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Lords Chamber

Volume 749: debated on Tuesday 19 November 2013

House of Lords

Tuesday, 19 November 2013.

Prayers—read by the Lord Bishop of Birmingham.

Energy: Shale Gas

Question

Asked by

To ask Her Majesty’s Government whether they expect shale gas to be widely used in the United Kingdom; and whether there are circumstances under which they consider fracking for gas is likely to be dangerous.

My Lords, wherever shale gas operations are conducted they must be done in a safe and environmentally sound way. There are regulations in place to ensure on-site safety, prevent water contamination and mitigate against seismic activity and air pollution. As part of this rigorous process, my department, the Environment Agency and the Health and Safety Executive must all approve an application. Local communities will be consulted before any operations and the industry has committed to provide a package of benefits from shale gas production.

My Lords, I thank my noble friend very much for that opening, but I want very quickly to say a few words about the position of shale gas in the UK. On one side, shale gas is considered as having no real future importance and as not being worthwhile; but on the other side, the position is quite different. The Financial Secretary to the Treasury recently wrote that shale gas has the potential to support thousands of jobs, generate substantial tax revenue and keep energy bills low for millions of people. If that is true then our shale gas is very important. Which way would the Minister vote on this?

My Lords, my noble friend is aware, of course, that the Treasury and the Government are very keen to explore all sources of energy. Shale gas will provide the UK with greater energy security, economic growth and jobs, and the Government are encouraging exploration to determine this potential.

My Lords, I suppose that we have all been nimbys at one time or another but it is important now that the public interest should be the main issue. Unfortunately, it looks as if the companies that are investing in fracking are being stopped or delayed, and that is clearly not in the public interest. As I am sure the Minister knows, all the evidence shows that there is only a low public health risk, and even that could be reduced considerably by proper regulation. In those circumstances we need the full support of both sides of the House. I hope that my own party will strongly support the Government on this, although there may be some critical points. What can the Minister tell us about what they are doing strongly to support the companies that are bringing in the private investment which is desperately needed in this vital matter?

My Lords, the noble Lord is absolutely right that this is an important source for us, and as with all things, we are making sure that the environmental protections are in place. We have a very strong regulatory process in this country, as he said. We are doing whatever we can to ensure that the process is followed through smoothly and as quickly as possible so that this industry which is investing in our country is not hindered by unnecessary regulations and red tape.

My Lords, do the Government consider that there are risks from shale gas exploration for such national assets as, for example, the hot mineral water at Bath and the water flowing through the caves at Cheddar? Are there methods for assessing such risks, and are there ways of preventing harm?

My Lords, I hope that I am making it clear that we take seriously any environmental risk whether it is water contamination or anything else. It is therefore right that the Environment Agency, the Health and Safety Executive and my department work very closely together to ensure that the proper processes are followed through and that all the regulations which need to be in place are in place in order for companies to do their work carefully, safely and properly, and for the country to benefit from the potential.

My Lords, is my noble friend aware that just 25 acres of shale gas well pads in Pennsylvania produce as much energy each year as the entire British wind industry, and that they produce energy rather more reliably, too?

My Lords, I am extremely grateful for my noble friend’s intervention because it allows me to agree with him that shale gas is a very important component of the mix that we want for our country.

My Lords, does the Minister agree that there is a big difference between this country and America in that people there own the mineral rights under their farms whereas in this country it is very important to get public opinion behind it? The businesses involved may provide community benefit but that will not replace such a thing as financial benefit. I am not sure that they will get the public behind shale gas without that.

My Lords, the noble Viscount raises an interesting point. Companies have pledged through their own charter that they will at exploration stage give £100,000 in community benefits, but also that 1% of the revenues generated from each well will go to local communities.

My Lords, in the United States the shale gas industry is fragmented and there are good and not-so-good operators in terms of environmental risks. What specific lessons have been learnt from the United States? It is estimated that some 10% of the total UK water supply could be demanded by shale gas if, as many of us hope, it were to be successful. What discussions are the Government having with the water industry to make sure that that area will be catered for if shale gas development takes place?

My noble friend again raises an important point. Water UK, which represents water companies, is working closely with the United Kingdom Onshore Operators Group—the representative body for onshore oil and gas—to make sure that any potential extra demand for water will be managed sensibly. However, water companies are already obligated to produce and update every five years a proper water plan. Water companies will therefore assess well in advance the amount of water that will be available to the operator before it is used.

My Lords, I wanted to let the Minister know that I have just returned from Poland, and fracking was a topic of great conversation there. What if anything has she done to reach out to Poland to discuss how it will pursue fracking? It could make a huge difference to Europe’s carbon emissions.

My Lords, I know that the noble Baroness was in Poland and was aware that she returned today. As she will be aware, the UK is always in close conversation with all its member-state partners, and of course these conversations are ongoing.

House of Lords: Size

Question

Tabled by

To ask Her Majesty’s Government what representations they have received about the increase in the size of the House of Lords.

My Lords, on behalf of my noble friend Lord Foulkes, and with his consent, I beg leave to ask the Question standing in his name on the Order Paper.

My Lords, the Government have received few representations about the size of the House. Of the ones that I have received, I would say that the majority are from those seeking to increase the size of the House by suggesting eminent candidates for membership, sometimes including themselves.

That is very good. My Lords, I do not need to remind the Leader of the House that, with the exception of the National People’s Congress of China, we are now the largest legislative Chamber in the world. Does he agree that there is virtually no support on the Benches behind him—or anywhere else in the House—for further increases in the size of this House? Is he not aware that people see this attempt to pack the House as a bit on the cynical side? However, it is not working, because the Government are still losing Divisions. What is the point?

There are a number of points. First, we need to keep refreshing the House with new and young membership. I cannot remember which noble Lord it was who the other day pointed out that sadly all of us are growing older. That is why we need to have new Members coming in.

On the point about “packing the House”—that was the phrase the noble Lord used—I repudiate the charge. In his next point, he himself gave the lie to that by citing the fact that, for some extraordinary reason, the Government continue to suffer the occasional defeat on their legislation. In terms of the numbers, it is worth reminding the House that if one draws a comparison with the numbers for each of the four main groups in 2007 when Gordon Brown became Prime Minister, there are 25 more noble Lords now than there were then. We sometimes forget that, sadly, around 100 Members have died or taken leave of absence since the most recent general election.

Is my noble friend aware that in the other House, Mr Dan Byles has taken up the Bill that we passed some months ago, which would provide the authority for the House to produce both retirement and expulsion? Would he keep a benevolent eye on the progress of that Bill in the other place, because it would provide an alternative exit strategy to that provided by the Grim Reaper?

I am keen that we should have alternatives to the Grim Reaper. I shall certainly keep an eye on progress. The whole House will share my gratitude to my noble friend Lord Steel for his persistence in taking forward these issues. Therefore I am pleased, as I know he will be, that, following representations from a number of people, not least himself, the Government’s position has moved to one of support for the Private Member’s Bill sponsored by Dan Byles. The whole House will welcome that. It will deliver the benefits to which my noble friend referred.

My Lords, has the noble Lord read the study by UCL that shows that if the Government go ahead with their intention to rebalance the Lords according to the votes cast at the most recent general election, the size of this House would reach 1,200 or more? That would be a nonsense. Will the noble Lord reassure the House that no more political appointments will be made to your Lordships’ House until the next general election?

I will say two things. First, shortly after I came in, I was assured by everyone that there were going to be 100 Peers packed into the House within a couple of weeks. The noble Lord, Lord Hunt, will remember that, on the back of an amendment put down by my noble friend Lord Steel, he put forward a helpful amendment urging the need for restraint so far as appointments and patronage were concerned. I argue—as I argued then—that that restraint has been shown. The August list of 30 or 31 names was the first political list for three years.

In terms of the future, I cannot give any different undertaking from that which I am sure all my predecessors would have given: namely, that patronage rests in the hands of the Prime Minister. However I shall certainly ensure, as I continually do, that the views of your Lordships’ House are brought before all those who are concerned with these decisions.

Finally, following which I must allow others to speak—I know that this is an issue about which many people in this House care a lot and that there are concerns—it is very important when talking of the work of the House to the outside world that we do not in some way give the impression that this House is unable to do its job. We do it outstandingly well.

My Lords, will the Leader of the House take the opportunity to emphasise the last point that he made, not only in this House but elsewhere? Whatever the issues may be, it is important to recognise that this House holds the Government to account to a very high standard, scrutinises legislation to a great degree and promotes debates that are of great concern to our fellow citizens. The House actually functions well.

I agree with the Convenor of the Cross Benches very strongly. In taking legislation through your Lordships’ House, I saw the difference in the intensity of scrutiny in this House compared with that at the other end of the building. I think that we are right to be proud in the way that the noble Lord reminds us.

My Lords, on a lighter note after that very important question, one hears the complaint that there are too many noble Lords and that we cannot get a seat. I draw the House’s attention to the fact that, in the Commons, there are 650 Members and 350 seats. With an average number of 450 Peers, or around that figure, attending daily, it seems that we are rather well served in the ratio of seat to Peer. Does my noble friend agree?

I think my noble friend said “seat to Peer” rather than “seat to rear”. It is good of her to remind noble Lords of that, and I know she is not suggesting that we should therefore set about a process of reduction of space. I know that here are problems at certain times of the day—Oral Questions is a good example. However, we all know that there are other times of the day when the Chamber is not as full as perhaps we might sometimes wish. As the noble Lord, Lord Laming, said, in terms of the job that we do, we do not have guillotines, we are all able to put amendments down and we take part in scrutiny. I have been able to increase the number of opportunities for QSDs, which I think has been widely welcomed, and we are getting through them much faster. We have had more post-legislative scrutiny and more ad hoc committees. I am hoping, in that way, to address the issue of attendance, which is a greater challenge for us than the question of the absolute size of the House.

Syria

Question

Asked by

To ask Her Majesty’s Government what representations they have received relating to the creation of a humanitarian aid corridor in Syria.

My Lords, humanitarian corridors are temporarily demilitarised zones intended to allow the safe passage of humanitarian aid and the evacuation of vulnerable civilians. DfID supports many humanitarian agencies operating inside Syria. To date, DfID has received no requests or representations for a humanitarian corridor from these partners or other humanitarian agencies. We welcome any option that complies with international law that might save lives in Syria.

I have it on the authority of Dr David Nott, the distinguished London surgeon who recently returned from delivering front-line medicine in rebel-held Syria, that aid is not getting where it is most needed. Dr Nott made representations to HMG, to which he has not received even an acknowledgement as yet. Will the Government work with the international community to insist that a humanitarian corridor be opened to deliver life-saving medical aid and bring the severely wounded to safety? Safe passages have been achieved in other conflict zones. If chemical weapons inspectors can be given protection, surely protection is possible for humanitarian aid.

I have a great deal of sympathy for what the noble Baroness has said and for what the surgeon David Nott has said. I heard the appeal that he made and obviously pressed very hard within DfID to elucidate this, because it is obviously extremely appealing. The problem is of course, as the noble Baroness will know, that the situation in Syria is immensely complex. One needs only to look at the map of where various groups are, and how that changes from day to day, to see how complex this is and the number of humanitarian corridors that would be required. In order for those to be created, all groups in the relevant area would need to buy in. Alternatively, it would need to be enforced in a military fashion, which would require a UN Security Council resolution. I think the noble Baroness can see some of the challenges in my answer.

My Lords, some 18 months ago, Turkey was considering intervening in Syria to create a humanitarian buffer. At the same time, US State Department officials were mooting a similar no-kill zone. The massacre at Srebrenica tells us, with a very good example, why a humanitarian corridor would require a protective military presence. Who would provide it in Syria, and with whose collective agreement?

My noble friend is absolutely right, and that bears out the answer I just gave to the noble Baroness. We would require the buy-in of all the parties or that kind of military enforcement. That is why the major organisations working in the area—for example, the United Nations, MSF and the ICRC—have reservations about the proposal for a humanitarian corridor for the very reason that my noble friend referred to. Sometimes, these result in civilians being less safe. He pointed to the Bosnian example, but more recently, of course, there has been the Sri Lankan example. There are examples where not only civilians, who are supposed to be protected, are in greater danger, but the humanitarian workers who may appear to be shielded by particular military groups are also under greater threat.

My Lords, will the Minister clarify whether discussions are taking place in response to the view expressed by the UN High Commissioner for Human Rights, Navi Pillay, that Syria should be referred to the ICC? Would an ICC referral not send an unequivocal message that such is the seriousness of the crimes—including denying the right to humanitarian aid—that strong measures to tackle impunity are essential and that criminal indictments of senior leaders, as was the case in the Balkans, can strengthen peace efforts?

It is clear that referring leaders in these situations to the ICC has, we hope, a chilling effect for other leaders thereafter. One can see that building in terms of leaders’ responses, and one has to hope that in the situation in Syria some of the rebel groups as well as the government groups will recognise the challenge there. However, at the moment, the most important thing is to try to bring about a political resolution to this problem so that the killing on all sides can stop.

My Lords, I think that everybody recognises the complexity of the situation, but just over a month ago, the UN Security Council itself called unanimously for humanitarian pauses. What contribution have Her Majesty’s Government been able to make diplomatically pursuing the possibility of more humanitarian pauses to bring relief to some of the civilians caught up in the fight?

Again, that is a case in point. The right reverend Prelate makes a good point in referring to those humanitarian pauses which were politically agreed but not delivered. That is the challenge. This is a very complex situation with many groups fighting each other, and enormous efforts are being put in—not least by UN special envoy Brahimi at the moment—to try to push forward some kind of agreement, but it is immensely difficult.

My Lords, does the Minister agree that as welcome as the statement recently produced on humanitarian access was, the perception on the ground is that access to Syria is not being permitted as it needs to be? Will the Minister seek to encourage her colleagues that, no matter how frustrating it may be to deal with the authorities in Syria, in order to move further forward with greater humanitarian access, one needs to persevere in communicating with the senior Syrian leadership?

The noble Earl is right. The presidential statement called for unhindered humanitarian access, including the granting of visas and permits, which is something that the Syrian Government can do, and pressure is being put on them to do that.

My Lords, in response to the noble Earl’s question, is it not made rather difficult because we do not recognise the legitimacy, or even the existence, of the Syrian Government?

Small and Medium-sized Enterprises

Question

Asked by

To ask Her Majesty’s Government what assessment they have made of the level of financing available to small and medium-sized enterprises.

My Lords, under this Government credit conditions continue to improve. Survey evidence indicates that more small and medium-sized enterprises are using external finance. Recent data from the Bank of England show that gross lending is continuing to rise year on year and in September reached the highest level since 2009. More broadly, confidence is beginning to return to businesses, which are now more ready to borrow and invest than since before the financial crisis.

My Lords, yet again I am asking the Government why much needed financial support is not getting through to SMEs. According to the Bank of England, net lending to SMEs was down £600 million in the second quarter of 2013. The answer to the Question is obvious: financing that should be going to small businesses is in fact being used by banks to build up their profitable mortgage portfolios. Does the Minister accept that banks should be backing small businesses rather than helping to create another property bubble?

My Lords, it is important to set the picture in context. According to the British Bankers’ Association, the current stock of lending to SMEs by the top seven banks is more than £99 billion. By this measure, around £2 billion is lent by the banks to SMEs every month. SMEs are actually twice as likely to be successful when applying for finance than has been predicted.

The World Bank’s ease of doing business index puts the UK as the top place in the world for accessing finance. I think this overstates how things are. In any case, we know that there is scope for improvement. Clearly, it is a tough environment for small businesses. Although net lending might have dropped last year, I am pleased to report to the noble Lord that gross lending has gone up, as did net lending in September.

My Lords, the August SME Finance Monitor showed a welcome increase in SMEs seeking finance, from 39% to 44%, but this increase is from less conventional sources of funding; for example, lease and income financing, which focus on cash flow rather than growth. The report went on to say that 25% of SMEs expect their loans to be turned down, whereas in fact 50% are successful. What can the Government do to encourage more SMEs to apply for finance for growth?

The noble Baroness makes a very important point. SMEs are more likely now to have an alternative source of finance, including asset or leasing and quite often inward discounting. They are not approaching their own banks as much as they used to, but I am pleased to report that banks are now proactively lending money to SMEs.

Will the Minister respond to my noble friend’s question about real estate? The Bank of England report states:

“The outlook for corporate lending also depends on developments in the commercial real estate (CRE) sector, which makes up around a third of lending to non-financial businesses”.

The point is that the property bubble is taking money away from the SME sector. Will the Minister respond to that?

My Lords, under our Funding for Lending scheme, £80 billion has been allocated by the Bank of England, of which some £17.6 billion has been taken up by SMEs. I agree that a large proportion of that is in the property sector. We have relaxed some of the conditions for lending money to SMEs, which are now able to finance their debt or their stock. Hence we will be lending more money to SMEs and this figure is gradually going up. Real lending to businesses is now taking place.

My Lords, finance is important for small and medium-sized enterprises right across the board. Can the Minister tell us what the Government are doing to help with cutting red tape? This is one of the most important things for a small business. Finance is important but cutting red tape, which gets in the way of start-ups and small businesses, is also very important for small businesses’ future.

My Lords, it is a pleasure to answer the first question from my noble friend, who brings a wealth of experience from both the private and public sectors. As your Lordships know, the Government have introduced a moratorium on all new domestic regulations for three years for new start-ups and businesses with fewer than 10 employees. In addition, in January we introduced a “one in, two out” rule on all domestic regulations affecting businesses and voluntary organisations. The Government are absolutely committed to creating a culture in which all businesses, including SMEs, can thrive.

My Lords, in September 2012, having failed to persuade the Treasury to break up RBS, the Secretary of State announced the formation of the British Business Bank. However, it was not until 17 October 2013 that the first chair was appointed and then we were told that the bank was in a “substantial expansion phase” and that it was on target to unlock £10 billion for expanding companies. Last week we learnt that the bank finally made its first investments, when it gave £45 million to two financial institutions, Praesidian Capital Europe and BMS Finance. When will we see funding actually flowing to the small and medium-sized businesses that need it and when do the Government expect the bank to reach its £10 billion target?

My Lords, on 1 November RBS committed to a new direction that will lead it to being a boost to the UK economy, rather than a burden. It will be dealing decisively with the problems from the past by separating out the good and the bad and putting the bad loans in an internal bad bank. RBS will now focus on its core British business, supporting British families and companies. It will sell off more of its overseas operations and go on shrinking its investment bank so it has more capital to support lending to the British economy. RBS is committed to becoming the number one bank for small and medium-sized enterprises, as judged by customers, measured by the newly created survey to be run by the Federation of Small Businesses. On growing SME lending, RBS continues to be the number one bank for SMEs.

My Lords, one of the key problems at the moment in the British economy is not about lending but quite the opposite—businesses are sitting on cash mountains, particularly large corporations and even medium-sized and some small businesses. We need now to liberate that cash so it is invested and drives this economy forward. Is not the good news economically at the moment the exact trigger for those businesses to do just that?

I agree with my noble friend. In fact, we are returning to consumer and business confidence. The figures this morning from the OECD show that our growth forecast has gone up from 0.6% to 1.4% for 2013 and 2.4% for 2014. My noble friend is quite correct that a large number of SMEs are holding cash in their banks. A lot of them are also risk averse, or were until recently, and hence are not borrowing that much money from the banks.

Northern Ireland (Miscellaneous Provisions) Bill

First Reading

The Bill was brought from the Commons, read a first time and ordered to be printed.

Statutory Instruments

Membership Motion

Moved by

That Baroness Humphreys be appointed a member of the Joint Committee in place of Lord Avebury, resigned.

My Lords, in the spirit of restoration and renewal, I beg to move the Motion standing in my name on the Order Paper.

Motion agreed.

Motor Vehicles (International Circulation) (Amendment) Order 2013

Motion to Approve

Moved by

That the draft order laid before the House on 17 October be approved.

Relevant document: 12th Report from the Joint Committee on Statutory Instruments, considered in Grand Committee on 12 November.

Motion agreed.

National Health Service (Approval of Licensing Criteria) Order 2013

Motion to Approve

Moved by

That the draft order laid before the House on 16 October be approved.

Relevant documents: 11th Report from the Joint Committee on Statutory Instruments, considered in Grand Committee on 12 November.

Motion agreed.

Inheritance and Trustees’ Powers [HL]

Order of Consideration Motion

Moved by

That it be an instruction to the Special Public Bill Committee to which the Inheritance and Trustees’ Powers Bill [HL] has been committed that it considers the Bill in the following order:

Clauses 1 and 2, Schedule 1, Clauses 3 to 6, Schedule 2, Clause 7, Schedule 3, Clauses 8 to 11, Schedule 4, Clause 12.

Motion agreed.

NHS: Mid Staffordshire NHS Foundation Trust

Statement

My Lords, I shall now repeat a Statement made earlier today in another place by my right honourable friend the Secretary of State for Health on the Government’s response to Robert Francis’s report on Mid Staffordshire Hospital. The Statement is as follows.

“With permission, Mr Speaker, I would like to make a Statement about the Government’s response to the Mid Staffordshire NHS Foundation Trust public inquiry.

Let me start by paying tribute to the men and women of courage without whom this darkest episode in the history of the NHS would never have come to light: people like Julie Bailey and members of Cure the NHS, who stood outside the Department of Health in all weathers because no one would meet them to hear about the inhumane care given to their loved ones; brave whistleblowers like Mid Staffs nurse Helene Donnelly; and campaigners who suffered tragedies elsewhere, like James Titcombe, who never gave up the fight after losing his son, Joshua, at Morecambe Bay. They suffered greatly for their selfless determination to make sure that their personal losses were not in vain. All of us in this House today are humbled to stand in the shadow of their bravery.

Robert Francis and his team also deserve huge credit. Their diligence and thoughtfulness led to an outstanding report which will transform our NHS for the better. Finally, let me pay tribute to all NHS front-line staff, for whom reading about these events in the media has been immensely distressing. We owe it to them to make sure that poor care is never again allowed to take root and survive unchallenged in our NHS.

Since our initial response to the inquiry in March, much has happened. Thirteen hospitals have been put into special measures as part of a tough new failure regime. Those hospitals, where poor care had been allowed to persist, are now being turned around, and I thank the Keogh inquiry team for its painstaking work in this area.

Independent, Ofsted-style ratings of hospitals are under way, led by Professor Sir Mike Richards, the new Chief Inspector of Hospitals. The first 18 trusts are currently being inspected, with quality of care and safety paramount. We have appointed new Chief Inspectors of Adult Social Care and General Practice, whose robust inspections of care homes, domiciliary care and surgeries start next year. Surgical survival rates for 10 major specialties have been published by individual surgeons, making the NHS a world leader in transparency.

Today, the Government are publishing their further response to the inquiry as well as our response to the Health Select Committee’s report on the inquiry. Both these responses have been laid before Parliament.

The NHS is a moral being or it is nothing. It was set up 65 years ago with the noble ideal that no one should ever be prevented by background or finances from accessing the best care. That is why it remains the most loved British institution, and rightly so. But each and every case of poor care betrays those worthy aims. I do not want simply to prevent another Mid Staffs; I want our NHS to be a beacon across the world not just for its equity but its excellence. I want it to offer the safest, most compassionate and most effective care available anywhere, and I believe it can.

But that is only if there is a profound transformation of the culture in the NHS. The inquiry shows the devastating effects of overly defensive responses: hurting families, suppressing the truth and preventing lessons being learnt. Failure cannot be addressed when it is covered up, so today I am announcing new measures to promote a culture of openness and transparency.

From 2014, every organisation registered with the CQC will have a statutory duty of candour. Patients must be told promptly about any avoidable harm, but there will be a statutory requirement to notify any harm that has led to avoidable death or serious injury.

We will consult on whether hospitals that are found not to have been open and transparent with patients or families at the earliest reasonable opportunity should risk having their indemnity from litigation awards reduced or removed by the NHS Litigation Authority. The signal must go out loud and clear to all clinicians: if in doubt, report an incident and tell the patient.

The professional regulators have agreed to place a new, strengthened professional duty of candour on all doctors and nurses. Failing to inform a patient, not reporting avoidable harm, or obstructing someone else seeking to do so will be subject to sanctions, including being struck off.

Inspired by the airline industry, this duty will cover “near misses”—occasions when mistakes were made that could have led to harm and from which we need to learn. Conversely, prompt reporting may be considered as a mitigating factor in a professional conduct hearing. This is not about penalising staff for making mistakes; it is about enabling them to learn from them. The NHS will adopt a culture of learning, as recommended by Don Berwick and his expert committee. I thank them for their seminal report.

A culture of openness also means learning from complaints. In line with the recommendations of the right honourable Member for Cynon Valley and Professor Tricia Hart’s excellent review, all patients will be able to access independent help in making their complaint, with clear signs in every ward explaining how to do so; the Chief Inspector of Hospitals will inspect complaints handling to establish whether trusts are genuinely seeking to understand and learn from them; every quarter, trusts will publish the number of complaints received and the lessons learnt; and the Health Service Ombudsman will dramatically increase the number of cases that she looks at.

It is impossible to deliver safe care without safe staffing levels. All hospitals will be required to monitor their staffing levels on a ward-by-ward basis, analysing precisely how many shifts meet safe staffing guidelines. By the end of next year, this will be done using models independently approved by NICE. No hospital will be able to conceal unsafe staffing from the public because from next June all these data, both at ward and hospital level, will be published alongside other safety data on a new NHS safety website, triggering CQC action if there is cause for concern.

Things are already changing for the better and I am pleased to report that trusts are planning to recruit an additional 3,700 nurses compared to a year ago. However, we need to go further to train and motivate staff, particularly healthcare assistants and social care support workers who perform so much vital care. Healthcare assistants and social care support workers will be required to have a new care certificate to ensure that no one is ever asked to perform personal care without adequate training, whether in hospitals or care homes. The title “nursing assistant” will be used widely in hospitals and paths to nursing careers will be improved. I thank Camilla Cavendish for her excellent work in this area. We also need to broaden the talent pool going into NHS management positions, in particular attracting more clinicians and those with good external experience. We have introduced a fast-track leadership programme, sending 50 people a year to a world-leading business school, followed by time shadowing top NHS chief executives.

Robert Francis correctly highlighted the failure of regulatory systems to identify quickly what happened at Mid Staffs. Subsequently it has become clear that Ministers put pressure on regulators which may have led them to tone down news about poor care. This is totally unacceptable, so we will strengthen the statutory independence surrounding reports into care quality. The chief inspector will be the nation’s whistleblower-in-chief and nothing must ever be allowed to stand in his way. The CQC can prosecute when fundamental standards are breached. Trusts put into special measures will have a strictly limited time to get their house in order before administration is considered. Foundation trusts in special measures will have their autonomy suspended and action will be taken to ensure that they quickly improve. No trust will be able to progress to foundation status unless they are rated good or outstanding.

Proper accountability must be at the heart of the NHS. I have therefore accepted Professor Don Berwick’s recommendation of legal sanctions for those found guilty of wilful neglect or ill treatment. There will be a new criminal offence for care providers that supply or publish false or misleading information. A new “fit and proper persons” test will enable the CQC to bar unfit directors from boards. Every hospital patient should have the names of a responsible consultant and nurse above their bed. Starting with over-75s from next April, there will be a named accountable clinician for out-of-hospital care for all vulnerable older people.

One of the most chilling accounts in the Francis report came from Mid Staffs employees who considered such care to be “normal”. Cruelty became normal in our NHS and no one noticed. The Francis report made 290 recommendations. I accept the principles behind all of them and, wherever possible, have adopted the practical solutions suggested by the inquiry.

Robert Francis himself has welcomed today’s announcement as a carefully considered and thorough response to his recommendations, which he says will contribute greatly towards a new culture of caring and making our hospitals safer places for their patients.

Today’s measures are a blueprint for restoring trust in the NHS, reinforcing professional pride in NHS front-line staff and, above all, giving confidence to patients that after Mid Staffs the NHS has listened and learnt and will not rest until it is delivering the safest, most effective and most compassionate care anywhere in the world. I commend this Statement to the House”.

My Lords, that concludes the Statement.

My Lords, I remind the House of my interests as chairman of an NHS foundation trust, president of GS1 and a consultant and trainer with Cumberlege Connections. I thank the Minister for repeating the Statement. What happened at Mid Staffs was a betrayal of the NHS and its values. The previous Government rightly apologised, but now is the time to back our words with action. That is why, in welcoming much of what has been said, I would like to press the Minister on where we feel we would have gone further and question why, of the 290 recommendations from Francis, 86 are not being implemented in full.

First, I pay tribute to my right honourable friend Ann Clwyd, Professor Patricia Hart, Professor Sir Bruce Keogh, Camilla Cavendish, Professor Don Berwick and of course Sir Robert Francis. Between them they have given us proposals that will help to prevent a repeat and, more importantly, change the whole of the NHS for the better. Both Francis reports found three primary and fundamental causes of what went wrong: a failure to listen to patients; a lack of properly trained staff; and a dysfunctional culture. I shall turn to each of those.

First, I am sure that the Minister will agree with me that patients and their families must always, as Francis recommended, be the first priority for the NHS. Was Francis not right to recommend that the NHS constitution and the ethos that it sets out should be required reading for all NHS staff? I congratulate the Minister on agreeing to implement the Clwyd review in full and change the way that the NHS handles complaints.

Secondly, there is the issue of staffing numbers and training. The first Francis report found that Mid Staffs made dangerous cuts to staffing over a short period. I welcome the Government’s new focus on this issue, but is it not the case that nurse to patient ratios across the NHS have got significantly worse in the past three years, with nearly 6,000 fewer nurses, more older patients in hospital and bed occupancy running at record levels?

It is encouraging that the NHS plans to recruit more nurses and is introducing more monitoring and transparency. The Secretary of State says that things are already changing for the better, but is the Minister aware that Monitor, the economic regulator of the NHS, has warned that trusts are planning major nurse redundancies in the 2014-16 period, far outweighing any increase planned this year? Will the Government intervene to stop that? Further, why have the Government stopped short of requiring safe staffing levels? Is the Minister aware that nurse training places have been severely cut in recent years and that many NHS trusts and foundation trusts are now being forced to recruit from overseas?

Alongside nursing, more action is needed to raise standards across the caring workforce. As Robert Francis has said, it is unacceptable that the security guard at the door of the hospital is more regulated and subject to professional sanctions than the healthcare assistant attending to an elderly patient. The development of the care certificate, as proposed by Camilla Cavendish, is a step forward, but will it not work only alongside a register of those who hold it and with an ability to remove it if they fall short? What happens if a member of staff employed as a care assistant in an NHS hospital has indeed obtained a care certificate but is then found to be wholly unsatisfactory to carry out a care assistant’s work? What happens to the certificate? Surely we need to go back to the Robert Francis recommendation of a system of regulation for healthcare assistants. Will the Government reconsider this decision and at least commit to keeping it under review?

On culture change, Robert Francis’s central proposal is a new duty of candour on organisations and individuals. It is not entirely clear how an organisational duty alone will help individuals challenge an organisation where there is a dysfunctional culture. Is it not the case that an individual duty, as proposed by Francis, is needed? The point comes over very clearly from the evidence given to Francis from a senior, soon to be retired consultant. He said:

“I took the path of least resistance … There were also veiled threats at the time that I shouldn’t rock the boat at my stage in life”.

It is only when an individual is both required to speak out and protected in doing so that the House can say that it has done enough to safeguard patients.

The duty of openness and transparency should apply equally to all organisations providing NHS services, including, as Francis rightly recommended, contractors providing outsourced services. The Government are clearly bringing in more outside providers. Surely patients need reassurance that we do not have an uneven playing field where private providers face less scrutiny. Will the Government extend the duty of candour to all healthcare organisations as Francis proposes? The amendments to the Care Bill do not seem to make that clear. Should not the Minister commit to extending freedom of information law to any provider of NHS services and not allowing them to hide behind commercial confidentiality?

On openness, Francis made a direct call on the Government to set an example to the rest of the NHS. He said:

“risk assessments should be made public, and debated publically, before a proposal for any major structural change to the healthcare system is accepted”.

Given the Government’s claim to have accepted this recommendation, should they not show what they mean by finally publishing the risk register on the current reorganisation of the NHS?

Finally on openness, the NHS will be more accountable to families with a proper system of death certification. The House will recall that this was a core recommendation of Dame Janet Smith’s inquiry into the Shipman murders. The Francis recommendations on this are not all accepted in full. I hope that the Minister will be able to give me some reassurance on that.

I would also like to ask the Minister about the regulatory structure. I have raised with him before the question raised by Don Berwick in his very interesting report on patient safety, which the Government themselves commissioned. In that report he said:

“The current NHS regulatory system is bewildering in its complexity and prone to both overlaps of remit and gaps between different agencies. It should be simplified”.

He went on to say:

“The regulatory complexity that Robert Francis identified as contributing to the problems at Mid Staffordshire is severe and endures, and the Government should end that complexity”.

Has the Minister picked up on the comment made by the chair of the CQC to the Health Select Committee in October, where he said that responsibility for patient safety in the health service should be transferred back from NHS England to the Care Quality Commission? Will the Minister agree that that is the right thing to do?

Can I also ask about the impact of competition on patient safety? The Minister may well have seen reports at the weekend that there are proposals to centralise cancer services in first-class treatment centres in order to enhance the efficiency, safety and effectiveness of the treatments being offered. Is he as shocked as I am that there has been a challenge to those proposals on the basis that they may run against the competition rules set out in the regulations that the Minister brought to this House in relation to Section 75 of the Health and Social Care Act 2012? Will the Minister look into those circumstances?

Finally, can I ask about the National Patient Safety Agency? In his Statement, the Minister referred to the fact that there will be a duty on staff to report near misses. He will be aware that the previous Government established the National Patient Safety Agency to allow staff to report those near misses. Is he as concerned as I am that the abolition of the NPSA and the transfer of the listening and reporting function to NHS England may, in itself, act as an inhibitor to staff feeling confident in reporting those safety incidents?

Finally, does the Minister believe—

My Lords, this does not eat into Back-Bench time. I think I am quite at liberty to ask as many questions as I like. Perhaps the party opposite would do me the courtesy of actually listening to the questions. Let me say finally—

My Lords, I am very happy to carry on. We have 20 minutes for Front-Bench questions and answers, and I have not yet taken half that time. I am quite happy to go on but, of course, I want to give the Minister time to respond as well. Perhaps some noble Lords will read the Companion to see what the rules are.

Finally, is primary legislation needed to implement any of these recommendations? I say to the Minister that if that is so, we on this side will certainly co-operate on a cross-party basis to enable those recommendations to be implemented in full.

My Lords, first, I welcome the noble Lord’s very positive comments about the various reviews that have been commissioned in recent months. I am glad that he agrees that, in broad terms, the Government are on the right lines in accepting the recommendations that have come forward.

The noble Lord asked a number of questions, the first of which was about why we have not implemented all the recommendations of Robert Francis in full. Most of the recommendations have been accepted in principle, in part or—in the main—in their entirety. In some cases, we are taking an alternative approach to that suggested in the inquiry if we believe it is likely to be more effective in reaching the intended outcome. In total, we have rejected just nine of the 290 recommendations and where recommendations have been rejected, a full response outlining the reasons for doing so and the alternative action that organisations are taking is provided in our system-wide response.

The noble Lord asked about the regulation of healthcare assistants, a matter to which we return at regular intervals in this House. I assure him that the Government keep this issue under regular review but, for the time being, our view is to tackle the key issue at its root, focusing on making sure that healthcare support workers have the right training, values, support and leadership to provide the high-quality care that we all want patients to receive. We are committed to ensuring that this part of the workforce receives high-quality and consistent training. We have commissioned Skills for Care and Skills for Health, as the noble Lord knows, to develop a code of conduct and minimum training standards. We have also announced the development of a care certificate, which I am sure will be particularly welcome to a number of my noble friends.

The noble Lord asked me about a situation in which employers might find that a healthcare assistant or social care support worker no longer met the standards required by the care certificate. In that event, Health Education England and the sector skills council will set out in guidance the requirements for ensuring that appropriate retraining is given or other disciplinary action is taken. The guidance will be that the worker in question should not work unsupervised until the problem has been resolved and the employer is confident that their care certificate remains valid. Of course, if a healthcare assistant is found to have harmed patients or have been a serious risk to patients, the Disclosure and Barring Service needs to be considered as the ultimate remedy to make sure that that person does not put patients at risk in future. However, that is an extreme situation, which I believe will not be the norm.

The noble Lord referred to the nurse numbers. In the last spending review, the NHS budget was protected in real terms, with cash funding rising by £12.7 billion by 2014-15. Alongside that, Health Education England has been working with NHS trusts to develop the overall workforce plan for England for next year, reflecting the strategic commissioning intentions. That work indicates that a number of trusts have already increased their nurse staffing levels during the current year and others are planning to do so, as I mentioned in the Statement. Initial plans indicate that trusts intend to employ an increase of more than 3,700 nurses this year.

Moving to staff ratios, nursing leaders have been clear—indeed, there is a letter in today’s Times about this—that hospitals should publish staffing details and the evidence to show that staff numbers are right. However, we do not think that prescribing a rigid set of rules from the centre is the right way forward. The National Quality Board and the Chief Nursing Officer are publishing a guidance document that sets out current evidence on safe staffing. By next summer, NICE will produce independent, authoritative, evidence-based guidance on safe staffing and review and endorse associated tools for setting safe staffing levels in acute settings. From next April, by June at the latest, NHS trusts will publish ward-level information on whether they are meeting their staffing requirements. A review every six months will allow for those staffing levels to be quality assured.

On the issue of candour, we have had a number of debates on this subject, both during the passage of the Health and Social Care Act and, more recently, in the Care Bill, and I believe that we have reached a place for which this House can take some credit because the Government have moved a considerable distance from their original position. We agree with Don Berwick’s intention that professional regulators are in the best position to strengthen the duty of candour for individual professionals working in a hospital. Of course, the duty of candour applies to the corporate entity but the GMC and the NMC will be working with the other regulators to agree consistent approaches to candour and the reporting of errors, including a common responsibility to be candid with patients when mistakes occur, whether serious or not, and clear guidance that professionals who seek to obstruct others in raising concerns or in being candid would be in breach of their professional responsibilities. The professional regulators will issue new guidance to make it clear that it is the responsibility of professionals to report near misses for errors that could have led to death or serious injury as well as actual harm, and they must do so at the earliest opportunity. We will seek advice from experts on how to improve the reporting of patient safety incidents, including whether the threshold for the statutory duty of candour should include moderate harm.

The noble Lord referred to the NPSA. He is right that the NPSA’s function of reporting safety incidents has transferred to NHS England, into which the National Reporting and Learning System has been absorbed. I do not see that transfer as, in any way, inhibiting staff confidence in reporting safety incidents. The essence of the system remains as it always has been.

The noble Lord asked about the responsibility for patient safety being transferred back to the CQC. I am sure that, on reflection, he will agree that patient safety is everybody’s business. In part, it is the business of the CQC but, above all, it is the business of those who work in the NHS. It is the business of trust boards and of commissioners. It is also very much the business of those whose job it is to look at the performance of the NHS on behalf of patients—chiefly Healthwatch, but also patient organisations. Therefore one cannot single out an individual organisation as taking sole responsibility for this.

I will write to the noble Lord about the Freedom of Information Act. However, he should not forget that the standard contract that the NHS operates binds anyone who provides services to the NHS into certain contractual terms, and the disclosure of relevant information is a part of that.

On death certification, the noble Lord asked me about medical examiners. We agree that they must be independent of the deceased person and their medical practitioner. That is because medical examiners need to carry out independent scrutiny of the medical circumstances and cause of apparently natural deaths to make sure that the right deaths are notified or referred to a coroner. However, we need to ensure that there are sufficient numbers of medical examiners to carry out this work, particularly in rural areas, so appointees are likely to have some sort of professional relationship with local care providers. Therefore the draft death certification regulations for medical examiners do not require that medical examiners are independent of the organisation whose patients’ deaths are being scrutinised. However, we are mindful of the need for a greater level of independence within the spirit of this recommendation and the Government will review how they can include further safeguards on this front.

The noble Lord suggested that the NHS constitution was not the right means of changing the culture of the NHS, and I agree with him. However, declaratory statements in the constitution are an important part of signalling to the NHS its vision and values in the broadest terms, and the duties that people should feel they are under. The values, rights and pledges set out in the NHS constitution form the basis of everything the NHS does. NHS England, Health Education England, the department and CCGs are developing a joint strategy to embed the constitution further, as we promised they would during the passage of the Health and Social Care Act.

On the system that we have put in place and the complexity that the noble Lord sees in that system, I say, simply, that the system we now have is more transparent than the one we had before. Accountabilities are clear, responsibility is clearly placed where it should be and it is backed by robust lines of accountability, including to Ministers and Parliament.

I hope that that answers most of the noble Lord’s questions, but I will of course write to him if I have omitted anything.

My Lords, we on these Benches welcome both the Francis report and the Government’s Statement. In particular, we welcome the importance of openness, transparency and access to information to ensure that there is a change in culture. Can the Minister confirm that the new care certificate will be an NVQ qualification so that the public can be confident that staff have the right skills and training? We would also welcome registration and regulation for those staff in the way that the noble Lord, Lord Hunt, referred to earlier. Can the Minister also confirm that when complaints and other items have to be published, it will not be as a few lines in an annual report but on the web, and that it will easily accessible by patients and the public?

My Lords, I very much agree with the spirit of my noble friend’s questions. Certainly as regards complaints, the public should have a clear view of the nature of the complaints that have been registered with a particular organisation. They should be able to have a sense of what those complaints relate to and what action the organisation has taken to address the matter in question.

On my noble friend’s first point, we are currently working through the question of the care certificate and will seek advice. It is important to arrive at an agreed formula that gives the maximum assurance, both to care assistants and to those they look after, that basic standards of training have been learnt and are being adhered to. It is important to define as closely as we can what we mean by that, and as soon as we have further details we will announce them.

My Lords, I thank the Minister for repeating the Statement, and I welcome the Government’s comments on the Francis report. I apologise on behalf of my noble friend Lady Emerton, the matron, who is not here today as she is unwell, and also my noble friend—he is a friend, although he sits on the wrong Benches—Lord Willis. He cannot be here because he has been asked to undertake the duties of my noble friend Lady Emerton. They asked me to represent their views—which I will not do, because I would get them wrong, but perhaps I may make my own comments. I realise I am not allowed the same time as the noble Lord, Lord Hunt, had. That is a pity, because I have much to say about the Statement.

I welcome the statutory requirement to give notification of any harm or serious misses that have happened. During my time as chairman of the National Patient Safety Agency I tried to get that into statute and failed; it was not under the current Government, but that does not matter. I am therefore delighted that this will be a statutory requirement. The important thing is that, as Don Berwick said, this is about learning; reporting by itself is not enough. The Minister referred to the airline industry, which learns from what has happened by doing root-cause analysis. We need that system established in the NHS if we are to learn from avoidable harm and near misses. Whose responsibility will it be to do that, and how will that expertise be gained?

On staffing ratios, the Minister knows that if my noble friend Lady Emerton had been here she would have asked about ratios of trained to untrained staff. Now that there will be a new care certificate to ensure training for all care assistants and nursing assistants, which I welcome, she would have asked for regulation. However, we have passed that stage, and I welcome the fact that there will be a new care certificate following the training. Why, however, is all this to be only for hospitals? What about care homes? Why were care homes excluded from reporting on staffing ratios?

I apologise, but I did not quite hear the last part of the noble Lord’s question. Was it why care homes were excluded?

The Statement refers particularly to hospitals. They will have to report on staffing ratios, but it did not say that care homes will have to do that.

I am grateful to the noble Lord. I am in complete agreement with him on his first point. The best thing might be for me to read out a very short passage from Professor Don Berwick, who said:

“The best keys to health care safety do not lie in blame, or regulation, or punishment, but rather in learning, support, and encouragement to the health care staff, the vast majority of whom are dedicated to excellence in care.

Leaders who aim for safe and effective care have a duty to supply the workforce with the tools, knowledge and encouragement to do the work that adds meaning to their lives”.

We have attempted, as far as we can, to make that philosophy the guiding principle of our response on patient safety. We do not want to create a blame culture; we want to create a culture that encourages everybody to feel ownership of the work that they do, and to feel well led. That is the other side of the coin to the culture that we have spoken about in other debates about innovation—about making innovation everybody’s business in an organisation. It comes down, in the end, to good leadership.

We are not insisting that every organisation should carry out root-cause analysis. On the other hand, we are saying that it is the business of trust boards to make complaints, mistakes, and lapses in patient safety central to their work and to the scrutiny that they undertake of their organisations, and for those matters to be discussed openly and resolved openly.

As regards care homes, as I said, we have commissioned NICE to work through the guidance that will underpin safe staffing. It is not yet apparent whether that will cover care homes and it is difficult to see how it could do so because care homes are clearly very different organisations from acute trusts. On the other hand, we expect the CQC to have some way of judging whether a care home can call itself safe. We will certainly look at the noble Lord’s points as we carry that work stream forward.

My Lords, I am sure it will be welcome to patients and their families that the name of a responsible consultant will now be above the patient’s bed, but will the noble Earl say a bit more about the new attention to 75 year-olds that has been promised? In the extensive leaks of the Government’s response over the weekend, GPs were definitely named as the people who would be responsible for the over-75s. The Statement refers to “a named accountable clinician”. Is there a difference between the two?

Yes. There were no leaks. The report that the noble Baroness saw was a report on the new GP contract that we announced at the end of last week. That was legitimate reporting by the press of an element of the new contract for next year, when we want all NHS patients over the age of 75 to have a named, accountable GP. However, we are saying in this response that every patient in a hospital setting should know who their consultant is, and therefore that there should be a named responsible consultant for every hospital patient. The two issues are, therefore, related but different.

My Lords, the Statement said that the NHS has to be a moral organisation or it is nothing. I am sure that my noble friend carried the whole House with him when he said that. Therefore, the raft of changes and the new legal accountability that will come in next year are very welcome in their own right as they will bolster that concept. However, how is it that no individual or individuals have been held accountable for the tragedy and disaster at Mid Staffordshire? I know that my noble friend keeps saying, on behalf of the Government, that they do not want to encourage a blame culture, but will he explain to your Lordships’ House how we can have an accountability structure without any blame attached?

My Lords, the trust board at Mid Staffs was ultimately responsible, and individuals on it have been replaced. That was the first step in holding the system to account. We are introducing strengthened accountability for the future, including a fit and proper persons test for directors, as well as a single-failure regime triggered by failures in care. We have also appointed a Chief Inspector of Hospitals with power to ensure that the system acts quickly to tackle unacceptable care. In a range of ways I hope that we have addressed the central point in my noble friend’s question, which is very well placed.

My Lords, I am pleased to hear about the transparency and the duty of candour, but will the noble Earl give the House an assurance that patients will be listened to? I am thinking about the young man who implored staff for a drink, and even telephoned the police on his mobile, but was ignored by staff. This was not Mid Staffordshire but a London teaching hospital. Further, will staff be protected when they blow the whistle? Will the noble Earl give an assurance that they will not lose their jobs?

My Lords, I completely agree with the noble Baroness that the voice of the patient is an essential part of maintaining a culture of safety in the NHS. Improving the way in which the NHS manages and responds to complaints will be critical in shaping a culture that listens to patients and learns from them and ending a culture of defensiveness or, at worst, a culture of denial about poor care. That is why we welcome and accept the spirit of the review of the NHS hospital complaints system by Ann Clwyd MP and Professor Tricia Hart and the principles behind their recommendations.

On whistleblowers, the amendments to the NHS constitution have enhanced the protection for whistleblowers, but we are not complacent and we are already considering whether there is a need for more developments both to protect whistleblowers and to ensure that action is taken, where necessary, in response to concerns. We are looking, with the national regulators, at how whistleblowing concerns are dealt with at the moment and, where appropriate, we will introduce improvements to systems in the future.

My Lords, much of what my noble friend has said has given us satisfaction, but it is perfectly true, as we have already been reminded, that troubles were going on not only in the Mid Staffordshire area but all over the place. It is also true that it is not just the whistleblowers who warned time and time again about what was going on and who should have been listened to. I spent four or five years raising cases of people who had written to me. On one occasion I presented the then Minister, the noble Lord, Lord Hunt of Kings Heath, with a dossier of some 25 cases, all of which had been checked very carefully. All the details were correct, all the patients, or their relatives, had given permission for these cases to be raised and they were raised in this House. I am not blaming the noble Lord for failing to take these cases forward, or failing to listen to the arguments put out clearly in this House, because I think that he passed them on, but they were never properly investigated.

It is upsetting that for such a long period warnings were being given and were allowed somehow to filter into the ground and away, or into the past. I particularly warned about the practice, which was fairly unknown at that time, of failing to feed patients because food was put too far away from them and other examples. I worry about the people who suffered for those long years when something could have been done if those responsible at the grass roots had taken care of what was being said in this House. I beg the Minister not to leave aside the really serious point that cases raised with great sincerity and truth in this House should be regarded and not just pushed aside in the future.

My Lords, my noble friend should be listened to with great care. Of course, I remember those cases. I was not the Minister in charge at the time she submitted those cases to the Department of Health, but she shared them with me, and I share her concerns, which are, of course, directly relevant to the matters we are discussing today. We have the new duty of candour and in April the Enterprise and Regulatory Reform Act strengthened the main whistleblowing legislation introduced by the Public Interest Disclosure Act so that an individual who suffers harm from a co-worker as a result of blowing the whistle now has the right to expect their employer to take reasonable steps to stop this. The idea is to ensure that people do not feel intimidated from speaking up. The Care Quality Commission is using staff surveys and the whistleblowing concerns it receives as part of the data in its new intelligent monitoring system. That data will guide the CQC about which hospitals to inspect. Since September, the commission’s new inspection system includes discussions with hospitals about how they deal with whistleblowers and handle them.

My Lords, I declare an interest as a member of the General Medical Council. In no way do I speak on its behalf today, but it is obvious from the remarks that the Minister has made that the GMC has been working with the Government and other regulators and is committed to underlining professional responsibilities, particularly in relation to the duty of candour. That work will, of course, continue. On a personal level, I welcome the return to naming the consultant and the nurse responsible for an individual patient. It is emblematic of that personal sense of responsibility and accountability for patient welfare.

In respect of the new complaints procedure, as the Minister said, the care of patients and their safety are the responsibility of not only the named consultant and nurse but everybody in that institution. Does he agree that there is also a particular responsibility on the trust’s non-executive directors in that respect and that the new system should ensure that they are taking their responsibilities seriously? I know from decades ago, when I chaired the complaints panel at a London teaching hospital, that that resource, in terms not only of the ability to protect patients but of improving efficiency and the quality of care by understanding complaints, was a treasure trove that should not be abandoned.

I entirely agree with the noble Baroness, who of course has immense experience in these fields. I agree with her in particular about the role of the non-executive director. If an organisation has what may look like quite a high number of complaints, it should be regarded as a sign of openness, transparency and the right kind of culture in that organisation. It is only where suspiciously low numbers of complaints have been recorded that alarm bells should start ringing. I agree that boards of directors, led and encouraged in this area by the non-executives, should make it a central part of their business to analyse complaints and make sure that they have been followed through, not just that the matters have individually been remedied but that any systemic issue has been properly addressed.

Energy Bill

Third Reading

My Lords, I have it in command from Her Majesty the Queen and His Royal Highness the Prince of Wales to acquaint the House that they, having been informed of the purport of the Energy Bill, have consented to place their prerogative and interests, so far as they are affected by the Bill, at the disposal of Parliament for the purposes of the Bill.

Clause 3: Further duties of the Secretary of State

Amendment 1

Moved by

1: Clause 3, page 3, line 39, at end insert—

“(9) Where carbon intensity of electricity generation is reported to have increased year on year for not longer than three consecutive years, starting from the date of Royal Assent, the Secretary of State shall report to both Houses of Parliament, setting out both the reasons for the increase and the additional actions that will be taken to reverse this increase in carbon intensity.”

My Lords, during our scrutiny we have come to know this Bill as the “decarbonisation Bill” as it has passed through this House. It has been referred to in that way by a number of noble Lords and it is a reasonable description. The Bill represents a significant intervention in the electricity market that is justified on the basis that it will help to decarbonise our electricity system. Noble Lords will be aware that we have had lengthy discussions about the setting of a decarbonisation target in the Bill in order to give that clarity of purpose and to create a responsibility on the Government to deliver through the powers that they are taking. Unfortunately, we were unsuccessful in bringing forward the setting of a date for the setting of such a target. However, on Report the Minister was kind enough to give a partial concession in relation to the Government’s commitment to monitoring carbon intensity and to acting if carbon intensity remained high. The concession was that, should carbon intensity rise year on year for three consecutive years, the Government would report to Parliament, setting out why this was the case and the additional actions that would be taken to counteract that increase.

The concession is welcome. It is not a replacement for a carbon intensity target by any means, partly because carbon intensity is currently at an astonishingly high level. This is because the merit order currently favours inefficient old coal plant over more efficient, cleaner gas stations. Therefore, currently carbon intensity is higher than would otherwise be the case. Intensity seems unlikely to increase. If it did, something would be seriously awry with government policy. The concession, while welcome, does not go far enough but I should hate to lose it. The purpose of this amendment is to place that commitment in the Bill to introduce into it a measurement of progress and a mechanism through which the Government will report back to the House on that progress and take corrective action.

It is fair to say that the interventions in this Bill and the powers that are given to the Secretary of State are so extensive that they ought to be matched with responsibility and a system of holding the Government to account to see that they are delivering. The measure of progress should be carbon intensity, the issue the Bill seeks to address. Therefore, I hope the Minister will accept this amendment in the spirit of enhancing that important part of the Bill that justifies why it has been introduced and the powers that have been taken. I beg to move.

My Lords, this is a worthy amendment. However, Parliament is grown-up enough for those of us who are interested in these issues and see them as really important to notice what happens and seek answers from the Secretary of State and the Government about carbon intensity. The issue is important but the amendment adds little to the Bill.

My Lords, I thank the noble Baroness, Lady Worthington, for tabling the amendment. The Government fully support the aim of clear and transparent reporting. However, like my noble friend Lord Teverson, I do not think it necessary to introduce an additional statutory reporting requirement to the Bill as the noble Baroness proposes. I shall set out quickly the reasons.

First, as the noble Baroness recognises, at Report I made a commitment to Parliament that the Government would undertake reporting measures once any decarbonisation target range had been set. This would supplement those reporting measures that are already included within Part 1 of the Bill. I repeat what I said on Report, which was that,

“where carbon intensity is reported to have increased year on year for three consecutive years, the Government will explain the reasons why, and, where appropriate, report additional actions to address it within the annual statement of grid carbon intensity”.—[Official Report, 28/10/13; col. 1366.]

Secondly, it is important to recognise that, under the Climate Change Act 2008, there are already high levels of scrutiny of the progress made to meet our economy-wide carbon targets. This includes coverage of the power sector within the context of our wider economy. For example: the Government currently report annually on emissions in the power sector through the UK’s greenhouse gas emissions inventory; the Committee on Climate Change publishes an independent and impartial report each year on our progress towards meeting our carbon budgets and the 2050 target; the Government provide annual responses to the committee’s recommendations, which include a dedicated chapter on the power sector; and the Government publish updated energy and emissions projections each year, setting out the future trajectory we anticipate the economy taking.

Lastly, the amendment proposes that these reporting measures start from the date of Royal Assent. The Government’s view is that it is logical for any additional reporting measures to be triggered by the setting of a decarbonisation target range rather than by the enactment of the Bill. That would ensure alignment with the existing reporting framework that is already included in Clause 3, and we should not forget that we already report on grid carbon intensity ahead of any decarbonisation target range being set. Section 5 of the Energy Act 2010 requires a three-yearly report to Parliament on progress in decarbonising electricity generation. That report sets out the policy framework and explains trends in grid carbon intensity over the reporting period.

In conclusion, the Government are already proposing a clear and robust target framework that includes regular reporting on progress in meeting any target range. That is in addition to the high levels of scrutiny that are already in place to meet our economy-wide carbon targets. For those reasons, it would be unnecessary to introduce another statutory reporting requirement. I hope that the noble Baroness will agree with me that the existing commitments are sufficient and will, on that basis, withdraw her amendment.

I am grateful to the Minister for her response and for the contribution from the noble Lord, Lord Teverson. I agree that we are all mature in looking at these things and that people who scrutinise and follow this in detail will raise issues as they occur. However, something is clearly not working, otherwise why is it that carbon intensity has been allowed to rise to such high levels recently with the Government apparently incapable of acting to bring it down? Obviously, many factors play into that, but the whole purpose of the Bill is to bring some of those factors under greater control and to allow the Government to intervene in the market to create contracts for difference that bring forward investment in the low-carbon economy that would not otherwise be supported by the market.

There is a problem, given that carbon intensity remains stubbornly high; the measure of the success of the Bill will be that starting to fall. It is regrettable that the Government are not prepared to start monitoring that or reporting on it, in terms of actively managing it, until 2016, which is a number of years away. I understand that the Bill has existing requirements on reporting carbon intensity, and that it is routinely reported now, so I am happy to withdraw, but this is something we need to keep a close eye on. I am sure that the noble Lord, Lord Teverson, and others will join me in ensuring that we do just that.

Amendment 1 withdrawn.

Clause 34: Power to make capacity market rules

Amendment 2

Moved by

2: Clause 34, page 22, line 10, after “is” insert “, or who has notified the Secretary of State of his intention to become,”

My Lords, Part 2, which is really the heart of the Energy Bill, contains all the proposals for the reform of the electricity market. Chapter 3 of Part 2, in respect of which I am moving this amendment, deals with a very important part of the reform, the introduction of the capacity market. As the noble Baroness has just mentioned, that is of course designed to try to attract investment which the market might otherwise find it difficult to support. It is one of the measures that the Government are introducing, if I may put it crudely, to keep the lights on—to make sure we have enough generating capacity to keep the power flowing. At this stage of the Bill, I do not think it is necessary for me to start spelling out all the details of this, which have been very substantially debated at Second Reading, in Committee and on Report.

However, I think it right once again to draw the attention of the House to the fact that most of the detail of this is to be in regulations. We are hoping that the Bill will be Law before the end of the year—indeed, I hope well before the end of the year—and that the regulations will follow next year, and we are waiting for those. I have to say to my noble friend that the Government have been extremely good at producing drafts of what all the really important regulations would contain. It is a substantial document and I do not propose to read it out, but there is an enormous amount of detail in it and it is helpful for those who have to operate the new system to have that detail now.

In addition to the regulations, there will also have to be what are called capacity market rules. They will either be made by Ministers, or can be made by the regulator, Ofgem. Again, in that document we have been given draft rules and I will come to them in a moment. Both the rules and the regulations are currently the subject of consultations and, while this is clearly essential to get them right and to make sure that they avoid unintended consequences, it means that even at this late stage of the Bill, it is not really open to us to debate the details. What we can ensure is that the Bill provides the necessary rules and guidance to what we think the Government ought to be aiming at in making these regulations, and that the processes by which they are made are sound and fit for purpose.

That is really what this amendment is about. It is Clause 34 that confers on the Secretary of State the power to make the capacity market rules. As I said, it is Clause 34(3) which gives the power to the “Authority”. That is the phrase used in the Bill, but that means giving the regulator, Ofgem, the power to make capacity market rules subject to conditions. These conditions may be about consultations, and in particular, they must provide that if it is Ofgem which is to make the capacity market rules, it must consult and then set out two categories of what one might call the participants in the scheme—either anyone who has a licence to supply electricity or anyone who is already a capacity provider.

It is my view that this leaves out an important group. Ministers have recognised that in order to promote competition—there will be a great deal more about competition on the next amendment that I will move—it is important that new entrants and independent generators should be enabled, or indeed encouraged, to apply for a contract under the capacity market arrangements. They may very well not already be licence holders, and by definition they are almost certainly not yet capacity providers. My amendment provides that, in addition to those two categories in the Bill, there should also be included anyone,

“who has notified the Secretary of State of his intention to become”,

a capacity provider.

How important is this? I have already demonstrated that in this volume the draft rules cover no fewer than 119 pages. They are immensely complicated; the definitions alone cover 20 pages, which gives a measure of the complexity of all this. They cover such vital issues as the timetable for the capacity auctions, how those wishing to bid could gain the necessary prequalification, how to decide who is eligible to bid, how the auctions will be conducted and so on. This is all highly relevant to anyone who is going to take part in these auctions, especially new entrants and independent generators that are aiming to participate in the market. Surely it is as important for these companies to know about the rules and any proposed changes to them as it is for firms already operating in the industry. It is a very simple question and I think that the answer can only be: yes, they must know about them. I hope my noble friend will give us satisfaction. I beg to move.

My Lords, we support the amendment moved by the noble Lord, Lord Jenkin. Possibly it is merely an oversight that those who wish to become capacity providers are currently excluded from the list of consultees. As the noble Lord has explained, this part of the Bill is very important and should be open to new and independent players to attract them into the market. If all the capacity mechanism does is provide security to the existing incumbents, it will have failed in its aim to deliver capacity at least cost, with a good degree of competition enabling prices to be kept to the minimum. Given the context, it is an eminently sensible amendment and I really hope that the Minister will be able to support it.

My Lords, I thank my noble friend Lord Jenkin for his amendment. Both the electricity capacity regulations and the capacity market rules form the legal framework that will enable the introduction of the capacity market. The capacity market rules will be subsidiary to the regulations, for which the Secretary of State will continue to have responsibility.

Much of the content of the capacity market rules will comprise provisions of a technical and administrative nature, designed to supplement the regulations and ensure the efficient running of the capacity market; for example, the rules will set out how the delivery body is to conduct capacity auctions and the pre-qualification process, as well as its duties to maintain a capacity market register and carry out monitoring and testing.

Given the technical and administrative nature of the rules, we therefore expect changes usually to be of a minor and technical nature, with the primary purpose of ensuring the efficient operation of the capacity market. It is important to make the duty to consult on those changes proportionate, and to get the balance right between consulting widely and implementing the change within an appropriate timeframe.

Potential capacity providers may not necessarily be affected by a proposed rule change in the same way as existing capacity providers; for example, existing providers will have rights or obligations under the capacity market that might be affected by a change in the rules. I am therefore of the view that potential capacity providers should not be added as parties that the authority must consult on every proposed change.

Nevertheless, it is important that if the authority were to propose a significant change to the rules that affected a wider range of parties, consultation on that change should go beyond existing suppliers and capacity providers. I therefore reassure my noble friend that we expect the authority to consult more widely, as appropriate, for any significant changes to the rules that might affect a wider range of parties, such as prospective capacity providers. This is reflected in the draft electricity capacity regulations 2014, published for consultation in October, which would oblige the authority also to consult the Secretary of State, the delivery body and,

“such other persons as the Authority considers it appropriate to consult”.

The authority will be producing guidelines on the process it intends to follow for making changes to the capacity market rules, including its processes for consultation and for considering rule changes proposed by a third party. The authority intends to publish these draft guidelines next spring before finalising them, allowing all potential capacity providers the opportunity to comment on them.

I hope that my noble friend has been reassured that the consultation provision in the Bill is not exhaustive and that the authority can, and will, consult more widely where appropriate. I hope, therefore, that he will withdraw his amendment.

My Lords, I am extremely grateful for the support from the noble Baroness, Lady Worthington, and it is very nice to know that if I had decided to divide on this I would have had her party with us. However, my noble friend has indeed been reassuring. I entirely accept that all these people should not be consulted on every minor change, but she has given us a clear assurance that, on anything of any significance, both the department and the regulator will consult all those who might reasonably expect to be affected. On that basis, I am happy to withdraw the amendment.

Amendment 2 withdrawn.

Amendment 3

Moved by

3: Clause 34, page 22, line 15, leave out paragraph (b)

My Lords, government Amendment 3 responds to a recommendation from the Delegated Powers and Regulatory Reform Committee regarding delegated powers in the capacity market. I am grateful to the committee for its recommendation and to my noble friend Lord Roper for raising it on Report. Amendment 3 will limit the powers of the authority to make capacity market rules and to confer additional functions on itself when exercising powers under Clause 34(3). It will do this by requiring the authority to obtain the Secretary of State’s consent on each occasion that it seeks to confer a function on itself when making capacity market rules. This will ensure that there is a sufficient level of oversight when the authority makes changes to the capacity market rules. I hope that my noble friend finds the explanation of my amendment helpful and I beg to move.

My Lords, I thank the Minister for having put forward this amendment which, as she says, follows the discussion that we had on Report and the report of your Lordships’ Delegated Powers and Regulatory Reform Committee. It is a most satisfactory amendment and, again, I thank the Minister for it.

My Lords, after much debate in Committee and on Report we also welcome this further government amendment in response to the 11th report of your Lordships’ Delegated Powers and Regulatory Reform Committee, which was published at the end of October. It is indeed important that no blanket powers or consents should be given for making particular categories of rules.

Amendment 3 agreed.

Clause 57: Duty not to exceed annual carbon dioxide emissions limit

Amendment 4

Moved by

4: Clause 57, page 56, line 13, after “station” insert “with units emitting through a common stack”

My Lords, this amendment follows on from our discussion about the decarbonisation aspects of the Bill. Noble Lords will be aware that an important amendment was successfully added to the Bill at Report. It would close a current drafting loophole in the Bill that would allow old, inefficient, polluting coal stations to upgrade and seek extensive life extensions without the need to comply with any kind of emissions performance standard. This will now, of course, be debated in the Commons, and we look forward to seeing the results of that.

However, in succeeding in having this part of the Bill accepted, an interesting definitional issue has arisen. Bear with me as I try to explain it. The industrial emissions directive, which requires tightened quality standards to apply to coal stations from 2016, applies at a station level. A station is defined as “a common stack”, meaning a chimney that can be used by multiple units. This has interesting implications because the EPS limits can therefore be met by one unit upgrading to fit filters while another unit remains unabated but still operating unencumbered and at full capacity. Our intention in closing a loophole that could potentially extend coal’s life span to late into the next decade was that the EPS should apply at the same level at which the IED applies, meaning that if a station with four units decided to retrofit two of the four in order to comply with the IED, the station as a whole would then be caught by the EPS.

We have had representations from industry asking for clarification on this because, in sitting down to work out the implications of the amendment, they have looked at the Bill and seen that the definitions are not clear. The Bill defines a “plant” as a “station”, which is insufficiently precise when one is trying to assess this, because plants are made up of units. The definitions used in air quality standards use “common stack” for that purpose. The amendment would bring greater clarity to the EPS part of the Bill and bring it in line with the definitions in the industrial emissions directive. The implications of the Bill could then be understood by those making investment decisions on whether to upgrade their plant or to opt out, run their hours out and close.

I hope that I have made that clear—I fear that I may not have done because it is very complicated. To put it in its simplest terms, the Bill is insufficiently clear on these definitions of what constitutes a station and we have tabled this amendment to address that. I hope that the Minister will be able to accept it. I beg to move.

My Lords, I support the amendment. The noble Baroness, Lady Worthington, is too modest. She has made it abundantly clear that clarity is needed in the legislation because, as the wording stands, simply part of an operating unit may be upgraded. I therefore hope that the Government can accept the amendment.

My Lords, I welcome the amendment because clarification is needed—and, indeed, I thought that the explanation given by the noble Baroness was very good. I would be very interested to hear the Government’s view on how this issue should be resolved, as it is clearly important for the way in which the industry moves forward.

My Lords, I am grateful to the noble Baroness, Lady Worthington, and I hope that I can add a little clarity on the matter she has raised. Under the existing provisions, and save for the circumstances provided for under Schedule 4, the EPS will apply to the entire generating capacity of any new fossil fuel power station consented after the EPS comes into force. For example, where planning consent is given for a new fossil fuel power station, the generating units that comprise the consented power station are, for the purposes of the EPS, the “generating station”.

A generating station will report its carbon emissions under the EU Emissions Trading Scheme and the intention is that those reports will be used to reconcile total carbon emissions in a year against the EPS limit for the generating station, which is calculated using the formula in the Bill—I hope that noble Lords are following me thus far.

In respect of the circumstances provided for under Schedule 4, paragraph 1(1) of Schedule 4 gives the Secretary of State a power to make regulations to apply the EPS to a generating station consented before the EPS came into effect where it replaces or installs an additional main boiler—so where it effectively adds to or renews its generating capacity.

Paragraph 1(1)(b)(iii) of Schedule 4, on which the Government were defeated on Report, would extend the scope of Schedule 4 to enable the Secretary of State to apply the EPS also to an existing generating station that fitted substantial pollution abatement equipment. The exercise of the power to make regulations under Schedule 4 is at the discretion of the Secretary of State, and it would be premature to comment on whether or how that power may be used.

Sub-paragraphs (1) and (2) of paragraph 1 of Schedule 4 together allow the EPS to be applied with or without modifications and to different parts of a generating station. For example, it could be applied to only those units that are new or have replacement boilers or to only those units that have fitted substantial pollution abatement equipment.

While I recognise that the proposed amendment may be one way of determining how the EPS will apply to fossil fuel plant, it does not cater for a wider range of circumstances in the way intended by Schedule 4. The regulation-making power in Schedule 4 provides for alternative approaches and, due to the potential complexities and impacts on existing assets were we minded in the future to exercise these powers, we would want to consult fully on possible options before making regulations. I believe that this would provide a more properly informed debate and I therefore ask the noble Baroness to take my reassurances at this stage and withdraw her amendment.

My Lords, I am grateful to the noble Baroness for her reply. Discretion gives flexibility but equally it gives a lack of certainty for industry. I am not quite sure why this proposal is premature as we need to give clarity to those affected by this Bill as soon as possible. It seems to me that in maintaining this discretion, we are prolonging lack of certainty for the industry. I think that it is very important that we do this consultation quickly and that we give clarity as soon as possible, whether that is through the regulations that follow or in a separate process. I am sure that there are many people sitting in boardrooms around the country looking at their assets, who need to know this information and need to know how the department is interpreting its powers.

If the department is minded to have an EPS apply only to the units which fit the filters that make the upgrade, that will have the very perverse affect of allowing unabated plant—the other corresponding units—to operate indefinitely at very high load factors. That is precisely what we are trying to avoid with this amendment. There is a very strong reason why we do not believe that discretion is necessary and why the definition should be at a plant level. However, I understand that the Government may wish to consult and to seek a little extra time before making this issue fully clear. I hope that that is completed in the shortest time possible, as prolonging uncertainty will make life harder for the industry and investors in deciding what their next move should be following the passage of the Bill. I beg leave to withdraw the amendment.

Amendment 4 withdrawn.

Clause 131: Designation of statement

Amendment 5

Moved by

5: Clause 131, page 101, line 5, at end insert—

“( ) how the Authority shall incorporate social and environmental factors in carrying out its functions.”

My Lords, in moving this amendment I remind the House that I am involved in a voluntary capacity in a number of NGOs concerned with the environment.

On Report, the Minister said that energy production and consumption should be sustainable. I remind the House of an important point made by my noble friend Lady Worthington, that we face a “quadlemma” in which we must tackle climate change, keep bills affordable and keep the lights on without sacrificing social and environmental standards in the process. It is very much in the spirit of this observation that I am pursuing this amendment.

On Report, the Minister helpfully reminded us that Ofgem has social and environmental duties and can consider sustainability when carrying out impact assessments for particular schemes. She also informed us that in future Ofgem’s forward planning must show how it will implement the new strategy and policy statement and that it must report annually on how it is contributing to the delivery of the Government’s policy outcomes. The Minister further explained that the Bill seeks to remove social and environmental guidance provision because it has,

“not achieved coherence between the Government’s energy strategy and the regulatory regime”.—[Official Report, 6/11/13; col. 263.]

She explained that it would be replaced by a strategy and policy statement setting out the Government’s strategic priorities. She emphasised that Ofgem must have regard to strategic priorities and carry out its functions in the way that it considers best calculated to deliver the policy outcomes, and argued that this would be a stronger obligation on Ofgem than existed in current guidance.

The Minister undertook to write a letter to me and place a copy in the Library of the House setting out precisely how the Government will satisfy themselves that Ofgem will pay due regard to the effect on the environment of activity connected with the conveyance of gas through pipes or the generation, transmission and distribution of supply of electricity, including what measures, benchmarks and associated matters will be taken into account and used in establishing those benchmarks. The Minister has indeed written to me and the letter is in the Library, and I am grateful for the detailed advice about Ofgem’s various duties and responsibilities. However, I am afraid that her letter failed to establish how social and environmental safeguards would be implemented, not weakened, by the Bill.

We seem to be in a circular argument. As I explained in some detail on Report, the strategic priorities set out in the Ofgem policy statement are functions to which the principal objective and general duty is applied. This duty is to be found in Section 4AA of the Gas Act 1986, with equivalent provisions in the Electricity Act 1989. These provisions make it clear that the principal objective is to protect the interests of existing and future customers of electricity and, wherever appropriate, to promote competition. They are not about social and environmental considerations.

Furthermore, the Bill has been set out in such a way that, should the Secretary of State decide to issue social and environmental guidance in future, it would be subordinate to Ofgem’s commercial responsibilities. I have taken into account counsel’s advice that the reality will be that if the Bill is enacted as the Government propose, the explicit responsibility to issue social and environmental guidance will disappear. There is nothing in the Minister’s letter that indicates how it will be replaced. To be crystal clear about this, it is not a requirement that the strategy and policy statement should cover social and environmental issues, which it should if the present level of protection is not to be significantly weakened. My own views remain unchanged: Ofgem’s social and environmental responsibilities will be weakened by this legislation. If that is not the Government’s intention, there should be a clear statement in the Bill that the Secretary of State will indeed provide social and environmental guidance to the regulator in the strategy and policy statement. This small amendment would achieve that.

Even at this stage, I ask the Government to think very carefully about this and ask themselves: where is the vision? What does the word “sustainability” really mean? What sort of environment do we want to be living in, in future? What of the incalculable psychological and emotional value of landscape and its contribution to national well-being? If the Government recognise the quadlemma to which my noble friend referred and wish to address it, what are they actually doing to avoid the gradual destruction of the natural environment in their pursuit of energy goals? If current policy is anything to go by—it all seems to be about streamlining development—the answer seems to be not a lot. In short, it seems to be the Government’s express intent to remove environmental safeguards in the quest for growth. I beg to move.

My Lords, I support the noble Lord, Lord Judd, in his amendment. I declare my interests as listed in the register.

I have only one minor correction to make. It is very important to draw attention to the fourth leg of the quadlemma, but we should really be calling it a tetralemma if we are going to be consistent in Greek. It is important that the concerns that the noble Lord has raised, which are vital to communities all over the country, about the desecration of landscapes that is being visited on them should be taken seriously. I look forward very much to what I hope will be a reassuring reply from the Minister.

One thing which seemed to be missing from the letter to which the noble Lord, Lord Judd, referred was the role of the Environment Agency. I have raised this before. There are two separate agencies. There is Ofgem, as the regulator, and then there is the Environment Agency, which has some very specific responsibilities in this direction. When my noble friend replies to the debate, I hope she will put this in context.

I totally understand the point that has been made by the noble Lord, Lord Judd. I will not use the Latin, but the trouble is that what you put into one list automatically excludes anything else. That is a canon of legal construction. My noble friend has made it very clear that when there was a list of people who would be looked after socially—the disabled and chronically sick, those of pensionable age, those on low incomes and those residing in rural areas—that should not be taken as implying that regard might not be had to the interests of other types of consumer. That statement was made by the Minister, obviously on advice, so that I think the social thing is all right, but I accept the point that my noble friend Lord Ridley has made. We need to make sure that the environment is properly protected, but I had always understood that that was primarily the responsibility of the Environment Agency and other similar organisations. I hope that my noble friend can put this into context.

My Lords, I, too, would like to record briefly my support for my noble friend’s amendment. The Minister’s letter is helpful, although I received it in a very roundabout way, but I do not think it goes far enough. There is a lot at stake here. Our environment is precious and is also vulnerable. Unless these safeguards are explicit in the way that my noble friend has drafted I am sure that they will come second to other considerations.

My Lords, one of the things that I certainly enjoy when I get up when I am at home is seeing a living countryside rather than the one bathed in aspic, as some of my colleagues sometimes talk about. It is great to see a countryside that is there alive helping to generate the power that we need for this country and for its economy to move forward. It is a great delight to me and to many of my colleagues.

I support my noble friend’s amendment. Getting the regulator to incorporate social and environmental factors was a hard-fought battle. It would be a great shame if the passing of this Bill should see us going backwards on that front. I am grateful to the noble Viscount for the correction, although I prefer quadlemma, because we can then talk about the effect that Cuadrilla will have on the quadlemma. I look forward to the Minister’s response.

My Lords, I thank the noble Lord, Lord Judd, for his amendment and for raising the matter of Ofgem’s social and environmental duties. I recognise the importance that the noble Lord and others attach to this. It is recognised in primary legislation, which sets out Ofgem’s duties, including those concerned with environmental sustainability and social issues. The noble Lord will be aware that Ofgem has other duties, including its principal objective to protect consumer interests, including their interest in a reduction of greenhouse gases and security of supply, as well as duties to promote efficiency and economy and the need to ensure that energy businesses are able to finance their activities.

The Government recognise that Ofgem’s role to a large extent is concerned with identifying what is an appropriate balance between all of those different objectives. This is a case of an independent economic regulator. The Government’s principles of economic regulation state that,

“regulatory decisions are taken by the body that has the legitimacy, expertise and capability to arbitrate between the required trade-offs”.

In the case of energy, that body is, of course, Ofgem.

We are introducing the strategy and policy statement as a result of the Ofgem review, which concluded that this was necessary to provide more coherence between the Government’s strategic energy priorities and the way Ofgem regulates the energy sector. It is crucial, however, that the statement should not undermine independent regulation. The review also concluded that Ofgem should remain responsible for the consideration of trade-offs between economic goals and broader goals, including social and environmental matters. That is why Ofgem will now have additional duties to take into account the contents of the statement when carrying out its own regulatory functions, which will stand alongside its existing duties. As before, Ofgem will be expected to continue to achieve the appropriate balances between its objectives.

The strategy and policy statement will set out the Government’s strategic policy and identify policy outcomes which are relevant to what Ofgem should achieve, but it will not specify how Ofgem should act to achieve these outcomes or specify outcomes in a way that would compromise Ofgem’s independence. It is not necessary to restate Ofgem’s objectives within the strategy and policy statement and it would not be appropriate to include text which could be seen as directing Ofgem on how it should interpret its duties.

I repeat my previous reassurances that we will take social and environmental matters into account when we draft the strategy and policy statement and that there will be opportunities for interested parties to comment on its contents when we consult next year. Both Houses will be able to consider the contents of the statement before it is designated.

My noble friend Lord Jenkin raised the role of the Environment Agency. Ofgem is a regulator of the energy sector and the strategy and policy statement is aimed at achieving coherence between government energy policy and regulatory actions. It is not aimed at doing the work of the Environment Agency which, as my noble friend rightly said, is a duty on that agency.

However, the noble Lord, Lord Judd, and others have raised important points about visual amenity and other environmental concerns. Existing planning and environmental habitat legislation are operating in tandem with national policy guidance on planning matters. This provides the framework to ensure that this is done, and done properly. Environmental impacts are considered at all stages of the planning process, from the development of proposals by applicants, including, for example, through preparation of environmental statements, to consideration by the Planning Inspectorate and final determination and assessment by the Secretary of State. Environmental considerations are also taken into account when government are taking policy-making processes. Key guidance on considering planning for nationally significant infrastructure projects is contained in the national policy statements.

There is a lot already out there for Governments to utilise so, given all those reassurances, I hope that the noble Lord, Lord Judd, feels better reassured and will therefore withdraw his amendment.

My Lords, as I have said before, I have no doubts whatever about the Minister’s good will. What I am concerned about is the muscle that will ensure the objectives for which I have been arguing. I listened carefully to the words of the Minister. I am of course an optimist by nature and I hope that what she said will lead to the right conclusions. I would, however, be misleading the House if I did not say that I have a profound sense of foreboding of another grim slide downwards in the character and quality of our countryside. This really is a profoundly serious issue. We shall see what happens but I hope I am allowed to say that I am absolutely confident that if this Government fail to reverse the trend, it will be reversed by the future Labour Government who, after all, will be the heirs to all that fine and imaginative legislation between 1945 and 1951 which enshrined the importance of the countryside in our national profile. I beg leave to withdraw the amendment.

Amendment 5 withdrawn.

Amendment 6

Moved by

6: Before Clause 139, insert the following new Clause—

“Secretary of State able to amend Authority’s powers after review

(1) If a formal review of the regulation of competition in the energy industry discloses that the Authority lacks the powers necessary to implement any changes recommended in that review, the Secretary of State may make regulations to amend the Authority’s powers so as to enable it to give effect to those changes.

(2) Regulations are to be made by statutory instrument.

(3) An instrument containing regulations which make provision falling within this section may not be made unless a draft of the instrument has been laid before and approved by a resolution of each House of Parliament.”

My Lords, this amendment is also in the names of my noble friend Lord Roper and the noble Lords, Lord Berkeley and Lord Cameron of Dillington. I am very glad to see the noble Lord, Lord Cameron, back in his place; he sent me the first e-mail from Ethiopia that I have ever received, only a day or two ago. I cannot promise to be quite as brief with this amendment as I was with the previous one that I moved.

The House will remember that on 31 October my noble friend Lady Verma repeated a long Statement about the Government’s energy policy, made in the other place by my right honourable friend the Secretary of State for Energy and Climate Change, Ed Davey. Towards the end of that Statement, following an announcement made earlier in another place by the Prime Minister, Mr Davey gave further details of a proposal to set up,

“annual reviews of the state of competition in the energy markets”.

He referred to them as “competition assessments”, to be undertaken,

“by Ofgem, working closely with the Office of Fair Trading and the”,

newly established,

“Competition and Markets Authority, when it comes into being”.—[Official Report, 31/10/13; col. 1771.]

As noble Lords will be aware, there is now serious public mistrust of the way in which the regulatory system has been working. The recent spate of announcements of, in some cases, swingeing price increases for energy have simply inflamed that mistrust, so there has been a cautious welcome to the announcement. I say “cautious” because I think most people remain to be convinced that these reviews will make any difference in practice. They see that, in place of the more than 20 generating companies which we had before 1997, there are now only six major firms which control 92% of the generating market. They also see what they rightly perceive as the failure of the regulator to get tough with the industry, even to the extent of failing to use its existing powers; there can be no doubt about that—I am glad to see my noble friend on the Front Bench nodding her assent.

Last week the Secretary of State delivered what he called “a tough message” when he spoke to the industry’s main trade association, Energy UK. It is a long speech but I will quote just one or two bits of it because it very much reinforces the case for this amendment. Near the beginning of his speech he says:

“Trust between those who supply energy and those who use it is breaking down. You’ve admitted as much to me. For it is so difficult for people to work out what exactly they are paying for, that they fear the big energy companies are taking them for a ride when bills go up. Fair or not, they look at the big suppliers and they see a reflection of the greed that consumed the banks. So this is a ‘Fred the Shred’ moment for the industry to avoid the reputational fate of the banks”.

That was indeed a very tough message. He went on to make the claim:

“The Government and Ofgem have been acting to open up the market, to increase competition, and put consumers in control of where they get their energy, and how they use it”.

I suspect that few people are able to see that that claim has been actually happening.

This is not the time or place to quote more of what I believe was, by any standards, a forceful and effective speech, but I will allow myself one more quote. After making the point that tough and rigorous competition bears down on costs and prices, he referred to the annual competition reviews. He said:

“Competition works. We’ve seen small suppliers gain substantial business on the back of this year’s high price rises. And today’s announcement by”—

he mentioned one of the companies—is, he said, another welcome thing. However, he said, this,

“will only work … when there is a relationship of trust between suppliers and consumers”.

He went on to talk about the reviews which had been announced.

Part of the problem has undoubtedly been that, for whatever reason, Ofgem has failed to use its powers. It is, no doubt, true that both the other bodies—the OFT and the new Competition and Markets Authority—will have further powers. However—and here we come to the amendment—what happens if the reviews throw up abuses with which the regulators do not have the powers to deal? Do we have to wait for primary legislation to provide those additional powers? That is why, in the exchanges that followed the Statement given in this House on 31 October, I asked my noble friend:

“Would it not be wise to take powers now in order to avoid having to introduce fresh primary legislation?”.

In her reply, my noble friend started by agreeing:

“The purpose of the review is to enable the regulators, led by Ofgem, to see what needs to happen in order to strengthen competition”.

She then ended:

“If they need extra powers, it is for the Government to ensure that we support them by ensuring that those extra powers are put in place”. —[Official Report, 31/10/13; col. 1775.]

That is quite right. However, she did not answer the question that I had asked, which was: what happens if the extra powers are needed and are not there? Should we not now give the Government power? They could introduce regulations in the Bill that would give regulators extra power. That would be a considerably better solution than to wait for new legislation that might otherwise be necessary.

My noble friend and I had a brief discussion about this yesterday, and she asked me, “What sort of thing do you have in mind?”. Earlier today I drew her attention to the specific recommendations set out last July in a Which? report, entitled The Imbalance of Power. The report is quite long, but I will quote only two bits of it. It said that,

“we’ve found little to give consumers confidence that the prices they pay are fair. The structures of the biggest companies raise serious questions of conflicts of interests. Much price setting and trading is hidden away behind closed doors. The volume of trading and the level of competition in the open wholesale markets are low”.

Those are pretty swingeing criticisms. One then comes to the report’s recommendations, the first of which echoes an amendment that was moved at an earlier stage by the noble Lord, Lord Berkeley:

“Ring-fence supply businesses from generation businesses in vertically integrated companies by requiring a distinct license holder for each business. Which? considers that a natural skewing of incentives exists within the current vertical integration arrangements—reducing the effectiveness of the market to the detriment of consumers. Evidence set out in this report suggests that structures that put supply and generation or production businesses under a single management and governance structure, may impede competition, and so increase … prices”.

I do not know whether, if the review threw up a recommendation that something along those lines had to be done, it would be within the existing powers of Ofgem. But I do know that Ofgem does not seem ever to have considered any such thing in practice, so one wonders whether that is because it does not have the power to do it. The other bodies may have some power; I have not attempted to analyse that—but if there are no existing powers to enforce such a change, and if the reviews find that there ought to be such powers, why should we not give the Government the authority now to introduce regulations to create those powers? Why do we have to wait for other primary legislation?

If the Government were to accept the new clause it would do two things. First, it would demonstrate beyond peradventure to the industry that they are deadly serious about strengthening competition in the industry. Secondly, it might begin to rebuild the trust that the Secretary of State has acknowledged has evaporated. I beg to move.

My Lords, I support this important amendment. The noble Lord, Lord Jenkin, has fully and clearly outlined the reasons behind it. Many of the concerns probably stem from misunderstandings, intentional or not, as to what Ministers, in particular, mean by the word “competition”. We hear that word a lot, usually in connection with the price consumers pay for their power, rather than the competition between the generators, or the unfair competition that results from the vertical integration between retail and the generators, which we discussed fully on Report.

The noble Lord, Lord Jenkin, is right to say that trust has broken down. There is a complete lack of transparency, and I do not think that the present structure is fit for purpose. Conflicts of interest seem to abound. I am still surprised that, apparently, Ofgem either does not have the powers or chooses not to use them. It should have done so long ago. Even if there is to be a competition assessment, why do we have to wait for it? Why has it not been done before? However, we are where we are, and as the noble Lord, Lord Jenkin, said, the amendment would be an important addition, as it would avoid several years’ delay if primary legislation were required before any action could be taken.

I would go one step further. If the Minister does not accept the amendment I shall suspect that the Government are completely in the pocket of the big six, and do not want it because it would cause trouble. They are more frightened of the lights going out—that is what the big six have said would happen—than they are willing to establish a structure for the industry that will take us forward into the future. I look forward to hearing what the Minister has to say in reply to the amendment.

My Lords, I must speak against the amendment. My noble friend Lord Jenkin made some very good points about trust and getting more competition. That is absolutely true. However, competition narrowed considerably under the previous Labour Government. The noble Lord, Lord Berkeley, and the noble Baroness, Lady Worthington, have waxed lyrical during our discussions but we ought to recall that the previous Secretary of State for Energy under the Labour Government—Mr Edward Miliband—did absolutely nothing to correct the situation and refused to refer any of the energy companies to the Competition Commission.

My concern is that this amendment is the wrong way to solve the problem highlighted by my noble friend Lord Jenkin because it would take away parliamentary democracy. The amendment refers to,

“a formal review of the regulation of competition”.

That formal review could be held at any time. Let us imagine that we have a Government whom none of us in this Chamber likes. If the amendment is passed, they will turn to this new clause and announce that they will carry out a formal review. The formal review will have whatever outcome they want and they can implement its findings without primary legislation. That would take away a hugely important role not just of this House but of the other place.

Lots of little things could be done by secondary legislation. Having been a Minister, I am sure that officials and civil servants have already worked out as many areas as possible that can be dealt with by secondary legislation. However, very significant changes may arise which need to be properly debated in both Houses of Parliament, but which could escape that close scrutiny if this amendment is passed. If a future Government of whatever persuasion were to use this new clause, I can imagine the row that would erupt in this House and the complaints that would ring around this Chamber that there had been a lack of opportunity for debate, particularly from the noble Lord, Lord Berkeley. We should not put ourselves in that position.

My Lords, hotfoot from Ethiopia, I rise to support this amendment. Unlike the noble Earl, Lord Caithness, I believe that this is a fallback amendment which cannot in any way harm either the general thrust or the detail of the Government’s policy, as spelled out in the Bill. As I said on Report, and the noble Lord, Lord Jenkin, has made amply clear this afternoon, the Secretary of State continually talks the talk about the importance of competition to all parts of the energy industry, yet the Government seem strangely reluctant to walk the walk when it comes to the Bill. I remain rather mystified by that.

I am sure that the noble Lord, Lord Jenkin, will respond to the comments of the noble Earl, Lord Caithness. However, the amendment refers to drafts of instruments being approved by each House of Parliament, so I do not see that the Secretary of State would be denied democratic freedom under the revolutionary scenario that the noble Earl made out. I hope that the unassuming, safety-net nature of the amendment will prove an exception to the Government’s reluctance to walk the walk in respect of competition.

My Lords, this proposed new clause follows up debates we had in Committee and on Report and is, I believe, a matter of considerable importance. I shall therefore listen with great care to what the Minister has to say in reply.

My Lords, here we are at Third Reading debating an issue of such fundamental importance that it merely serves to illustrate the point that, although this Bill is considerable in size and breadth, it fundamentally fails to do what it says it is going to do: that is, reform the market.

Although I am sympathetic to the defence of this amendment that has been put forward, it simply is not enough. It hinges on whether one believes that a review undertaken by Ofgem will deliver anything. On this side of the House, we are absolutely certain that it will not. We have had numerous reviews from Ofgem, and Ofgem has clearly demonstrated that it is not fit for purpose. That is why the Labour Party and the leader of the Opposition have been absolutely crystal clear that under a Labour Government we would have a complete restart of that regulatory body to refocus it on putting the consumer first and bringing genuine competition across the market, not just in supply, tariffs and the consumer-facing parts of the industry, but all the way through the chain. That includes the generation market and the wholesale market, but also, importantly, the regulated aspects of this industry.

Throughout the passage of the Bill one part of the energy sector has gone almost without mention. That is the regulated aspects of the industry: the distribution network operators and the transmission grid operators. I inform noble Lords that on Friday Ofgem will be issuing a consultation on the business plans of the DNOs. We raised this issue in Committee. They are now extended to eight-year regulated periods. Starting in 2015, they will sign off on a business plan that will last eight years to 2023—just think how many Governments that covers—and that essentially ties the hands of future Governments who want to look at that aspect of industry. It is an important issue because these regulated industries are going to change; they will see changes arising from the Bill. If the Bill does what it says it is going to do, which is to decarbonise and to help us move to a more sophisticated demand-management system through capacity mechanisms, it has significant implications for those regulated aspects of the industry and yet we have heard scarcely a word about that. We have a price review which is completely out of synch, and the business plans have been drawn up before the Bill has even received Royal Assent.

It is evident to me that the regulator is not fit for purpose. I have heard anecdotally that various parts of Ofgem, not the whole thing, have gone completely native and are now merely rubber-stamping what the industry wants. Therefore it is deeply regrettable that we are, at this very late stage, having such a fundamental discussion. It reflects very badly on the Government. This would not even be an issue if the leader of the Opposition had not made it such a political centrepiece of his conference speech, and here we are, several months later, discussing it and still we have no cohesive or comprehensive answer from the Government.

I support the principle behind the amendment, but I fear that it is simply too little, too late. We need a fundamental resetting of the market to rebuild the trust which, it is clear, has been lost. We must look at all aspects of the industry again to ensure that we put the consumer first and, as we strive to meet the many challenges involved in energy policy, that we put the consumer and value for money centre stage as we also seek to achieve the very important aims of keeping the lights on and addressing climate impacts. I am grateful to the noble Lord, Lord Jenkin, for raising this at this time. However it is, as I said, too little, too late. We really need a fundamental review of this, and that can happen only under a new Government.

My Lords, I am grateful to my noble friend Lord Jenkin for his amendment and for raising again the important issue of competition. I reassure my noble friend that we are deadly serious about greater competition. Competition is at the heart of the Government’s drive to make sure that energy bills are as low as they can possibly be, to ensure that all consumers are getting a fair deal and, as importantly, to build the trust that my noble friend referred to.

In response to the noble Lord, Lord Cameron, we are walking the walk. That is why we have seen a great number of new entrants since 2010. The Government announced in the annual energy statement that Ofgem and the competition authorities—the Office of Fair Trading and the newly created Competition and Markets Authority—will conduct an annual competition assessment of the energy market. The first assessment will be completed by spring 2014. Together, these independent regulators already have extensive powers to investigate the market and to implement the full range of structural and behavioural remedies to strengthen competition. The statutory framework includes important safeguards to give market participants confidence in a fair and predictable regime. The Government have established the Competition and Markets Authority, which will have strengthened responsibilities and powers and will take on the work of the Competition Commission and a number of responsibilities of the Office of Fair Trading. This will lead to more robust and faster decision-making.

We are strengthening Ofgem’s hand through the Bill. The Government are taking powers to enable Ofgem to step in to improve wholesale market liquidity should its reforms be frustrated or delayed, and we are giving statutory backing to Ofgem’s retail market reforms. We are also giving Ofgem a new power to compel energy businesses to provide redress to consumers. These measures will further strengthen Ofgem’s ability to take effective and timely action to strengthen competition.

I listened carefully to the noble Baroness, Lady Worthington, about the weakness of Ofgem and what her party would do, but Ofgem’s inception was under her Government, and they had 17 reviews. They had ample time to reform Ofgem, if they had wanted to. While I keep hearing from the noble Baroness that her party would abolish Ofgem, they have never given us a sound, credible alternative. When she says that the leader of the Opposition has put consumers at the heart of prices, I remind her that the Prime Minister highlighted the need to simplify the many thousands of tariffs that cropped up under the previous Government.

I should say to the noble Lord, Lord Berkeley, that we are not frightened of the big six. That is why Ministers in my department have been having tough, robust conversations with all energy providers to ensure that they understand quite clearly that this Government are determined to ensure the best outcomes for the consumer.

Finally, the strategy and policy statement will give Ofgem clear guidance on the policy outcomes that are to be achieved to implement the Government’s strategic energy priorities. The Government stand ready to act in support of the regulators where necessary, as I have already said to my noble friend. We had a constructive conversation yesterday in which I wanted to reassure him that those powers are already there. It is for us to ensure that they are being utilised properly. My noble friend mentioned the Which? report on ring-fencing. Ofgem, the Office of Fair Trading and the Competition and Markets Authority will consider all measures that may be necessary in the competition assessment. Together they have far-reaching powers and are able to put in place the full range of remedies, which may include some forms of ring-fencing. It is for the competition authorities to decide what needs to be done, based on evidence. I hope that my noble friend is reassured that the Government are indeed taking this matter very seriously. The regulators have extensive powers to act, which are being strengthened by the creation of the Competition and Markets Authority. I hope that on that basis he is content to withdraw his amendment.

My Lords, my noble friend has gone quite a long way to reassure me, but I have one or two other questions. However, before I come to them I shall respond to my noble friend Lord Caithness. This amendment simply creates a new power to make regulations that confer powers on the regulator; it does not attempt to say what should be in those regulations. Of course they would be subject to consent by both Houses of Parliament, and I have no doubt that if a significant new power were required, that, too, would have to be subject to an affirmative resolution, or possibly a super-affirmative resolution, in both Houses. I do not see this as being undemocratic and without parliamentary review. The parliamentary review would happen inevitably at each stage. I cannot accept my noble friend’s suggestion that this is the wrong answer.

I recognise and am grateful for the support that the amendment has received, even the somewhat doubtful support from the Opposition Front Bench. I can only echo my noble friend on the Front Bench. The Opposition have yet to explain of what this new marvellous—what should we call it?—“restart” of the whole system is to consist of. I believe in building on what we have got and improving it, rather than taking a leap in the dark and making some entirely new start. These reviews that have been announced—I caught wind of them some time before the Prime Minister made his statement in the other place—are a major new effort to get at why competition has not been working largely because of the reduction in the huge number of generators under the previous Government.

I am grateful to those who supported the amendment. I agree that the main purpose of stronger competition is to protect consumers. A recent National Audit Office report looked at the impact of infrastructure investment on consumer bills. Its view was that,

“Government has made no assessment of the overall impact of infrastructure on future bills or whether those bills will be affordable. Therefore government and regulators are taking decisions on behalf of consumers in the absence of full information about the situation for consumers”.

This is a worrying report. It points to a considerable shortcoming of not just this Government, but all Governments. It is interesting that its first two recommendations are aimed at the Treasury. The Treasury has to set up the structures whereby consumer interests can be considered during the whole question of the infrastructure investment. I do not think I am being unduly alarmist by pointing out that if there has been neglect of the consumer interest in the consideration of the Government’s infrastructure investments, it is not altogether unreasonable to assume that it has also been neglected elsewhere in government, and that this is a wider problem. I do not want to pursue that now except to say that I shall be looking forward to the Government’s response to the National Audit Office report.

My noble friend has gone a long way. She referred to the new powers in the Bill. She also referred to the extra powers that may be available to the Office of Fair Trading and the new Competition and Markets Authority. I shall take her at her word that these are the kind of things that could deal with the proposal that has been made by Which? about separating out the vertically integrated forms. She indicated that that could well be part of the process. On that basis, it would be wrong to divide the House. One point on which I do agree with the noble Baroness on the Opposition Front Bench is that this is a very late stage to raise an important issue. It arose out of the Statement that was made on 31 October. That was the first time that we got the details of these reviews. I hope I have not been wasting the time of the House in bringing this forward, but in this circumstance it would not be right to take the opinion of the House. I beg leave to withdraw the amendment.

Amendment 6 withdrawn.

Clause 139: Power to modify energy supply licences: domestic supply contracts

Amendment 7

Moved by

7: Clause 139, page 108, line 31, at end insert—

“(f) provision for requiring a licence holder to provide information to domestic customers about the licence holder’s costs, or profit, attributable to its domestic supply contracts, which may, in particular, include information about—(i) particular kinds of those costs, and(ii) the extent to which domestic customers’ costs are attributable to any of those kinds of costs, or to profit;”

My Lords, this group of amendments has the effect of giving the Secretary of State the power to require energy suppliers to provide a breakdown of costs to consumers. This includes both information about their costs in supplying domestic customers and costs passed on to domestic consumers through the Government’s environmental and social programmes. It also enables the Secretary of State to set out the categories of costs to be included and to determine the frequency with which this information must be provided. I am grateful to my noble friend Lord Forsyth, who sadly is not in his place today, and to other noble Lords who raised this matter on Report. I listened very carefully to the views expressed and the Government have brought forward this amendment in response.

The Government are in complete agreement on the importance of providing clear information on the costs that contribute to consumers’ energy bills, including the costs of government policies. Indeed, that is why the Government publish each year a detailed assessment of the impact of our policies in the Estimated Impacts of Energy and Climate Change Policies on Energy Prices and Bills. However, I recognise the strength of feeling on this issue and that is why we will now go one step further and ensure that this information is provided directly to consumers. We will be working with consumer groups, including Which? and Consumer Futures, to take this forward. Four of the largest suppliers already provide a breakdown of their costs on consumer bills. As a first step, I will be seeking a voluntary agreement with other suppliers to ensure that they also provide a breakdown of their costs to consumers.

It is right that we should first pursue a voluntary agreement, as this is the quickest and most cost-effective route to getting this information out to consumers. In the event that the Government are unable to reach agreement to a voluntary approach, the Secretary of State will exercise this power. We need to strike a balance between providing sufficient detail on the costs associated with supplying gas and electricity, and significantly increasing suppliers’ costs, which would inevitably end up being passed on to consumers.

I will explain the types of costs about which suppliers might be required to provide information. I expect to see costs broken down into the following types of categories: wholesale energy costs, network and distribution costs, costs of complying with government environmental programmes, VAT, operating costs and profit. How suppliers display these costs should be left for them to decide, provided they include these categories. I believe the approach we are taking strikes the right balance by providing transparency to consumers on the costs incurred by suppliers without imposing significant additional burdens. I beg to move.

My Lords, I welcome this amendment, which began its life, I think, in an interchange between the noble Baroness and me in Grand Committee. She has pretty much supplied everything that I asked for then, and I am very pleased. The only point that I will make now is that the Government rightly want to make it easy for consumers to switch suppliers. That is a good thing and it is very helpful that this information will be made available one way or another on bills. However, it needs to be made available consistently, in the same form, by different suppliers, so that if you are comparing a bill from one supplier with a bill from another, the information is supplied in the same form on each bill. The noble Baroness did not quite make that point in what she said. I hope that she can assure us that these costs will be disclosed—either voluntarily or by the exercise of the power that she is taking—not only transparently but consistently and comparably by different suppliers.

My Lords, I have one question for my noble friend. She talked about making environmental costs clear to customers on their bills. In the past few weeks, we have had lots of discussions about eco and green taxes, and it has become quite clear that the big six, in particular, have sometimes not pointed out to their customers, or admitted in their discussions, that some of those costs are social costs. Everything is in a bit of a state of flux at the moment but, depending on how things work out, it is also important that we are quite accurate on the bills about what is a social cost and what is a so-called green tax. I will also just say that I am very sorry that I was not here for the previous stage of the Bill when the noble Baroness accepted my amendment about the clarity of bills. I hope that the point that was raised by the right reverend Prelate will be covered in the amendment that was passed on Report concerning the clarity of Bills.

My Lords, I very much welcome this government amendment. However, I have a concern which is similar to the concern expressed by my noble friend Lady Maddock about how these numbers are produced. When the price increases came through from the energy companies, a bill that I saw, to family members, bullet-pointed the green energy costs as being at the top of the list, giving the impression that this was the most important thing. We all know that numbers are subjective. Numbers in company accounts are as objective as they can be but they are subject to how things are interpreted to some degree; as we know, for example, in terms of the lack of tax that is paid by some multinational companies. Do the Government have any view about how these numbers should be somehow independently audited or at least be auditable, if we feel that they fall below standard?

I will just add one point before my noble friend replies. I was very glad to hear her say that she would rather this was done voluntarily, but a back-up power is important to encourage the right response from the industry. I apologise to the right reverend Prelate. I was moving amendments on this subject during proceedings on the last energy Bill but one. Those amendments suggested that we needed to see more detail in the Bill. As other noble Lords have said, one needs to have a very clear view as to what these figures actually mean, which is not always apparent. I get bills with pie charts and other things from British Gas. I have one in front of me, to which I have referred before, from Southern Electric. Many of them try to do their best, but such is the lack of trust now between the public and the industry that the public need to be reassured that the figures actually mean what they say. I look forward to seeing what comes from this but, along with other noble Lords, I very much welcome these amendments.

My Lords, as someone who spoke in favour of the amendment of the noble Lord, Lord Forsyth, on Report, I, too, welcome this amendment and think that it goes in exactly the right direction. I particularly welcome the emphasis on voluntary reporting, which will result in a much more flexible and effective way of finding out exactly what these costs are, and where they are, than if we tried to micromanage it by specifying the details ourselves as hopeless legislators rather than people who know how these things are done.

From these Benches, I am happy to endorse the spirit of the amendments in the interests of consumers and providing them with more information on their bills. These amendments seem more neutral than those proposed on Report in that they do not seek in the Bill to mandate energy suppliers to highlight certain designated costs. The amendments thereby avoid the claim that they are targeting so-called green levies on behalf of one strident viewpoint. I listened carefully to the Minister’s words in proposing these amendments and, like the noble Baroness, Lady Maddock, I am not sure that I picked up entirely how the Minister expected costs to be broken down to include the social costs. Can she clarify that in her reply? The impact of different costs, especially the so-called green or environmental costs, should be balanced and it is important how that is portrayed to consumers.

We welcome the consultation that this will enable so that all views can be expressed prior to the introduction of regulations—if any are introduced. However, we are concerned that the transparency of the whole market needs to be enhanced, not simply transparency with respect to the costs of energy supply companies. I refer here to generating costs and transfer pricing within each of the big six power companies, which can make big margins on their generation that would not then show up as the Government may intend.

We remain concerned that these clauses do not go anywhere near far enough. From these Benches, we contend that without proper reform of the market, the data available at any later date are likely to be of severely limited use. At this stage, we are content with the amendments but regard them as highly immaterial to the overall transparency of the market.

My Lords, I am extremely grateful to all noble Lords for, by and large, their support for my amendments. I will quickly respond to the right reverend Prelate the Bishop of Chester and to my noble friend Lady Maddock about transparency. The Government and Ofgem both agree that it is important that suppliers are transparent about their costs, including the costs of complying with government environmental and social programmes. One part of the list to which I referred earlier was about complying with greater transparency on those costs. The suppliers would be expected to be able to comply on the cost of delivering government environmental and social programmes. Just to reassure noble Lords, the power enables the Secretary of State to specify the particular kinds of costs that suppliers must refer to, so if we need to get further detail, there is scope to enable that to happen.

I have tried to provide a balance between not overcomplicating the Bill and enabling consumers to be able to look at a bill, see how much their energy is costing them and see whether they are able to get a cheaper deal elsewhere. Providing that information in a way that is clear and easy to understand is what my amendment proposes to do.

Amendment 7 agreed

Amendments 8 to 10

Moved by

8: Clause 139, page 108, line 47, at end insert—

“(4A) Provision that may be included in a licence by virtue of subsection (2)(d) or (f) may in particular—”

9: Clause 139, page 108, line 49, at end insert—

“( ) make provision about the times at which information is to be provided;”

10: Clause 139, page 109, line 46, after “make” insert “incidental, supplementary or”

Amendments 8 to 10 agreed.

.

Clause 145: Fuel poverty

Amendment 11

Moved by

11: Clause 145, page 113, line 12, leave out “addressing the situation” and insert “reducing the number”

My Lords, in moving this amendment I shall also speak to Amendment 12. I had better declare an interest on this: I am the chair of a small fuel poverty strategy. I do so because the Minister was, I am glad to say, present at the opening of our conference today, which I am very grateful for.

We come now to fuel poverty. I am not quite sure how many “lemmas” we now have in energy policy, whether it is a tetralemma or a quadlemma, but clearly one of the objectives of energy policy must be to rectify the detrimental effects that arise from fuel poverty on some of the poorest in our land. The House will be well aware of how important it is to regard tackling fuel poverty as one of the priority aims of energy policy. There will still be millions of households in severe distress this winter because they cannot heat their homes properly. As a result, there will be millions of pounds of expenditure by the NHS in treatment of cold-related diseases, and sadly there will be some thousands of premature deaths.

Because of this background and because of the inexorable rise in consumer energy prices since about 2004-05—whatever programmes existed then were struggling against a rising trend of prices—the original intentions to eliminate fuel poverty, set down as far back as 2000, were no longer achievable. It was therefore of some concern to many of us that when the first version of this Bill appeared in another place, there was no mention whatever of fuel poverty.

In Committee, the Minister herself produced the provision that attempts to rectify that situation. It was commendable of her to persuade her colleagues that this was necessary, and the Government’s commitment in Clause 145 to producing a new strategy for fuel poverty in a maximum of six months’ time was broadly welcome—and I still welcome it. However, many of us also considered that more detail was required to make clear the nature of this strategy. As colleagues will remember, a number of more detailed proposals for inclusion in this part of the Bill were considered both in Committee and on Report. The Government rejected all of those, unfortunately, but at least the strategy is there.

The amendments before us today are much simpler in nature. They simply attempt to clarify what the strategy is about. I would have thought that the Government could simply accept Amendment 11. Clause 145 refers to the intention of the strategy as,

“addressing the situation of persons ... in fuel poverty”.

That is pretty neutral. Surely, at a minimum, the proposed strategy should be about either the elimination of fuel poverty or at least the reduction of the numbers of people in fuel poverty. That needs to be reflected in this clause.

I regret having to say this but the reason why it is so important that a reference to a reduction in numbers is included is that there is considerable scepticism out there about the Government's good intentions in this area. The Government started by closing down the only taxpayer scheme designed to improve the energy efficiencies of the dwellings of the fuel poor and, in effect, abandoned targets and sought to redefine the problem. Extreme cynics, some of whom I have met, would say that the main thing that the Government have so far done to “address” fuel poverty in the terms of this clause has been to change the definitions—to statistically manipulate 2 million people out of the figures without anything actually having changed.

There were problems with the old definition, and in my view there are even greater problems with the new one. But whatever the merits of the change in definition, the combination of that with the Government’s abolition of previous schemes, the slow and somewhat expensive start of the ECO—which is supposed to address the problem of fuel poverty—plus the lack of a mention in the original version of this Bill, has led to some scepticism about the Government’s intentions. I am moving this amendment so that the Government can make their aim clear. This relatively modest amendment is as much in the Government's interest as it is anybody else’s. I hope that they will simply accept it and make clear what the intentions of this strategy will be in a few months.

Amendment 12 is also intended to provide clarification. It has always been the case, and is still the case under this Government, that multiple measures are needed to address the problem of fuel poverty. The tariff structures, which were addressed at an earlier stage of the Bill, and income enhancements such as winter fuel payments for pensioners, are also important. Most important of all, however, is the need to improve the energy efficiency of the homes of the fuel poor. That is also important for carbon reduction purposes. However, the need to address energy efficiency in buildings is not mentioned in Clause 145 or anywhere else in the Bill.

When the Government express the strategy in terms of targets in a few months’ time, I hope it will be clear that the targets are about energy efficiency improvements as well as the number of fuel poor. If that is the intention then it would be useful to have a reference to energy efficiency in dwellings inserted in Clause 145 to clarify that intention. That is what the second amendment does.

It is in the Government’s interest to clarify this, and it will certainly be in the interest of the consultation which they intend to hold on the fuel poverty strategy in a few months’ time. I therefore hope that the Government will consider these amendments positively. I beg to move.

My Lords, I thank the noble Lord, Lord Whitty, for his amendment. Rightly, he has again highlighted the seriousness of fuel poverty, as he has throughout the debates on this Bill, and I know that on all sides of the House there is a real determination to ensure that the interests of the fuel poor are represented properly. Indeed, earlier today I attended an event with fuel poverty experts to gain a better understanding of how to tackle the problem, at the invitation of the noble Lord, Lord Whitty, for which I am extremely grateful.

The Government are determined to act to ensure that consumers get a good deal and affordable energy bills. Indeed, our analysis suggests that as a result of the electricity market reform measures in this Bill, household electricity bills will be, on average, around 9% lower per year over the period 2016 to 2030 relative to what they would be if decarbonisation were achieved through existing policy instruments. As such, the impact of EMR will be to reduce fuel poverty compared to what it would have been without these policies in place.

The noble Lord’s amendments would set an objective to reduce the number of persons living in fuel poverty and improve the energy efficiency of their dwellings. The Government are intent on tackling fuel poverty at its heart, with improving energy efficiency for fuel-poor households a real priority. We agree that improving the energy efficiency of fuel-poor homes can make a sustained improvement to the situation of households struggling to keep warm and it is therefore the right type of target to aim for. However, the right balance must be struck between what is set out in primary legislation and what is subsequently laid out in regulations, in order to maintain an appropriate use of parliamentary time and the level of government accountability.

Therefore, we have proposed setting out the detail of this objective through secondary legislation because we believe that this strikes the right balance between the certainty of a legislative target and the need for flexibility in the future. We know from Professor Hills’s independent review that the way in which we understand the problem can change over time, as well as the best ways of tackling it. Primary legislation is not the appropriate vehicle to set out the detail of the target, given the importance of a nuanced, flexible approach to tackling fuel poverty.

The issue with the current legislation is that there is a very specific target which does not make sense in the context of how we have come to understand the problem of fuel poverty. That is why we have framed the new provisions in the way that we have, to ensure that there is an objective to address fuel poverty but with the detail of that objective set out in secondary legislation. Our proposals ensure that the setting of the target, and any changes to it, will be subject to full parliamentary debate, and the importance of that debate is why we have suggested from the outset that these provisions will be subject to affirmative resolution by both Houses.

Furthermore, from a practical perspective, it would not be sensible to make specific reference to improving the energy efficiency of dwellings, as this could mean that every time the methodology for measuring energy efficiency is updated, the primary legislation would need amending. As this could occur every couple of years, it would not represent a proportionate use of parliamentary time for what would be very technical amendments.

To reflect on what the noble Lord, Lord Whitty, said about the measures we are currently using under ECO, thus far 311,250 energy-efficiency measures have been installed in around 273,000 properties through ECO and the Green Deal, to the end of September. The vast majority have been installed through ECO so we believe that ECO is working. It is reaching out to the very families that I know the noble Lord and I both believe need the greatest assistance.

In summary, I agree with the spirit of the noble Lord’s amendments but do not believe that it would be sensible to put this detail in the primary legislation However, since we are agreed on the intention, I hope that my response has reassured the noble Lord and he will withdraw his amendment.

This is the last group to which I will speak, so before I sit down I would like to put on record my thanks to everyone who has played a role in the passage of the Energy Bill through this House. I start by thanking the Lord Speaker and all Deputy Speakers and Deputy Chairmen who have facilitated our proceedings. I also thank all those who have worked behind the scenes: the clerks, Hansard, the doorkeepers and the officials from the Ministry of Defence, the Department for Communities and Local Government and the Department for Environment, Food and Rural Affairs who have supported the Government. I add my particular thanks to my officials from DECC, who have worked tirelessly—even to the point of giving up annual leave during the Summer Recess—to be able to provide the information that your Lordships required, which was made possible by the way they performed so heroically during the passage of this Bill.

I also thank all noble Lords who have taken part in our debates for their constructive contributions to the Bill. We have scrutinised it in full and I have no doubt it is leaving us in a better state than it arrived in, thanks to the expertise of this House. We have added new provisions on fuel poverty, access to markets and enabling the level of the small-scale feed-in tariffs threshold to be raised. Thanks to my noble friend Lord Roper and the Delegated Powers and Regulatory Reform Committee, we have also improved the level of scrutiny afforded to the delegated powers in the Bill.

I particularly thank my noble friend Lord Gardiner, who has so ably assisted me at the Dispatch Box, as well as my noble friends Lord Courtown and Lord Teverson, who have assisted from the government Benches.

I am also extremely grateful to all members of the House of Lords informal scrutiny group on the Energy Bill, which first convened for pre-legislative scrutiny and has continued its most helpful and appropriately challenging scrutiny in parallel to the Bill’s passage. I particularly thank the noble Lord, Lord Oxburgh, who I do not see in his place, for his long-standing chairmanship of this group.

We have not agreed on everything but I am grateful for the broad support there has been for the intentions of this Bill. As I am sure noble Lords will agree, it is now important that the Bill proceeds to Royal Assent as swiftly as possible in order to secure the investment that is vital for growth, jobs and the decarbonisation of our economy.

My Lords, I echo the noble Baroness’s sentiments in relation to the passage of this Bill. Although, apart from the Minister herself, we are now discouraged from making lengthy speeches at Third Reading, I would like to underline her thanks to her staff, because they have been extraordinarily helpful to other Members of this House. The meetings we have had under the auspices of the noble Lord, Lord Oxburgh, and the noble Baroness have been extremely helpful.

As the noble Baroness says, we have not always agreed. We do not entirely agree on this clause. Some of what she addressed in her reply related to earlier discussions we had on Report. I am not trying to specify targets in any detail; I am saying simply that the fuel poverty strategy should be about reducing the number of fuel poor, including by improving the energy efficiency of their homes. I would have thought that was pretty incontestable and really should have been reflected in this Bill.

I will not pursue this tonight but I will just say to the noble Baroness that because of when this was introduced, the other place has not actually considered the fuel poverty dimensions of this Bill. I rather suspect that her colleagues in the House of Commons will have some lengthy discussions on this and, in the light of that prospect, I will withdraw my amendment tonight. I reiterate my thanks to the Minister and her staff for the conduct of the whole passage of this Bill.

Amendment 11 withdrawn.

Amendment 12 not moved.

Amendment 13

Moved by

13: After Clause 149, insert the following new Clause—

“Smoke and carbon monoxide alarms

(1) The Secretary of State may by regulations make provision imposing duties on a relevant landlord of residential premises in England for the purposes of ensuring that, during any period when the premises are occupied under a tenancy—

(a) the premises are equipped with a required alarm (or required alarms), and(b) checks are made by or on behalf of the landlord in accordance with the regulations to ensure that any such alarm remains in proper working order.(2) “Required alarm” means—

(a) a smoke alarm, or(b) a carbon monoxide alarm,that meets the appropriate standard.(3) Regulations may include provision about—

(a) the interpretation of terms used in subsections (1) and (2);(b) the enforcement of any duty imposed by regulations.(4) Provision made by virtue of subsection (3)(b) may in particular—

(a) confer functions on local housing authorities in England;(b) require a landlord who contravenes any such duty to pay a financial penalty.(5) Provision about penalties made by virtue of subsection (4)(b) includes provision—

(a) about the procedure to be followed in imposing penalties;(b) about the amount of penalties;(c) conferring rights of appeal against penalties;(d) for the enforcement of penalties;(e) about the application of sums paid by way of penalties (and such provision may permit or require the payment of sums into the Consolidated Fund).(6) Regulations may—

(a) include incidental, supplementary and consequential provision;(b) make transitory or transitional provision or savings;(c) make different provision for different cases or circumstances or for different purposes;(d) make provision subject to exceptions. (7) Consequential provision made by virtue of subsection (6)(a) may amend, repeal or revoke any provision made by or under an Act.

(8) Regulations are to be made by statutory instrument.

(9) An instrument containing regulations may not be made unless a draft of the instrument has been laid before, and approved by a resolution of, each House of Parliament.

(10) Subject to provision contained in regulations, in this section—

“the appropriate standard”, in relation to a smoke alarm or a carbon monoxide alarm, means the standard (if any) that is specified in, or determined under, regulations;

“local housing authority” has the meaning given in section 261(2) of the Housing Act 2004;

“premises” includes land, buildings, moveable structures, vehicles and vessels;

“regulations” means regulations under this section;

“relevant landlord” means a landlord in respect of a tenancy of residential premises in England who is of a description specified in regulations;

“residential premises” means premises all or part of which comprise a dwelling;

“tenancy” includes any lease, licence, sub-lease or sub-tenancy (and “landlord” is to be read accordingly).”

My Lords, in moving Amendment 13 I will speak also to Amendments 14 and 15. Before I get to that, though, I will start by paying tribute to the noble Baroness, Lady Finlay of Llandaff, and indeed your Lordships’ House, for raising and debating the important matter of carbon monoxide poisoning during the passage of this Bill.

As noble Lords will recall, in Committee the noble Baroness, Lady Finlay, explained the effects of carbon monoxide poisoning and highlighted, as indeed did other noble Lords, some of the recent tragic cases. The noble Baroness tabled an amendment that would have introduced regulations for carbon monoxide detectors in the Bill. We could not accept that amendment but it provoked a debate within government which led me to announce on Report a couple of weeks ago that we would extend our review of private rented accommodation to examine whether landlords should be required to install carbon monoxide detectors.

Noble Lords will recall that on Report the noble Baroness tabled an amendment that would have introduced order-making powers on the Secretary of State. During our debate then I was clear that the Government could not commit to regulate in advance of the completion of the review I had announced that day. However, as I could see the merits of having the power in place should the Government decide that regulations are the correct course of action, I agreed to discuss this further with my ministerial colleagues. Having done that, I am pleased to put forward government amendments today and am also pleased that the noble Baroness, Lady Finlay, and others have added their names.

The amendments before us now differ from the one tabled by the noble Baroness, Lady Finlay, on Report in two important respects. First, the government amendments also cover smoke alarms. We decided that it would be sensible to do so given that the arguments around carbon monoxide alarms are very similar for smoke alarms. Secondly, the amendments apply only to rented housing, whereas the amendment tabled by the noble Baroness, Lady Finlay, would have applied to all properties, including owner-occupied ones. We have restricted the scope of the amendment in this way because tenants in rented homes do not generally have the same degree of control over their homes compared with home owners and may therefore need greater protection. In addition, there is some evidence that privately rented homes represent a greater risk to the safety of occupiers than any other sector.

In tabling these amendments, I make it clear again that the Government remain to be convinced of the need to regulate in this area at this time. However, as I have said, we have decided that it would be prudent to take the necessary powers now. We will now take forward a wide-ranging and fundamental review into property conditions in the private rented sector. The review will consider very carefully the case for requiring landlords to install carbon monoxide alarms and/or smoke alarms in their properties. The review is scheduled to last approximately six months and to conclude in June 2014. As soon as possible following this, the Government will publish a report which will summarise the key findings of the review, set out government conclusions and detail the Government’s intended actions following those conclusions.

The first stage of the review will be the publication next month of a discussion document setting out the terms of reference and inviting views on a range of issues. We will also engage widely with interested organisations including landlord associations, housing charities, tenant groups and professional bodies. In addition to considering whether smoke and carbon monoxide alarms should be required in privately rented housing, the review will also look at the minimum standards tenants should expect when renting a property. This will include considering the requirements of the Landlord and Tenant Act 1985, the current licensing system for privately rented housing, current requirements around regular checks of electrical installations in the home and whether there is a need to introduce a compulsory system requiring that such installations are checked regularly. We will also give careful consideration to the possibility of requiring landlords to repay all or part of any rent they have received where they rent out a property that contains serious health hazards or has other major defects.

It is important that we do not prejudge the outcome of the review. The Government are seeking to take these powers now to enable us to move quickly if the review concludes that such alarms should be mandated in this sector. I hope, therefore, that noble Lords feel reassured by what I have said today and are reassured that the Government take this issue very seriously. I am very grateful to noble Lords for their intervention on this important issue which has had a significant impact in raising its profile. I beg to move.

My Lords, I am delighted to add my name to this amendment. This is Carbon Monoxide Awareness Week so the amendment is extremely timely and I am glad the Government have been prudent, and prudent enough to extend it to smoke alarms as well. I am most grateful to the Minister for the time that she has spent with me on this issue and also to the noble Baroness, Lady Verma, in her role as Minister taking this Bill forward. I hope that the Public Health England warning that went out yesterday over fossil fuel and wood-burning stoves for Carbon Monoxide Awareness Week will become a thing of the past. It is important that the cost of a working smoke alarm at European Standard EN 50291, guaranteed for seven years, is put in context. One year’s protection costs less than a large cup of coffee at a motorway service area. Some 40 people a year on average lose their lives through carbon monoxide poisoning and about 4,000 people end up in A&E. This is a really important step. I wish that we did not have to take it but I am sure that we will end up needing to have regulations made. I will continue to question the Government as it goes through and I will be watching the review very carefully. In the mean time, I am most grateful and I am sure that the victims’ families are also grateful that the Government have listened carefully and acted at a point where they could.

My Lords, I, too, added my name to this amendment and I am very grateful to both Ministers for bringing this forward. Like most people who have campaigned on this issue over the years, it began with a personal experience. My first experience was in a private home where a room had been made in a roof and there were fumes as the builder had not properly sealed the chimney. I hope that at some point we can look also at homes other than rented ones.

My experience was 20 years ago and over those 20 years a number of groups and individuals have campaigned on this. During the passage of this Bill, we got the old familiar answer that, “It is not our department”. I am very grateful to the Minister because she did not stop it there and the noble Baroness, Lady Finlay, and I had a very productive meeting with her and her officials—she took on board that we really ought to sort this out. It must be somebody’s responsibility somewhere. I had hoped that there might be some regulations somewhere that we could add this on to but that is not exactly what has happened. I also raised it with my right honourable friend Ed Davey, the Secretary of State at DECC, and he took this seriously as well, so I know that a lot of work has gone on to bring this forward.

I, too, thank the Minister for the amazing access we have had and the information that we have all been party to through the passage of the Bill through this House. As other noble Lords have said, we always make legislation better when it comes here. We have certainly done that and I thank the Minister for bringing forward the fuel poverty strategy. We know that it is not perfect but we are really grateful as it was not there before. As the noble Baroness, Lady Finlay, said, on behalf of all those who have campaigned about the unnecessary deaths from this silent killer, carbon monoxide, we thank everybody who has brought forward these amendments today. However, like the noble Baroness, Lady Finlay, I shall be watching what happens in future because the dreaded word “may” is in the Bill; it is not “must”.

My Lords, we, too, thank the Minister for joining with the energy department to bring forward this sensible amendment which, if implemented, will undoubtedly save lives. We also thank the noble Baroness, Lady Finlay, and other noble Lords, including my noble friend Lord Harrison who cannot be in his place today, who have campaigned strongly on the issue. Deaths from carbon monoxide and from fire are avoidable. These alarms are cheap to buy and fix and must be among the most efficient life-saving devices ever on the market. It must also be stressed that there can be no substitute for regular maintenance. I am glad to see that element also included in the amendment.

While welcoming the consultation to capture views on how the measure may be taken forward as part of a wider review, our only concern is that the Government may not bring forward the necessary regulations despite the undoubted value of these devices, which could save hundreds of lives a year. Will the Minister tell the House when the review announced on 16 October will report? We see no reason to hold up this welcome measure unnecessarily while the review looks at a number of other, quite unrelated issues. We therefore urge the Government to move with some haste on this measure, so saving tenants across the country from the risk of death either from fire or from carbon monoxide poisoning.

I am grateful to all noble Lords who have spoken and for their support for these government amendments. I share the views expressed by my noble friend Lady Maddock and the noble Baroness, Lady Finlay, on the work that my noble friend Lady Verma has done in this area. It was she who responded to the debates in Committee and ensured that there was the greater collaboration across government departments that led to the announcement that I made on Report. We have worked together on this, but the amendment was triggered by her response to the debates that took place in Committee.

I do not think that there is a great deal more for me to add to the points that I made when moving the amendment. I am grateful to the noble Lord, Lord Grantchester, for his support for the amendment. As I said in my opening remarks, the review that the measure forms part of will conclude next June. We will be as swift as possible in making public our conclusions in response to that review. As I have said and as I have demonstrated today, if the outcome of that review is a decision that we should regulate, we now have in place the order-making powers that would make that possible. The noble Lord urged us to go further, but as I said when we discussed this matter at the previous stage, his own Government conducted a comprehensive review of this area only in 2009 and concluded that they should limit regulations to just the installation of solid-fuel appliances. I accept his challenge and the pressure he puts on me to make sure that we go further, but we are doing this by way of review because we think that it is the right thing to do. I am quite confident that, by conducting a comprehensive review, we will be able clearly to demonstrate that our conclusions are evidence-based and well informed.

Amendment 13 agreed.

Clause 154: Extent

Amendment 14

Moved by

14: Clause 154, page 122, line 6, leave out “Section 145 extends” and insert “Sections 145 and (Smoke and carbon monoxide alarms) extend”

Amendment 14 agreed.

In the Title

Amendment 15

Moved by

15:In the Title, line 12, after “State;” insert “about smoke and carbon monoxide alarms;”

Amendment 15 agreed.

Bill passed and returned to the Commons with amendments.

High Speed Rail (Preparation) Bill

Second Reading (and remaining stages)

Moved by

My Lords, I open this Second Reading by reminding this House why so many of your Lordships across the political divide have given their support to a high-speed rail network. The noble Lord, Lord Faulkner, has said:

“There you have the essential case for building High Speed 2 —not as a separate line, physically and operationally away from the current railway, but as a crucial part of a reshaped and improved national network”.—[Official Report, 24/10/13; col. 1226.]

The noble Lord, Lord Greaves, from the Liberal Democrat Benches, who is not in his place but was involved in the previous debate, said:

“It will herald a new era for railways in Britain, and it will form a vital part of bringing together the different parts of England and closing the regional divide”.—[Official Report, 24/10/13; col. 1221.]

The noble Lord, Lord Heseltine, who sends his apologies because he is committed to a speech tonight, said:

“HS2 is about our country’s competitiveness for half a century or more. It is about so many more people sharing growth that has, for too long, been concentrated on London and the south-east. It’s all about drawing together our economy as a whole as well as improving our access to the enlarged, and enlarging, home market of Europe”.

Of course, there are opponents of high-speed rail and specifically of HS2. I respect them; they raise real challenges; and I shall address those challenges today.

The Bill before your Lordships is a paving Bill. Mercifully, it is simple and clear. It grants the Secretary of State authority to incur expenditure, which must be also approved by the Treasury. It describes the route as publicly committed, but allows for future extensions as well as connections to the wider network. It requires an annual report to be made to Parliament for all expenditure incurred, including any variation from budget. It requires reporting on those receiving vocational qualifications as a consequence of the project, and, of course, it is a money Bill. Each phase of HS2 and any future extensions will require a separate hybrid Bill without which construction cannot begin. That will be the opportunity to debate and scrutinise the route in detail and the manner in which the project will be delivered.

There are three key arguments for HS2 and the high-speed rail network that this Bill presages: capacity, connectivity and growth. In Britain, we are running out of capacity on our most important north-south routes. Demand for intercity rail travel has doubled in the past 15 years. By the mid-2020s, the west coast main line, our main rail line connecting London, the Midlands and the north, will be full. That is calculated on very modest figures for passenger growth: 2.2% a year. I should note that for the past decade demand has grown at 4.4% a year or more. Already in 2011, during the morning peak, 4,000 people were standing on arrival into Euston and 5,000 people were standing on arrival into Birmingham. It is close to impossible to get train paths for new services on the west coast main line.

We need a high-capacity answer, and that is HS2. It gives us 18 trains an hour in each direction when complete, each carrying up to 1,100 passengers. By taking long-distance travellers off the existing lines, it releases space on the west coast, east coast and midland main lines to be used for much needed regional and commuter services. Network Rail estimates that more than 100 cities and towns could benefit from the released capacity. It also releases essential capacity for freight: demand for rail freight is forecast to double by 2043, and there is not the capacity to carry it.

I am, of course, aware that many have proposed alternatives: upgrades to our existing lines to provide that capacity. Many of the ideas are interesting—in fact, some will probably be implemented—but they leave us with two problems. The first is scale. Including every reasonable alternative, we can achieve a 24% increase in capacity. HS2 gives us a 105% increase. It is a complete step change.

The second problem is disruption. As upgrades mean working on active lines in daily use, we have to resort to closure for much of the work. This House will have seen the Atkins report showing 14 years of weekend closures, and that is with an aggressive work programme of two simultaneous schemes on each route at any one time. It would frankly be a nightmare.

HS2 also transform connections across Britain. It will link eight of our 10 largest cities. It links up great cities of the north and the Midlands. Just as important as cutting times from London to Birmingham and Manchester, HS2 takes more than an hour off the journeys between Birmingham and Newcastle, York and Leeds. It will be integrated with the nation’s main airports, with stations directly serving Manchester and Birmingham and short connections to Heathrow via Crossrail and to East Midlands Airport from Toton station. It is this new connectivity that provides a spur to growth, and it is the reason why the great northern cities are so supportive of HS2.

My noble friend Lord Deighton and the HS2 taskforce are looking at ways to maximise the growth benefits of the line. The great cities are doing exactly that without prompting. They can see the opportunity to rebalance the economy of the Midlands and the north. The economic analysis shows them gaining double the benefits of the south.

The national gain is £15 billion a year by 2037. Construction and its supply chain alone will provide 19,000 jobs. The Core Cities group predicts that HS2 will underpin the delivery of 400,000 jobs, and 70% of the jobs created by HS2 are expected to be outside London. HS2 will be an opportunity to build a British supply chain, as discussed previously in this House, with skilled jobs for our young people—a supply chain and skill set that will support not just this project but British industry at home and abroad in future infrastructure markets. Of course not every part of the UK benefits from HS2. It benefits more the areas that it physically reaches. However, so does every transport infrastructure project past, present and future; that is a characteristic of infrastructure.

That brings me to the cost. The budget for HS2 is £42.6 billion. That is an upper limit with a contingency of £14.4 billion. Rolling stock will be another £7.5 billion. This means a benefit-cost ratio of 2.3, which is frankly remarkable for a large project, especially given the limitations of a formula that caps passenger demand three years after phase 2 is finished. Sir David Higgins, the new chairman of HS2, has been instructed to bear down on those costs, and he has said that he can and will do so. The noble Lord, Lord Heseltine, recently reminded us that part of those costs can be picked by up the private sector rather than the taxpayer. That is the intention of the Government and will be part of plans going forward.

I remind your Lordships that while the sums for HS2 are large, they are only part of the transport spending budget. In the next Parliament we will spend £73 billion on transport, only £17 billion of which is for HS2. We are tripling the national roads budget and adding 400 extra lane miles of motorway. We are tackling 195 local pinch points to break up jams. We are delivering the biggest rail modernisation programme for generations, with more than £9 billion of government funding for major rail projects, including a new £500 million rail link from the West Country to Heathrow, an 850-mile national programme of rail electrification, Crossrail and Thameslink in London and more than £900 million in flexible funding for smaller schemes.

However, infrastructure on this scale always has some negative impact, and I understand the anguish of those who cherish the countryside along the proposed route. That is why 70% of surface lines between London and the West Midlands will be insulated by cuttings, landscaping and fencing. We are at present consulting at present on property compensation, another issue that is often raised in this House. An exceptional hardship scheme is already in place. The Government have said that they intend to be fair but generous, going beyond the requirements of the law. I urge noble Lords with an interest in this area to respond to that consultation before it closes on 4 December. The detailed environmental statement for phase 1 will be laid alongside the hybrid Bill. It will be the largest environmental impact assessment ever undertaken in the UK.

We have the opportunity today to support a Bill that takes Britain into the future. We cannot opt again for make do and mend, relying on an exhausted Victorian system for our vital rail transport. Doubters have always decried new infrastructure projects, from the M25 to the Jubilee line to HS1 to Crossrail, but we will build HS2 responsibly and within budget. I ask your Lordships across all parties to join in this commitment to a modern rail network that can support our ambitions for growth and our economy. I beg to move.

My Lords, this is my first opportunity in the House to congratulate the noble Baroness, Lady Kramer, on her appointment as Transport Minister. I do so very warmly.

The previous Government started work on what became HS2 five years ago. In March 2010 we published the Command Paper that set out the case for HS2, together with the detailed route plan from London to Birmingham and the outline plan to extend the line from Birmingham to Manchester, Derby, Nottingham, Sheffield and Leeds, linking to the existing main lines to Liverpool, Newcastle, Glasgow and Edinburgh. HS2 transforms connections between London and the major cities of the Midlands and the north in the spirit of the great Victorian pioneers who built the main lines from the 1830s—starting with Robert Stephenson’s London & Birmingham Railway—upon which we still depend today.

It was always clear to me that without cross-party agreement and a fixity of national purpose to rise above short-term party politics, HS2 would never happen. HS2 through to Manchester and Leeds is a 20-year project. The golden rule of high-speed rail is that while everyone wants the stations, no one wants the line. From the outset of planning HS2, I therefore consulted with the Conservatives and the Liberal Democrats, and the Cabinet agreed to publish the Command Paper in 2010 only on the basis of their support. I am glad to say that the coalition Government have maintained this cross-party approach and very largely stuck to the 2010 plan for HS2. We may disagree on other areas of transport policy—for example, I am proud that East Coast is doing such a good job for the public as a state company and believe that it ought to be allowed to continue as such—but on HS2 I acknowledge the constructive role played by the Prime Minister, the Secretary of State and other Ministers in keeping this a national project, not a party project. This approach is fully reciprocated by my right honourable friend the Leader of the Opposition.

I also applaud the decision to appoint Sir David Higgins as chair of HS2. The biggest infrastructure project in Europe needs the best infrastructure manager available. Sir David Higgins, fresh from delivering the 2012 Olympics on time and on budget, is the very best. As with all major infrastructure projects, HS2 has experienced some teething problems. Sir David must get a firm grip on management and costs at HS2, including the recent increase in the total projected cost from £32 billion to £42 billion—an increase largely due to a sudden, and in my view hard to justify, decision by the Treasury to impose an extra £6 billion of contingency reserve on the project, taking the contingency reserve alone to £14 billion. HS2 cannot be “at any price” and this represents a 50% contingency on the costed design of £28 billion. We look to Sir David to review these costs and to stress-test the figures with some urgency. I was glad to hear what the noble Baroness said about that. I know that Sir David will also take to heart the good advice on project costs and management from the noble Lord, Lord Heseltine, in his excellent lecture on HS2 to the Royal Town Planning Institute last week.

I will say a few things about the history of HS2. There have been claims that the 2010 Command Paper was not a thorough analysis, that I and others were kidnapped by rail fanatics who bamboozled us into mortgaging the Exchequer simply to cut half an hour off the journey time from London to Birmingham, and that the whole project has had to be relaunched on the basis of capacity rather than speed. None of this is correct. Capacity is and always has been the central argument for HS2. The 2010 Command Paper could not have been clearer. It set out the previous Government’s intention to proceed with HS2 in these words:

“The Government’s assessment is that over the next 20 to 30 years the UK will require a step-change in transport capacity between its largest and most productive conurbations, both facilitating and responding to long-term economic growth … alongside such additional capacity”—

I stress those words—

“there are real benefits for the economy and for passengers from improving journey times and hence the connectivity of the UK”.

So, capacity first, with speed and connectivity significant additional benefits. That was the argument for HS2 in 2010, it is the argument in 2013 and, if we see this through, it will be the argument on its completion in 2033—and no doubt on HS2’s centenary in 2133—because capacity is the fundamental problem, solved for a generation and more by HS2. It is a problem that, if not solved, will mean that in just 10 years’ time we will have to start closing the north-south intercity railway to new business, which would be a betrayal of the future prosperity of this country, given that HS2 connects the five principal cities and conurbations of the UK.

The facts on capacity are compelling. Long-distance rail demand has doubled in the past 16 years alone; the trend growth rate is 5% a year, consistently ahead of economic growth, as other modes of intercity transport such as motorways and domestic aviation become saturated or simply unavailable, and as railway services steadily improve.

Furthermore, HS2 does not just meet rising demand for intercity travel; by freeing up substantial capacity on the existing lines, it also provides a huge capacity boost for freight trains and for commuter and regional passenger services. Rail freight volumes have increased by more than 50% in the past 20 years and continue to grow fast. Moving freight from road to rail is a national imperative, placing a special pressure on the west coast main line, which gets most of the relief from the additional capacity of HS2 since 43% of all rail freight movements in the country use it to get from the ports to the nation’s major goods distribution centres in the Midlands.

As for commuter rail, demand has also increased sharply over the past 20 years, particularly into the biggest cities served by HS2—London, Birmingham, Manchester, Sheffield and Leeds—because the big cities are the national dynamos of population and employment growth, and they will continue to be so as the UK’s population increases by a projected 11 million people in the next two decades. Here, again, HS2 is an essential congestion-buster, to the benefit of dozens of towns and cities in and around the major corporations. Coventry, Wakefield, Bradford, Stockport, Leicester, Peterborough, Stevenage, Bedford, St Albans, Cambridge, Milton Keynes—the list of beneficiaries goes on.

The question before Parliament and the country is this: if not HS2, what? Given that we are not going to be building new intercity motorways or encouraging more domestic aviation—nor should we—the only alternative to HS2 for dealing with the capacity crunch is massive further upgrades of the existing Victorian main lines. This would be very expensive and destructive and yield only a fraction of the capacity and other benefits of HS2. You do not need a crystal ball to appreciate this reality. It is only five years since the most recent upgrade of the west coast main line was completed; it cost £9 billion and entailed a decade of constant chronic disruption, at weekends and often on weekdays too, without services or with severe delays and diversions. Upgrading a busy main-line railway is like conducting open-heart surgery on a moving patient—horrendous for all concerned.

The 2010 Command Paper estimated that to achieve two-thirds of the capacity of HS2 by conventional line upgrades, just for London to Birmingham, would cost more in cash terms than HS2. In practice, though, many of those proposed upgrades, like four-tracking the Chiltern line, are simply unattainable. If I was in any doubt about that, I have been seriously disabused by the large number of your Lordships who live in the Chilterns and rightly treasure it, and who have given me freely the benefit of their advice on these matters.

The present Government have since identified a more credible upgrade alternative from London to Birmingham, Manchester and Leeds, which is set out in chapter 6 of the strategic case document that was published last month. The key points about the upgrade alternative are these. First, the upgrade is projected to cost £19 billion. That is nearly half the cost of HS2 but the capacity increase would be less than one-quarter—so half the cost for one-quarter of the capacity.

Secondly, that increase in capacity would be insufficient by the late 2020s even to keep pace with the lower of the growth projections for intercity traffic set out in the Government’s strategic assessments. So in all likelihood we would complete the upgrades of the existing lines, spending £19 billion, only to be faced with the prospect of either carrying out yet more expensive upgrades to the existing main lines or, at that stage in the 2020s, of embarking on HS2. That would be an even more expensive repeat of the situation that we now face in taking forward HS2, having already spent £9 billion on the most recent upgrade of the west coast main line when we might have done better to have started HS2 15 years ago.

Thirdly, the £19 billion price tag for the upgrade alternative does not take into account the chronic disruption of the upgrades in question—the open-heart surgery on the moving patient that I just described. Look at the description of these upgrades and you will see that to undertake them would require, as the Minister said, the equivalent of 14 years of continuous line closures every weekend. Furthermore, the list of projects involved in the £19 billion upgrade alternative, with its 14 years of disruption, is colossal, to say the least: a new 30-mile stretch of tunnel and surface line to get the east coast main line out of King’s Cross, avoiding a series of acute existing bottlenecks including the Welwyn viaduct; the rebuilding of most of the major stations on all three of the main lines going north from Euston, St Pancras and King’s Cross, including those three termini, to accommodate more platforms and longer trains; and four-tracking a lot of two-track sections of line, including in urban areas. The idea that this would be an easy alternative to HS2, let alone a cheap one, is wishful thinking, to put it mildly.

It is true that putting the £19 billion upgrade option through the Treasury’s benefit/cost ratio methodology produces a somewhat, but not much, higher ratio figure than comes out for HS2, but from my experience of major transport projects I would always be cautious about the value of benefit/cost ratios because they involve so many artificial assumptions. The M25, the Victoria line and the Jubilee line extension all had low benefit/cost ratios and faced a deeply hostile Treasury, but which of those do we now think it would be a good idea to close? All three of them have recently been upgraded to deal with congestion.

Much has been made by the critics of HS2 of the value given in the benefit/cost ratio to the benefit of time saved by business travellers, as if they were not able to work on trains. Equally artificial, though, and far more significant in its impact on the BCR for HS2, is the fact that the benefit/cost methodology caps traffic growth projections in 2036, only three years after the opening of HS2, on the grounds that further growth thereafter is too speculative. Do any of your Lordships seriously think that traffic will stop growing in 2036? Brunel did not build the Great Western Railway on the assumption that there would be no traffic growth after 1870—thank goodness, otherwise the GWR would have been built single-track. He might even have been told by a Treasury economist that upgrading the canals offered better value for money. Nor did we build the M25 thinking that traffic would stop growing in 1995, which would have been an equivalent assumption. What is needed here is a dose of common sense plus a grasp of history, which shows that in Britain, with our historic aversion to major infrastructure investment, we have consistently under- estimated the value of better transport links serving our major population and economic centres.

I have a few other points to make. Faster journey times, although not a principal reason for HS2, are a considerable benefit that cannot but be advantageous to the unity of Britain and the strength of its economy. As HS2 proceeds further north, the time savings become steadily greater: an hour off every journey between London and Manchester, Sheffield and Leeds. Journeys will be further shortened by the proposed interchange between HS2 and the new Crossrail line at Old Oak Common, just west of Paddington. This will give an 11-minute connection direct to Heathrow and fast underground trains direct to the West End, the City and Docklands without going via Euston and its congested Victoria and Northern lines. This could be a rare British example of joining up two major traffic infrastructure projects at the point of conception.

The second point is that the notion peddled even by some reputable commentators that bringing northern and Midland cities closer to London will suck the lifeblood out of them is utterly farcical. If it were true that modern transport connections between great economic centres were a negative factor, we should close existing motorways and intercity rail lines because Manchester, Birmingham, Sheffield and Leeds would be better off without them, prospering in splendid isolation.

The third point is that HS2 not only dramatically improves connections between these cities and London but between the cities themselves, as the noble Baroness said. This is a crucial part of the connectivity improvement brought about by HS2. The Victorian railway companies built mostly separate main lines from provincial cities to London, which is why rail links between most of our provincial cities remain terrible. Birmingham and Manchester are only 67 miles apart, yet the rail journey takes one and a half hours. It is 40 minutes by HS2.

Fourthly, while I do not think that just because most other developed countries do things we should follow suit, I believe that when a technology has proved successful elsewhere we should take note. Almost every developed country with an economic geography similar to ours has over the past generation built high-speed rail to link their major cities. Japan started in 1964 with Tokyo to Osaka, about the distance from London to Glasgow. Since then, France, Italy, Germany, Spain, the Netherlands, Belgium, South Korea and Taiwan have all followed suit. China is constructing more high-speed rail than the rest of the world combined, and the United States is building its first line from LA to San Francisco—two major cities also about the same distance apart as London and Glasgow.

In conclusion, I am not aware of a single country that has introduced high-speed rail between its major cities and now thinks it was a mistake. They know that high-speed rail is integral to building a modern economy and a modern society. I believe it will be the same here in Britain, so we should get on with HS2.

My Lords, I warmly endorse the words of the noble Lord, Lord Adonis. I do so having managed all four lines out of London towards Edinburgh and Birmingham, including via Marylebone. They are now full. When I managed them there was about half the amount of traffic that there is now and very little capacity has been added since then. The noble Lord mentioned the upgrade on the London to Birmingham line but, in fact, it has not produced much in the way of new track; it simply patched up what was there before.

I am quite convinced of the need for a new line north of London. The problem is that, whichever way you go, it is going to upset somebody. There is not a way you can build a line without building it through areas that will be badly affected. It is therefore extremely important that the compensation arrangements, to which my noble friend Lady Kramer referred, are fair and the environmental impact is measured carefully. This is going to be the case because, while I agree that during construction there will be damage to the environment—there is bound to be as there is on any construction site—once the work is done, the countryside can get back almost to where it was. The wildlife and flowers will return—whatever you value will return—as a railway does not interfere with the area around it in the same way that a road does.

As the noble Lord, Lord Adonis, said, there is a strong management team in place, probably the best person possible is now in the lead on this. He will not need any lessons from us on the questions of delivery, keeping costs under control, and generally driving the scheme forward. The idea has been put about by some of the opponents that once you have the high-speed line, other places which formerly had a train service to London will lose theirs, so somehow Coventry and Rugby, to name two places, will suddenly lapse back into having poor quality services. That is most unlikely to be the case, because the case will exist to provide good services on those lines and there is no reason why the providers should not seek to meet that demand, under any structure you might imagine.

People have also said that there will be cuts elsewhere and I have heard some very depressing stories about the draining of so much away from Cambridge and Bristol. That is nothing to do with the argument and there is no reason to suppose that it will draw the lifeblood out of anywhere, but particularly places such as Cambridge, which is one of the strongest economic growth areas in the country.

I do not think any town or city will be worse off. I do not think we are suddenly going to stop spending money on the railway as there are very good plans to do so. I accept that there is objection from people in the Chilterns that deserves mitigating as far as possible. Of course, they will have the opportunity, as the hybrid Bill goes through both Houses, to make their case twice if they want. At the same time, it will be up to us to ensure that the matter is handled as sensitively as it can be handled, through what we all know are very sensitive landscapes. I am pleased to speak in support of the Bill.

My Lords, I am a strong supporter of the project for HS2. I am sure that those on the government Benches will welcome the fact that the noble Baroness, Lady Kramer, is the Minister is charge. She will bring her reasonableness, calmness and courtesy to the progress of the Bill through your Lordships’ House, which gives me a great deal of comfort.

I find myself in some difficulty regarding the speech of the noble Lord, Lord Adonis, as I agreed with everything he said, which will make my contribution understandably brief. I speak with modest experience as the Transport Minister responsible for the day to day planning and then construction of HS1. There are very few lessons to be learnt about the strategic need for HS1, because it was about speed through the Channel Tunnel. At two hours and 15 minutes between Paris and London, it beats the alternative of flying from Heathrow if you are coming from central London. It has been an unqualified success, in my judgment, and we can learn some lessons for HS2, to which I shall briefly refer at the conclusion to my remarks.

The noble Baroness, Lady Kramer, and the noble Lord, Lord Adonis, referred to the fact that we are nearing capacity on certain sections of existing railways. I am going to refer briefly to the west coast main line. Without proceeding with this Bill, in 25 or 30 years’ time, we will have a shambles of a national railway system. We have to upgrade the capacity. My noble friend Lord Heseltine, whom I served, is absolutely right to focus on capacity as one of the key arguments for this line. It is estimated that up to £20 billion is required to upgrade the west coast main line. I hope that figure is right; it is certainly that order of magnitude. Upgrading that line, as opposed to HS2, would create absolute mayhem for many weekends over many years and deliver only about half the benefits.

I will make one or two points about the alternative of trying to upgrade the west coast main line. Your Lordships might be interested to know that, at present, in the final peak hour for passengers coming into and out of Euston on the west coast main line, on average there are 120 passengers on board each train for every 100 seats. There is already a capacity problem. If we look forward to the 2020s without an HS2, the mind boggles.

I know that my noble friend Lord Bradshaw is particularly concerned about freight, as I am, too. HS2 will do a great deal for freight, particularly by taking it off the M1 and the M6. Creating more capacity at the southern end of the existing west coast main line by moving that passenger traffic onto the high-speed line will, I am told, deliver 20 extra daily freight paths on to the line. I see my noble friend Lord Bradshaw nodding, so I must be right. There will be relief for freight traffic on the M1 and the M6. Without HS2, that freight traffic can only increase. I am told that the order of magnitude is of half a million lorry journeys coming off the motorways per annum. That is what will occur if we not only proceed with this legislation but build HS2.

The noble Lord, Lord Adonis, referred to three other advantages of HS2 which relate directly to capacity: the link to HS1, so that one could travel from Birmingham to Paris directly through Old Oak Common; the link with Crossrail, which will certainly help with congestion in central London; and ultimately, if Heathrow is to remain as our key airport, the link to Heathrow.

I strongly support this Bill and when we come to the hybrid Bill—I look forward to that being introduced as quickly as possible—I am sure that the Government and the Minister will pay great attention to the legitimate concerns of those affected. The one lesson I learnt from HS1 is that it will be better to be reasonable, which will often mean some money as compensation, to get HS2 built. I hope that we can be reasonable, constructive and sympathetic.

My Lords, I declare an interest as a resident of Little Missenden, a small village in the centre of the Chilterns. I live in the village and have done for nearly 20 years. The proposed route currently goes close, but not that close, to the village, and it is tunnelled in the immediate environment of Little Missenden, but that does not stop me having concerns about the way in which the programme has been developed. I thank the noble Baroness, Lady Kramer, for her eloquent introduction of this paving Bill and I particularly thank the noble Lord, Lord Bradshaw, for his concern about the Chilterns, which I listened to with great interest. That is in fact what I will talk about in my brief address.

Much time has been spent in your Lordships’ House recently on the National Planning Policy Framework. In its section on conserving and enhancing the natural environment, it says:

“The planning system should contribute to and enhance the natural and local environment”;

and it gives some examples, the first of which is by,

“protecting and enhancing valued landscapes”.

Later it says:

“In preparing plans to meet development needs, the aim should be to minimise pollution and other adverse effects on the local and natural environment. Plans should allocate land with the least environmental or amenity value, where consistent with other policies in this Framework”.

It continues:

“Great weight should be given to conserving landscape and scenic beauty in National Parks, the Broads and Areas of Outstanding Natural Beauty, which have the highest status of protection in relation to landscape and scenic beauty ... Planning permission should be refused for major developments in these designated areas except in exceptional circumstances and where it can be demonstrated they are in the public interest ... planning permission should be refused for development resulting in the loss or deterioration of irreplaceable habitats, including ancient woodland and the loss of aged or veteran trees found outside ancient woodland, unless the need for, and benefits of, the development in that location clearly outweigh the loss … Planning permission should … identify and protect areas of tranquillity which have remained relatively undisturbed by noise and are prized for their recreational and amenity value for this reason”.

There is clearly a tension here between conservation and what may be claimed by those who support the proposed route for HS2 to be in the public interest. For example, the Woodland Trust has demonstrated that the Government’s preferred routes for both phases of the HS2 scheme will cause loss or damage to at least 67 irreplaceable ancient woods. When the Secretary of State—who was in his place a few minutes ago—announced the preferred route for phase 2 of HS2, he said:

“The scheme would avoid any national parks or areas of outstanding natural beauty”.

So, the Chilterns AONB is now the only AONB along the entire HS2 phase 1 or phase 2 routes that is adversely impacted by the proposed project. Actually, it will be destroyed as the present tunnel erupts into an ancient monument and an ancient wood bang in the middle of the AONB.

The draft environmental statement consultation published on 16 May accepts that a tunnel through the Chilterns AONB would perform better on environmental grounds when compared with the current HS2 Chilterns tunnel option. It accepted that it would also reduce operational noise impacts and, for certain locations, would result in reduced construction impact. In other words, it seems to meet many of the concerns expressed in the national planning framework. It is feasible in engineering terms and would fully protect the only unique area of outstanding natural beauty on the HS2 route; meet local concerns without damaging the overall objectives of the HS2 project; avoid major surface construction at 10 sites in the AONB and the loss of ancient woodland and the Grim’s Ditch ancient monument; and is supported by all the local councils and action groups within the AONB.

The designation of the protected landscape of the Chilterns AONB rests on the unique characteristics of its landscape. The design of the Government’s proposed scheme takes no account of the designated landscape of the Chilterns AONB or the protective provisions of Part IV of the Countryside and Rights of Way Act 2000. Conserve the Chilterns and Countryside has commissioned a study into the practicalities of extending the tunnel from the proposed current termination point to the boundary in Wendover. This study was published in October 2012 and HS2 Ltd was asked to comment on it. The conclusion it reached was that such a tunnel extension was a practical engineering solution, but it declined to pursue it because it is of the opinion that it will cost more than the published scheme.

However, there are other factors to be taken into account here—factors that have so far been ignored but which need to be debated. The analysis undertaken to date has shown that the published scheme affects 60 square kilometres of the Chilterns AONB; the tunnel extension through the Chilterns would affect six square kilometres. The published scheme would result in the loss of 13 historic sites; the tunnel extension would affect one. The published scheme removes 9.2 hectares of ancient woodland; the tunnel extension affects none. With the published scheme, approximately 250 hectares of agricultural land would be lost but under the tunnel extension only 20 hectares would be lost. From the figures that I have given, your Lordships can see that there are other factors to be taken into account. Analysis of these further indicates that the proposed scheme will incur environmental and other costs of the order of £500 million to £750 million, which is about twice the additional cost of building the tunnel extension.

Given the duty of the Government under Section 85 of the Countryside and Rights of Way Act 2000 to,

“have regard to the purpose of conserving and enhancing the natural beauty of the area of outstanding natural beauty”,

the scale of any cost differential between the published scheme and the proposed tunnel extension has to be balanced against the incalculable loss of an AONB—the only one on the line, and the one nearest to London.

In his speech last Tuesday, which has already been referred to, the noble Lord, Lord Heseltine, recalled his long interest in regeneration. He gave the example of Canary Wharf, where he recalled that he had appealed over the heads of his senior Cabinet colleagues—perhaps the noble Lord, Lord Freeman, was one of those—the Permanent Secretary of his department and all the leaders of the London boroughs to the Prime Minister who, he said, “backed me”. Perhaps he should have added “on this occasion”. He also recalled that another Prime Minister backed him against the Department of Transport when he,

“argued for HS1 and the regeneration of Stratford against British Rail’s preference for the Channel Tunnel to hit the buffers at Waterloo and exclude the rest of the UK”.

The noble Lord’s example of the late change of route imposed on HS1 is instructive. In truth, there ought to have been a lot to learn from that episode. HS2 appears to have ignored many of the principles established by HS1. The lower design speed of 300 kilometres per hour allows the line to be twinned with the M2 and M20 motorways through Kent. It used existing major transport corridors. HS1 crosses the Kent AONB at its narrowest point. The published route for HS2 crosses the Chilterns at its widest point. As the noble Lord, Lord Heseltine, pointed out, bringing the main terminus out of London to Stratford brought much needed regeneration to the East End and paved the way for the Olympics. What would be the analogy for HS2, and why is the noble Lord not suggesting that at this time?

While I do not agree with everything that the noble Lord says in his speech, he does echo the recent Armitt report's call for us to do our infrastructure planning differently in future, although appealing over the heads of one's colleagues is probably not what Armitt had in mind. The reality is that the Government will not get their hybrid Bill for phase 1 of HS2 through in this Parliament. Given that the public interest would be better served if the proposals could be evaluated in the context of a fully developed infrastructure plan and a national planning framework of the type outlined in the recent report by Sir John Armitt, why not pause—which seems to be the vogue—the process now? There would then be time to engage in a proper cross-party debate and take a fresh look at HS2 to help the Government build in greater connectivity, sustainability and flexibility, and also help meet local concerns without damaging the overall national objectives of the HS2 project.

My Lords, the Secretary of State for Transport says that what he calls the “north-south railway”,

“is one of the most potentially beneficial, but also challenging infrastructure projects on the planet”.

Again, and all too often, “on the planet” is an example of pointless hyperbole. However, he also says:

“The case for the new line rests on the capacity and connectivity it will provide”.

Capacity is a lot more down to earth than the glamour of speed or the need to show France, Germany, Italy, Spain, Japan and China that we can do better. I would have been well disposed towards the speech of the noble Lord, Lord Stevenson, but I regret that there has been no provision for an ad hoc Select Committee of the House to examine HS2. If this is such a challenging project, the procedures of the House should have allowed time ahead of today’s Second Reading.

Last month, there were at least two new HS2 Engine for Growth documents. The origin of The Economic Case for HS2 is not clear. The second document is called The Strategic Case for HS2. It has a ministerial foreword, which I mentioned earlier. However, it has no command paper reference. Is it a White Paper, like the other reports on HS2 that we had in January 2012 and January 2013? I would be grateful to know its status in order to keep track of the burgeoning HS2 literature.

Chapter 7 of The Strategic Case for HS2 is fascinating about governance. Paragraph 7.2.19 refers to,

“processes for project cost control of Phase One”.

It goes on to state:

“This oversight regime includes a dedicated High Speed Rail Board which has representation from HMT and IUK which oversees the overall HS2 programme and reports progress to DfT’s Senior Board and to Ministers”.

Then, in paragraph 7.2.27 it states:

“It is unlikely that a project as complex as HS2 could be delivered simply by one organisation being given sole responsibility for implementing it … Therefore an important consideration is how best to align roles of different bodies”.

Finally, it says:

“The structure of how HS2 will be delivered requires careful analysis and consideration, and consequently a joint group led by DfT and including HMT, IUK and HS2 Ltd is undertaking options analysis to consider what is the most appropriate structure for the delivery of HS2”.

I find all this breathtakingly obscure.

The Secretary of State has appointed Sir David Higgins as chair of HS2 Ltd, with eight other members of the board, but it can hardly be claimed that this is an independent board. A clearer, simpler governance and managing structure should have been established well ahead of today’s Second Reading. When I was Secretary of State for Transport many years ago, I had responsibility for four nationalised industries, including British Rail. I took the view that I should have an arm’s-length relationship with the excellent chairman, Sir Peter Parker. It worked well, with only a little constructive tension. It is crucial to have a clear, agreed responsibility for HS2 Ltd and a transparent relationship between the Secretary of State and the chairman of HS2 Ltd. I hope that my noble friend will reassure me on these matters. I would be grateful if my noble friend would remind us whether MPs and Members of this House will have direct access to the chairman of HS2 Ltd or access only through Ministers.

I make a further point related to funding and financing set out in paragraphs 9.7 to 9.11 in Command Paper 8508 of January this year. Paragraph 9.7 states that,

“the Government is engaging with third parties to secure funding contributions towards HS2”.

Paragraph 9.8 states that it will,

“examine the potential for private financing to reduce the up-front capital demand on the taxpayer and offer value for money”.

My noble friend Lady Kramer made an important contribution to discussions on the disastrous outcome of the maintenance and upgrading of the London Underground a dozen years ago. Referring to the stability of public-private partnership, she said that any joint venture involved high risk. As Minister, my noble friend has only just inherited HS2 and cannot be held responsible for any shortcomings hitherto. However, I hope that she can confirm today that no planning arrangements will involve joint ventures in the spirit of public-private partnerships such as Metronet.

I have spoken about the governance of HS2 because it is crucial to the project’s success or failure and to avoid any major delay or significant additional cost. In turn, it is related to the concerns expressed earlier today by the noble Lord, Lord Stevenson, and, on 24 October, by my noble friend Lord Bradshaw and the noble Lord, Lord Berkeley, who referred to the loss of more than 2,000 properties in the London Borough of Camden. As speed rather than capacity is no longer the principal case for HS2, it must follow that HS2 Ltd is now free to take rather longer to reach its destination. On the face of it there should be scope for more flexibility and choice, thus easing the problems in the countryside and at the London end of the line—if, for instance, taking 20 minutes longer than the White Paper’s route is more acceptable. I hope that my noble friend will reflect on that option.

There is a separate specific question, the answer to which I cannot find in the HS2 papers, although that may be my fault. What proportion of all travellers—or customers—on High Speed 2 will be business travellers? Whatever the answer, what has been put into the calculations of the increased use of video conferences, Skype and other emerging internet facilities? Busy business people do not want to travel, even on faster trains, if they are able to work in the office or at home by using the latest technology.

It is said that High Speed 2 will bring the north and the south together, leading to living standards rising disproportionately in deprived areas, or where the population is declining, or in areas of high and persistent unemployment. For many years I have spoken in both Houses and elsewhere about economic geography and the two nations. I was born and brought up in the north-west, in Liverpool, and for 20 years I was a Member of Parliament in the north-east, for Stockton-on-Tees. In the light of the outstanding contributions from noble Lords today, in particular the opening speeches, I wish I could believe that High Speed 2 would contribute to major regional benefits. However, I remain deeply sceptical.

My Lords, it gives me great pleasure to support this High Speed 2 Bill. I congratulate the noble Baroness on the way she introduced it and, of course, my noble friend Lord Adonis on his very full and fascinating description and arguments in favour of it. It is great that we now have all-party support for this project. I declare an interest as chairman of the Rail Freight Group.

As several noble Lords have very kindly said about rail freight, it is forecast to double over 20 years. We have discussed that, and passenger increase, in previous debates. Therefore I see High Speed 2, certainly in phase 1 and continuing into phase 2, as in effect adding two more tracks to the west coast main line in a way that will not obstruct or close it while it is being built. I think that the noble Lord, Lord Freeman, said that he expected that if we did not have this, there would be a shambles in 20 to 30 years. I believe that it will be closer to 10 years.

As part of the preparations, the freight industry is discussing the capacity with HS2. Noble Lords will understand that when phase 1 gets to somewhere around Lichfield, where it joins the west coast main line, you have lots of different train services going on to the west coast main line, which happens to go into a short section of two tracks that go through Shugborough Tunnel. We have had very useful discussions with Network Rail and HS2 about where all these trains will go when seven extra High Speed 2 trains in phase 1 join the residual services on the west coast main line—although “residual” is not the right word, because they are very important services. As noble Lords have said, there is no intention to reduce those services provided to people who are not on High Speed 2. If you add to that the increase in freight, you have a problem. Network Rail is working with the industry on what to do about that problem, but it will still be there in 10 years’ time. Whether it involves diversions, more night working or whatever, that challenge will happen now.

As I have said here previously, if it does not go by rail, it will go by road, and do we want another three-lane motorway somewhere? I think that the answer, as my noble friend said earlier, is that we do not. Therefore we have to find solutions to the capacity problem. It is a problem mainly on the west coast main line and, funnily enough, it is not just near Lichfield and thereabouts, but will happen north of Crewe as well, because there are sections of two-track there when you go over Shap towards Carlisle. The network needs looking at in a 20-year horizon so that the demands of freight and passenger—not just up the line but across it and parallel to it—are met. It is good that it has begun, and we shall probably have to have quite a few debates about the detail of this when one gets to the hybrid Bill and the Select Committees to see what answers and commitments can be made. However, in many ways that is a good challenge to have.

I was struck by comments from my noble friend Lord Adonis and the noble Lord, Lord Bradshaw, and others about the appraisals. It is absolutely crazy to say that that the growth will stop three years after phase 2 opens. That is rather like the announcement last week by either the Treasury or maybe the Department for Transport that the forecasts are that the growth of cycling in London will suddenly stop in 2015 and will thereafter decrease. Leaving aside the terrible run of accidents in the past week or two, what evidence is there that the growth in cycling in London over the past 10 years, which has been pretty surprising and gratifying for me, will suddenly tail off? It is probably something to do with the fact that they do not want to spend any more money on it. We need a review of the whole appraisal methodology. Maybe the noble Lord, Lord Deighton, is the person to lead that. The whole structure is not fit for purpose. Having arguments about what the cost-benefit ratio on a project the size of HS2 is is a pretty good waste of time, but still, we have to do it.

The noble Lord, Lord Stevenson, spoke about environmental issues, particularly in the Chilterns, and about AONBs and woodlands; I do not think that he mentioned bats, but they will come in. I was involved in a way with the construction of HS1 and had many dealings with the noble Lord, Lord Freeman, when he was Minister. He certainly tried very hard and very successfully to deal with the objections of some of the people who lived along that route. One person said, “You are destroying the garden of England”. In three years’ time, after the line was opened and the trees had grown up a bit, he told me that it had not made any difference to his life at all. The construction will be hard, but we have to be careful about overreacting to what will, I hope, be a temporary and well managed construction phrase. When it is built, it will not be particularly serious. This makes me worry about how one balances the concerns of people against environmental concerns. As the noble Lord, Lord Jenkin, said, 2,700 properties in Camden are affected against 100 in the Chilterns. How do we balance those? Are the Chiltern people more important, or is the environment more important? That is a very difficult judgment to make, although I am sure somebody will make it. However, we have to be careful that we do not overreact. I say this as someone who was brought up in Great Missenden; I know it very well.

I have had lots of letters from people about objections. Some say that this is about capacity, others that it is about speed, while others argue about the economy. However, let us just look at what has happened to Lille and Lyon in France, which were two of the first provincial cities in France to be connected to the high-speed network. The city of Lille paid a lot of extra money to get the station in the middle of Lille rather than having the line go round the outside, as originally planned. The two cities are completely transformed. To say that such a line pulls economic benefit away from such cities to the centre is all wrong. It will help. Even outside cities such as Lille—up to 20, 30 and 40 kilometres away—there are benefits. We should look and see what has happened there.

We should also reflect on the fact that the first high-speed line in France, to Lyon, was built as a means of providing more capacity; it was nothing to do with speed. It is a virtually straight line from Paris to Lyon, which goes through very sparsely populated countryside, and it has done so well in the 20 or 30 years that it has been open that they have had to replace all the track already and have signalled it so that, I believe, it can now take a train every two minutes, because the demand is increasing. That will probably go on.

The track is very steep and undulating. I remember taking some Members of Parliament there when I worked for Eurotunnel, and they drove a train; we were allowed to drive the trains in those days. It was great fun, although people normally got a bit seasick in the front. It was also very exciting, and it still is exciting—and it just shows what the demand really could be.

To conclude, I shall say a word or two about connectivity. A lot of people have said that the HS2 line is not connected, but I think the Government are right not to specify what services will be operated in 10 or 20 years’ time. The links are there. They are linking into the west coast main line. They are going to link to Manchester, to the west coast north, to Leeds and everything. In the south, Old Oak Common, as some noble Lords have said, is a wonderful interchange.

I have concerns about some of the connections in London. The noble Lord, Lord Bradshaw, and I are coming up with an alternative idea that, we hope, will reduce the demolition around Euston and provide better connectivity. I also have concerns about the station in Birmingham and the lack of connectivity on to Wolverhampton, because people will not save much time if they have to walk for 15 minutes between the new station and Birmingham Snow Hill to go on to Wolverhampton.

However, these are small details. The key issue is how to get the connectivity between these new services and the existing ones and city centres. We have problems in many station termini in London: Victoria, Paddington and Euston all get very congested in the rush hour, particularly on the Underground. Connecting some of the west coast main line suburban trains into Old Oak Common and directly into Crossrail will save an enormous number of passengers from going into the Underground at peak times.

Those are the kinds of issues that need to be discussed because HS2 is part of a network, and I hope that HS2 trains will go to many different parts of the north and west on electrified lines. That will provide enormous benefits in capacity. The speed will help in some places, but the important thing is capacity, because if we do not have the capacity we will be really lost. We have to get on with this as quickly as we can. I do not believe that doubling or quadrupling the great central or the midland main line will be enough. Just imagine the hassle in High Wycombe and Princes Risborough if we had to demolish half the houses there and build four tracks. The midland main line will probably have to be reconstructed as four tracks, as it used to be, in addition to HS2, within 10 or 20 years anyway. This is the kind of growth we are looking at. We have to get on with this project. It has been well thought out. I am sure that there are still some improvements that can be made, but I end by asking the Minister this question, to answer when she winds up: when will the hybrid Bill be published?

My Lords, this country’s debt is increasing at a rate in excess of £100 billion a year. I find it hard—almost impossible—to believe that in these circumstances Her Majesty's Government propose to enter into a financial commitment the case for which—I say this in spite of the eloquence that I have heard today—looked at in the very best, kindest and most positive way, is weak. Looked at in any normal way, HS2 is, frankly, insane. No sane businessman, dealing with his own money, would dream of making an investment based on the criteria being used to justify HS2.

Granted, the economy is improving, so that by the time bills have to be paid the financial position might be better, but the country will still have a burden of £1 trillion of public debt to deal with. There is no certainty about what the project will cost. I do not think anyone knows. In 2008 the cost was estimated to be £17 billion, in 2010 the estimate had increased to £30 billion, in 2012 it was up to £33 billion, and this year the figure has increased to £42.6 billion. And that is without counting the cost of the odd £10 billion for rolling stock. For what it is worth, the Financial Times has estimated the true cost to be £73 billion. Who knows what the final cost will be? Major Government spending plans have a habit of going over budget distressingly frequently.

Until quite recently the main argument to support this project has been the financial benefit to be gained from faster train journeys, because they would give more time for travellers to get on with their affairs—indeed, 79% of all benefits in the business case for HS2 are attributed to these savings. However, the vast majority of passengers on trains do get on with their business: reading, writing, using laptops and so on. They do not just sit there doing nothing. If the proponents of this Bill had ever sat on an intercity train they would have seen this. As a businessman who has never had a head office, but has had interests all over the country, I have spent many hours travelling; half an hour more or less on a train has never mattered. In practice, travelling time on trains is useful, as it enables one to get on with things, such as writing and reading, without interruption. The other point your Lordships might care to note is that the time-saving calculations assume trains travelling at 140 mph—a speed not yet achieved.

More important is the time spent journeying to and from stations, when it is considerably more difficult to use the time to good effect. In five of the seven main provincial cities to be served by HS2 trains, the line will not even go into main railway stations. In Sheffield, Nottingham and Derby the HS2 station will be 10 miles from the city centre. With the extra time required to get from the station to the final destination, one has to question whether there will be an overall time saving at all: will the journey door to door take just as long with HS2 as it did before?

With increasing recognition of the weakness of the time argument, the justification now being emphasised is the need for the extra capacity that HS2 will provide. How this will happen with, for example, the number of platforms at Euston presently used for existing services being reduced from 18 to 13 is difficult to understand. Figures that became available in December 2012 as a result of a judicial review show that intercity trains on the west coast main line were only 52% full in the evening peak period, and there was still scope to increase the size of trains if necessary. In spite of what the noble Lord, Lord Adonis, said, I believe that if there is a need for spare capacity there are other and considerably cheaper solutions.

The existing line could be upgraded. Claims that this would take 14 years and cost £19 billion have been comprehensively rubbished by a number of different commentators—so much so that the objectivity of the arguments in favour of HS2 must be seriously suspect. In any event, it would take 17 years before both phases of HS2 were complete.

There is also the possibility of opening up the Chiltern Line, another cheaper alternative. We are a trading nation and depend on the trade we do with other countries, be it in services or manufactured goods. To be effective we need the best possible communications with the outside world. It beggars belief that Her Majesty’s Government are proposing to spend quantities of billions of pounds on a project for which the business case does not even stand the most cursory examination, instead of getting on with increasingly desperately needed airport capacity—something the Minister hardly even mentioned in her long list of money to be spent on transport. Even today there is an article by Sir Martin Sorrell in the newspapers begging for better airport capacity. I urge the Minister to have a look at this side of life as well as the trains.

My Lords, I hope that the House will forgive me if I do not follow the noble Lord, Lord Howard of Rising, in all the points he made. Needless to say, I disagree with every single one of them. On the question of cost—

On the question of cost, to which he referred, if he reads the speech by his noble friend Lord Heseltine to the Royal Town Planning Institute, he will find that a number of those issues are addressed and answered very fully. I draw his attention to the fact that the noble Lord, Lord Heseltine, refers to the Government selling a 30-year concession in 2011 for High Speed 1 to a Canadian pension fund for £2.1 billion. I understand that something in the order of £10 billion could be realised for a similar concession on HS2, and there is a great deal more of the same.

I start by thanking the Minister—the noble Baroness, Lady Kramer—for convening the meeting for Peers with her officials last Tuesday. I certainly found it helpful and informative and left the Committee Room hopeful that this Bill and, indeed, the whole High Speed 2 project are in good hands. As we had such an excellent debate on High Speed 2 in your Lordships’ House on 24 October, there is no need for me to go over the ground that I covered then. However, I am grateful to the noble Baroness for quoting a sentence from what I said that evening.

The important thing that came out of the debate was a demonstration of the overwhelming need to add capacity to our railways as a consequence of the phenomenal growth in demand for rail transport over the past 20 years. Passenger demand has doubled since 1995. As the noble Lord, Lord Rodgers, is still in his place, I will go back to 1976 and recall a conversation that Sir Peter Parker had with Tony Crosland, who was then Secretary of State for the Environment, which Sir Peter wrote about in his autobiography. He said that he was depressed by Tony Crosland saying to him:

“Peter, I see a future for BR as a smaller, sensible little railway”.

Spare capacity was ruthlessly removed throughout the 1970s and 1980s as BR desperately tried to cut costs to meet the financial objectives imposed on it by the Treasury, about which my noble friend Lord Adonis spoke so eloquently earlier. Therefore, it is no wonder that more capacity is needed for the railways now.

Given the gloomy forecasts for passenger and freight demand produced at that time, which were all proved hopelessly wrong within 10 years, I am reminded of the words of the great economist John Kenneth Galbraith, who said:

“The only function of economic forecasting is to make astrology look respectable”.

The lesson we should have learnt, post Beeching, is that you must keep your options open, retain the flexibility for future growth and never sell the track bed as it is a resource that must be protected.

At the Minister’s meeting on Tuesday I pointed out that the task of building a high-speed railway to the Midlands and the north would have been much easier if previous Labour and Conservative Governments had not closed the Great Central Railway—the last main line to be built in Britain until High Speed 1, and the only main line, until High Speed 1, built to the continental gauge. One of its routes to Rugby, Leicester, Nottingham and Sheffield went straight through the Chilterns, including the towns of Amersham, Great Missenden and Wendover. I am sorry that my noble friend Lord Stevenson is not here to—

Oh, he is here. He has moved down to the Front Bench. I expect that a number of your Lordships have been on the receiving end of lobbying from residents of these places. As my noble friend is in his place—I am delighted to see him—I say to him that this lobbying from people in the villages and towns of the Chilterns has to be balanced against the voice of the representatives, from all political parties, of the eight core cities of England outside London: Birmingham, Bristol, Leeds, Liverpool, Manchester, Newcastle, Nottingham and Sheffield. In their letter to the Daily Telegraph, published on 29 May this year, they wrote:

“Research has shown that an over-reliance on the capital city is bad for national economies. England needs these eight core cities to succeed. If these cities performed at the national average, another £1.3 billion would be put into the economy every year. Unlocking growth relies on rebalancing the economy of Britain, which HS2 will help to do, bringing regeneration benefits outside the South East … High-speed rail is not just about fast trains. Increasing capacity on the rail network is critical to our economic future. There is an important relationship between growth, jobs and HS2. High-speed rail is the best way to achieve a more sustainable economic future for the nation as a whole”.

Of course, the residents of the Chilterns are entitled to express their views, although I have to say to them that the effectiveness of their lobbying would be enhanced if they wrote individually to us. For last month’s debate, the first seven paragraphs of all the e-mails I received were exactly the same, and the same happened with the e-mails sent to me about this debate—all of which, incidentally, got the date of this debate wrong. If you do a little research, you discover that they were all generated through an American company which, according to its website,

“has developed a cloud based service that solves the challenge of email delivery by delivering emails on behalf of companies”.

This is not exactly evidence of spontaneous local initiatives on the part of the residents.

However, I would certainly support generous compensation for those affected. As the Minister reminded us last Tuesday, and again this evening, the levels being offered are far greater than those which have been paid—and, as far as I know, continue to be paid—to those affected by highway schemes.

While we are on the subject of the Chilterns and its area of outstanding natural beauty—I know about this, having been brought up, like the noble Lord, Lord Berkeley, in that part of England—is it possible to imagine a more destructive transport project than the construction of the M40 in the 1970s right through the heart of the Chiltern escarpment above the Vale of Aylesbury, known as the Stokenchurch Gap? That was driven through the middle of the Aston Rowant National Nature Reserve, and all pleas to the inspector to put the motorway in a tunnel or follow a different route were ignored. Still active today is the M40 Chiltern Environmental Group, which says on its website that it represents 25,000 people who live along the M40 corridor from junction 3 to junction 8, and say:

“Day and night we all suffer from intolerable noise pollution”.

By comparison, the residents of Amersham and Great Missenden are being offered a pretty good deal in terms of compensation and environmental protection. This will be confirmed by the residents of Kent, where HS1, so controversial when proposed 20 years ago, is simply no longer an issue. Indeed, it is hard to hear the trains in Kent because of the noise from the M20.

Make no mistake; if we do not build High Speed 2, we will have few options to meet the demand for transport. One would be to return to the days of the 1970s and 1980s and resume a massive programme of motorway construction. However, we should remember that the width of land required for a dual three-lane motorway is 36 metres, compared with just 22 metres which will be needed for High Speed 2. Over the entire 330-mile route, HS2’s land take will be 11.7 square kilometres, compared with 19.1 square kilometres for the equivalent length of motorway.

The other option would be to patch up Victorian railways, even though we know, as we have heard from other speakers tonight, that that will come nowhere near meeting the demand for rail travel after 2020. It is worth remembering that “make do and mend” would inflict on all of us 2,770 weekend closures, endless bus substitutions and increased journey times over 14 years —all for a capacity increase between London and Birmingham of just 53%, compared with High Speed 2’s 143%, with no increase in current line speed.

At some point I hope that the whole nation will again take pride in its railways, in the same way as other countries with modern high-speed lines do, such as France, Germany, Italy, Spain, Japan, China and Taiwan. Some of our finest architecture and engineering structures are to be found on our railways. Just consider such icons as Brunel’s bridges across the Thames and the Tamar, Robert Stephenson’s Royal Border Bridge at Berwick, the fantastic Forth Rail Bridge, wonderful Victorian stations, as fine as our medieval cathedrals, such as Bristol Temple Meads, York, Newcastle, Glasgow Central, and modern treasures such as Manchester Piccadilly, St Pancras and now, again, King’s Cross. There is no reason why High Speed 2 should not be in the same league as Brunel’s Great Western Railway or Stephenson’s London & Birmingham Railway, adding to, not detracting from, the landscape, with soaring viaducts, fine stations and supremely engineered track and alignments. Above all, it is a project that will meet the nation’s transport needs in the 21st century.

My Lords, I ask myself, “Has everything already been said about HS2?”, but I think the answer to that is no. I shall just repeat two points that I made on 24 October. The first is that it needs better leadership. The noble Lord, Lord Rodgers, in reading out that paragraph, identified that. I still do not know who is in charge, although I realise that Sir David Higgins will obviously be in charge. The second point is that it is not about a few minutes off journey times.

The Secretary of State made an excellent speech on 11 September at the Institution of Civil Engineers, but the noble Lord, Lord Heseltine, made a much better speech at the Royal Town Planning Institute on 12 November. We could do a lot worse than get the podcast in here tonight, switch it on and go home. The Library provided me with the podcast; it is no good reading it, listen to it. It is electrifying to hear the noble Lord set out the case for HS2.

At this point I need to mention a couple of interests. I do so in particular because the Register of Lords’ Interests is frequently attacked over a lack of transparency. I can say that I have never discussed HS2 with either the company or other rail operators; I have had no discussion with the roads lobby, the landowners lobby or the airlines lobby; and I have had no discussions with local government, although I have requested written briefings. However, earlier this year, HMG was seeking someone to chair the HS2 planning forum, which is the meetings between HS2 Ltd, the Department of Transport and the local authorities along the proposed route. It was for just a handful of days per year. I offered. I did not get past the first cut and I have never spoken to anybody. I have nothing to register but I am being open and transparent, because the offer is there in the files, so that trouble makers in the future cannot make any mileage out of my position.

Following the sad death of my noble friend Lord Corbett of Castle Vale, I was asked by residents to take on the chair of the partnership board at Castle Vale, which is a very large-scale regeneration project on an estate of 10,000 citizens in my late noble friend’s constituency of Birmingham, Erdington. Colleagues will have driven past it. There were 34 tower blocks there at one time; there are now two. The link from the north-south route of HS2 into the centre of Birmingham will traverse the outer perimeter of Castle Vale. It has not been on the agenda of the board to date, although various local representatives have attended consultation meetings. I have not been involved to date, but the Castle Vale partnership board is in the register anyway.

I support the HS2 project. I am not locked into one route or to the starting stations. There will probably be some changes as the thing makes further progress. It has to be straight and cannot stop too often as it has to be fast. Those are a given and I do not see a problem with that. A new north-south link, which in my view should reach both Glasgow and Edinburgh, using modern technology, will bring benefit to generations and regions in the UK. Not many of us here today, as the noble Lord, Lord Heseltine, said, will see the benefit, but the crazy way in which the figures are presented is designed to put people off, designed to put supporters off, even. If it is going to benefit generations, why are most of the headline figures less than half a lifetime? It does not make sense. Talk about selling the project short.

My noble friend Lord Adonis in his excellent speech mentioned some of the alternatives. What are they? We could raise the fares; stop people using the railways. Reduce demand—it can be done, but it will not be much good for connectivity, economic productivity and growth. There could be a major expansion of domestic air flights, with extra check-in times, more pollution and a few more local runways. Enough said. We could build more motorways. The road lobby would welcome that. In fact, I wonder how much it is spending on anti-HS2, but I am not making any point about that. Of course, we need to improve the motorway network, junctions and feeder roads, especially on the M40 and the M20, but a major network of new motorways cannot be what the country needs. I have to assume that nobody from the Chilterns ever goes on the M6 north of Birmingham. That road has been 60 feet from the bedrooms of some of my ex-constituents, from 24 May 1972 until today: an elevated section at rooftop level 60 feet from their houses. Think about that for the way people move around the country. It works, but we do not want any more. We do not want a new motorway system. The idea that nobody travels on the existing infrastructure, which does disturb people, is, of course, palpable nonsense.

We could patch and mend the railway. I have not seen the attack on the 2,500 weekends. Basically, it is 14 years of weekend working, as the Minister said, on two out of the three north-south lines at any one time. That is the reality and what is more, it would cost £19 billion to £20 billion and we would not get a great deal from it. None of these alternatives will create the ingredients for regional economic growth and bring the private sector investment on the back of public expenditure which has occurred elsewhere. A new classic rail, the figures say, will cost 9% less than high speed, but high speed rail delivers journey time benefits by a factor of more than 5:1. It is not about journey times but the factor has to be taken into account that HS2, compared to the classic rail, is 5:1.

Not everything has to done at once, which is the impression given by the loose talk of some about the costs. The noble Lord, Lord Heseltine, mentioned that the annual £2 billion on London Crossrail ends as the HS2 annual expenditure of £2 billion starts. The two things merge together, and this benefits the whole country, not just the capital city. That has to be taken into account. Buried deep in the publications on HS2 is the point that we are talking about generations benefiting. Therefore, why cannot we use assumptions beyond the 20 years set out in the main body of the documents? The cost-benefit ratio goes from 1 to 2.3 to 1 to 4.5 if we go to 2040. It is preposterous to say that it will benefit generations and then cut off all the calculations showing how beneficial it will be at half a lifetime. It does not make sense. It may be the way that it has been done in the past by the Department of Transport and the Treasury, but it does not make sense in making the case.

I would like to hear from the Minister about one aspect of the speech of the noble Lord, Lord Heseltine, as I thought that it was the most important point he made. He said that the Government should propose development corporations at points of development on the route in order for the public to recoup some of the planning gains in exactly the same way we did in Docklands. Let us face it, in Docklands four local authorities did nothing for 30 years. That is why Docklands had to be seized into a development corporation to get the planning gain back for the public investment. That is exactly what the noble Lord said we can do along the HS2 route. I would genuinely like to know about that because it has not been referred to elsewhere. We cannot be certain—nothing is fixed about this—but the evidence in Docklands, the Thames Gateway and other areas of public investment, such as in the new city of Milton Keynes, which is doubling in size, is that along with public investment comes private investment to create the jobs and an economic future. We cannot, however, factor that into the calculations, although it is clearly self-evident. The noble Lord, Lord Bradshaw, made that point. The public sector must lead on this project. It is no good saying that the private sector should build HS2; the public sector has to lead but it does not have to do it all. By using our brains we can recoup as much of the extra land values as possible, as we have done in the past.

I hope that with this Bill we can hear the whistle blown for HS2 to leave the station of Whitehall to spread economic and social regeneration throughout the UK. So far, the only whistle I have heard regarding HS2 is the dog whistle blown by some colleagues in Labour’s high command, aimed at those living in the Home Counties. Dog-whistle politics are not honest politics in any case. In this case, it happened that the dog whistle was heard in the town hall corridors of the northern cities of this country, and the message came back loud and clear. I hope that we hear no more of the dog whistle.

This is a visionary project on a scale that transcends the Channel Tunnel—although that is unique by definition—and the post-war new towns. It cannot be right, therefore, for any political leader to claim the project for themselves, and the Prime Minister is not doing that. As my noble friend Lord Adonis said, it is to the credit of this Government that they have taken this project forward. This has to be all-party or it will not happen; it is as simple as that. Furthermore, the final decision cannot be left to the financial bean counters because we know that the finance figures are fiddled. The 20-year cut-off helps to destroy the case, so I do not accept it. I reject the scrimping “Britain can’t do it” approach. Leaders need to lead and show vision. They should connect public good investment, much of which can be recouped, with the substantial private gains in jobs and economic and social prosperity. A petty, party, tribal approach is to be condemned and condemned hard and fast to nip it in the bud, otherwise this 20-year project will not get off the ground. I am happy to support the preparation Bill.

That is the sort of rumbustious and splendid speech that we are used to hearing from the noble Lord, Lord Rooker. I am sorry that I cannot entirely follow him or agree with all he said, but he would not expect that. I begin on a congratulatory note—first to my noble friend the Minister, who in 10 minutes presented an argument forcefully, cogently and persuasively. She brings to her task many gifts and qualities from which we will all benefit. I was also delighted to see the Secretary of State sitting on the steps of the Throne during her speech and that of the noble Lord, Lord Adonis. It is far too rare that Cabinet Ministers come and listen to debates in your Lordships’ House, and the Secretary of State set a very good example tonight. He is a man for whom I have very considerable respect and affection.

However, even for the Secretary of State I am unwilling easily and willingly to endorse a blank cheque—and that is what the Bill is. There is no limit on the expenditure that the Secretary of State can sanction in preparation for this project. The noble Lord, Lord Adonis, who also made a forceful and powerful speech, would clearly not object to that, but it is a matter for which we should have a care, even though in this House—quite rightly—we do not have the power to send back or amend money Bills. I would not wish to have that power. The unambiguous democratic mandate in this country is at the other end of the Corridor, and long may it remain so. That is why I have always been such a staunch defender of the secondary role of your Lordships’ House in these matters.

However, there are things that we have to consider. My noble friend Lord Howard of Rising made some very good points—and, after all, he is a man who has considerable business knowledge and is not alone in voicing his concerns at the prodigal expenditure on this scheme. We have heard many comments from the Institute of Directors and other business men and women who know what they are talking about and do not see this project as the panacea that many in the debate would claim.

Only this morning I had breakfast with one of the most successful British businessmen. It would be wrong to mention his name because I did not tell him that I would do so, but when I said that I was going to speak in this debate and that I would be voicing a degree of opposition to HS2, he warmly encouraged me to do so. He felt that the project was a distortion of priorities and said he did not feel that it would bring the benefits that so many in the debate have claimed. He is clearly not alone. Many in your Lordships’ House agree and we heard spirited speeches in the previous debate—in which, sadly, I was unable to take part—from the noble Baroness, Lady Mallalieu, the noble Lord, Lord Mandelson, and others who put a different point of view. After all, we are having a debate and it is important that different points of view should be put.

There is one thing that we do not consider as carefully as we might. This is a finite country. People have been talking this evening about France and Germany, which are enormous European countries on our continent, and have thrown in references to China, which is not exactly a miniscule country. Noble Lords sought to suggest that because those countries depend so much on high-speed rail, given the enormous distances that have to be covered, we should follow suit. I do not think that to have an efficient transport system in this country we need necessarily to follow the suit of other countries that are enormous in extent.

We also have to bear in mind that other priorities should be considered. When I drive from my home in Lincoln to London, I come down the A1. It is a scandal that the main arterial route to the north is not of motorway standard. I agree with the noble Lord, Lord Rooker, and I know spaghetti junction almost as well as he does; for 40 years I represented a seat in Staffordshire, and from the opening of the M6 onwards I used that road weekly—year in, year out. I agree with him that we do not want a lot more motorways, but parts of our road system are wholly inadequate for the needs of our people, and the A1 is one of those roads. A number of things could and should be done, if there is £50 billion going begging, to improve the infrastructure of our country.

We should also have regard to the size of our country when we have a concern for its environment. I have spent a long time in this place and the other seeking to speak up for heritage causes. As long ago as 1976 I wrote a book called Heritage in Danger, in which I talked about the threats to our landscape from unthinking development. I well understand why people living near the Chiltern Gap feel as they do about the M40, skilfully as it has been landscaped. Our country is precious. Our countryside, once destroyed, can never be brought back. We must have very real concern about the environmental effects of HS2, particularly in the Chilterns. I was in that area for a couple of days last week when we had our brief break. It is one of the loveliest parts of England. It is not selfish of the noble Lord, Lord Stevenson, or anyone else, to point that out.

Why is the National Trust, our largest environmental charity—four million of our fellow citizens are members—so opposed? Not because its members are nimbys or introspective, but because they are seeking to be protective. This has to be taken into account. We have to look at proportion, and we have to look at balance. If I may say so without sounding insulting, I think that some people who are going over the top for HS2—and I would gently reprimand the noble Lord, Lord Adonis, in that regard—do not pay sufficient attention to the environmental side of things. I have great respect for the noble Lord. He was one of the most successful Ministers in the previous Government, deservedly gaining a fine reputation, and I am glad to see him back in front-line politics. However, I urge him to consider a little. Perhaps I could quote the famous remark of Cromwell that you should,

“think it possible that you may be mistaken”.

We can all have that quoted at us, and he would with good cause perhaps want to quote it back at me. However, I say to him as one of those passionately concerned about the beauty of our countryside, which is not only ours but which brings enormous economic gains from the tourists who come here, that it is infinitely precious and should not be easily sacrificed.

This is a complex issue. I well understand why people feel that to upgrade our transport we have to build something brand new, but I am not convinced of the argument. We do not pay sufficient regard to those who say that HS2 will possibly suck the life-blood out of some of our other cities and make us more of a London-centric country than we are already—and we are far too London-centric as it is.

These are all points worthy of consideration, and although they are causing infinite amusement to my dear friend, the noble Lord, Lord Snape—Lord Snape of the railways—who is sitting on the Back Bench and grinning like the proverbial Cheshire Cat, nevertheless they are worthy of our regard and our consideration. I hope we can develop some of them as we debate HS2 again, as we certainly shall when the hybrid Bill comes before us.

My Lords, in following the noble Lord, Lord Cormack, I doubt very much that he will reflect that he might be mistaken on the basis of the arguments that I will put forward. On two things, he ought to reflect on whether he might have got them wrong. I shall begin with his phrase “a small island”. Actually, that is the argument for railways, compared to larger countries. It is undoubtedly the case that as the economy grows, there is a propensity for the coefficient describing how fast passenger miles grow to increase. People have more discretionary expenditure which, as family dispersion proceeds, produces more family passenger miles as well as more business passenger miles, so these extra passenger miles will be generated. There is a positive coefficient in relation to economic growth. No one now flies between Heathrow and Manchester as they used to some time ago, and so the alternatives are much greater congestion on the roads or more capacity on the railways.

Higher speed attracts and is part of the equation. So is the fact that the size of the country is shrinking, if we think of economic geography in terms of how long it takes to get somewhere. We see as a cluster the whole city region of Manchester—where I was born—West Yorkshire, South Yorkshire, East Midlands and West Midlands. It is less than an hour all the way round. I ask the Minister whether the department ought to produce a study of a regional cluster compared with some European and other ideas, because this is a way in which we can learn from each other. I think that the answer will be that we are talking about an economic transformation.

I remember when Alastair Morton, the visionary chief executive of Eurotunnel, described economic geography as the basis of economic development. I am an economist myself. That is what I did for my first few years, and I think that the Channel Tunnel has produced a very interesting answer; namely, that it is very easy now to jump on a train in Paris and be in London or Brussels in two hours, and this is transforming so many things in terms of an economic growth model. So is the regeneration of Kings Cross. Even the Shard is on London Bridge station. Whether we have stations on the edge of cities or not, there will be different patterns of demand which fit.

Heathrow is not in the centre of London, but on the Surrey-Hampshire border where I live, we are part of the Heathrow economy. The noble Lord, Lord Howard of Rising, has got things 180 degrees wrong. There is no contradiction in talking about the need to deal very quickly with 98% of Heathrow’s capacity already being full—national scandal that that is—and getting on with HS2. The scandal of not doing HS2 would be very similar to the scandal of not building the two extra runways, which should probably be to the west of the two runways at Heathrow.

I say to the noble Lord, Lord Cormack, that we can learn from the experience of Kent in another way. My noble friend Lord Adonis, who is not in his place at the moment, knows that I convened a meeting about four years ago because I happened to know some of the people in Kent who had been in consultations there. I got the National Association of Local Councils to bring together all the local councils in the Chilterns at a meeting here in the House of Lords to find out about all the stages of the consultation that had been gone through in Kent. The people from Kent confirmed what I think the noble Lord, Lord Berkeley, and others have said, that they had been very satisfied with the experience of the consultation. Although they never became what one might call protagonists, they all agreed that the noise envelope from HS1 is nothing like the noise envelope from the M2 and the M20. Those are the alternatives that we have to look at.

The noble Lord, Lord Howard of Rising, tried to ridicule the idea that £50 billion should be spent on a project of this kind. I do not know what goes on in his mind when he talks about £50 billion being spent on this, as if it is spent on social welfare in some sense, but it is value added in the supply chain in the west Midlands and other parts of Britain. It may well be that we have to look to our laurels to make sure that the tunnel boring machines are not all from ThyssenKrupp or whatever in Germany, but that is a slightly different question, about our industrial capacity. I put a second question to the Minister: has the Business Department joined up in Whitehall, as on Crossrail, to make sure that British industry gets the great share—the lion’s share if I may call it that—of the £50 billion that we are looking at? That is the wages, salaries, profits and engineering progress that are entailed.

I can only echo what the noble Lord, Lord Heseltine, of whom I have always been a fan on these matters, said:

“It is 120 years since we built a new railway north of London”.

It is a bit of a shock when you say it like that. Why should we not have built another railway north of London for 120 years? It is not as if railways, à la Beeching, are now a thing of the past. Ending—in due course—where I began, the argument is precisely that we are a small island. We should not be frightened of this because we are a small island.

We seem to have the idea that the Victorian era was some sort of golden age. I think Wordsworth wrote a poem about the Ribblehead viaduct or something—these exact arguments took place during Victorian times, even though we now all talk about the Victorian railways. The noble Lord, Lord Cormack, whom I greatly admire, is exactly the sort of person who probably has a society for the admiration and better understanding of the Ribblehead viaduct. I would not be at all surprised, and the noble Lord is nodding his head. He probably is the president because he is the president of everything like that. But it was not exactly top of the pops at that particular time.

I am also reminded of when, exactly 20 years ago, in the presence of Her Majesty the Queen, President Mitterrand said, with a straight face: “Having travelled at 300 kilometres per hour across the plains of northern France, we came through the Channel Tunnel and reduced our speed to 100 kilometres per hour, to better admire the beauty of the Kent countryside”. I did not know that the French were up to that sense of humour, but President Mitterrand somehow put his finger on a fallacy of our national psyche at that time.

In conclusion, I believe that we could be running the risk of another procrastination by having endless procedures which, in other circumstances, I could only call red tape. The Government are very committed to a bonfire of red tape—apart from when it comes to tying up the trade unions in red tape, although that is not the question we are discussing this evening. I suggest that, side by side with a statement about when we are going to see the next stages of legislation, we have a clear timetable, like the Olympic timetable, so that the thing does not slip and so that the people who are looking at the new patterns of economic geography can have some confidence. Many of the stations will not be in the middle of cities—I do not think that is necessarily a bad thing but more work can be done in the city clusters study that I recommend to look at the consequences of some of the stations not being in the centre of the cities and the connectivity there. That may have the upside of what I call the Heathrow Airport type of economic geography, as well as what you might call the downside, given that we all want to arrive at Kings Cross. There is a lot of very exciting work to be done and I have very little doubt that the Government and the Opposition are, on this issue, speaking for the nation’s future and, also, for the environment on the small island on which we live.

My Lords, I should declare some interests, in view of the remarks of the noble Lord, Lord Cormack. I am a member of the National Trust, but it does not speak in my name. I am also the leader of Wigan Council, as most Members know, and chairman of the Greater Manchester Combined Authority. I confirm to the Minister that all the local authorities in Greater Manchester, whatever their political control, are supportive of High Speed 2 coming to Manchester. Indeed, it has the support of the business community in Greater Manchester. We have great support and are getting very positive comments from the consultation for Greater Manchester as a whole and, I am sure, for each and every one of the local authorities.

We support the strategic case that the Minister and other noble Lords have made. It is about capacity. Let us get this clear: it is about capacity on the railways in order for people to continue to travel. The growth that noble Lords have talked about, in both numbers of passengers and freight, means that we cannot cope with the existing infrastructure and we have to invest in new.

One of the alternatives, which noble Lords have talked about, is to try to improve capacity. That has been well established, but I can remember the misery of being a passenger on the west coast main line during its refurbishment. It was not much fun; I even missed an appointment with the Garter King of Arms to come into this place because the train was late, as was every train on the west coast main line at that time. Therefore, that is not really an option.

I am a former director of Manchester airport so one might think that the idea of increasing air transport would appeal to me. But we cannot possibly have the capacity at our airports to handle intercity transport within Britain; we want that capacity to be used for international connections and not for too many internal connections. We could not do it; it is not a possibility. Of course, in order to get to airports, infrastructure needs to be designed. Although I am sure that the noble Lord, Lord Heseltine, is normally correct, we actually built a new railway into Manchester airport to enable better connectivity.

Another option is to do something with the motorways. They are already congested and if we do not do anything to the rail system or to the motorways, we will just end up in gridlock. The impact of an increased capacity on the motorways, as the noble Lord, Lord Berkeley, said, is going to be far greater than anything that High Speed 2 would create. Therefore, High Speed 2 is really our only alternative.

We support the economic case even more strongly because of the benefits that we believe High Speed 2 will bring to cities such as Manchester. I am willing to take the gamble that it will not suck business out of Manchester; rather, it will create more activity in our city region. We think that the benefits of HS2 alone will be about £1.3 billion but, of course, the additional facility in Greater Manchester of the airport station will probably add to that by a further half a billion pounds. Therefore, HS2 could result in an increase in activity in Greater Manchester of almost £2 billion.

Piccadilly station is bang in the heart of Manchester and will help to regenerate more of the city centre. There will be additional benefits resulting from that and the regeneration will be important for Manchester. As the project is being constructed, as noble Lords have said, jobs will be created. We are already working locally to see what skills will need to be developed so that we can maximise the benefits of construction in Greater Manchester.

In Manchester we benefit from this national connectivity. As noble Lords have said, it is not just connections from Manchester to London—although that is clearly important—but Manchester to Birmingham, Leeds and other cities that will be greatly improved. We also recognise that we need to improve local connectivity and through the Greater Manchester Community Transport Forum, we are already investing considerable amounts of money into improving the tram system and the bus network so that people will be able to get access from across the conurbation into the new station at Piccadilly. The airport will provide us with international connectivity that will mean more jobs.

If we are serious about rebalancing the economy in this country, then High Speed 2 is really important. Otherwise, the south-east will tend to dominate, as it has done in the past. I particularly welcome the creation of the growth taskforce, which will concentrate minds on how we can best engineer that growth, and I am sure that the Minister is aware that we have two members of that taskforce from Greater Manchester who are, I am sure, making a contribution.

Noble Lords have hinted that in the early part of the 19th century, this country had a phenomenal period of building railways. In a period of 20 years we built about 6,000 miles of railways in this country, providing the basis of the network that we have today. We did it because we had the confidence and engineering skills, and we did it without the cost-benefit analysis; no Victorian asked “What will be the benefit?”. They just had the confidence that this thing would work—it did, and it produced the benefits for the Victorian economy that we can see.

On the whole, during that period, Parliament was supportive of railway developments. The only hiccup was when the first Manchester to Liverpool railway was mooted and turned down, and they had to reroute it so that it did not go across too much of the Marquis of Stafford’s land. George Stephenson’s ingenuity meant that he managed to get it to go across an impossible area of Chat Moss and to float the railway as he did, meaning that that railway could be built. Other than that, Parliament supported the building of railways during the Victorian period and I hope that we can do the same in this particular Bill.

I want to briefly mention, as noble Lords have done, this odd contradiction between what Britain thinks about high-speed rail and what other countries, particularly in Europe, think about it. Spain has already got 3,000 kilometres of high-speed line, carrying 29 million passengers. The Germans are planning a network of about 2,500 kilometres and they have about 78 million passengers. We are planning to get about 317 kilometres and we currently have 9 million passengers—somewhat behind Belgium. Then, as noble Lords have mentioned, there is France. France was the leader in high-speed rail, planning for nearly 5,000 kilometres. It has with well over 100 million passengers currently on the TGV system.

On holiday in France last summer, I was delayed by some construction work near Tours for a new TGV line. When I came home, I checked what was going on, and it was a new extension of the TGV from Tours to Bordeaux, eventually on to Toulouse and the Spanish frontier. They announced this on roughly the same day that my noble friend Lord Adonis was planning to talk about HS2. It will open in 2017. We are now at the stage of a paving Bill and the lines in the north will not be completed until 2033. The French seem to be able to do these things somewhat faster than we can.

My only criticism of the Bill and the Government’s plans—not just this Government but both Governments —is not that we are building it but that we are building it too slowly. Actually, we ought to be building the two phases together. I accept that the congestion on the southern bit of the west coast main line is causing the greatest pinch points and needs to be tackled, but the economic benefits are greatly needed in the north and should be considered. If the Minister wants to examine the relative spending on rail by region, she will find that in the south-east they are spending roughly £2,700 per head of population; in the north-west it is £178, so there is quite some way to go.

There are two visions of Britain in the future. One is a vision where we try to make do and mend with the current system; we accept that Britain will be a second-class country with a second-class economy and a clapped-out transport system. The other is a vision for the future, a vision for our children, a vision of a Britain that can compete in the modern world, and for that we need high-speed rail.

My Lords, it was a great delight to hear the noble Lord, Lord Rooker, in full flight again. I remember very well when he was a Defra Minister the great thing about him was that occasionally he used to throw away the script and agree amendments that the Government did not agree with. Those days are long gone, most regrettably.

A role that I had in this House until May was chairing one of your Lordships’ Select Committees, EU Sub-Committee C on external affairs—the nearest thing we have to a foreign affairs committee in this House. Last week I had one remaining engagement that came out of that: the University of Kent asked me to give a lecture to its politics and international relations department about the External Action Service, which we had just done a report on. The university said that it would book the fares for me, so I got the tickets and went to the station, which of course was St Pancras, and was swept over the Thames and along the north Kent coast in a Javelin train.

The train was at about 4 pm and it was pretty full, not