least by UKIP members in your Lordships’ House, as the unelected bureaucrats of Brussels who are wagging the dog by the tail. Yet, in practice, we do not see the mythological creation in the minds of UKIP members—the idea that somehow legislative initiative is the Commission’s ball and that it will determine the rules by which all the games will be played. That is described quite clearly in the report as being far from the truth. It is arrant nonsense, and it is well debunked by the evidence that we had in formulating the report, especially the very detailed evidence that came from two former European Commissioners who are Members of your Lordships’ House—the noble Lords, Lord Brittan and Lord Kinnock.

Arising from the evidence of the noble Lord, Lord Kinnock, is the report’s very interesting Table 1, on the exercise of the Commission’s right of initiative and where the focus of the demand for legislation came from. The total proportion of EU legislative proposals that come under the category, “Adaptation of Community law to the development of scientific, economic or social data (of which 15 per cent are also responses to requests from other EU bodies)”, is 35 per cent. Under the category, “International obligations entered into by the Community”—the sort of things that Members of your Lordships’ House are always demanding of the Commission—we await a conclusion to a Doha round, which is the responsibility of the Commission to conclude on our behalf, and when we get it we want to see the legislation—the total is 31 per cent. Under the category, “Response to an express request from other EU bodies, Member States or economic operators”, it is 17 per cent. Under the category, “Mandatory instruments under the Treaty or secondary law”, it is 12 per cent. Then we come to the smallest group, “New initiatives from the Commission”, which is 5 per cent of the total. The idea of this bureaucracy being housed in the Berlaymont, dreaming up every crackpot idea that it can think of and then inflicting it on unwilling institutions and unwilling member states is a fantasy of imaginations that are really not fertile enough. It is so far from reality that they should by now have learnt some of the realities.

The sole right of initiative is described very clearly in the report. It is, as the noble Lord, Lord Bowness, said, and as the report says,

“a power to propose, not to dispose”.

When it comes to legislation in the European Union, the Commission has no role in the legislative process once the proposal has been made. Usually it is not the sole originator of the legislation. In the report, we see that the European legislature—the Council, or more usually the Council and the European Parliament—determines which proposals become law and which parts of which proposals remain in the legislation when the legislative Act is passed. Paragraphs 149 and 150 describe that in great detail.

One of the most complex things in the legislative process, which is described very well in this excellent report, is the interrelationship between European institutions. The idea that the Commission has a power that it can exercise, almost in a vacuum, ignores the fact that its members are all subject to appointment hearings by the European Parliament. Indeed, adverse comments expressed about a would-be Commissioner led in one case to the then Italian Government replacing their nominee. The institutions have the power to dismiss the Commission as a whole. Members in your Lordships’ House will remember when Jacques Santer and his Commission jumped ship before it happened.

The Commission’s annual work programme is subject to parliamentary scrutiny and examination in the Council of Ministers. Its annual legislative programme is equally subject to a vote in the European Parliament and, because of the need for consent, in the Council of Ministers. On top of all this, the most significant factor in the inter-institutional complexities, which mean that the Commission has to take into account the views of others, is the budgetary powers of the European Parliament and the Council of Ministers. A Commission that sought to enact legislation would not get it through. Even if it devised some mechanism that could get the legislation through in the face of opposition from the Parliament and the Council of Ministers, it would not have the budgetary resources to give effect to its views.

We have debunked a lot of the mythology that people have tried to weave into the European discussion over the years. The report gives a very clear description of the reality. As paragraph 154 says with great clarity:

“The Commission operates in a very open way”.

The reality is a far cry from the abusive description of the Commission as a secretive and self-serving bureaucracy—the description that we get from so many Eurosceptics and which I will not be too surprised to hear later on in the debate today.

Finally, there are two things in the Government’s reply to which I particularly wish to refer. One is the suggestion from Jim Murphy, the former Minister for Europe, at paragraph 2, that the,

“minimum consultation period of 8 weeks makes it difficult for national stakeholders to respond. We would therefore like to see the Commission increasing this period to 16 weeks and we will continue to press for this”.

The other thing relates to the idea that the noble and learned Lord, Lord Mance, described as interesting and the fact that the Government have referred that interesting idea to BERR, the department responsible. I am sure that the noble and learned Lord and his Committee will continue with their usual courtesy to seek a progress report on what that government department is doing. I welcome this report, which debunks a lot of the mystique of Europe. In doing so, it serves a useful purpose for which the noble and learned Lord deserves our congratulations.

My Lords, I can at least agree with the noble Lord, Lord Tomlinson, on one thing in congratulating the noble and learned Lord, Lord Mance, on his report and on the work that the committee has done to produce it. I was taken with the preamble, which said that the committee was dedicated to “lift the veil”, as it was elegantly put, in the call for evidence on the process of the creation of EU legislation. I enjoy the expression “lift the veil”, which conjures up the image of a mysterious lady. We do not know what lies behind that veil. When we lift it, what will we see? Will we see a sloe-eyed young beauty or a poxed and wizened hag?

Sadly, the committee’s report reveals the latter. The fact that such a report is necessary, surely underlines the point that the system of European governance is opaque and poorly understood by anyone who is not a paid-up Euroanorak. I suppose that any one of us here today will qualify as that. In its conclusion, the report states:

“Unless the Commission proposes legislation, none can be adopted”,

which does not quite chime with the idea that this is a collegiate system. But nowhere in the report could I find any searching questions asking whether this was a good idea or whether it is healthy for democratic governments or, perhaps more importantly, whether it is good for the people who elect those governments to see so many laws put into statute by a foreign body which they did not elect and which they cannot sack.

Paragraph 166 of the report states—

My Lords, I hesitate to interrupt, but it seems to me that the noble Lord is ignoring what the report says. It has been said time and again that, while the Commission proposes, it does not put the result into law. Does the noble Lord accept that? It is put by the Council of Ministers or by the Council of Ministers and the Parliament. That is a fact, whatever one’s opinion about law in Europe may be.

My Lords, of course the Commission proposes, but the Council of Ministers has very little control over what the Commission then does. The Council of Ministers is simply a channel for taking the proposals of the Commission and passing them through to national Parliaments. It has very little control over what the Commission does. I hope that the noble Lord will accept that the Commission is the sole proposer of legislation. The report says that.

Paragraph 166 of the report states:

“The Commission is a political body, not just an administrative one”.

The problem is that this political body has zero political legitimacy, which goes to the heart of the matter. That is why the French and the Dutch electorates failed to ratify the constitution. They voted it down when it came before them. It is why the Irish people voted down the Lisbon treaty, which, as we know, is, in essence, the constitution as well, although it is trading as the Lisbon treaty. It is also why the—

My Lords, the noble Lord mentioned the Irish referendum. Is he not aware that one of the reasons why the Irish were not very happy with the treaty was that they thought that they might lose a Commissioner? Therefore, I do not understand why he feels that the Commission would be regarded as a bad thing by the Irish people.

My Lords, I am grateful for that intervention, but there are a number of reasons why the Irish voted against the Lisbon treaty. I do not think that losing a Commissioner was the principal one. It was one of many reasons why they voted against. I have read only today that they are to be given the chance to vote yet again. The EU does not like a vote against it. It will have another and the Irish will go on being asked to vote until they give the right answer. Is that democracy?

I find the list of witnesses curiously unbalanced. Asking two former Commissioners, however distinguished, if they thought that it was right that the Commission should retain the sole right of legislation is rather like asking a fox if it wants to keep the keys to the hen-coop. You are unlikely to get the answer “no”. Will the Secretary-General of the Commission Secretariat really tell the committee that the process of initiating EU legislation is opaque, undemocratic and should be changed? That question answers itself. Where were witnesses who may have given the committee a rather different flavour? Where was Bernard Connolly or Marta Andreassen, the former chief accountant of the European Commission? Where were some of the whistleblowers who have been sacked by the Commission for blowing those whistles? It would have been helpful to have had at least one witness who had a slightly different and a rather less laudatory view of the Commission’s activities.

The noble Lord, Lord Kinnock, told the committee that it was a waste of energy to try to dress the Commission in some democratic legitimacy. He said that it does not need it. According to the noble Lord, the Commission should be judged on its “operational legitimacy”, a yardstick your Lordships may think to be more appropriate for the KGB—I do not mean the “Keep Gordon Brown” campaign—rather than for the EU political driver.

The noble Lord, Lord Brittan, was characteristically fulsome in praise of the Commission. As the noble and learned Lord, Lord Mance, quoted:

“The whole thing is a great bargain of some genius”,

was his considered view.

Well, maybe and maybe not. As the noble Lord, Lord Tomlinson, reminded us, this,

“great bargain of some genius”,

had to resign en masse in 2000 when even the European Parliament found the stench of fraud and corruption around the Commission too much to stomach. The smell of roses does not hang around the present Commission. One of the members of the Commission was indicted for fraud. He was pardoned, but, none the less, he passed the scrutiny process, about which the noble Lord, Lord Tomlinson, told us. There still remains, let us say, a question or two about the purity of this body.

I should like to pick up on what the noble and learned Lord, Lord Mance, said about the curious charade played between lobbyists and the Commission. I must admit that I was astounded to read in the report that the Commission uses taxpayers' money to fund certain lobby groups that it favours; for example, the World Wild Fund for Nature was examined. It appears that it received 600,000 euros from the Commission. Therefore, it was paid by the Commission, to lobby the Commission on matters that the Commission wishes to see brought forward. Is this not Alice in Wonderland stuff?

I was sorry to note that the committee thinks:

“On balance, we consider such funding arrangements may be justified so long as they are transparent”.

They are clearly not transparent as none of the committee members appeared to know that this cosy little scam existed.

Finally, I should like to touch on something that I found interesting, which is central to our debate today. In one of the evidence sessions—at question 293—the noble Lord, Lord Wright, who was in the Chamber, asked of Mr Kim Darroch, the UKREP chief in Brussels:

“Have you ever known a House of Lords report influence the initiation of legislation?”.

Mr Darroch replied:

“If I say no, my Lord, it does not mean that it has not happened, it just means that I cannot remember off-the-cuff”.

In other words, it has not happened. The noble Lord, Lord Wright, pursued this and asked substantially the same question to the Minister for Europe, Mr Jim Murphy, at question 466. Mr Murphy replied that there was no legislation, but that he thought there was something about mobile phone charges.

In that same session, the noble Baroness, Lady O'Cathain, asked, somewhat plaintively, if Mr Murphy could find any more examples,

“because sometimes we think we have spent hours going through this stuff, and where does it all end up?”.

The noble Baroness, who I am pleased to see in her place, should not hold her breath. As we all know, these reports end up in the wastepaper baskets of the Commission, and that is that.

My Lords, as the noble Lord has quoted me, I thank him for allowing me to intervene. Perhaps I may make it clear that the inference that I think that all the reports end up in the wastepaper basket is absolutely not true. Wherever we go in Europe, particularly in Ireland, we find that the House of Lords reports have been read and indeed pored over. It casts aspersions on the wonderful structure we have in place for our European Select Committee. While our findings might not result in major new legislation, they are helpful in assisting those who formulate legislation in the European Union to take into account certain factors that might not otherwise be apparent.

My Lords, I thank the noble Baroness for her clarification. Perhaps I should have made it clear that her quotation should have finished with the words “where it all ends up”. My interpretation was that we know it all ends up in the wastepaper basket, which of course is true because as I made clear, no legislation, apart from the intangible provision on mobile phones, has ever been put forward.

Following on from that, what is the point of these committees? They do a lot of good work and hear a lot of evidence and it is all very interesting, but what actually is the point of them? The answer in truth is that the vast majority of our law is now made in Brussels by our real government there, leaving our elected MPs with ever less to do. The painful and fundamental question we should often be debating in this Chamber is whether we really need 690 Members of Parliament or some 740 Members of this House to rubber-stamp all the legislation coming over from Brussels. We ought to ask ourselves: what are we here for?

My Lords, two days ago, Gideon Rachman published what I thought was a rather naive article in the Financial Times on the requirement for world governance and therefore the need for world governance—and thus, he thought, the acceptability of world governance. As I read it, I thought of all those people on the nationalist right in the United States who believe that the United Nations is a conspiracy against American sovereignty. They think that black helicopters from the UN have invaded South Dakota and so on. In this country we have a similar belief about the European Union, which is now necessary in a whole range of areas such as economic and environmental co-operation and dealing with the interests of the almost 5 million British people who either live or spend part of the year wintering elsewhere in the Union. In spite of the fact that the Union is necessary and desirable, many in this country and beyond it believe that it is all a vast conspiracy. We have just heard the speech of the noble Lord, Lord Willoughby de Broke, who did not mention that, when one looks at the scrutiny work of the European Parliament, one sees that the contribution made by UKIP Members over the past five years has not been among the most distinguished or among the freest from various failures close to corruption.

I regret that this is the last year during which we shall have a Law Lord as the chair of Sub-Committee E. When I was the chair of Sub-Committee F, I worked with two Law Lords, who were extremely co-operative, helpful and expert colleagues. We learnt a great deal from them and I regret that we shall see rather less of this distinguished group, which gathers twice a week in a sometimes rather closed circle in the Library. When I first came here I was deeply in awe of the Law Lords as a group slightly apart, but now that one of them is someone with whom my wife and I used to go to the pub as junior law lecturers at the University of Manchester, I am slightly less so. Perhaps it is because we are all getting older and more experienced.

I must comment on a small point. The beginning of Chapter 2 of the report notes that the European Parliament is a legislature that does not propose legislation, as if that is an odd thing in a legislature. I had not noticed that much of the legislation that passes through the two Chambers of this Parliament is actually proposed by members of the legislature. We all understand, here as in Brussels, that necessarily the complex process of policy making is one in which those who propose a policy do not always carry everything through to its final conclusion. What we want of the Commission and the Brussels process is, as the noble Lord, Lord Brittan, said in his evidence, for them to do less and to do it better.

My Lords, does not the noble Lord agree that the Executive here comes from the Parliament? The difference in Brussels is that it is the bureaucracy that proposes legislation. In that it is not similar to any other democratic process, apart from some that we would rather not think of, on the planet.

My Lords, I am glad that the noble Lord, Lord Pearson of Rannoch, has been able to join the debate. I am familiar with his views on this issue. All forms of international co-operation have problems regarding democratic legitimacy. Other forms of multilateral co-operation, such as the G7, the G8 or the climate change discussion now taking place at the Poznan conference, suffer the same sort of problem. We have to have international co-operation, much of which leads to decisions that directly affect this country. The least undemocratic of them, and the one that tries the hardest to be legitimate, is the European Union. I know that the noble Lord will not to his dying day accept that, but it is where we are.

When Britain first joined the European Union back in the 1970s, there was a culture in the Commission that had grown around the belief of many that, in the making of Europe and what would be good for it, they knew better than the rest of us. It left me uneasy at the time and, in retrospect, I am still uneasy about it. However, I am happy to say that it has changed with the generations as the European Parliament, national Governments, national parliaments and lobbies have become much more actively engaged in the Commission’s policy-making process.

I regret that the Lisbon treaty has not taken us as far as I wanted it to in terms of subsidiarity. It has strengthened the power of national parliaments, but they now have to make use of the leverage that they have been given. There is some way to go. I regret, too, that the coherence of the Commission is an increasing problem. We will now give in to the Irish and recognise that there will continue to be 27 Commissioners, rising to 30 as the Union expands. I think that that is a categorical mistake. It would be much better to have a Commission of 11 or 13 and to recognise that it is the national permanent representatives who look after national interests in Brussels. The Secretariat-General tries hard to pull the different directorates-general and the Commissioners with their interests together. Moreover, as the report rightly flags, multiannual programmes are agreed between the European Council and the Commission, while the annual work programmes and/or legislative programmes provide levers that national scrutiny committees should use and pay more attention to. One should say also that, if there is criticism of EU legislation, some of us have felt while working on the Bills that have come through this House over the past few years that the quality of national legislation can sometimes leave a certain amount to be desired.

I want to make a few points arising from the report. The question of British staff in the Commission is one that, as the report rightly notes, we ought to be more actively concerned about. There is a real problem in that the number of people coming out of British schools and universities with language skills is declining, which means that the number of British applicants to the College of Europe, with which I have some association, has declined over recent years. The college is one of the most useful sources of direct recruitment into the Commission. I regret that the European fast stream, a good initiative to encourage more bright young British people to go into the Commission, the Council Secretariat and other Brussels institutions, has been closed. I hope that the Minister will be able to tell us whether it may reopen. I regret the closing of the Diplomatic Service language centre, which helped to ensure that enough British officials spoke other European and non-European languages. The Government need to do a number of things to make sure that there are enough people in the Brussels institutions who, as the Brussels saying goes, know this country best.

Secondly, Brussels is a paradise for lobbyists, both in and out of the Commission. I strongly agree with the report’s conclusion that there should now be a compulsory register of lobbyists in the Commission and I trust that the committee will, if necessary, return to this issue. There is a clear overlap between lobbyists and the stakeholders whom the Commission consults. We have all seen the extent to which well funded law firms and others in Brussels operate, walking in and out of Commission offices. This requires watching. For example, I was told that the origins of the famous, or infamous, regulations about straight bananas and cucumbers and so on were, in part, lobbyists from supermarket groups that wanted to make sure that they got what they wanted rather than the misshapen products of the past.

Box 2 on page 30 refers to Article 13, the amazingly ambitious addition to the Amsterdam treaty, outlawing discrimination on grounds of disablement, race, gender and so on. That was pushed through by a coalition of non-governmental organisations in collaboration with the Commission and various others; most national Governments did not notice. When I chaired Sub-Committee F, we had a look at this and I was struck by the fact that all those who came to talk to us about it from various Brussels NGOs seemed to know the noble Lord, Lord Rix, extremely well. It was all part of an issue that had got round national Governments. It did not affect the British very much because we already had a great deal of the legislation in place, but the implications for Germany, Austria and other countries that had not yet passed anti-discrimination legislation were considerable.

I have some reservations about the Commission funding of NGOs. “Friendly” organisations, which the Commission consults and says that they represent the people of Europe, ought to make us all nervous. I have been to one of those consultations and I thought that it did not provide a cross-section of popular opinion throughout Europe. However, as the noble Lord, Lord Bowness, said, the overall process is clearly not controlled by the Commission. It involves a range of interested parties. The question for Her Majesty’s Government is how actively we engage and how effectively we play our corner. It has not helped that there have been 10 Europe Ministers in the past 10 years. We would have had a more effective engagement if we had had greater consistency in British voices.

The European Union Committee may first have to maintain the excellent quality of its reports. I, too, have on many occasions found in Brussels, in the European Parliament and in the Commission, people who have our reports on their desks and quote them back at us. We have a useful role in the process. We have COSAC, the Conference of Community and European Affairs Committees, and, as the noble Lord, Lord Roper, has told me, a useful developing network of national chairs of committees in national parliaments, which also helps to build up the network of national scrutiny. Moreover, national parliaments, including our own, now have offices in Brussels.

I shall add one point to this, which perhaps is a subject for another inquiry. Most other national parliaments also have useful and constructive co-operation between their national Members of the European Parliament, their national scrutiny committees and themselves. We do that remarkably little. Perhaps the European Union Committee might inquire into that further.

My Lords, I thank the noble and learned Lord, Lord Mance, for raising this important debate and I congratulate him on an excellent maiden speech. I agree with my noble friend Lord Bowness and the noble Lord, Lord Wallace of Saltaire, that the House will miss the Law Lords’ technical expertise on subjects such as this when they no longer sit in the House from next year.

There has been much highly charged and contentious discussion about EU legislation over the past Session. It is right that we should continue such scrutiny over an issue that can have a major effect on policies and functions in this country. One area on which the Government’s reply to the report focused was ways to improve the quality of EU legislation. They were right to do so. Nevertheless, while quality is often more important than quantity, it is not always the thought that counts. The plethora of legislation being pumped out of the EU is disturbing in itself. The current Prime Minister famously said,

“it is unacceptable that 50 per cent or more of regulations come from the European Union”.

Every year, more than 1,000 European documents are put into Parliament. Of these, only a very few are fully debated in the House. This is worrying. It further serves to illustrate how important it is to analyse and scrutinise every area of initiation and production of EU legislation.

I therefore welcome the useful report on the initiation of EU legislation and applaud the work of the cross-party European Union Committee in producing it. As stated in the intentions, it sheds some light on an area of EU activity that is not often examined. I echo the point made by my noble friend Lady O’Cathain and the noble Lord, Lord Wallace of Saltaire, that House of Lords committee reports are widely respected.

As this report states, its principal function is descriptive. Nevertheless, it reaches a clear conclusion:

“Developments since the establishment of the EU have not cast doubt on the validity of the arrangements and we believe that the Commission should retain the right of initiative”.

That is all well and good, but we still need to recognise the democratic tensions inherent in the system.

The report rightly underlines that this general monopoly of initiative is a great power. Paragraph 150 states that the power conferred,

“should not be under-estimated … The right to wield the pen provides the power to select among the many ideas for legislation which come forward from other parts of the system and outside it”.

In nation states, that power normally belongs to elected Governments, who change as voters decide. No such limit exists for the Commission. This explains why dossiers tend to keep being pushed until the other European institutions accept them. The Commission’s persistent support for a European public prosecutor is a good example. Yet perhaps the unhappy disconnect between bottom-up democracy and the need for the Commission to act impartially in the general European interest is irreconcilable. If so, it makes it all the more important that national parliamentarians are scrupulous in holding this power to account and making sure that scrutiny is maintained to the utmost level. I am cautious about regarding the issue of the right of initiative as closed.

Furthermore, if the Commission is to retain the right of initiative, it is imperative that our own Parliament has the chance to consider whether the legislation meets the principles of proportionality and subsidiarity. One of the few improvements in the Lisbon treaty is on national parliaments’ rights in this area. If any national parliament considers that this does not apply, they have a period of eight weeks to send a reasoned reply. The sheer amount of legislation pouring from the EU means that that is far too short a period. The report states that member states should,

“take advantage of the opportunities provided … to contribute to the development of EU legislation”.

How true. In their reply, the Government state that they would like to see this period extended to 16 weeks. What action have the Government taken to promote that proposal, and have there been any developments? Do the Government agree with the European Scrutiny Committee’s recent report that,

“we doubt whether the Lisbon Treaty’s new subsidiarity provisions about the role of national parliaments would make much practical difference to the influence presently enjoyed by the UK Parliament”?

This same level of scrutiny should be maintained across the board. The report describes lobbying, which the noble and learned Lord, Lord Mance, mentioned, as,

“both inevitable and useful to the initiation and development of legislation”,

with the careful caveat that it should be “transparent and appropriately regulated”. The report also states that the members of the committee,

“initially found it surprising that the EU provides funding for interest groups who are engaged in lobbying the Commission”.

The report states that,

“in practice, NGOs are not afraid to bite the hand that feeds them”,

as the noble and learned Lord told us earlier. That seems to me to be a rosy view. Do the Government share our view that the European legislative system can sometimes be a dangerously closed loop, with the European Commission funding EU-wide bodies that then provide vocal support for EU-wide legislative initiatives? Is there not a conflict of interest there?

As the noble and learned Lord said, the report also focuses on the role of impact assessments. We welcome the fact that these have become standard practice. They are there not least because of the persistent pressure from Conservative MEPs and others who share our view that too often in the past European legislation has been initiated with little thought as to its costs. I pay tribute to the Barroso Commission for the notable improvements in this respect.

We welcome the fact that in 2008 the Government expect to have carried out 200 of these impact assessments. The Government will doubtless quote their shadow price of carbon scheme to use as the,

“basis for incorporating carbon emissions in cost-benefit analysis and impact assessments”,

which should aid impact assessments. However, I cite the examples of the impact assessments into biofuels and renewables targets, which both went far further and had a far greater impact than the assessments predicted. We welcome the production of these documents, but if they are not done well they run the risk of being relegated and becoming just jargon.

Lord Denning once pointed out that, as more legislation increasingly came under the scope of the European Court of Justice, the unhappy conflict between the English common law and the civil law of the European Union would become more apparent. The Government themselves have recognised that this is a problem, stating that,

“the Common Law system needs to be more widely understood within the Commission and taken into account when legislation is developed on justice and home affairs”.

The action taken to support that position, however, is of questionable effectiveness. Examples include arranging for,

“Commission lawyers to visit the UK to increase their understanding of Common Law”.

What evaluation have the Government made of the effectiveness of such measures?

In conclusion, we welcome this report and are encouraged by the amount of useful information contained within it. Nevertheless, I urge the Government to consider the important caveats that I have mentioned.

My Lords, I begin with a brief apology. The Government would have preferred that the Minister replied to this debate but, as noble Lords will have appreciated from their television screens, my noble friend Lord Malloch-Brown is somewhat preoccupied with the disastrous developments in southern Africa, particularly in relation to the cholera epidemic in Zimbabwe, and it will be appreciated that he is doing such distinguished and sterling work with regard to that aspect of the Foreign Office that it precludes him from responding to a debate of this significance today.

It therefore falls to me to respond and to begin by congratulating the noble and learned Lord, Lord Mance, on what I think was a unique maiden speech. A maiden speech that is also a sad swan-song is an interesting concept. The noble and learned Lord also indicated that it might be a little while before the House heard from him again because of the constitutional changes that are being effected. In due course, however, I hope that his maiden speech will be looked upon as the first of the contributions that the noble and learned Lord will make to the House. We have all valued his work; strange it is that that work should be done by someone who has not spoken in the House before and yet has made such a contribution, as represented by the report. I both congratulate him on the report and thank him for the precise, accurate and effective way in which he made his maiden speech today. I did not detect the bundle of nerves that normally besets some of us when we first address the House, but then the noble and learned Lord has been with us for several years and has been doing sterling work alongside his colleagues. We very much respect that contribution.

The Government broadly welcome the report and recognise that it points to ways in which we can be more assertive about the need for reform in Brussels. In a moment I shall come on to the various contributions to the debate that have raised issues of principle. The noble Lord, Lord Willoughby de Broke, presented his case with his usual forcefulness. That case is not related to the constructive concepts of this report but is to damn the Commission and all its works as having failed any conceivable democratic test. Therefore, there is not much that the report can possibly have in the way of enlightenment for the noble Lord. However, he will appreciate that my noble friends Lord Tomlinson and Lord Rosser had partly anticipated that onslaught, as indeed had the noble Lord, Lord Bowness. Having worked so hard on the report and on how we can make European institutions and the Commission more effective, they were concerned to present a rather robust, principled position on the role the Commission plays. I do not have time to deploy that case in full; indeed, that has already been done successfully for the Government by the three noble Lords to whom I have made reference. Instead I shall respond to the report, which identifies where we can effect greater reforms in Europe to improve the work of the institutions.

The Commission is much misunderstood in Britain. That is not surprising. The noble Lord, Lord Willoughby de Broke, berates the Commission—we have heard the noble Lord, Lord Pearson, do the same on other occasions—for being very different from any structure that we know of in the United Kingdom or indeed in other parliaments and democracies that follow our model. The Commission is different because the European institutions are different in their approach to representation of the democratic will and to how decisions are taken in Europe. Of course I understand the extent to which criticism against the Commission can be voiced, but let us not exaggerate. The noble Lord, Lord Astor of Hever, indicated that he had reservations about the amount of legislative proposals that emerge from Europe. There was a time under a former Administration when there were a very large number of regulations relating to the essential building work of establishing the single market. We are all aware that a large amount of cross-European legislation was necessary.

A House of Lords Library report indicates that about 8 per cent of our legislation emanates from Brussels. So let us not be caught up in the myth that the United Kingdom has handed over its law-making capacity to Brussels. That is just not so, and it needs to be understood.

My Lords, I guessed that I would not get very far with this presentation without the noble Lord intervening, and I gladly give way.

My Lords, what, in that case, do the Government say to the former president of Germany, Roman Herzog, and the German federal justice department, which put the figure at 84 per cent of national law? Of course we are not talking about local government law covering street cones or statutory instruments which follow on from other law, but about the body of national law. There, I think, many of us are comfortable with a figure of some 70 per cent at least.

My Lords, the danger is that we could engage in a debate which I think has been sufficiently aired already this morning. I know that the noble Lord looks at the small print of everything that emerges from Brussels, so he will be acquainted with the fact that a great deal of the work of the Commission is as a result of initiatives taken by others. The myth that the noble Lord and others wish to present is that the Commission is the sole driving force of law. That is not so; of course the Commission has a very important role to play in this area, but more than a third of its work is in response to scientific, economic and social data and another third relates to international obligations, in which it is responding to initiatives which are part and parcel of the modern world in which we live and a reflection of the European community to which we belong. Another fifth of the Commission’s initiatives is in response to direct requests from member states or other EU bodies such as the European Council or the European Parliament.

I know that that will not do, but we all know the burden of the onslaught from certain Members from the other side. If the European Commission were transformed rather more into some aspect similar to the British Civil Service—which it is not—then they would set about describing how illegitimate the European Parliament was. That would be the next base for the argument that there cannot be institutions that are democratic in Europe. On these issues of principle, the Government do not agree, and nor, I think, do the vast majority of British people. Nor do I think it is relevant to bring these issues into a report which is careful and precise about what it wants to see done.

Inevitably, the noble Lord, Lord Willoughby de Broke, referred to the Lisbon treaty. That is of some apparent concern in the light of the developments of the past few days. On Monday, noble Lords will have an opportunity to deploy that case again as there will be a Statement in the House resulting from the ministerial meeting. When the Lisbon treaty is ratified, it will give Europe’s citizens the right to propose ideas for legislation, compelling the Commission to consider legislative proposals if there is a large enough body of opinion behind them.

A change is being effected to extend the democratic institutions of Europe. However, this report covers discrete and precise areas in which we could effect improvements. The Government very much welcome it and look upon the recommendations identified by the noble and learned Lord, Lord Mance, in his speech and by other constructive contributors to this debate as ways in which we can improve the position. We certainly want to see the Commission act as transparently as possible, so we welcome its code and register of representatives and lobbyists, which were introduced in June this year. The noble Lord, Lord Wallace, referred to that. We look forward to the results of the Commission’s review of the register and code after its first year in operation. I have no doubt that transparency is of very great import for the Commission, and we are grateful that the point was identified in the report.

Concerns were raised in the report about whether the common law system was sufficiently taken into account in developing legislation on justice and policing. This is always a challenge for us specifically in the United Kingdom because of the different legal basis between our own position and that which obtains in Europe. There are significant exchanges between the Commission and our lawyers to improve understanding of these issues. We paid host recently to the entire civil law unit of the Commission, which was here for a two-day working visit. The noble and learned Lord, Lord Mance, would have not have chaired the committee with the distinction that he did if he had not emphasised the importance of understanding on both sides the way in which we can improve legal contributions to the work of the Commission, and the particular dimension of common law nuances which are bound to play their part in the British interpretation of European law.

We also consider that national Parliaments have a voice and a role to play. In September this year, the Commission published its 15th report on better law-making, reviewing the activity over 2007. It said that the House had sent the Commission 18 opinions on its new initiatives under its new system for communicating with national Parliaments. We made more submissions than any other Parliament except for the French Senate and the German Bundesrat. We are active in meeting the challenge, to which the noble Lord, Lord Astor, referred, between the obvious discontinuance in the British approach to political decision-taking and the role of the Commission and of European law. That will always be a challenge; we recognised it from the very first days of joining the European Community. I can reassure the House that the noble and learned Lord’s plea in his report that constant work should be addressed to these issues is being continued by the Government.

We also appreciate the fact that the right level of regulation is important for Europe’s credibility and competitiveness. Europe has an increasing role to play in tackling the big challenges of climate change. Although I hear criticism from time to time about the intrusion of Europe upon certain aspects of our way of life, I hope that even the noble Lords, Lord Willoughby de Broke and Lord Pearson, might think that on climate change, international co-operative action is the only conceivable way in which we will see the crisis situation resolved to safeguard the interests of all mankind. In those circumstances, the European institutions have a role to play.

We have been concerned that the Commission should show a real commitment to improving the quality of regulation. That is why the Commission is now involved in considerably more impact assessments—300 impact assessments have been completed since 2003. Its own Impact Assessment Board, which screens impact assessments for quality, has rejected some of them for being below par. It is critical of the work that has been done and we have no doubt that that is an important element in ensuring that European legislation proves to be successful.

None of us in this House regards the institutions of Europe as working as well as we would hope but none of in this House thinks that British institutions work as well as we would hope. That is why in a democracy there is a constant ferment of new ideas and pressure for progress, and the European institutions fit into that pattern. There is a great deal of work to be done. The Commission’s recent legislative and work programme for 2009 sets out to simplify Europe's regulatory environment and it will certainly be a key priority in this. We will ensure that that work gets high priority. We will continue to press the Commission to do more in this area and to do it faster.

This has been an extremely constructive debate aided by the fact that all noble Lords who contributed—with the exception of a dissonant voice, which is bound to be expressed on principle against Europe and all its works—supported the chairmanship of the noble and learned Lord, Lord Mance, and the work of the committee in terms of the constructive ways in which we need to improve the work of the Commission and European institutions. I congratulate the noble and learned Lord on his report. The whole House owes him and the committee a debt of gratitude.

My Lords, I thank all noble Lords and who have spoken today and thank the Minister. This has been a constructive and lively debate over large areas of the sub-committee's report. There is not time to mention more than a few points.

The committee certainly sought to take and invited evidence on a broad basis. There has been some debate this morning about the extent to which the EU law-making process can be regarded as properly democratic. There was reference to the possibility of a long-term change in the mechanisms by which legislation is proposed, but at present, as a number of noble Lords emphasised, the Commission does not dispose: it proposes. Although it has discretion, it is not in any way the sole disposer. It operates subject to constraints—institutional and public as well as the underpinning legal constraints, through the European Parliament, of appointment and budget.

As the noble Lord, Lord Wallace, said, of all international institutions, the Commission might be regarded as the most democratic. It is certainly very open. Of course, that gives us opportunities that we need to take and to engage with. A number of noble Lords supported the proposal that the period for response be extended to 16 weeks from eight. There was reference to scrutiny in this Parliament and in particular in this House and to the possibility that the Select Committee might consider the procedural aspects of that. I am sure that that is something the Select Committee is likely to take up.

The influence of reports of this House was mentioned. Of course we do not initiate proposals. Our role is to scrutinise proposals. In my limited experience, the scrutiny that we undertake can be and is effective. One example that I can mention immediately is the recent proposals relating to pre-trial supervision. We were roundly critical of the form in which they came forward and we received feedback from Brussels about the relevance and acceptability in large measure of some of the points we made. The ultimate proposal was far better thought through and far better drafted, and there have been several such instances. I believe that this House, through its scrutiny committees, has a real impact on European legislation; certainly that is what one hears.

There were references to the importance of British staff in the Commission and I welcome what was said in that respect in support of the committee, and in relation to the importance of common law and its role being understood. There have been some reservations about the Commission’s approach to the closed loop of lobbyists. Certainly that needs to be reviewed in the light of the publicity that should follow if the register is effective, although that is likely only if it is made compulsory. We hope it will be. I am grateful for the Government’s support for the report and for the Minister's response on matters in it. I look forward to his further response on outstanding points. I am grateful that he has indicated that they will receive attention.

Motion agreed.

Waste Reduction (Science and Technology Committee Report)

Motion to Take Note

Moved By

That this House takes note of the Report of the Science and Technology Committee on Waste Reduction. (6th report, Session 2007–08, HL Paper 163).

My Lords, I start by thanking my colleagues for giving me the opportunity of chairing this most interesting and useful study. As one who spent the past 10 years of my time in the other place chairing a Select Committee, it was quite illuminating to compare and contrast the experience of one House against the other. However, I realise that time is the thing that I must not waste today, so I will not carry on in that vein any longer.

It would be inappropriate of me not to thank our special adviser, Professor Evans, and the Clerk, Sarah Jones, for the way in which they enabled us to conduct our business and the manner in which the report was produced. Any criticisms that people may have of what is said here today should not reflect on anything that appeared as a result of their efforts because we are most grateful to both of them.

From the outset, the committee was quite clear about what it wanted to concern itself with. We did not want to concern ourselves with questions relating to domestic waste mainly because we would have drifted into cul-de-sacs out of which we would never have escaped. Equally, the fact is that domestic waste, although it takes up an inordinate amount of people’s attention, accounts for only 10 or 11 per cent of the total waste of the UK. It was also more important that we got across that we were more concerned with the better utilisation of scarce raw materials and, when appropriate, the recycling of those materials, and the reuse of components through better and more thoughtful design. In due course, that should lead to a reduction in the needless discarding of so much of the equipment we use at present.

We took as our starting point the inverted pyramid which we have in our report showing the waste hierarchy. Those five points need to be stressed at the beginning: prevention, reuse, recycling, recovery and disposal. The last option should be disposal. We wanted to ensure that the last four were given an enhanced profile. Our approach was to look at waste in context, the quality of nationally gathered statistics, waste-related legislation, mainly emanating from Brussels. We went on to consider issues relating to design, innovation and technology. We examined the application of those areas in manufacturing, construction and the wider economy. We sought to establish the consumer perspective because we were conscious that, as a society, we were drifting towards disposability being the first option rather than the last.

We also wanted to see to what extent business could use waste reduction as an opportunity for enhanced activity rather than a burden. Finally, we wanted to see what the Government could do to give a lead in these matters. Obviously, so much of what we are talking about is within the framework of legislation, albeit legislation over which we do not necessarily have much control as it is European in character. However, it is the Government’s responsibility to present that legislation and enable us to send out clear messages to the consumer, producers, business and the community at large.

I shall look at each of these briefly, because I know that colleagues will want to specialise in particular areas. My starting point is the definition of sustainability that we adopted in the report, as coined by the Brundtland Commission in 1987, which said that sustainable development,

“must meet the needs of the present without compromising the ability of future generations to meet their own needs”.

As I used to learn at Sunday school: that is the text for today. We were quickly exposed to concepts such as the “zero-waste society”, which is rather a zingy title but, when set against reality, is rather more than just an aspiration. We do not need to be too concerned about that.

We have seen in recent years that we are vulnerable as an economy, as a country and as a planet to dramatic surges in economic activity. We have seen in the past decade the Indian and Chinese economies consuming far more of the world’s resources, and sometimes doing so in a profligate manner of which we would be well advised to be careful. However, it is not for us, who have been squandering resources since at least the start of the Industrial Revolution 250 years ago, to lecture other countries, but to try to set examples.

In this report, we have tried to see what best practice exists internationally, how legislation and regulations can impact on that and where our aspirations can lead us. To do so, we need evidence-driven information and to make recommendations based on high quality data. One of our first disappointments was that the quality of the data left a lot to be desired, and will probably leave even more to be desired in the near future in so far as we see the budgets for data collection being cut. We are not happy with the nature of the response to that, which I shall address again in a minute or two.

We were concerned not only that we get good information, but that we are able to design equipment to make use of materials in such a way that we can take advantage of what is happening elsewhere, or what our own research facilities are offering. We were impressed by De Montfort University’s resource-efficient design initiative, which covered a number of areas. We were able to see, for example, “Design for Disassembly”, which sounds a bit like an oxymoron but basically means that we design a motor car in such a way that it can be dismantled very easily and quickly. The components can then be made available for recycling where appropriate, or can be disposed of quite efficiently. When we visited the Toyota European headquarters and saw a film of them dismantling a Toyota car, I, as the owner of another Toyota, was a wee bit disturbed by the ease with which it seemed our trusty cars could be taken to bits.

The point is clear. When we are talking about design for disassembly, we are talking about making it that much easier to take it apart. Equally, product light-weighting—we have to use terrible jargon, because that is the language in which these people speak—takes account of the need to reduce packaging. It is fair to say that the committee was not convinced that enough was being done, for example, to reduce the packaging on chocolate Easter eggs. You get hobby horses in all committees, but that was an issue that some of us identified.

Seriously, we were also impressed by the retailers who made the point that some food packaging could extend shelf life, particularly that of fruit and vegetables. However, we were not satisfied by some of the arguments put forward about sell-by dating procedures employed by retailers, which seemed to be as much about sustaining cash flow as food safety.

We also found that the glass and aluminium industries were concerned about weight-related matters. Aluminium suffers because it is in some ways too light. It is less attractive as a result, and more difficult to separate from other metals. It was estimated that something like 90,000 tons per annum that could be recycled were lost. The point about aluminium recycling is that it operates at 100 per cent: you get out what you put in, less the energy cost involved. However, there is currently a sizeable loss. Equally, with glass, we consumers put our green bottles into one box and our brown bottles into another. These boxes are collected by a company that puts everything back together again, in the interests of convenience. We lose the prospect of quite a lot of recycling there.

We were impressed by the approach of many companies, in a diverse range of activities, to meeting the challenge of sustainable design. However, far higher priority must be given to education and training in design. Within the curriculum there must be a design component taking account of the ambitions for sustainability. Equally, so much of the waste reduction is driven by legislation that we must get a component in design courses drawing students’ attention to the regulatory framework in which they will work when they graduate. I am not a lawyer. Any courses that I did at university with a legal component bored the pants off me. However, people are now working in the kind of regulatory frameworks where this is essential. We get the impression that there is quite a lot going on in academia, and there are some good examples, but there are also twilight zones where far more needs to be done.

We were also impressed by what was happening with knowledge transfer, but were concerned that the Government should be doing more to support sustainable design components. We were not assured by their reply to this point. We did not get the feeling that they properly appreciated the need for ring-fencing of the funding of a number of these areas. Things could be fudged and moved. Ultimately, technology transfer will only really be tested by the influence it has on the wider economy. Certainly, the impact is still fairly limited. However, the adoption of waste reduction techniques is made harder by the lack of accounting methodologies to enable businesses to measure their effectiveness. We recognise that ISO 14001 is a useful benchmark of sustainable practices, but we were not convinced that there was much of an incentive for businesses to continue to improve their performance once they achieved that level. The Government responded that they had stressed the need for continuous improvement. However, we felt that another route could be taken to promote continuous improvement; namely, through the development of a publicly available specification (PAS 2050). We would appreciate receiving a clearer statement from the Government on the methodologies referred to in their reply to our Recommendation 6 on this matter.

We are also conscious of a number of barriers to waste reduction in the shape of downstream factors. Local authorities are often the whipping boys in this respect, but they must once again take a wee bit of punishment here. They have a mixed record. Some are constrained by size, being too small to have the capital to purchase equipment. Many of them join consortia to achieve economies of scale. However, a lot still needs to be done in that regard. They are allowed too much freedom to define objectives in their own idiosyncratic ways rather than having a national standard to which they could aspire. There are problems around weight-based definitions. If they go for weight, they do not necessarily go for quality. One thinks of Stalinist steel production figures in connection with waste reduction. Greater attention should be given to the plight of local authorities but they also need more guidance.

Some of the questions of definition are being addressed by the waste framework directive, but there are problems even there as regards when waste ceases to be waste. The construction industry is subject to a lot of criticism as regards the “waste” definition of materials leaving a site. Insufficient attention is paid to the recyclability of components after demolition has taken place; for example, fancy fireplaces or stone that could be reused. As regards extended producer responsibility regulations—that is, whether you should have a national or an international industry standard or whether individual companies should assume responsibility for the standards—we should note that the end-of-life vehicles directive has been a success. The industry set up ISO 22628 to assess the ability to recycle or to recover elements of vehicles. A lot of work has been done in that regard. Unfortunately, the DVLA has let everybody down by having a half-baked destruction certification system, which means that not all cars have to be submitted for the relevant process. If they are abandoned, or nobody knows who owns the car—as subterfuge has been adopted—and who is to blame for it being abandoned, it is not necessarily subject to dismantling. Therefore, this measure has been partly successful. Some cynics might say that it was going to happen anyway and that it was in companies’ interest to adopt it, but certainly the car industry can derive a degree of satisfaction from the measure. Giving responsibility for the measure to an individual company as opposed to an industry has been tried in Japan. The Japanese adopted a different approach. It has been successful but that is because the Japanese retailing system and organisation are rather different from our own.

I am conscious that my allotted time is almost up but I do not want to leave out landfill tax. This is the real curate’s egg. Some argue that it should be increased; others say that it is too high. That suggests that it is probably about right. It is interesting to note the European experience. In Europe, countries with a high landfill tax tend to have relatively low levels of landfill and high levels of incineration. The UK rarely takes up the incineration option due to local opposition. We should like to see a far clearer definition of landfill tax. The decision to abandon hypothecation is dangerous. It will deny resources to a number of areas where we would have hoped that the good practice which has been established would have been maintained. The Government’s view is that good practice has been established, they have shown the way, and they will now cut back on the budget and get the thing done more cheaply. That is very shortsighted. It is also fair to say that organisations such as Envirowise, the Market Transformation Programme, the National Industrial Symbiosis Programme and WRAP all deserve continuing support. We are disappointed at Defra’s response. We understand that it has had burdens imposed on it due to other difficulties, but I do not think that the waste handling industry or the objectives of trying to secure better treatment of waste should necessarily be the casualty of past foot and mouth foul-ups. We shall want to talk to officials about some of our recommendations to which they have not given satisfactory answers.

This was a useful exercise. We are very pleased that we were able to address an issue which in many respects has not been looked at before. We were relieved that some of the people to whom we spoke were pleased that we were doing this because there is nothing worse than conducting a Select Committee inquiry when people are moaning because you are doing it. We had a good response. The committee worked well. We have come up with a realistic set of objectives. I say “realistic” in the sense that we are not in any way trying to wish for the moon and the stars. Therefore, it is sometimes all the more disappointing that the Government have not been quite as constructive in their response as we would have wished. However, we continue to hope.

The test of a Select Committee’s recommendations is not three months after the report is produced, but 30 months afterwards. I am always reminded of the words of George Bernard Shaw, who said of his father that at the age of 18 he was probably the most ignorant man he had ever met but that by the time he was 21 he was surprised how much he had learnt. Sometimes Governments go through that process as well.

My Lords, the whole House will be grateful to the noble Lord, Lord O’Neill of Clackmannan, for the very skilful way in which he chaired our inquiry and, indeed, for the way in which he presented this timely report today. He is absolutely right to say that we were very well served by our specialist adviser, Professor Evans, and our Clerk, Miss Sarah Jones. I join in paying tribute to them both.

As the noble Lord reminded us, when we look at waste we tend to give far too much attention to domestic waste, which represents only about 10 per cent of waste. We can make an impact as regards demolition and construction waste, which represents about a third of waste, or mining and quarrying waste, which represents about another 30 per cent, or industrial waste at 13 per cent of the total.

In the demolition and construction industry, two clear initiatives are needed, with leadership and co-ordination from government and from the industry. First, on design, we should look at the amount of materials that are taken on to a building site and the amount of waste that emanates from those materials because of a lack of co-ordination between the trades. It is particularly reprehensible to have waste simply because the bureaucracy created by myriad legal rulings and the waste framework directive, which has now been revised, means that waste has to be handled through a lot of permits and the like. We heard what was a perfectly fair whinge from any number of people, who said that they could make much better use of raw materials, if only the definitions were more user-friendly, both for the producer and the consumer.

I was very impressed when we visited Belgium, particularly Flanders, which has done something that we do not seem able to do; that is, effectively to co-ordinate the handling of domestic and industrial waste. Perhaps by accident, we have locked ourselves in to local authorities each choosing their own contractors to handle waste, very often with completely different contractors alongside each other. They lack critical mass. It is very difficult for, say, a national designer of a product to be able to ensure that this is handled consistently throughout the country, when there are completely different objectives from the local authorities, and the local authorities are working separately from the industrial waste contractors. Co-ordination is needed, and leadership is clearly the role of government.

The incentive of the waste management companies is all on weight, which is to the detriment of light, valuable materials such as aluminium, to which the noble Lord, Lord O’Neill, drew our attention. It is a great confession of failure that we use twice as much new aluminium as old aluminium. We are just not recycling efficiently. Local authorities have no incentive to co-ordinate with the industrial sector. The moment that they take responsibility for waste, they are subject to the landfill allowance trading scheme, known as LATS. Once they then fail to achieve their landfill allowance trading scheme targets, they are penalised. Inevitably, there is a disincentive to handle that waste; exactly what is not required. Yet the government response to our report says that the LATS is “working well” and that it is,

“a crucial scheme to ensure compliance with the landfill directive”.

I accept that the LATS may be crucial, but it is not working well. In other parts of mainland Europe, the LATS apply to the industrial sector as well as to local authorities. Surely the first and most obvious thing to be resolved is how local authorities can be encouraged, not disincentivised, to produce a co-ordinated approach to waste handling through all waste streams, particularly industrial, building and construction waste, which is, after all, the main part of the problem.

We call for joint waste authorities, but they must be more than authorities concerned with the co-ordinated collection, treatment and disposal of waste. We are talking about raw materials which are the by-products of the source of material for relevant industries. They are providers of raw materials for a wide range of industries. Here, we come back to the problem of the definition of waste, which has been a highly contentious issue since 1975. When the waste framework directive was originally drafted, it was absolutely clear that it was extremely tightly drawn, and legal case after legal case has tried to interpret what is meant by “waste”. There is a great reluctance now for agencies such as the Environment Agency in the United Kingdom, or other regulators, to go through a lot of attrition to at least establish what is meant by “waste” and what permits are required, upsetting these legal rulings. It has been trying to make sense of an extremely expensive and wasteful misuse of these raw materials coming out of the waste stream.

At least now we have some definition of “end-of-waste” in the revised directive. Previously, the waste directive was silent on that issue. Some 30 years after the framework directive was originally formulated, the Environment Agency is producing protocols to help industry to determine how to handle materials that can be reused by business without the need for waste management controls. It would be churlish not to say that these protocols, after all these years, are helpful, regarding products such as cooking oil, compost and the like. There are also some manuals of regulatory position statements on products such as wood.

Clearly, this is extremely important and helpful. It gives some guidance to industry on how to get through this plethora of regulation. I am simply mystified why it has taken 30 years to give this guidance. I would go further. I agree with Professor Grimes, who is quoted in paragraph 4.42 of our report. She suggested that,

“waste should only be material destined for final disposal”,

and that,

“anything that can be re-used or recycled should be defined as a non-waste by-product”.

The revisions agreed to the framework directive by the European Parliament and the Council of Ministers are a modest start. At least we now know when waste ceases to be waste, when it can be reused, and the status of some by-products. We wait still for the Joint Research Centre in Seville to undertake what is described as “preparatory work” for new criteria for the waste stream. I groan when I read that, because it is clearly going to be some more years until final elucidation is given on these matters.

As the noble Lord, Lord O’Neill, reported, we went to see Toyota in Belgium, which is one of the most impressive companies in Europe in how it handles waste and how it encourages its suppliers to put in place protocols for reducing waste. It would say that, of the obstacles that it finds the most challenging, it is the question of legal definitions of waste and differing legislation between countries. I clearly favour a harmonised EU waste directive, but I fear that we have some way to go before the revised directive is fit for purpose.

My Lords, I, too, very much welcome the report, and I congratulate my noble friend Lord O’Neill and the committee on producing it, and particularly on the systemic approach that it took to the waste stream, taking it back to the design stage.

I shall focus on four points; first, government policy of various sorts, and, secondly, the whole issue of waste streams, particularly the point that the noble Earl, Lord Selborne, just referred to, on how we can change waste into raw materials and into feedstock, both in legal and definitional terms and in process management. Thirdly, I shall touch on consumer behaviour in this area and, fourthly, on recycling markets, both domestic and international.

I declare two interests; I am the chair of Consumer Focus, and I am a member of the Environment Agency board. I am, therefore, personally deeply conflicted regarding the differing demands of the consumer interest and of sustainability in this field. We strive to reconcile those as regards government and consumer representation.

On government policy, I know that there has been some hesitation about the effectiveness of the targets and the landfill tax in relation to the leverage that the Government have already used. The report is certainly correct to say that huge attention has been given to municipal waste, mainly household waste, and relatively little attention given to industrial and commercial waste, which is far greater in quantity and more difficult to dispose of and use effectively. We need more broadly to use the leverage that we have already developed in the municipal waste area upstream by looking at waste reduction, re-use, recycling and disposal targets, and we need also to move on from municipal to commercial and industrial waste.

That requires attention to the total waste stream. It takes us back to issues of product distribution, the production process and, as the report firmly emphasises, the design process for systems and products. I agree also with the report in that it is a little worrying that the forward expenditure by the Government on such bodies as Envirowise, WRAP and the market transformation system is extremely short-sighted. I hope that Ministers will revisit that. It also has a knock-on effect on the quality of data—as was stated in the first recommendation in the report.

I also think that the Government need to get over their inhibitions about hypothecation and the fact that the landfill tax will have reduced hypothecation, rather than increased it. The Treasury has taken a sort of ideological position in this area in which we are trying to change business and consumer behaviour, and where hypothecation is an enormously important part of the motivation and reward systems which make interventions effective. I therefore hope that those issues will be revisited across Whitehall.

I return to the need to address the total waste stream, where there are also significant difficulties with the regulatory framework, as the noble Earl, Lord Selborne, said. As a Defra Minister I was concerned that the regulatory requirements on waste conflicted with those that we wished to introduce to mobilise the use of waste as feedstock for biofuels, for example, and in other areas. That conflict of regulation and the subsequent legal cases to which the noble Earl referred have greatly inhibited reaching a situation whereby the waste stream can move relatively seamlessly into a stream that deals with raw materials and feedstock. I am glad to say that not only has the waste framework directive been altered to improve this, at least to some extent, but the Environment Agency in recent years has recognised this point. There are clearly safety, transport and environmental problems regarding waste taken offsite or away from industrial processes. Those issues have to be addressed and must have regulations which are properly enforced. That is why I am not sure that this can be dealt with simply by redefining much of that waste as by-products with potential for further use.

It is vital that a waste chain is established which moves into the productive use of those materials. That is why the Environment Agency’s work on waste streams is important, so that we can move from a system whereby waste is a cost and a hazard, to one in which it is a feedstock and a profitable raw material. As the noble Earl, Lord Selborne, said, the Environment Agency has already developed a number of protocols on, for example, waste wood and vegetable oil, and is working in further areas, including flat glass, boiler ash, plasterboard, and the residue from anaerobic digestion. That cycle will be completed when those protocols are in place, and that continuous process is very important. There is a long way to go and this area requires a superstructure of regulation to be reflected in it.

I wish to focus slightly on the energy use of waste. We have debated energy frequently in this House recently; we have focused on policy regarding renewables, nuclear energy and energy efficiency policy, but we are very coy about how we use materials that have already passed through the consumer end as a feedstock for energy. We can generate electricity by incinerating mixed wastes. There is not a huge sorting problem in many cases. We can achieve heat recovery at the same time by maximising combined heat and power, and we can use anaerobic digestion to generate electricity or produce biogas on small and medium scales. The variety of technologies available in this area is enormous and in relatively common use in a number of European countries, but in the UK we allow ourselves the indulgence of continuing to landfill materials of high calorific value which could be used to produce energy.

There would also be, of course, an indirect effect whereby if we used similar waste materials as the raw materials for other industries, those industries would save energy. It takes three-fifths of the energy to produce a bottle from recycled glass, compared with virgin materials, simply because it needs to be held in a molten form for a significantly shorter period. That can be a huge saving for glass manufacturers and a huge saving in potential waste. These recycling processes save money and energy and we need to develop the capacity to deliver those processes to manufacturers and to develop the market for them.

The consumer is vital, and the consumer society as it has developed has dropped many aspects of reuse and recycling that were there in the 1950s. We have managed to motivate a certain degree of consumer behaviour in relation to composting and recycling, but we have not done that much in terms of reuse or reduction of household and consumer waste in total. Some of this is a regulatory issue, and some of it quasi-regulatory. My noble friend Lord O’Neill referred to sell-by dates; many food retailers, for example, use sell-by dates that are much tighter than those laid down in the regulations. However, there is not so much a regulatory need as there is a need to induce changes in consumer behaviour. That clearly applies regarding food, and although there has been some progress in reducing waste in the food processing and retail sectors, that same benefit has not been seen at the consumer end.

This is also the case in other fields where there has been regulatory intervention—the noble Lord mentioned end-of-life vehicles whereby owners of cars have not been brought into the process, except through what appears to be a bureaucratic procedure. I had similar objections to the way in which the WEEE directive was introduced; consumers were not involved or told of the implications until well after the regulation was actually enforced, and even then it was pretty haphazard and we did not provide the capacity to deal with the disposal, dismantling and recycling of much of those materials—one would have thought we would have learnt from our experience with fridges. We are still dumping electronic equipment into mainstream waste, and even when such waste is in the recycling system there is the problem of collectors actually remixing it—plus we have insufficient capacity for dealing with it.

The other consumer issue is labelling. It is vital that we do not go for a profusion of labels in the sustainability area. It may take a bit of time, but we need to work out a proper carbon labelling system which applies to a whole range of products. There is total confusion regarding the labelling of agricultural production methods, and all-out conflict over nutritional labelling, although I hope that is being resolved by the FSA and the industry. We cannot afford the same confusion and conflict over labelling for sustainability purposes, and certainly confusing consumers is far worse than not telling them anything.

My final point relates to recycling markets. There has been a good deal of panic in some of the press with comments that, because the Chinese economy is growing by only 6 per cent instead of 11 per cent, the whole market for our waste will dry up. I do not think that that is yet true but obviously some of the signals are pretty negative, and issues relating to storage and our own waste or recyclables chain in this country are important. The key point here is the quality of the chain.

Recyclates are fit for use by industry as raw materials, or at least most of them should be. The demand for such raw materials from India and China, and indeed from industries closer to home, will continue. However, because that market boomed so quickly in the past, in one sense it has let us get away with the low-grade provision of badly sorted paper and cardboard and mixed plastics. The recession is forcing us to increase the quality, but clearly in the immediate period there will be a drastic reduction in the price. However, we are talking about a commodity, and commodity prices go up and down, so in that sense these recyclable materials are no different from agricultural products. But the price will go up again, particularly if we offer these markets properly sorted, high-quality waste. For example, the market for clean recyclable material such as cardboard and particularly paper, which we sell to Sweden, is still substantially stronger than some of the lower-grade markets where we have relied on poor-quality or invalidated waste for a few bob when, if the quality were higher, we would be able to sell it at a much higher price and in a wider range of markets.

There is also the question of why we do not have high-quality waste facilities ourselves. It is easy to say that we cannot sort high-quality raw materials here because our wages are a hundred times higher than those in China and that basically this is a labour issue, but it is not necessarily a labour issue. The recovery of high-quality materials depends on capital investment, the introduction of technology in that area and the construction of a more domestic supply chain in the UK and in Europe.

There is money to be made out of muck. There always will be, and there is some pretty high-quality muck out there as a consequence of 50 years of a consumer society. We need to get businesses and consumers to change their behaviour but we also need to establish systems and changes that will enable people to make money out of waste to ensure that we minimise the amount produced in the process.

My Lords, waste may not seem a glamorous subject but it impacts on us every day. Waste affects the prices of the goods we buy, the environment we live in, the businesses we work for and the future we leave to others. So I declare an interest, both as a citizen and more specifically as professor of manufacturing at Warwick University.

As a result of the all-pervading presence of waste in our society, the challenge of reducing it involves a complex, many-layered problem. From the individual consumer to the European Union, we all have a contribution to make.

In bringing out the contributions of every member of the committee, my noble friend Lord O’Neill deserves the thanks of the whole House for the thoughtful and non-partisan approach that he brought to the subject as chairman. His remarks in opening the debate were so to the point that I am tempted to reduce waste by simply agreeing with him and taking my seat, but in this area I am not quite as committed to re-use and recycling as I should be.

As the report states, on current estimates we produce 270 million tonnes of waste each year, but it is important to realise that this enormous figure refers only to the waste that we can measure. For example, if a process is developed to reduce the paint used on a car by 20 per cent but no one uses it, then 20 per cent of all car painting is wasteful, but it will never be classified as such. This is a crucial point because it shows that, when we examine the challenge of reducing waste from first principles, then design and the transfer of knowledge are central to our task. If we were to focus simply on waste disposal and recycling, we would spend too little time thinking about the management of waste reduction from first concepts. This is the essence of the waste hierarchy that is discussed in the report. So I am glad that the government response recognises that only 9 per cent of waste comes from consumers and that we need a “much stronger” focus on business waste. The question is how to achieve this aim.

The committee discovered that we have no shortage of regulation on the subject of waste. From Europe alone, we have a galaxy of directives. There is the waste framework directive, the end-of-life vehicle directive, the waste electrical and electronic equipment directive, the packaging waste directive and many more. Many of these directives are helpful; some have achieved notable success. As an aside, like many others, I have concerns about the practicality of applying extended producer responsibility to the entire electronics industry, but it is probably sufficient for the moment to say that, while the principle is fair, the implementation must be managed very carefully.

Unfortunately, this regulatory focus on the disposal and management of waste has not been accompanied by a similar focus on the benefits of designing out waste to begin with. As a result, as the report says at paragraph 3.25, many businesses are unclear about what they should be doing to reduce waste. Witnesses told the committee that as much as four-fifths of a product’s environmental impact could be eliminated through better design, yet we do not give four-fifths of our attention to better design. As the Centre for Resource Management and Efficiency at Cranfield University told us, eco-design is not seen as an essential function.

There is no doubt that pressure by regulation has increased business interest in waste reduction but, alongside the stick of regulation, surely we need to offer businesses the carrot of improved profits and lower costs. Sometimes the benefits of less wasteful design are obvious and businesses do not need prompting to pursue them. The witness from Philips told the committee that three-quarters of the company’s environmental initiatives had a positive impact on its bottom line. The benefit to automotive manufacturers of producing lighter, more fuel-efficient cars is also very clear, but identifying and reducing waste is not always obvious, especially for small and medium-sized enterprises struggling with the day-to-day battle to increase their business. It takes time, effort and staff resource, all of which are at a premium.

Therefore, those involved in design and production in development agencies, universities and research councils need to work together with businesses to find practical ways to minimise waste. As an engineer myself, I was particularly struck by the six sustainable design strategies set out by the Resource Efficient Design initiative at De Montfort University. These strategies—design for disassembly, product light weighting, durability, recyclability, reusability and cradle-to-cradle design—give us a useful way of categorising and educating designers and engineers in the techniques and benefits of low-waste design. For example, consumer PCs are essentially modular, but very few consumers treat them as such, which means that many computers are simply discarded when computing requirements increase. This is as much an engineering design as a waste disposal problem. There is no magic bullet for a problem as big as waste, merely the continued application of common sense and new technologies.

Like the lean manufacturing model employed with such success by modern manufacturers, minimising waste via better design must be a continual, iterative process. Whether by improving modular production or the application of “smart” materials, such as plastics which expand when exposed to particular sound frequencies, innovation and better design can help to reduce waste in measurable ways. We must ensure that low-waste design is part of all our higher education and research priorities and that this research is made useful to business via knowledge-transfer networks and partnerships with industry. This should be a real priority for the Government.

I believe that the Government need to be more aggressive in supporting the spread of low-waste design to businesses than their current response to the report suggests. The Government’s science budget allocation document says that research focused on energy consumption and living with environmental change are two of the four “grand challenges” that face the nation. Despite this, there is little clarity on how research councils are supporting these aspirations with hard cash.

The Government should pay careful attention to the funding streams for sustainable design, waste reduction research and knowledge transfer. As Dr Tracy Bhamra of Loughborough told us, sustainable design and knowledge transfer is currently something of an ad hoc affair. We need to change that, and to be blunt, that takes money.

The EPSRC told us that it is important to focus on a holistic understanding of the whole resource and energy life cycle. Indeed it is, but given the importance of waste reduction now, it is just as important to focus on the practical changes that can be made by research and development and the subsequent knowledge transfer of new technologies. Today, funding to do this is available to researchers and businesses through ring-fenced funding, but this is being phased out in favour of a more flexible approach. We must ensure that investment in sustainable design and waste reduction increases after the move away from ring-fenced funding.

Increased investment would also provide a helpful spoonful of sugar to make sure businesses accept the benefits of landfill tax increases, even if this is not quite the tax hypothecation that the Government oppose. I was pleased that Ian Pearson MP, the former science Minister, was focused on this point. I hope that he has taken that same focus with him to his new eminence in the Treasury and that his successor keeps a clear focus on this area.

Among engineering students and businesses there is huge enthusiasm for finding ways to reduce waste. As an engineer, I can tell the House that there is nothing we like more than a practical problem on which to start working. When we hear of innovations, such as the use of RFID chips to track component parts or lamination to reduce packaging requirements, even a grey beard like me can think of myriad uses to reduce waste across several industries. In just the same way, my students are excited and inspired by the possibilities of low-waste design.

At Warwick Manufacturing Group we recently developed the Eco One racing car, made entirely from natural materials. The tyres are made from corn starch and the body work from plant fibres. Green yes, but it has a power-to-weight ratio superior to a Ferrari Enzo and can reach 140 mph. The enthusiasm that those students showed in finding cradle-to-cradle solutions to design problems will stay with them for life, as will the understanding of how to develop low-waste answers to high-tech challenges. Students like these, the future engineers and designers of our products, should be helped to find practical solutions to our growing waste crisis. We should help them by extending the education of all designers and engineers on waste minimisation and reduction and by increasing the funding that goes to supporting research and innovation in low-waste design, whether blue sky or applied. Finally, we should all help by ensuring that the benefits of their research are quickly propagated to the businesses that can apply them in the commercial world.

I believe that this report shows us the way forward.

My Lords, I speak wearing two hats: first, as the spokesman from the Liberal Democrat Front Bench, and, secondly, as a member of the committee. Fortunately there is no conflict of interest, as my party endorses all the recommendations in the report and I am happy to do the same. I extend my thanks to the noble Lord, Lord O’Neill of Clackmannan, for the way in which he chaired the committee and for his masterly presentation this morning of its main findings. I also thank our expert, Professor Stephen Evans, and our clerk, Sarah Jones, who both contributed substantially to what proved to be a substantial report.

We began, as the noble Lord, Lord O’Neill, mentioned, by looking at the waste hierarchy. I was slightly surprised that we used the term “prevention” rather than “reduction”, because I have always thought of it in terms of the three Rs. Perhaps in my education hat I think naturally in those terms, but reduce, reuse and recycle were always the top three elements in the waste hierarchy. Reduction is at the top because it positively saves us from using the resources of energy, material and labour unnecessarily. If we reduce waste, everyone gains. Potentially there are more resources to devote to meeting other needs, or perhaps one should say future needs. We should be aware that every tonne that goes into landfill is equivalent to a quarter of a tonne of CO2. The more we can save from going into landfill, the more we are contributing to limiting our emissions of CO2 and other greenhouse gases. The rule of thumb that I use is the one used by WRAP, although I confess that it is very rough and ready.

It is significant that we are discussing this report today at a time when in Brussels people are arguing hard about the future of the emissions trading system. Perhaps I should declare another interest. I was rolled off the Science and Technology Committee and rolled on to another committee, which has been looking at the EU emissions trading system and produced its report earlier this week. We argued that we should be tough and not let the EU run away from its climate change obligations and that we should stick by our targets. It is significant that waste management contributes to helping to fulfil our responsibilities under those CO2 targets.

As I said, reduction has the top slot in the hierarchy. To our mind—the noble Lord, Lord O’Neill, and the noble Earl, Lord Selborne, mentioned this—it got lost to some extent in government policy, where concentration has been placed disproportionately on recycling, the third one in the hierarchy, and particularly on recycling domestic waste. Only 9 per cent of waste in this country is domestic waste, so our report concentrated on the 91 per cent that comes from the commercial and industrial sectors and on the need for reduction there.

How relatively easily that can be achieved was illustrated in a piece in the Guardian commenting on our report. It produced the example of the £1 billion Bart’s and the Royal London hospitals’ building site. The main contractor is Skanska, and 99 per cent of the waste from the site is now recycled in one form or another. More to the point, Skanska has worked with its suppliers and trade contractors to prevent waste from coming on site by minimising the amount of packaging and by ordering components to size and fit. By careful planning and ordering and by working closely with the designers, it has been able to eliminate much of what was previously designated waste. Where waste comes on site, it is carefully segregated into different skips and can be recycled from them.

In our report, we were anxious that some of these principles should be adopted by industry. Putting emphasis on sustainability alongside engineering and design in the early stages of product development would see a new generation of products coming down the line, whether tin cans or cars, where resource efficiency is the key element in production and use. The noble Lord, Lord Bhattacharyya, spoke about his students’ excitement in taking up these principles and incorporating them in the work that they are doing. It is exciting that we now have a new generation of students coming through who have these principles in mind.

To some degree, we can see the concept of life-cycle analysis, which looks at the use of resources through the life of a product, being incorporated in some of the elements that we are seeing coming into use. The End-of-Life Vehicles Regulations have already been mentioned. Almost everybody has mentioned that we were very influenced by our visit to Toyota and how impressed we were by the fact that Toyota is taking these principles into account. It is significant that its Burnaston plant was the first plant to achieve zero waste. The noble Lord, Lord O’Neill, mentioned that that is an ideal, but in 2005, three years ago, the Burnaston plant achieved the zero-waste target. All Toyota’s plants in Europe are now zero waste. That it can be done and that a lot of it is achieved through design is strikingly important and an example to us all.

We were also influenced when we went to see Xerox and Hewlett-Packard and talked to them about the way in which they recycle their machinery. We were impressed by the extent to which Xerox is recycling copiers and designing them so that they can be dismantled and the parts can be refurbished and used again. What was sad was the degree to which consumers are not always ready to use those machines. We need to take consumer attitudes seriously.

Firms such as Toyota, Xerox or Hewlett-Packard are at the forefront of what can be achieved. However, the difficulty for small and medium-sized businesses, which make up the majority of British firms, is that unless they are caught up in the supply-side chain of one of these major firms, they are somewhat left out in the cold. Indeed, their position is perhaps even worse than being left out in the cold because, as we discovered, they often have difficulty even in recycling their rubbish. The noble Earl, Lord Selborne, mentioned that local authorities are loath to pick up any waste that they are not required to because of the LAT scheme. Small and medium-sized businesses find that they have to make arrangements for commercial collection of their waste. However, because they are too small to handle specialist recyclables, many commercial companies will take general waste but not specialist recyclables. Small and medium-sized businesses then get rapped on the knuckles if they put their recyclables in the local authority site. They face a real problem.

By contrast, in Belgium we visited OVAM, the public waste agency in Flanders. It provides a counselling service for small and medium-sized businesses, helps them to dispose of their waste and provides them with free audits and a lot of advice about how they can minimise waste. I am sure that the Minister will say that the Government have been providing precisely that sort of help. Under the BREW—business resource efficiency and waste—scheme, there were four agencies: WRAP, the waste resource action programme; Envirowise; the national industrial symbiosis programme, which was rather misnamed, because no one really knew what it meant, although it provided precisely that sort of help from government; and the market transformation programme. They all, in their different ways, helped to advise and direct small firms in their waste management programmes, giving them precisely the sort of help that OVAM provides in Flanders.

We then discovered that the budget for all the BREW programmes, which had stood at just over £90 million, was cut last year to £56 million. Schemes such as the national industrial symbiosis programme have been more or less eliminated. It is very difficult to understand why the Government are folding those schemes. They were to a degree overlapping and I know that the Government are bringing them under the RDA hat and that they will be served by Business Link. However, when you have spent three or four years training people to provide precisely that advice, is it not absolutely stupid to fold those schemes and try to start all over again training a whole lot of new consultants under the Business Link scheme? Will the RDAs really be able to do that job? What sort of measures of waste reduction will be used by RDAs? What competence do they have to provide the energy audits that schemes such as WRAP and NISP used to provide?

Once again, the Government, having got some relatively small schemes—in the broad picture, £90 million is very small beer for the Government to spend—up and running, doing a very useful job and becoming extremely successful, just close them down and start again. That is too typical of the initiatives that we see from the Government. It is most unfortunate. Let me quote from the Government’s response as to why they were doing that:

“Defra’s delivery bodies have delivered major environmental benefits and substantial cost savings for businesses”.

That is absolutely true.

“However, given the change in business attitudes referred to above”—

in the government evidence, but I am not sure what they were referring to there—

“we have decided to refocus the support that we provide through our delivery bodies. From the current financial year onwards, support will concentrate on providing the necessary evidence to encourage businesses to change their behaviour, rather than supporting individual businesses for projects where the benefits come quickly through to the company bottom line”.

More evidence and information are not what those companies need. They are receiving masses of glossy brochures every day. They do not want more information. They want precisely what they were getting, which was direct help with their bottom line.

Why do the Government do this? Why do they resist the hypothecation of the landfill tax? It works so well. I know that the Treasury does not like hypothecation, but if you are trying to mobilise public opinion, nothing was better than the notion that you could trade off investment in the infrastructure to provide better waste management and the little schemes to help small and medium-sized businesses against the money paid in such taxes. Locally, you could trade off environmental improvements against money paid in those taxes. That gave the public the right message. By breaking the hypothecation link, the Government are sending completely the wrong message to the public.

Our biggest disappointment is the failure of the Government to provide a lead on the issue—indeed, on all environmental issues. The Minister probably does not agree, but having sat through reports on renewable energy, energy efficiency and now waste reduction, time and again I have had the one feeling that the public are now ready for a lead, but the Government have failed and failed again to provide it. There is a problem with consumers; we know that. The “I will if you will” attitude is endemic, but the credit crunch provides us with an opportunity to break the link with conspicuous consumption. I think that the public are willing to follow a lead from the Government, as is business.

I cite the evidence given to us by Mr Tait, programme manager for the market transformation programme. He said that businesses want “long, loud and legal” signals:

“They want it to be absolutely clear that this is a long-term process; they want to be told about it clearly, in no uncertain terms; and they want to have it underpinned by a legal framework so they know exactly where they stand”.

This is extremely disappointing. The government response as a whole is very complacent.

Finally, I shall read from two paragraphs from the Government’s introductory remarks. Paragraph 5 says:

“We have made good progress already and our focus is now to continue to translate these priorities into practical action, in a way which makes a difference on the ground”.

Well, all right, but good progress in what? The UK in relation to our international partners, particularly our European partners, is at the bottom of the league tables. There is so much to be achieved and so much that we could do. We only have to look at a country such as Belgium, which we visited, or Germany to realise how much there is to be done. What complacency is this on the part of the Government?

Paragraph 7 says:

“We already have a wide array of measures and processes to address the key issues … Measures already in place include the substantial increase in the landfill tax escalator announced in 2007”—

yes, but that is not an environmental measure—

“a range of voluntary agreements on waste reduction and recycling with different sectors of industry, detailed implementation of several sector-specific EU waste directives, and EU agreement on revisions to the Waste Framework Directive”.

Yes, yes, yes, we have all these, but, with the exception of the landfill tax escalator, these are all either voluntary agreements—we know that although some countries will obey them, others will not; it is often a matter of “I will if you will”—or are EU driven. Indeed, we have much for which to thank the EU. I do not know whether others sat in on the previous debate, but quite clearly this is an area in which the EU has taken the lead and our Government have not. In no sense have the Government shown decisive leadership in all this.

The danger of the recession that is now upon us is that the environmental agenda will be shelved. Recycling schemes are already under threat from falling commodity prices, and many similar initiatives will be under pressure. Yet recession also offers the opportunity to make a decisive change. If the Government are prepared to adopt active leadership, this is the time to encourage people to make those behavioural changes for which we have long been looking: to buy products that last longer and can be repaired and not just scrapped; to shift to smaller, energy-efficient cars; and to turn the central heating down that one notch. What we need from the Government is not the attitude, “We are doing splendidly. Now it is up to you”, but, “This is an opportunity to make substantial changes, and we will provide the lead to help you to make those changes”. I hope that I shall hear something of this response from the Minister.

My Lords, I declare an interest as the co-chairman of the Associate Parliamentary Sustainable Resource Group. This used to be the All-Party Sustainable Waste Group, so it has a great interest in this subject, and I take this opportunity to praise its work in this area. It has done a lot, not least when it organised a reception to celebrate the publication of the committee’s report. My bulb business also has a packaging waste obligation, so I have a direct interest in and some experience of the subject. On a personal note, however, I suspect that when my doctor talks of waste reduction, he has something else in mind.

I thank the House of Lords sub-committee for producing this report and the noble Lord, Lord O’Neill of Clackmannan, for its introduction. All noble Lords have spoken from experience in the debate. The Government have produced a somewhat disappointing written response, and I look forward to the Minister’s reply at the conclusion of this debate in the hope that the Government might be able to remedy some of these deficiencies.

Waste reduction and resource efficiency are integral, as the noble Baroness, Lady Sharp, has pointed out, to our contribution in combating climate change by reducing greenhouse gas emissions and by our sustainable use of resources, which are depleting rapidly. Zero waste must be the objective, even if it is a distant prospect, as the noble Lord, Lord O’Neill, has pointed out, if we are to meet the needs of our environment and the social well-being of our economy.

I welcome the report’s focus on waste from the industrial, commercial and construction sectors. Domestic waste, as has been pointed out, accounts for only 9 per cent of the total waste stream in the UK. It is a much smaller percentage than most people would believe. I also wish to commend the Science and Technology Committee for examining waste reduction and for placing a clear emphasis on the urgent need for waste prevention and reduction, rather than actions about the management of waste, however important that might be.

In addition, I welcome the report’s emphasis that waste reduction is a priority which requires a collaborative approach and calls for a strong lead from government. In the light of the urgent need to focus on waste reduction, what action specifically will the Government take to address this? I have a number of questions, which, if the Minister is unable to give direct answers to today, perhaps he might respond to in writing to interested noble Lords. The sentiment of the debate is that we should like to take this report on and we hope that the Government will take note of it.

There is a significant commentary on data in the report. It highlights that there is a lack of joined-up data collection. It suggests that the Government’s approach of amalgamating administrative data sources is an insufficient and short-sighted way of tackling waste. When questioned about the lack of data, the Minister in another place, Joan Ruddock, conceded “we have got gaps”. But, rather than attempting to “plug all those gaps” the Government decided to focus on priority waste streams and then,

“work on the reduction of waste within that particular waste stream”.

The Government have said that they are focusing on priority waste streams. However, does the Minister believe that the data collection on waste will be sufficient to improve our policy and that it would fully meet the requirements for recycling targets from the newly adopted waste framework directive?

The last comprehensive data survey on commercial industrial waste was conducted by the Environment Agency in 2002-03. We in the Opposition believe that there need to be comprehensive surveys to collect data on various waste streams in the UK in order to provide a holistic view on the development of a strategic direction of waste policy. As the report states:

“Targets and policies … are meaningless if they are not based upon a thorough understanding of the waste streams involved”.

I turn now to sustainable design. It has been suggested that about 80 per cent of a product’s environmental impact can be eliminated by better design. The report states that some businesses have begun to embrace sustainability principles as part of their product design, to which noble Lords have referred in this debate, but that large gaps in knowledge still exist. The noble Lord, Lord O’Neill, rightly praised the work at De Montfort University and the noble Lord, Lord Bhattacharyya, brought us his engineering experience to show what can be done by research and knowledge transfer. We must not forget just how important knowledge transfer is to complement the research.

The Opposition believe that in order to encourage sustainable design, designers must be encouraged to work beyond the minimum level of compliance. This process must start at the beginning of product life, with designing out waste through reduced packaging and improved product design. It is possible to use raw materials much more efficaciously and in turn recycle and reuse to much greater effect. This undoubtedly offers environmental and economic benefits. Does the Minister support the use of awards, for example, as suggested in the report, which would be issued by professional bodies to acknowledge those who push the boundaries of sustainable design?

I should like to celebrate an excellent example of how a collaborative approach to sustainable design was recorded in the report. SATCoL, the trading arm of the Salvation Army in the UK, collaborating with a spin-out company of the University of Leeds and Oakdene Hollins, has been working on a cradle-to-cradle approach to encourage the creation of sustainable textile garments. Their work is directed at encouraging reuse—in other words, upcycling—and extending the life of existing products, and should be commended.

At the heart of a waste reduction economy is a set of measures on producer responsibility. This means a reduction in the environmental impact of products and is achieved by producers changing product design, substituting materials and extending product life. Current producer responsibility arrangements cover only a small proportion of waste, mainly packaging, electrical goods, vehicles and batteries. Furthermore, because the current scope of producer responsibility is based on specific categories, it represents only 16 per cent of the total waste generated. It is imperative that we extend producer responsibility at least to those industries, such as electronic producers, that have unilaterally written a joint statement calling on individual producer responsibility in their sector. We know that the British Retail Consortium remains supportive of the reduction of waste. There is much that it can do in this area, as indicated by the noble Lord, Lord Whitty, in his valid point about the sell-by date on foodstuffs.

We need better producer responsibility so that it changes the nature of products. Poor implementation and enforcement of producer responsibility legislation, such as the essential requirements of the 1994 packaging waste directive, have resulted in limited success and missed opportunities regarding waste reduction. How right my noble friend Lord Selborne was to point out that the use of weight criteria discriminates against aluminium, one of the most recyclable materials but in energy terms one of the most costly to produce from its bauxite ore.

The Opposition have recently announced that Archie Norman, the former shadow Environment Secretary and chairman and chief executive of Asda, will develop the first “responsibility deal”, looking at producer waste. I look forward to the development of this deal, and certainly Mr Norman’s experience and drive give good reason to suppose that it can make a significant difference. But what the report makes clear to the Government is that there is much that they can do, and others can take the initiative if they fail to do so.

I am sure that we are all well aware of the collapse in the market for recycled products. Recommendation 4 of the report is,

“to once again ring-fence a proportion of the landfill tax revenue to fund waste reduction initiatives”.

What is the Government’s response to this recommendation? As the noble Lord, Lord Whitty, pointed out, we are way behind in new technologies on recovering energy from waste, whether through the thermal combustion of dry products or anaerobic digestion systems for wet products.

The key to success lies in encouraging businesses to place waste reduction high on their agenda. Those firms which implement innovative solutions to waste reduction often make significant cost savings that also contribute to environmental gains. However, businesses are still lacking information, advice and guidance on clear strategies for waste reduction, and many still fail to recognise the financial costs of their waste material. As enormous contributors to waste production in the UK, it is vital that businesses are given the support required to improve their environmental performance. It is a cause for concern that the Government consider the current arrangements for business support to be sufficient. As the noble Baroness, Lady Sharp, pointed out, organisations such as the Waste and Resources Action Programme, Envirowise and the Market Transformation Programme have an essential part to play in maintaining the momentum in waste reduction, but at the same time the committee recorded its extreme disappointment at the reduced funding for some of these major support bodies. What are the Government’s plans for the future funding of these projects?

It is clear that there is a key relationship between businesses and local authorities in managing waste reduction. As the noble Lord, Lord O’Neill, pointed out, there is a need to provide further guidance to local authorities. How do the Government plan to support the role of local authorities in the management of commercial and industrial waste in the light of funding cuts?

I have spoken up until now about the role of business in particular, but we all have a part to play. Changing our approach to waste is vital for the health of the environment; it is about changing our mindset. Use of eco-labels is a step in the right direction to help consumers make informed choices over products. However, as the committee report noted, the use of eco-labels will not be enough to change the behaviour of consumers to ensure that we become a zero waste society. More must be done, not least, of course, the introduction of an agreed labelling standard, as the noble Lord, Lord Whitty, pointed out. What other measures will the Government take to ensure that there is a change in consumer behaviour towards purchasing environmentally supportive goods?

There is a lack of effective ways for government, business, the voluntary sector and other members of the community to work together. As part of the collaborative approach required, the Government should not underestimate the role that the voluntary sector can play in mobilising support among individuals and community groups—for example, the work of the furniture reuse project during the July 2007 floods, a voluntary network which offered free furniture to those in need.

The Government must, of course, get their own house in order first. We commend them for the establishment of the Centre of Expertise in Sustainable Procurement and look forward to the principles of waste reduction being incorporated into all government departments.

I conclude by thanking once again the sub-committee for conducting this important inquiry and I congratulate its chairman, the noble Lord, Lord O’Neill of Clackmannan, on producing an impressive report. “A useful exercise”, he said. I should say so. Comments throughout the report demonstrate the value that waste reduction brings to creating a low-carbon economy and the pursuit of a zero-waste society. I agree with that view and look forward to progress on the committee’s recommendations.

My Lords, I thank my noble friend Lord O’Neill for his chairmanship of the committee and for an excellent opening speech in today’s interesting debate. Although he said that he was disappointed with some aspects of the response from Defra, some useful matters have been raised today and I can assure him that we wish to continue the dialogue. He mentioned wishing to have further engagement with officials in my department; I would welcome that. It has been a very informative debate.

I welcome the emphasis in the report and in the debate on non-domestic waste, an entirely sensible focus. I also commend the committee on the development of what is described as the waste hierarchy, with disposal being regarded as the last resort. The noble Lord, Lord Taylor, referred to waste and his waist. This can be seen in parallel with the way in which health policy has changed in recent years. For many years the emphasis was always on the end of life—or at least when care had to be given in hospital—whereas recently more emphasis has been placed on prevention in the first place. Of course care in itself is important, just as disposal policies are important, but it has been helpful to give a sense of the comprehensive, integrated and holistic approach that needs to be taken on waste.

I agree that it is right for the UK to seek to set an example. I agreed with the noble Baroness, Lady Sharp, before she injected some disagreeable comments into the later aspects of her speech, when she referred to the current discussions in Europe. She knows that in the Council of Heads of State these very matters are being discussed at the moment. They are critical, not just in terms of European action but with regard to our hopes for Copenhagen at the end of next year. Unless Europe sets the right example, those negotiations will become more difficult.

My noble friend Lord Bhattacharyya said that waste is hugely important and complex. Indeed it is, but it is part of a more general approach to sustainability and our efforts in respect of climate change. It is difficult to overestimate the importance of what we are discussing today.

I reject the noble Baroness’s delightful way of accusing the Government of complacency. My experience in the department I now speak for over the past two and a half months is that there is a huge range of activity, and indeed concern, to ensure that we get our policies and actions right with regard to waste. Her analysis that we are way behind our EU counterparts is not borne out by the facts. Of course there is more that we need to do and that can be done, but we should not underestimate the achievements that have taken place so far. We all accept that waste reduction is necessary, both for reducing carbon emissions and for using resources more efficiently. One of the important messages to come through today is the significant economic benefits for society and businesses of more efficient approaches to the use and disposal of materials, including waste prevention and re-use. The recent developments in the world economy further underline the importance of waste reduction.

That is the key message we have to get over to businesses, whether large businesses or SMEs, and to public sector organisations, which in many cases—the health service in particular—run operations that are very similar to business operations. We have heard examples of businesses that have done extraordinarily well in this area and in the area of design in the past few years, but we have to accept that there is much more to be done to ensure that business is aware of the potential for greater resource efficiency.

I have been discussing this matter with officials very recently, and one thing that has become clear is that the real challenge is to get through to business leaders—the boards of directors and the chief executives—of public sector organisations. We have to take advantage of the challenging economic climate to do that. I pay tribute in that regard to the all-party group mentioned by the noble Lord, Lord Taylor, because it has played an important part in bringing together businesses that operate in the waste sector and the customers they wish to engage with. For me the key challenge remains the question of what we can do to encourage business to recognise that there are distinct financial advantages for it in taking this agenda seriously.

I understand the concerns that the economic downturn poses a problem for those managing waste, as does the volatility of the recycling market. My noble friend Lord Whitty thought that we should be wary of panicking, and I understand that. I was at the Energy Council of the EU last week where this matter was raised by a number of member states. The EU has agreed to consider it before the council’s next meeting. Clearly, we are all aware of the issue.

Equally, we have to focus on commercial and industrial waste. The committee feels that greater emphasis needs to be given by Government to commercial and industrial waste. We believe that the Government have a series of policies which are just so addressed: the landfill tax escalator specifically targets business and commerce as highways producers. I shall come on to hypothecation in a moment. We have a big programme of engagement with business, and we are engaging with key waste stakeholders on priorities for commercial and industrial waste reduction.

I understand the concerns that local authorities may not be providing adequate opportunities for businesses to dispose of and recycle waste. I accept that the connections between commercial and municipal waste streams could be improved. We support the development of local government services through the BREW Centre for Local Authorities, and I do not believe that we should underestimate its work.

A number of noble Lords referred to the perception that local authorities may be disincentivised to collect commercial waste by the landfill allowance trading scheme. I understand that this is a concern for some waste disposal authorities, although there is no evidence that the proportion of commercial waste in the municipal waste stream is decreasing. A dilemma for the Government is that we are very keen to ensure that the landfill directive targets in 2013 and 2020 are met. They are very challenging. Long-term certainty and stability is needed in the scheme. That has led us to the view that rather than restructuring the scheme, we should use the BREW Centre for Local Authorities, which is funded to support and encourage local authorities to address commercial and industrial waste.

I also understand the points raised by my noble friend Lord O’Neill and the noble Earl, Lord Selborne, about local authority performance and the need for greater consistency and direction. How I wish that they had made that point in the Queen’s Speech debate on local government only two days ago. Here we have the eternal problem between the roles of local authorities and central government. In our Queen’s Speech debate on local government, most—indeed, all—of the arguments from noble Lords, particularly those on the Liberal Democrat Benches, were that the Government were telling local government to do too much. Today, as often in these matters when one comes to a specific sector, the view of the House of Lords is entirely different—basically it wishes the Government to tell local government what to do. I recognise the dilemma, because Governments continually play that pressure, but in desisting from the encouragement to dictate to local government in this matter, we have to rise to the challenge of ensuring that local authorities co-ordinate their approaches as much as possible. I certainly accept the potential of joint waste authorities. I will reflect on the comments made in this debate regarding future discussions in my department and with local authorities.

I say to the noble Earl, Lord Selborne, that local authorities have expressed concern about the apparent difference between the practical definition of municipal waste used in guidance for the scheme compared with that set down in the underpinning legislation. We have consulted on this issue and I understand that the majority of responses to the consultation agreed that we need to clarify the interpretation of municipal waste used in the landfill allowance trading scheme. We are planning to change the definition of municipal waste in the Waste and Emissions Trading Act 2003 to bring it into line with the practical application for the 2009-10 LATS year.

I have said that we are keen to give certainty about the level of the standard rate of landfill tax. Decisions on rates beyond 2010-11 will be taken nearer the time, but I can say to the noble Lord, Lord Taylor, that the Government have stated that they expect the standard rate of landfill tax to continue to rise after 2010-11.

I will come to the issue of hypothecation in a moment because I need to address the resources made available by the Government to encourage greater reduction of business waste. It is on the record that the Government are being more selective in the activities that they fund. Clearly, finance must be used as effectively as possible. Inevitably, there are increasing demands on government budgets and we have to ensure that we spend our money in the most effective way possible. I am adding up the list of public expenditure commitments made by the noble Lord, Lord Taylor, and making a careful note. It is easy for all of us to say we should spend more money on particular areas, but we need to be responsible about budgeting. There are clearly strong advantages for businesses to follow the advice given to them by these excellent bodies. It is not simply a matter of putting more resources into these bodies. It is a question of the effectiveness of the advice and the messages given. In general, we are moving away from a policy of hypothecation in order to secure maximum flexibility from our budgets. Even without it, businesses continue to benefit substantially from the support that is provided.

We had an interesting discussion about design. All noble Lords mentioned it in one way or another. The case for less wasteful design was made very clearly indeed. My noble friend Lord Bhattacharyya made some helpful comments, which I will reflect on. I hope that he will offer further advice to the Government in view of the tremendous work that he has undertaken at the Warwick Manufacturing Group. The Government are working with the Design Council on these matters. Clearly, we have to raise awareness of sustainable good design. I certainly accept that that is a challenge that must be undertaken.

I agree with what the noble Lord, Lord Taylor, said about procurement. If we include local government and other bodies, the Government are responsible for approximately £185 billion, which is a huge amount. The more that sustainability in its widest sense can be seen to be a key part of decisions, the more impact we can have on businesses and the way that services are provided. I am keen to take forward that work.

Just as we were saying earlier that we need to ensure that students and designers understand this agenda, so do people who procure—not just the procurement directive within the Office of Government Commerce, but those out there in the world of business and in the public sector. All those people who are concerned with procurement need help, advice and training. We need to engage with the institutes that provide the examination qualifications for those in procurement in this area.

The noble Lord, Lord Taylor, also mentioned awards. I have a list, which I am happy to share with noble Lords, of the many awards available. It has raised in my own mind the question whether there are too many awards, and whether they are perhaps insufficiently focused. I would welcome comments from noble Lords and others on whether the current system of the huge number of awards really does the job properly. I am struck by the fact that, when you visit organisations, you often see in the entrance Investors in People awards or the Queen’s Award flagged. I am not sure that I have seen many with relevance to sustainability. I wonder whether there needs to be a rationalisation and a way in which we can give more emphasis to those awards. We must come to that.

Producer responsibility is important. My department is concerned about the whole question of the environmental impact of products. We are currently piloting 10 product road maps looking at how environmental performance can be improved. I am hoping to launch another road map, on the clothing industry, some time in the new year. There is a great deal of potential.

The noble Earl, Lord Selborne, spoke wisely about how regulations can have a negative impact on the kind of progress that the committee wishes to see. He suggested that, while it is welcome that the Commission plans to overhaul and simplify the whole of the EU’s waste legislation, it will take some time. He is of course right. I will certainly see what we can do to encourage faster progress. It is as well that the noble Lord, Lord Pearson, is not in his place to hear me say that. On action in this country, we are, in liaison with the Environment Agency, planning to issue for consultation updated guidance on the definition of waste to assist businesses and other interested parties.

My noble friend Lord Whitty made some important points on consumer behaviour. We have heard about De Montfort and the need for consumer groups to play their part. We have recently given our intent to pay grants to a number of consumer third-sector voluntary bodies to look at the impact that they can have on changing behaviour. I am happy to write to the noble Lord with further information.

I have no doubt that consumer pressure on businesses to change their attitudes and policies can be very powerful indeed. Given that consumers are increasingly concerned, they will be responsible for the tipping point in our country when businesses that do not get this message will find themselves out of business. I am sure that we need to do more with consumers. The points about sell-by dates and labelling are well taken.

Finally—I have run out of time—I clearly understand the importance of good data in this area. Ministers are always asking officials for more data. We are mostly criticised in this House for the amount of data that we collect. However, I understand what a critical issue this is. We are looking at the available data and the priority waste streams. Early next year we will come to a view on whether the existing sources of data pulled together provide sufficient quality, or whether we need to do further work. I will be happy to report to noble Lords who have spoken in this debate when we reach those conclusions.

This has been an important and informative debate. Although noble Lords may be disappointed with some aspects of the Government’s response, I hope that I have convinced them that we take the report very seriously. We will continue to engage with members of the committee and with the important points that have been put forward today. I again thank my noble friend and members of the committee for their excellent work in this important area.

My Lords, I am grateful to my committee colleagues, the noble Earl, Lord Selborne, the noble Lord, Lord Bhattacharyya, and the noble Baroness, Lady Sharp, for their contributions. We were not only by and large in agreement but complemented one another, as we did not specialise in the same areas. However, we all emphasised our commitment to improving design, and the awareness of design, which lies at the heart of resolving so many of the problems.

I thank my noble friend Lord Whitty for assisting us with his previous ministerial experience and his ever increasing expertise in consumer matters. He made most helpful points. I appreciate the backing that the noble Lord, Lord Taylor, gave to the report. I am not a consensus politician by gut instinct, but I consider that we can agree on matters of this nature. Since the summer we have seen an increase in environmental ambition in this House and in the other place. There is an ever heightening awareness of the importance of getting things right and not slackening in our work despite the fact that we are living in more straitened economic circumstances.

I welcomed at least some of the remarks of my noble friend Lord Hunt of Kings Heath. He did his best to be conciliatory. However, he or his officials will be put not to the sword but to the test if we reconvene the committee. A report of this nature is a position paper at a point in time, but we as a House must return to this issue, not next year but perhaps two or three years’ hence, to see what is going on. Unless we keep it under scrutiny, this issue will be lost to people’s attention. Out of sight is often out of mind. With that health warning, if I can put it that way, I submit the report to the House.

Motion agreed.

House adjourned at 1.33 pm.