House of Lords
Tuesday, 4 November 2014.
Prayers—read by the Lord Bishop of Norwich.
The Earl of Oxford and Asquith took the oath.
Northern Ireland: National Crime Agency
My Lords, we continue to urge all parties in Northern Ireland to make progress on this issue. Justice Minister Ford has submitted a paper to the political parties which sets out enhanced accountability arrangements for the NCA. This paper should allay remaining concerns about the NCA’s role and allow all parties to support the full extension of the NCA to Northern Ireland without further delay.
My Lords, does the Minister feel it appropriate for Her Majesty’s Government to allow Sinn Fein to exercise a veto over the operation of the National Crime Agency? Is she aware that when debating Commons Amendments to the Crime and Courts Bill on 25 March 2013 the prospect of a Sinn Fein veto was anticipated? The noble Lord, Lord of Taylor of Holbeach, announced that in such circumstances,
“any Government of the United Kingdom will respond in a responsible manner”.—[Official Report, 25/3/13; col. 832.]
When will the Government override Sinn Fein’s veto, behave responsibly and fully establish the National Crime Agency in Northern Ireland right away?
The noble Lord refers to the words of my noble friend Lord Taylor and to the Government responding with responsibility. It is important to remember that this is a devolved issue. In order to retain the confidence of the people of Northern Ireland across the communities every effort should be made to reach the decision within Northern Ireland. The Government believe that the efforts being made by David Ford as Justice Minister in Northern Ireland are working towards that end.
My Lords, does the Minister agree that the Northern Ireland Act, which implemented the agreement, expressly reserves and protects this Parliament’s right to override that legislation, in just the same way that it has the power to override others in the national interest? How long will the Minister wait before the inevitable exercise of that power?
My Lords, the Government do not intend to breach the Sewel convention on this issue. We believe that there is still work that can profitably be done to bring all parties in Northern Ireland to agreement on this issue. If agreement is not reached, the parties will have to decide what measures they need to take on devolved issues to deal with the problems that they face.
My Lords, my noble friend has told us that these proposals are being talked about. Can she tell us whether they are being talked about in the context of the talks taking place to try to resolve many of these issues? I was not quite clear.
My Lords, with no disrespect to the Minister, we have heard before stories about it happening soon and all the rest of it. We have repeatedly asked for the Secretary of State to get involved, which would show the urgency of the situation. The security of the people of Northern Ireland is continually put at risk by the absence of participation in the National Crime Agency’s operations. Instead of merely urging the parties to get together, should not the Secretary of State stop hiding behind the figure of David Ford and get some action on the Government’s own account?
I understand the frustration that the noble Lord expresses, but I can assure him that my right honourable friend the Secretary of State has been constantly involved in this issue and is regularly in discussions with the political parties. However, the noble Lord is correct in drawing attention to the fact that the same protection is not afforded to the people of Northern Ireland while the issue of the NCA is unresolved. I can assure him that we are extremely keen to reach agreement on this.
I think the noble and learned Baroness expresses the same view that has been made clear around the Chamber not just today but in previous discussions that we have had on this issue. It is important that we are given this opportunity to discuss it because our frustration and concern need to be heard in Northern Ireland in order to ensure that all the political parties take this issue very seriously indeed.
My Lords, does the Minister agree with me that it is vital for the security of the whole United Kingdom that the National Crime Agency should be permitted unfettered freedom to operate within Northern Ireland as neither the Police Service of Northern Ireland nor the Garda Siochana will have the necessary expertise and resources to counter effectively the potential threat posed by international terrorists and criminal gangs operating across the United Kingdom’s only land border?
The noble Lord makes some excellent points. It is important to emphasise the huge pressure being put on PSNI while this issue remains unresolved. It is also important to point out that the NCA deals with serious and organised crime which does not respect boundaries. It has been very much more difficult to deal with serious crime—child exploitation, drug related crime, fraud, and so on—since the NCA has not been able to operate.
As all the parties in Northern Ireland have a very strong and noble position against human trafficking, does the Minister accept that the National Crime Agency has a key role to play in that respect? In their discussions with local parties, do the Government emphasise the important role that the NCA could play regarding human trafficking, which is increasingly troubling to those who pay attention to the affairs of Northern Ireland?
Central African Republic
My Lords, in April 2014 the United Kingdom supported the establishment of MINUSCA, the UN peacekeeping operation in the Central African Republic. We continue to support UN efforts to build its military and civilian assets to meet the mission’s mandate to build security and stability, support the political process and foster reconciliation in the Central African Republic.
My Lords, I thank the Minister for her Answer. The recent decisions to extend the European mission, EUFOR, and the level 3 emergency status at the United Nations are very welcome. However, when the noble Baroness, Lady Berridge, and I visited the Central African Republic last month, it was clear that instability there affects people not only in that country but in South Sudan, Cameroon, the DRC and others in the region. Will the UK continue to argue for an extension of the level 3 emergency status and the European mission until there is enough stability to conduct elections and secure proper development and progress?
First, I pay tribute to the work of the noble Lord, Lord McConnell, and my noble friend Lady Berridge in continuing to bring these issues before the House. We fully support the extension of the EUFOR mandate, which currently runs until the end of March. The intention is that, by that time, MINUSCA will be up to its full complement of peacekeeping forces and civilian support staff. At that stage, they should take full control. The noble Lord mentioned elections: that is clearly a matter for President Samba-Panza to implement. I know that she is working as hard as she can to get the elections in place.
My Lords, first, can my noble friend confirm that the UN peacekeepers are briefed not to hesitate to act in compliance with their mandate in rapid response to outbreaks of violence against civilians, establishing that they and not the militias enforce law and order in Bangui? Secondly, can she confirm that the warring parties and their leaders will be held accountable for any crimes that they commit and are on notice that incitement to violence—and violence itself—will be prosecuted?
First, the conduct of MINUSCA troops falls under the United Nations rules of engagement, which are covered by international humanitarian law. In the first instance, it is for the country which sent the troops there to hold those people to account, but the United Nations as a whole makes sure there is no impunity. I think that covers my noble friend’s second question. Where people transgress, impunity should not prevail and President Samba-Panza is trying to enforce her own legal systems, locally, to ensure there is no impunity there either.
My Lords, children are bearing the brunt of the insecurity and lawlessness in the Central African Republic. UNICEF has said that children are in desperate need of protection at this time and in danger of being forgotten by the world. Will the Minister tell the House what, if anything, is being done to make the CAR a priority, especially when the security of innocent people continues to deteriorate, despite the deployment of a UN peacekeeping mission?
The noble Baroness is right to focus on the lack of security for children. Of course, across the region there is a history of the abduction of children and their use as child soldiers. What I can say is that we remain the third largest bilateral provider of humanitarian aid in CAR, having given £30 million in direct humanitarian assistance to the Government and to refugees since the crisis began.
My Lords, there are of course no fully functioning police, courts or prisons in Central African Republic. The interim President, Catherine Samba-Panza, has heard of the UK’s wonderful work on security sector reform in Sierra Leone and has specifically asked the United Kingdom whether it will provide such support to CAR. Will Her Majesty’s Government consider offering such support?
My Lords, when the President made her address to the UNGA in September, she clearly set out her ambitions. Shortly thereafter, the security problems in the area increased. I think we should give all the support we can to her and her initiatives on security and imposing the rule of law. She has a tough task ahead. However, the help we are giving through MINUSCA means that we are ensuring that trained people are there to assist with the security of that region.
My Lords, given the widespread violation of both women and children in this tragic conflict, will the Minister indicate whether there are ways in which the Government could extend the success of the Preventing Sexual Violence in Conflict Initiative to the Central African Republic?
The right reverend Prelate makes a very important point. The work done by my noble friends in the Foreign Office and DfID this summer is bearing good results but we need to be able to take those further forward. I listened to what he said and I will certainly take his views back to the FCO.
My Lords, in this volatile situation in the Central African Republic, there clearly needs to be stability before progress can be made. Will the United Kingdom Government support security sector reform, with, in particular, advice from DfID on the development of national and local policing standards?
My Lords, of course we will listen to any requests made by the President for technical assistance. As the noble Lord will know, that can be done through the United Nations. Certainly at the moment MINUSCA, as a peacekeeping force, is concentrating on securing Bangui and the immediate area. Until that is done, it is difficult to go further outside Bangui to provide any assistance there. DfID will be doing all it can through delivering its humanitarian aid to provide the kind of technical assistance that is appropriate in those circumstances. The first objective, though, has to be to secure the region, which has been so troubled.
My Lords, the noble Baroness, Lady Kinnock, drew attention to the 2.3 million children who have been affected by the violence in this country. Will my noble friend join me in paying tribute to UNICEF and the other NGOs that are providing humanitarian assistance, despite unprecedented attacks against the humanitarian workers?
I join my noble friend in that with great pleasure. I ought to declare a past interest, of which I am proud, which is that I used to be a trustee of UNICEF. It is one of many organisations that perform valiant work and without them I have no doubt that Governments would find it almost impossible to deal with the humanitarian crises we face.
In Our Programme for Government, the coalition announced the cancellation of plans for a third runway at Heathrow, and the refusal of permission for additional runways at Stansted and Gatwick. However, we recognise the need for a long-term airport capacity solution to ensure continuing international competitiveness in the coming decades. Therefore, Sir Howard Davies was asked to chair the independent Airports Commission, which will submit its final report in summer 2015.
My Lords, it is absolutely important that as a Minister in the Department for Transport I make sure that the commission is always recognised as having full integrity and independence. Therefore, even when pressed with this question at my own party conference, I have always refused to give any answer other than that the Government will comment after the final report is submitted in 2015.
My Lords, in view of the improbability of any new runway capacity being constructed in the south-east during the lifetime of most Members of your Lordships’ House, does the Minister not agree that this is the time to look very seriously at the role of regional airports such as Birmingham, which will be only 47 minutes from central London by High Speed 2?
My Lords, does the Minister accept that her position has moved significantly? I welcome that, but does she appreciate the importance of airports to Britain’s success in global markets? If she does, can she please accept that we ought to give at least as much attention to airports throughout the UK as we do to the rest of the transport infrastructure, most notably rail and road? We have to put airports up there or we will not succeed.
My Lords, I respectfully point out to the noble Baroness that she may not be aware that the current arrivals and departures procedures used by civil aviation mean that it matters not whether we have one extra runway at Heathrow or 10. The fact is that we cannot land enough aircraft at the moment. Will the noble Baroness inquire of the Davies commission whether it will review the standard arrivals and departures procedures and the adoption of GPS technology, which I know the CAA has just started to use, to allow further arrivals at airports?
My Lords, my noble friend will remember that after Terminal 5 was approved, we were assured that there would be no further development at Heathrow Airport. I wonder if she can give us any insight into what will happen should a third runway be built at Heathrow Airport, and how much more development we shall see there?
My noble friend knows intimately the history of airport development in the south-east. I am afraid that I can make no further comment until the final report comes from the Davies commission in the summer of 2015, at which point I will be delighted to comment.
My Lords, are the Government sustaining pressure on Sir Howard so that an incoming Labour Government will be able to consider the report immediately after the general election? Another easy question for the Minister: how much did the unrealistic and abortive idea of “Boris Island” cost?
Does the Minister agree that there is bound to be a substantial delay between the publication of the report and the building of a new runway? Meanwhile, the costs will inevitably rise, and British aviation will have to pay those costs, among others. Does the Minister agree with that?
My Lords, I am sure that everybody would want a major decision such as whether to build a new runway to be made with the best information available. It is important in those circumstances to make sure that the issue has been fully explored. That may be called delay by some. I think that others would say that it helps to inform appropriate decision-making.
My Lords—third time lucky. May I ask the noble Baroness whether she agrees that one of the things that have bedevilled this issue over the past two decades has been delay? Does she believe that when the Davies report is finally published, it will be implemented? I declare an interest as a supporter of the Stop Stansted Expansion campaign. If she looks at that example, she will see the restorative effect of lifting the blight on an airport and the countryside coming back to life.
My Lords, decisions on elite funding criteria are for UK Sport. Its no-compromise approach has delivered our greatest ever Olympic performances in London and Sochi and exceptional Paralympic successes. We remain in discussion with UK Sport and Sport England on how to maximise the potential of sport to reach more people and succeed at the highest level. We await with interest the outcome of UK Sport’s consultation.
I thank my noble friend for that Answer. Does he agree that we have moved on since the debacle of the 1996 Olympics and that we should look at funding criteria that would mean that team sports, where they have one gold medal and one championship to achieve, are marked on something that is compatible with sports where there are many gold medals and many championships to win? I ask that because team sports generally have provided very good criteria for mass participation.
My Lords, I would not want to pre-empt the consultation, but its purpose is to listen to all those affected by the work that UK Sport undertakes and to build on the successes that GB has had over the last decade. That is what the department will be looking into. Whether they are teams or individuals, they are all extremely important to the morale of our sporting talent.
My Lords, I am sure that the Minister is aware of the report of your Lordships’ Committee on the Olympic and Paralympic Legacy, which I had the privilege of chairing. A key recommendation in that report was about the approach of UK Sport to funding sport—and, clearly, some consideration of that is now going on. Can the Minister tell us whether the role performed by the former Secretary of State for Culture, Media and Sport, who personally co-ordinated the Government’s activities in delivering the Olympic legacy, is a mantle that has been taken on by the new Secretary of State? If so, what is he doing to deliver a step-change improvement in the sporting activities of the country, as was originally the aspiration of the Olympics?
My Lords, 1.7 million more people are playing sport once a week than when we won the bid in 2005. There has been a 13% increase in funding for elite sport for the four years leading up to Rio 2016. One billion pounds is being invested over four years in youth and community sport, and there has been a huge increase in volunteering and a changing attitude to disability. I think that those are parts of the legacy of which we should all be very proud.
My Lords, Team GB delivered 29 gold medals and Paralympics GB 34 gold medals in London 2012. These were great performances, underpinned by UK Sport funding. Without pre-empting the results of the consultation, does the Minister agree that there should be no compromise to the no-compromise funding approach?
My Lords, it is important that I do not prejudge any consultation, but it is definitely the case that the difference in national morale after the Atlanta Olympics and after the 2012 Olympics—and the inspiration that our Olympics in London have given in terms of future athletes—should be very much borne in mind.
My Lords, does the Minister acknowledge that sport is an incredible way of motivating disadvantaged children, not just in terms of their self-esteem but actually of their attainment? Do the Government want to see a situation where we are not sending 40% of our competitors to an Olympics who have come from the public school sector but are making sure that children who are disadvantaged get their opportunity? Sport England has a huge part to play in how it works with the grass roots, in order to make sure that those children get the opportunity, because I know that they have the capacity.
My Lords, I very much hope for and look to a position where all children of all backgrounds have the same opportunities in sport. That is why, as I said, that the Government are investing £1.1 billion over the next four years in youth and community sport. It is precisely why we need to encourage schools to ensure—as they are required to do by law—that children have as much sporting opportunity as possible. All of that needs to be done.
My Lords, while I must congratulate UK Sport on the work it did in the run-up to the Olympics, there were some problems that have been mentioned already. Team sports have not done as well and there is real concern about the churn caused by the annual review of that programme. Could the Minister confirm that it is the intention of UK Sport to have changes in place after the Rio Olympics? Could he not try to persuade it to ensure that any changes that it recommends are done in time, so that we could have even more success in 2016?
My Lords, the door is always open to all Olympic and Paralympic sports to come through the system. I understand what the noble Lord said about the annual review, but it is important, if we have the no-compromise position and philosophy in place, that they are adhered to. It is very important that we have as much opportunity as possible for successes in Rio. The funding arrangements that we have in place for Rio will remain, and those for the Olympics in Tokyo are also very strong.
My Lords, will the Minister welcome, on behalf of the Government, the announcement today that the Emirates Arena in Glasgow is to host the Davis Cup tie next spring between the UK and the USA? Does he agree that this is part of the legacy of the fantastic success of the Commonwealth Games in Glasgow this summer?
My Lords, I very much congratulate all in Glasgow; indeed, £27 million of National Lottery money will be invested in the Golden Event Series for the period 2013 to 2019. That means that more than 70 events have already been secured, including world and European championships in Olympic and Paralympic sports.
Order of Consideration Motion
Social Action, Responsibility and Heroism Bill
My Lords, this is a short but significant Bill. Its core aim is to provide reassurance to people who act in socially beneficial ways, behave in a generally responsible manner, or act selflessly to protect someone in danger by ensuring that the courts recognise their actions and always take that context into account in the event that something goes wrong and they are sued.
The Bill forms part of a much wider programme of measures that the Government have taken forward to tackle unjustified and dubious claims and reduce fears of litigation. That includes transforming no-win no-fee arrangements; banning referral fees paid between lawyers, insurance claims firms and others for profitable claims; and preventing inducements in the form of cash incentives or gifts being offered by claims management companies. The latter provision is in the process of being extended to the legal profession more generally through provisions in the Criminal Justice and Courts Bill currently going through your Lordships’ House.
Before telling the House a little more about the Bill, I should declare a personal interest. During my practice as a barrister before achieving my current position, I frequently represented local authorities, the police, the fire brigade, the NHS, the Medical Defence Union and, on occasion, claimants. I was also a special adviser to the Department for Constitutional Affairs on a report that led to the Compensation Bill.
The Bill aims to achieve its goal by requiring the court, when considering the steps that a person was required to take to meet a standard of care in a claim for negligence or relevant breach of statutory duty, to have regard to three factors.
First, Clause 2 provides that the court must have regard to whether the alleged negligence or breach of statutory duty occurred when the person was acting for the benefit of society or any of its members. That will give reassurance not only to voluntary organisations but to individuals who perform acts of kindness or make other helpful contributions to the community. The Government have already taken a range of initiatives to promote volunteering and socially beneficial activity, and we are pleased to say that the number of people volunteering is steadily on the increase. For example, we have part-funded Join In, the Olympic volunteering legacy programme so recently referred to in your Lordships’ House, which has allowed sports clubs to flourish at grass-roots level, providing worthwhile activities for volunteers and aspiring athletes alike. The Step Up to Serve initiative was launched last year by His Royal Highness the Prince of Wales, and aims to double the number of young people aged between 10 and 20 participating in social action by 2020. We also continue to support the Alzheimer’s Society in recruiting supporters for those suffering from dementia.
Through the promotion of such schemes, we want to build a cohesive and altruistic society, and the Bill will help to further that aim by ensuring that people who want to get involved are not discouraged from socially beneficial action by the fear of being sued. A survey carried out in 2007 by the National Centre for Social Research and the Institute for Voluntary Action Research found that that issue was cited by 47% of those questioned who were currently not volunteering.
That message was confirmed in the important report published following the 2010 election by my noble friend Lord Young of Graffham, Common Sense, Common Safety. Four years ago I made my maiden speech on the publication of that report, an event that will be remembered only by me and possibly my wife. There was also the task force chaired by my noble friend Lord Hodgson of Astley Abbotts on Unshackling Good Neighbours. During the passage of the Bill through the other place, evidence was provided by the National Council for Voluntary Organisations which showed that this is still a matter of concern for many people, and is a significant factor in deterring those who would otherwise volunteer. I mentioned my noble friend Lord Hodgson. I know that he supports this Bill, for two reasons. First, he referred to it explicitly in his speech on the gracious Speech, and secondly he told me so in person last week. Unfortunately, he is unable to attend because he is abroad.
Section 1 of the Compensation Act 2006 attempted to address similar issues. It provides that the courts may look at whether requiring particular steps to be taken to meet a standard of care might prevent a desirable activity being carried out to any extent or discourage people from undertaking functions in relation to it. As the evidence from the National Council for Voluntary Organisations and others shows, this appears to have done little to reassure those who still say that worries about liability prevent them getting involved in socially valuable activities. The current Bill goes further than the Compensation Act did by making it a requirement for the courts to take account of the context where someone is acting in a socially beneficial way for the benefit of others.
Secondly, Clause 3 of the Bill requires the court to have regard to whether a person, in carrying out the activity in the course of which the alleged negligence or breach of statutory duty occurred, demonstrated a generally responsible approach towards protecting the safety or other interests of others. This represents a change to the law, as case law does not currently require a court to do this. Clause 3 will oblige the court to weigh that factor in the balance when considering a person’s liability for negligence, or breach of a relevant statutory duty. This will reassure organisations, individuals and small businesses who have taken a generally responsible approach to the safety of others during an activity that the law is on their side.
It cannot be fair that such people feel pressured to settle speculative and dubious claims. So as well as giving that reassurance, we hope that this provision will give them greater confidence in resisting such claims and indeed—this is important—will help to deter such claims being brought at all. The clause is broadly drafted to ensure that it is relevant in a wide range of different situations, and will be available to bodies such as small businesses, volunteering organisations, religious groups and social clubs, as well as to individuals.
There has been some criticism that the Bill will undermine the rights of employees. Among these is the Association of Personal Injury Lawyers. I can reassure the House that this is not the case. There is nothing in this clause, nor in the Bill more generally, that will prevent somebody who has been injured bringing a claim, or prevent the court finding an employer or any other defendant negligent if the circumstances of the case warrant it. In addition, the focus of the clause is on whether a generally responsible approach was adopted in the course of the activity in which it is alleged the negligence occurred. The requirement to consider whether the defendant’s approach was generally responsible applies to the activity in the course of which the alleged negligence occurred. It will not, therefore, enable a body with a slipshod approach to safety to escape liability, for example, because its general health and safety record would need to be satisfactory over a longer period.
The third main area of the Bill, Clause 4, addresses another key area of concern, and gives reassurance to those brave members of the public who see another person in danger and come to their aid. It does this by requiring the court to have regard to the context of such selfless actions in the event that a claim for negligence or breach of a relevant statutory duty is brought.
Unfortunately, there remains a reluctance among some members of the public to intervene and assist those in danger or distress because they are afraid of being sued should something go wrong. This is illustrated by the fact that 34% of those who responded to a recent survey conducted by St John Ambulance indicated that they were concerned about the legal repercussions of intervening. Clause 4 therefore provides reassurance that heroic behaviour in emergencies will be taken into account by the courts in the event of a claim being brought. I recognise that St John Ambulance has expressed some concern about the wording of Clause 4. I am sure that, if we have the opportunity, we will debate those concerns in more detail in Committee.
In concluding, I reaffirm that the Bill does not seek to confer immunity from civil liability on anyone whose actions fall within its scope. Those who are injured through negligence will continue to have access to legal redress and the Bill will not affect the court’s ability to do justice in an individual case. The Bill ensures that the important matters it deals with are always considered by the courts, alongside all other pertinent factors as appropriate.
I believe that the Bill takes a fair and proportionate approach that will provide valuable reassurance to those who act responsibly in the course of an activity, heroically or more generally for the benefit of society by requiring the courts to take that into account, while ensuring at the same time that those who are genuinely injured through negligence can obtain redress where that is appropriate. I commend the Bill to the House.
Amendment to the Motion
As an amendment to the Motion that the Bill be now read a second time, to leave out from “that” to the end and insert “this House declines to give the Bill a second reading on the grounds that (1) it is unnecessary and the subject matter is already covered by Section 1 of the Compensation Act 2006, and (2) the sole purpose of the Bill is not to make new law but to send out a powerful message or signal on behalf of the Government to the Courts, which is not a proper use of legislation.”
My Lords, I thank the Minister for the way that he has introduced the Bill today, but on this occasion I want to go a little further, provided that it does not embarrass him too much. We all know that he is a distinguished and very successful barrister, so he must have given up a lot when he joined the government Front Bench. Still, at least it can be said that he has an interesting time on that Front Bench, because instead of appearing before judges in court he has had to face a number of Members of the House of Lords and ex-members of the Supreme Court, of whom it cannot yet be said, as one looks at them, that they represent a row of extinct volcanoes. Having said that, I have to warn him that on this occasion, and in relation to this Bill, I come to bury Caesar—in the shape of the Minister—rather than to praise him.
I will start by saying something about the course on which I am embarked. I do so because different views have been held as to whether such a course is appropriate. One view is that when a Bill has been passed by the elected Chamber, we should always give it a Second Reading in this House. However, that view is not supported in the Companion, and nor could this Bill possibly be described as a manifesto Bill so as to bring it within the Salisbury convention. If there were some parallel convention it would surely have been mentioned in the Cunningham report, but as far as I know it is not.
In any event, such a view is contradicted by history. There have in fact been four recent amendments in the past seven years. The most recent example is the amendment of the noble Lord, Lord Dear, to the Marriage (Same Sex Couples) Act 2013. That amendment did not succeed but there was not the slightest hint that it was inappropriate to have approached the matter in that way.
Secondly, there was the amendment moved by the Labour Opposition to the Health and Social Care Bill in 2011. It is important to note that they voted in favour of the amendment of the noble Lord, Lord Rea, as well as that of the noble Lord, Lord Owen. The amendment of the noble Lord, Lord Rea, would have wrecked the Bill.
Thirdly and nearer home, there was the Fraud Bill in 2007. The Conservatives were then in Opposition. Lord Kingsland moved a reasoned amendment. His argument was that if you are against a Bill in principle, the proper course is to move a reasoned amendment, otherwise you are impliedly accepting the principle. No other course, he said, was open to the Conservative Party. That argument succeeded and I shall be asking the House to accept the same argument on this occasion. It seems to be accepted on all sides of the House—including the Cross Benches—that a reasoned amendment at Second Reading is not in itself objectionable.
Finally, it has been said that a reasoned amendment is acceptable only in exceptional cases of great importance. To refuse a Second Reading here is to give this Bill an importance that it does not deserve. On the face of it, that argument seems to be counterintuitive. This Bill is indeed exceptional—not because it is of any importance but because it is of no importance at all. It is useless. It received negligible support in the Commons.
I remind the House of what actually happened in the Commons. There were only two Back-Bench speeches on the government side. One was by Sir Edward Garnier, a former Solicitor General. He opposed the Bill in the strongest terms. He described it a silly Bill. He said it would be greeted with “derision” by the judges. Mr Dominic Grieve, a former Attorney-General, described it as “utter tosh”. We should listen to what former Law Officers have said, coming as they do from the government side. They should know. So this is not the sort of Bill of which it could be said that denying a Second Reading is in some way being discourteous to the Commons or that we should give it a Second Reading out of respect. That is all I have to say on why I am approaching the Bill in the way I am.
I will now say something about the Bill itself and will start by summarising what the Government hope to obtain by it. This has already been done by the Minister but I wish to add a few footnotes. The Bill, it will be remembered, has three operative clauses—to encourage volunteering, to tackle the so-called compensation culture and to encourage, or at least not deter, brave actions. On Clause 2 the Lord Chancellor relied on a survey of 300 people carried out seven years ago, in which 47% of them said that they would have volunteered but for the fear of being sued. That seems to be the sum total of all the evidence the Lord Chancellor had to support the clause. His view on the matter, however, was contradicted by a recent Cabinet Offence paper which states that, on the contrary, volunteering is doing well and that section of the community is thriving.
More importantly, it was contradicted from the Government’s own Benches by a former Minister for Civil Society, Nick Hurd, to whom a great deal of credit is due for all his tireless efforts in this area. He told the Commons that the number of volunteers is rising, not falling: but it may not matter, for the evidence of the National Council for Voluntary Organisations warns that this Bill is not going to make any difference one way or the other, so I leave it at that.
Turning to Clause 3 on the so-called compensation culture, the Lord Chancellor said that claims by employees against their employers have gone up by 30% in the past three years. No one seems to know where that figure comes from. The evidence the other way is that workplace claims have actually gone down by half in the last 10 years, and half of those claims were for less than £5,000. The latter view was the view supported by the noble Lord, Lord Young, in his report published in 2010. His view was that the so-called compensation culture is based on perception—encouraged, as it always is, by the media—and not on reality.
That view was also taken by Lord Dyson, the Master of the Rolls, in a lecture he gave last year entitled, Compensation Culture: Fact or Fantasy?. Again, it may not matter because it is the Government’s case that this Bill is not going to make any difference. In that connection, I am referring to paragraph 23 of the Government’s impact assessment which states that any difference this clause may make will not be substantial, and that if there is a problem, it can be solved only by education, not by legislation.
Finally, as to encouraging heroism, the Minister referred to ambulance drivers. But there was a far more significant piece of evidence against it from the Fire Brigades Union. It described Clause 3 as a very dangerous clause. For years, the fire brigade’s advice to the public in the case of fire is to get out as quickly as possible and stay out. It thinks that Clause 4 undermines that advice. If a member of the public enters the scene of a fire to rescue someone, he puts at risk not only his own life but the lives of the firemen who may have to rescue him as well. The Fire Brigades Union gave two graphic illustrations of when that has happened in practice.
Those being the purposes which lie behind the Bill, I come at last—I am afraid it has taken a long time, but I shall be quicker from now on—to the two reasons for rejecting this Bill. The first is simple enough. The Bill is unnecessary. The subject matter of all three clauses is already adequately covered by Section 1 of the Compensation Act 2006, to which the Minister made scant reference in his speech. I thought that it had always been the Government’s case that this Bill does not change the law. The key thing about the Bill, according to the Lord Chancellor, is that it simply lays down a set of principles. Mr Vara, the Parliamentary Under-Secretary, describes is as a consolidating Bill. That is why, although it covers exactly the same ground as Section 1 of the 2006 Act, this Bill does not purport to repeal that section. If this Bill becomes an Act, they are apparently to stand side by side on the statute book. The Bill may not add much but it does no harm. Until recently, that has been the Government’s case—it does not change the law.
However, quite suddenly, on the third day in Committee in the Commons, the Government changed tack. According to Mr Vara, the Bill does change the law. He gave this reason. Whereas, under the 2006 Act, the judges “may” take certain things into account, under this Bill, the judges “must” take those very same things into account. That applies to all three operative clauses of this Bill. Which is it to be? If this is a consolidating Bill, what is it that is being consolidated? Is it “may”, as under Section 1 of the 2006 Act, or is it “must”, as under this Bill? That is the question to which we are entitled to know the answer.
If it is “may”, the Bill is wholly unnecessary and all it does is add confusion. If it is “must”, the change is crucial. Will the judges be bound to have regard to these three clauses, even though, on the facts of the case before them, they are wholly irrelevant? How are they to comply with this duty which has been imposed on them? Are they to say, in every negligence case, “I have had regard to this Bill”, so that people realise that they are complying? That seems to be what the noble Lord is saying now. If so, this is yet another case—and a very bad example—of the Government telling the judges what to do and how to exercise their discretion. That is sufficient reason for regarding the Bill as wrong in principle and rejecting it.
There is a further reason for taking this view. In truth, the Bill is unamendable. That was the view taken by the Law Society, and it was right. The Bill is so defective in all three operative clauses that the only feasible amendment is to take each of the three clauses in turn and remove them from the Bill, one by one. That was the view taken by the Labour Opposition in the other place. They moved an amendment to remove Clause 3. They might just as well have tabled amendments to remove the other two clauses. That is what I shall seek to do in Committee if the Bill is given a Second Reading. If I succeed, we shall have an Act which, after it has been brought into force under Section 5, will consist of nothing but its Title. I wonder what legal historians will make of that.
I turn even more briefly to the second reason set out in my amendment. The Lord Chancellor has said over and over again that the purpose of this Bill is to send out signals—signals to the judges and signals to the public. I will say no more about sending out signals to the judges. What about signals to the public? If, as we are told, the intention is, for example, to increase the number of volunteers, or to reduce the number of spurious claims, surely the way to do that is for Ministers to appear on television and write to the papers. Are potential volunteers somehow supposed to become aware of the Bill and say to themselves, “Now it is all right; now I can volunteer; now I can sleep easily at night”? Nobody in their right mind could take that view of what would actually happen as a result of the Bill. If so, does it not follow that the Bill is a misuse by the Government of the legislative process? I say again—I and many others have said it many times—that the purpose of legislation is to make law that can be enforced in the courts. It is not to send out government messages, however well intentioned. I beg to move.
My Lords, the prisons are in crisis—understaffed, overcrowded, with a rising incidence of self-harm and suicide. The judiciary complains of the difficulty, delay and cost caused by the increase in unrepresented litigants denied legal aid. The magistracy is greatly concerned about the decline of local justice, exacerbated by court closures and the increasing reliance on professional district judges. An untried and risky change in the probation service is under way, beset by the loss of experienced staff and reports of confusion and disorganisation. The Lord Chancellor’s response is what can only be described as another Grayling gimmick.
Two years ago, the Lord Chancellor celebrated his arrival in office by pitchforking unnecessary provisions into the then Crime and Courts Bill, supposedly to protect householders from prosecution if they used force to defend themselves or their property from intruders. It would be interesting to learn in just how many cases that measure has been invoked. This autumn, we have a five-clause, 20-line, one-page Bill—one of the shortest on record—designed to meet another non-existent problem: the unfair or, alternatively, chilling effect of the so-called compensation culture on those who might face a claim for compensation for negligence or breach of statutory duty while,
“acting for the benefit of society or any of its members”.
From bash a burglar to hug a hero in two years.
Such was the significance of the Lord Chancellor’s proposed measure that of the 18 witnesses he invited to give evidence in support of the Bill, only five bothered to turn up. Two of those were fire authorities. The Greater Manchester fire authority was particularly exercised by the fact that it had faced two claims for compensation by people who had tripped over fire hoses in the vicinity of an accident. Quite what difference the Bill would have made to the outcome of such a curious claim is unclear. Perhaps the Minister would care to elucidate.
By contrast, all five witnesses invited by the Opposition attended. One of them, representing the Law Society, was treated to a most discourteous and offensive attack by the Minister, Mr Vara, who is clearly a graduate of the Eric Pickles political charm school. His performance only underlined how fortunate we are to have the Ministry of Justice represented in this House by the noble Lord.
The Second Reading debate occupied all of an hour and a half, with two Back-Bench speeches, one—as we have heard from the noble and learned Lord, Lord Lloyd—by the distinguished former Conservative Solicitor-General, Sir Edward Garnier. The Lord Chancellor did not condescend to stay for any speeches, even Sir Edward’s. He did not even extend the courtesy of staying to hear Sir Edward speak on Report and at Third Reading. Perhaps he anticipated the forensic dissection of this flimsy foray into legislative vote-catching. Not a single government Back-Bencher spoke in the debate in Committee.
The Bill starts with the premise that volunteers are deterred from helping individuals, or society as a whole, for fear that they might be sued if things go wrong because of the alleged compensation culture which insurance companies and the media constantly denounce. There is very little evidence to support that claim. Even the noble Lord, Lord Young of Graffham, who is not in his place—that ermine-clad St George, constantly in search of regulatory dragons to slay—observed that the so-called compensation culture was more a matter of perception rather than reality. As the noble and learned Lord, Lord Lloyd, has pointed out, that view was explicitly shared recently by Lord Dyson, the Master of the Rolls.
The irony is, of course, that banging on about a compensation culture is itself likely to create the very apprehension that the Bill purports to allay. The reality is that anyone seeking compensation has to prove, on the balance of probabilities, that the defendant has been negligent—that is, to have failed to take reasonable care—or in breach of a statutory duty, and that that has caused the damage that is the subject of the claim. Nothing in the Bill displaces that test and nor should it. If, as a result of my careless driving, a third party suffers injury, why should the fact that I may have been engaged in some voluntary service—perhaps taking an overexcited Minister to a therapy session, for example—in any way affect that third party’s right to compensation, even if he was my passenger?
The position was well summarised by the Minister, Mr Vara, in the Public Bill Committee:
“Nothing in the Bill suggests that it gives immunity from civil liability. It also does not change the standard of care that is generally applicable. That is and remains what the ordinary and reasonable person should have done in the circumstances. The Bill simply requires the court to have regard to certain factors in deciding what steps should have been taken to meet that standard of care in a particular case. It does not tell the court what conclusions to draw or prevent a person from being found negligent if the facts of the case warrant it”.
In which case, one might ask, what is the point of the Bill? He went on to muddy the waters:
“In a finely balanced case, if the court’s consideration of these provisions tipped the balance in favour of a defendant who had acted for the benefit of society, demonstrated a generally responsible approach towards the safety of others … or intervened to help somebody in an emergency, we would welcome that outcome”.—[Official Report, Commons, Social Action, Responsibility and Heroism Bill Committee, 9/9/14; col. 63.]
I suspect that the welcome would not be shared by the injured party, particularly if it allowed the insurer of the defendant—if he or his employer was insured—to avoid paying compensation.
Moreover, the courts would have to engage with interpreting the wording of the Bill, which, to put it mildly, is highly problematic. Take Clause 2, which requires the court to,
“have regard to whether the alleged negligence or breach of statutory duty occurred when the person was acting for the benefit of society or any of its members”.
How would one define “the benefit of society”? Would that proviso protect somebody who negligently inflicted injury while acting for the benefit of a “member of society” who happened to be doing something inappropriate or even criminal?
Clause 3 is similarly opaque, with its reference to its requirement for the court to,
“have regard to whether the person … demonstrated a generally responsible approach towards protecting the safety or other interests of others”.
What on earth constitutes a “generally responsible approach”? As the General Secretary of the Fire Brigades Union—the members of which risk life and limb daily to protect the public—put it,
“the question of how an employer deals with … situations is not a matter of the general perception of their responsibility … The question of the employer’s general responsibility … comes down to the specifics of how they have planned, prepared and resourced the particular incident”.—[Official Report, Commons, Social Action, Responsibility and Heroism Bill Committee, 4/9/14; col. 21.]
To cap it all, we have Clause 4, “Heroism”, which appears to be the stuff of Greek legend or the annals of Boy’s Own Annual. The court is solemnly charged with the duty of having regard to whether,
“the person was acting heroically by intervening in an emergency to assist an individual in danger and without regard to the person’s … safety or other interests”.
We all salute those who risk life or limb to rescue others, whether they do so as part of their job—as fire or police officers, for example—or simply as courageous citizens, like the recent tragic case of the doctor who died trying to save others from drowning in the seas off Cornwall. But where is the evidence of claims for damages by the subjects of such brave and selfless interventions against those endeavouring to help them? For that matter, where is the evidence that the present state of the law deters such brave responses to emergency situations? And what, after all, constitutes an heroic intervention?
There is another aspect of this defective Bill which causes concern; namely, the possibility that references to breaches of statutory duty imply a potential defence for employers, or perhaps for those with other statutory duties—for example, in the realm of care—for acts which cause damage or loss. Perhaps the Minister could clarify the Government’s intentions in this respect, assuming of course that they are conscious of having any.
If, as I hope, the noble Lord can confirm that the Bill is not intended in any way to diminish the existing protection to employees or others, we are left essentially with a Bill which is designed to send a message to volunteers—a message to counteract the possible, but unproven, effect on volunteering of a reaction to the compensation culture mythology which the Government sedulously peddle on volunteering. This would in effect merely echo, as we have heard from the noble and learned Lord, Lord Lloyd, the provisions of the Compensation Act 2006—a well intentioned but, I have to say, not particularly compelling piece of legislation on somewhat similar lines but without the surrounding hyperbole or loose phraseology. It is hardly surprising that the Delegated Powers Committee says:
“There is nothing in this Bill”—
although, in all fairness, it did go on to say,
“which we wish to draw to the attention of the House”.
The Explanatory Notes to the then Compensation Bill declared that it was intended to,
“contribute to improving awareness … of the law … and to ensuring that normal activities are not prevented because of the fear of litigation and excessively risk-averse behaviour”.
However, importantly, they also went on to stress that the provision did not alter the standard of care or the circumstances in which such a duty is owed, and they explicitly affirmed that it did not extend to cases of breach of statutory duty involving strict liability or where carelessness was not an issue. Moreover, the notes stated that the,
“provision reflects the existing law and approach of the courts as expressed in recent judgments”.
In other words, the legislation was, in effect, otiose, and this proposed legislation is doubly otiose.
Sir Edward Garnier spoke powerfully both at Second Reading and on Report. He detected in the Minister’s speech during the Queen’s Speech debate in your Lordships’ House some lack of enthusiasm in relation to this measure. Is the Minister able, in the light of the vestigial information contained in the impact assessment, to reply to Sir Edward’s inquiry as to how many High Court or county court actions would have been decided differently if this Bill had been in force?
Sir Edward’s speech was a devastating critique of the Bill. He declared:
“I really do think that the courts will treat this Bill with derision … unless we are clear … that we are doing something to improve the situation in an intellectually sustainable and coherent way. I sincerely regret the fact that so far this Bill does not do that ... I am used to bits of Bills sending messages and signals—albeit that that is an improper use of legislation ... We do not think about what is in the legislation; we just think about the flags we are running up the flagpole in order to send a message”.—[Official Report, Commons, 20/10/14; col. 697.]
It will be gathered that the Opposition are not enthusiastic about this Bill. My right honourable friend Sadiq Khan, in winding up the Third Reading debate in the Commons, observed:
“The Bill will change little, but we will not oppose it today. We tried in Committee to make something of it, and it will now fall to the other place to attempt to give it purpose”.—[Official Report, Commons, 20/10/14; col. 705.]
The noble and learned Lord, Lord Lloyd, feels very strongly about the Bill. He regards it as trivial and I have to say that I agree with him. However, when it comes to seeking to defeat a Bill at Second Reading, the House is traditionally cautious. I recall the two Bills that the noble and learned Lord referred to—their passage through this House occurred in the four years that I have been here. In particular, I recall the Health and Social Care Bill—a major piece of legislation affecting a huge swathe of public services and for which neither of the governing parties had made any kind of provision in their manifestos. It did not seem unreasonable on that occasion for the Opposition to move that the Bill be not read a second time.
Frankly, I do not think that a Bill as trivial as this should attract such an amendment and we will not support it. It gives a trivial Bill far too high a profile for its contents, but also it is not, in my submission, necessary to deal with the Bill in that way. If the noble and learned Lord, Lord Lloyd, divides on it, I will advise opposition Members to abstain. We will endeavour to make some modest improvements to this Bill in Committee. Even if we succeed in those, frankly, it will add little to the state of the law, but in my judgment that is a better process for us to follow. Indeed, in his speech, Sir Edward Garnier called on the House of Commons—mainly, as it turned out—to introduce,
“a degree of common sense into … the … Bill before the other place gives it a thorough grilling”.—[Official Report, Commons, 21/7/14; col. 1204.]
Let the grilling commence.
My Lords, I am most grateful, particularly to the noble Lord, Lord Pannick, for coming to my rescue. Having done that, I hope he will not be disappointed by what I am about to say.
I support the Bill, and certainly the way in which my noble friend on the Front Bench brought it forward. The final remarks of the noble Lord, Lord Beecham, about dividing on the Second Reading of a Bill need careful reflection and I concur with his reservations over having to do so. There are times when the House recognises the importance of a Bill by perhaps stepping away from our usual procedures. I am not saying that this is an unimportant Bill; I have some issues with it on which I should like reassurance from my noble friend— none the less, I support it.
We are a litigious society, which I know is a generalisation. But the more litigious that we have become as a society, the more risk-averse we have become. Which is the chicken and which is the egg? Have we become more risk-averse because we have become more litigious, or vice versa? I have no polls, studies or focus groups to back up the generalisation, but I served for nearly 20 years in another place and dealt with 84,000 constituents. Since the Boy’s Own Annual—which I thoroughly enjoyed when my brothers received copies for Christmas—was published, I have seen a fundamental shift in the casework and issues brought to me by those running voluntary organisations and in our uniformed services. We are not in that era. Things have changed. If anyone wants a snapshot, to be reminded of just how things have changed, in this country a game of conkers is regarded as a dangerous sport. Conkers requires risk assessments. Some local authorities have chopped down chestnut trees to prevent conkers falling on people’s heads. That is the backdrop against which we look at the reasons why the general public have real concerns.
I shall look at this from the perspectives of two different groups of people. The first is that of the general public, people who do things on a genuinely voluntary basis—that is, supporting voluntary groups and organisations. Over the years, I have known a huge number of people who run these voluntary organisations, including the Brownies, the Girl Guides and the sea scouts. These are organisations for which people give up their time to promote within young people a sense not just of well-being but of purpose and of things that will fashion how they develop into mature, responsible adults. I take my hat off to people—often the busiest people—who give up their time to do that. Over the years, however, they have become more and more concerned when they take young people away.
I was a Devon MP, and it is quite common for the whole area of Dartmoor to be seen as one of those areas where you take young people to test the parameters of how they work as a group and what they do in an outward bound environment. Yet the people responsible for taking them have become more and more nervous of the responsibility because of the compensation culture, the risk-averse society and the need for risk assessments, which are important but have, perhaps, gone well beyond what a previous generation would have regarded as proportionate.
I believe that there is that feeling and that those people and society need reassurance. When I used to employ staff down at the other end, I would occasionally take someone in for the last weeks of term, when they were about to leave school at the age of 18, to give them a couple of weeks’ experience of what life was like here before they went on a gap year or to university. I always had to fill in a risk-assessment form. I remember the first time I had to do it and writing to the authorities in the House of Commons to ask, “What should I say is the biggest risk in having a young person of 18 in my office for two weeks?”. I was told that it was the risk of a terrorist attack.
Those are the realities of life that a lot of people have to deal with. It makes you think—there is a risk of a terrorist attack while having an 18 year-old working in an office down the Corridor. These are not just trivial things; they are things that responsible employers, caring parents, teachers and volunteers have to address every day of their lives if they are to pursue their wish to enable young people to take the opportunity of these types of activities. From that perspective, I believe it is very important for the Bill to give some clarity to what can be expected in terms of the legislation that goes with such activities.
There is another group of people for whom I should like some reassurance from my noble friend. Every year, I have the great privilege to host the ambulance service awards in this House. Each year, we see the most wonderful examples of heroism within a range of ambulance services—the NHS, private, third sector and, of course, those very important people who provide the Medevac relief in our armed services. We have heard testimony in this House from former chief constables about the dilemmas they have faced when, for example, a uniformed officer has gone beyond the call of duty and has disobeyed force orders to go into a pond or a lake to pull out someone who might be drowning. The problem for chief constables, as I believe the record of the House shows, is that if that person going in on their own, without back-up or support, gets into difficulties and is injured or even dies, the relatives or next of kin can come to the police force for compensation for the injury and damage that the police officer received while on duty. That would apply to just about all our uniformed services.
The debate has been small and amusing so far, but I hope that my noble friend will reassure me when he winds up that this piece of legislation will ensure that chief constables and those who lead and have to set out the day-to-day rules for our uniformed services will no longer have to feel that they must keep the people they employ on a string when they are faced with an emergency or something that puts the life of a person in danger. I see that the noble Lord is looking rather perplexed at this, but we have seen examples of it and have discussed exactly that in a Home Office debate during this Parliament, with former chief constables explaining what the difficulties are for them. I hope that my noble friend will be able to clarify that.
The noble and learned Lord, Lord Lloyd, in his opening remarks, said that he had come to bury my noble friend. Shakespeare, in all his glory, did not manage to save the Roman Empire, so I live in hope.
My Lords, the words “common sense” strike a chord. It is good that we are addressing this issue today. A point has been made that the main purpose of a Bill should not be just to send out a message. That is fair enough, but the Bill is useful in trying to bring more certainty and common sense to the life that we lead. I come to this as an ordinary member of the public, with a small business background rather than a legal one, so I bow to the legal brains that are here today. However, as an ordinary person there are many incidents and events that come to mind where caution has ruled. I do not remember the full details with confidence but there was one case where someone in a uniform waited for instructions from a superior before helping in a life-saving situation, whereas the instinctive act should have been to pitch in and help right away.
On a different point, I hope that the Bill will help the small business community, where I come from. In this sector, we are always well aware that big businesses have big organisations behind them, with legal and PR departments and all that sort of thing. The small business community can be at a disadvantage when such businesses come to defend a situation where they are right but worry that they do not have the time or resources to defend themselves.
I will keep this brief because I am interested in what other noble Lords have to say, but it is right that we have this debate and ask the Government to give reassurances, as happened in the other place. There are, rightly, concerns about the compensation culture and I hope that the Bill can help to address them. I look forward to the Minister’s response.
My Lords, there is much to be said against this Bill and much already has been said against it. Either it is intended and apt to change the present law or it is not. Despite the Minister’s valiant and, as ever, beguiling advocacy, I find it difficult to see how a court could find, in any of these clauses, anything which would lead it to a different conclusion on the facts of a case. I await an explanation of how that could arise.
However, if it is intended to change the law, I respectfully submit that that should be made altogether clearer than it is at present. Just what change is it intended to bring about? Is this deemed always to have been the law, or will the Act take effect only from the date of some future conduct, whether that be action or inaction? If it is not intended to change the law—if it is intended, rather, to send out a message—that should be made abundantly clear, too. As the noble and learned Lord, Lord Lloyd, has already suggested, if that is the position, it is not an appropriate use of the legislative process.
There are many legislative initiatives that are worth taking, and the Government are to be applauded for a number of recent ones such as those on FGM, confiscation of criminal assets, and the forthcoming slavery and trafficking Bill. By contrast, this Bill would essentially be a waste of legislative time and worse because, inevitably, it would bring with it unintended consequences, one of which would be the needless future waste of court time and legal expense in debating what, if any, effect it is intended to have.
One distinct curiosity about the Bill is that in essence it mirrors what Parliament enacted eight years ago in Section 1 of the Compensation Act 2006, which has already been mentioned. I differ from my noble and learned friend Lord Lloyd on one aspect of this because, frankly, it seems to me that the change in this proposed legislation from “may” in 2006 to “must” now will actually make no difference whatever. The Bill states that the court must have regard in all circumstances to these considerations—it does already. If it is of simply no relevance, it just discards that regard which it has had to them.
As the Explanatory Notes to Section 1 of the 2006 Act say, that section addressed,
“a common misperception, that can lead to a disproportionate fear of litigation and consequent risk-averse behaviour”.
It was intended to reflect,
“the existing law and approach of the courts as expressed in recent judgments of the higher courts”—
most notably, perhaps, the judgment of the noble and learned Lord, Lord Hoffman, in the well known case of Tomlinson v Congleton Borough Council in 2004, 1AC 46 at 82, where he stressed the importance of,
“the social value of the activity which gives rise to the risk”.
It is hardly surprising that in those circumstances Section 1 of the 2006 Act, which of course was enacted by a Government of a different political colour, has been recognised by the courts to have been of no help whatever. As Lady Justice Smith put it in 2011,
“section 1 of the Compensation Act 2006 did not add anything to the common law position”,
echoing what Lord Justice Jackson had said the previous year:
“The principle enshrined in section 1 of the Compensation Act 2006 has always been part of the common law”.
The other striking fact about Section 1 of the 2006 Act—a shorter and simpler provision than we have here but, frankly, with the same essential effect—is the length of time it occupied this House in the course of enactment. I have here a substantial sheaf of Hansard reports dealing just with Clause 1—extracts from Second Reading, three days in Grand Committee and Report—and, frankly, much the same arguments were being advanced then about that provision as are now being made about these proposed new provisions.
I will confine myself to quoting just a single passage, from the contribution of the noble Viscount, Lord Eccles, who said:
“Clause 1 was discussed for more than seven hours in Grand Committee, which may give some indication of the way in which it might be discussed in the courts in the land in future—at unreasonable expense, I suggest. The reason for the length of the debate was partly the question of what the clause meant and partly an attempt to change and interpret the clause to provide legal cover for the promotion of desirable activities. Thus desirable activities would take place with greater frequency. This discussion ended in some frustration, because all the attempts to find a legal way forward were unavailing. As the Minister said to us at the time, the Bill was trying not to amend the law but to take away doubt”.—[Official Report, 7/3/06; col. 648.]
He continued by suggesting that it was likely to introduce more doubt than it would remove, and that it would be unwise to agree it. Indeed, it was suggested that it should not stand as part of—in that case—the 2006 Bill, which of course contained other provisions.
Of course, it did stand part and it was enacted—although, as I have indicated, without in any way affecting the course of the law. Now it is proposed to superimpose upon our common law yet another such provision. Are we, one cannot help wondering, perhaps cynically, to expect, a few years down the line, a third Bill to demonstrate yet again some new Government’s keenness to underline that volunteering is a good idea and that compensation would not be too readily ordered when it would be discouraged?
With all that said, I shall not be voting in support of the amendment of the noble and learned Lord, Lord Lloyd. It is perhaps a nuclear option which should come into play only on the rarest occasions—and this Bill is not, as has already been said, worthy of it. Indeed, in the 2006 Act it could not have been used because, as I said, other provisions were included. Perhaps that should give one pause for thought, should it not? You have only to add some other coherent provision and you defeat this nuclear option—so I shall not be supporting it. Assuming, however, that this Bill survives the amendment, is read a second time and goes ahead, then, with respect, it will need full dissection and drastic, radical amendment. For my part, I would, reluctantly, give it a Second Reading.
My Lords, I believe that this is a worthwhile Bill. Having read the Hansard report of its Second Reading in the Commons and listened to some of the previous speakers, I am aware that it is not without its controversial aspects. Nevertheless, the Government are to be congratulated on bringing it forward, and I am pleased to add my support.
Today, our society is in danger of becoming ever more insular. The effect of the Bill will be to encourage our fellow citizens to step forward to participate and to become more active members of their community. It will contribute to inspiring them to help others and to pay something back to society, while at the same time offering them reassurance and a degree of protection when things do not go entirely to plan or, as is inevitably the case, accidents happen.
In 2010, my husband, the noble Lord, Lord Hodgson, was asked by the Government to head a task force to examine what prevents people giving more of their time and money to charities and voluntary groups. In May 2011 it published its report, Unshackling Good Neighbours, which has already been referred to by the Minister. That report very sharply identified an evolving and rather depressing attitude in this country. It pointed out that the significance of,
“the prevailing attitude towards ‘risk’, the downgrading of the value placed on ‘common sense’ and on the enabling nature of English and Welsh Common Law. These factors together with a reluctance to extend any significant level of ‘trust’—not just among central and local Government but no less importantly amongst the general public”.
The evidence provided to the task force identified that guidance and regulations throughout civil society are often expressed in negative terms, reinforcing the view that a lawyer, with a writ at the ready, waits around every corner when something goes wrong. The report concluded that,
“an insidious mythology about being sued”—
“deterring millions of Britons, volunteer organisations and charities from helping out more fully in society”.
Whether with friends and neighbours, in the workplace or in a public space, many people have, rightly or wrongly, become apprehensive of taking part in voluntary activities, helping others or intervening in emergencies due to these types of concerns. The “nanny state” and “health and safety culture” have without doubt been very off-putting and discouraging. As we have already heard from the Minister, the Lord Chancellor and the Secretary of State for Justice stated during the Bill’s Second Reading in the House of Commons:
“In a survey carried out by the NatCen Social Research and the Institute for Volunteering Research, worries about risk and and liability was an issue cited by 47% of those questioned who were not currently volunteering”.—[Official Report, Commons, 21/7/14; cols. 1191-92.]
During that debate, we heard numerous grass-roots examples from both sides of the House of the shocking ramifications of this unhealthy culture. Most disturbing were tales of people unwilling to involve themselves in emergencies because they were worried that the law would not adequately protect them should something go wrong as a result of their intervention. People have become frustrated by a poisonous no-win no-fee compensation culture, where I know the Government have bravely tried to restore the balance by way of the Legal Aid, Sentencing and Punishment of Offenders Act 2012.
A personal real-life example perhaps illustrates the difficulties that people who genuinely wish to help can encounter. I was on the Tube recently and, at a station, a very young boy rushed into the carriage. His mother and sister were following, but, before they could get on, the doors slammed shut, leaving them on the outside, and the train pulled out of the station. The boy became absolutely hysterical. The two people closest to him were men. They very kindly tried to talk to him and reassure him. However, as we drew into the next station, I could see how anxious they looked about what they would do. So I stepped forward and said that I would look after the boy and got off the train with him. The uniformed station master came and said that there had been a telephone call from the previous station and that the boy’s mother was coming to pick him up. But the point of the story is that the two men on the Tube were clearly very worried that, if they took the boy off the train, it could be seen as absconding with him, when all they were trying to do was help a little boy in trouble.
Of course, some of the examples that were cited in the other House were myths. In one, farmers in Sussex were said to be worried about salting the roads near their farms in icy weather because, if there was an accident, they could be held responsible. That was a myth. I have been told that carers of the elderly are not allowed to trim their toenails and have to call in a chiropodist. Is this myth or reality? I do not know. Sending for a chiropodist is expensive and takes time. I would have thought that trimming toenails is something that everyone does and surely most carers could be trusted to wield some nail scissors without inflicting grievous bodily harm.
I believe that people are innately good, and that this culture is causing untold damage in shackling our natural inclinations to be helpful, compassionate citizens. By allowing these kinds of fear-driven attitudes to permeate our society, we are doing a massive disservice not only to ourselves but to future generations and the long-term interests of our country. We must try to reverse it now before it is too late.
The Bill will perform a valuable function of closing the gap between perception and reality by reassuring people that the law will stand by them when they are acting in the best interests of other people. The measures will thus encourage participation in volunteering and other socially valuable activities, which could lead to a most welcome increased sense of community spirit.
What are the arguments against the Bill? As we have already heard, some are saying that it is not needed because courts should make judgments on the evidence alone. I am no lawyer and, as I know that there are many learned and eminent members of that profession in the House, I will not attempt to enter into any detailed legal debate. But surely common sense says that the intention of an action is very relevant, and thus ensuring that the context is always taken into account seems reasonable and fair. However, nobody should be immune from civil liability and the Bill does not seek to introduce that. It does not instruct courts as to the conclusions they should reach nor prevent people being found liable where appropriate.
I understand that some have tried to argue that the so-called compensation culture does not exist, but evidence does not bear this out. I am informed that in the past three years there has been a 30% increase in personal injury claims. Then there is the stress of the legal process itself. While for lawyers suing and court appearances are an everyday normal occurrence, for those outside the law who end up trying to defend a claim it can be an incredibly long and very stressful experience. It can take months, and even years in some instances, to resolve such a situation. Meanwhile, it hangs over the person psychologically, sometimes creating great anxieties about the outcome—both financial and social—and putting enormous strain on working and marital relationships. Even when it comes out right in the end, the person will have gone through the most stressful and distressing time to get there. I sometimes wonder whether lawyers really understand the very detrimental aspect that going to law can inflict.
When it comes to matters of social action, we should surely encourage and support people to step up and make a difference if they feel they can. This is a Bill of reassurance: it tells people that they can take the initiative to contribute to society without having to worry about ramifications, mistakes or unintended consequences. In short, it tells people that the law and the Government are on their side. It will make our country even more generous, proactive and socially engaged. Such a society will only continue to build its own confidence and grow into something more successful. I am proud that our coalition Government have made a commitment to encourage volunteering and involvement in social action; I am even prouder that we are now seeing it through with this Bill.
My Lords, unlike some of your Lordships, I am not disappointed by this Bill. When I see that the Lord Chancellor is bringing forward a legislative proposal, I worry about which valuable aspect of our legal system he is going to damage: judicial review, human rights and legal aid have all come under the cosh. It is, then, a pleasant surprise that the Lord Chancellor should be using valuable legislative time on a Bill which is so anodyne and pointless that the only appropriate response is a shrug of the shoulders or the raising of an eyebrow. Since neither of those gestures would be recorded in the Official Report, it is necessary to put one’s response into language.
The noble Lord, Lord Beecham, and the noble Baroness, Lady Browning, each quoted Shakespeare. I cannot compete with that, but the Bill puts me in mind of what Basil Fawlty says of his wife Sybil in the celebrated television programme, “Fawlty Towers”. I hope that noble Lords will excuse this unparliamentary language. He said: “She should be a contestant on ‘Mastermind’. Special subject: the bleedin’ obvious”. The Bill is a statement of the legally obvious. I find it very difficult to believe that, if enacted, it is going to make any difference whatever to any case that becomes before the courts. The Government’s own impact assessment of the Bill, says, at paragraph 17:
“Both the possible reduction in case volumes and the size of any compensation payments are unknown, but are likely to be small”.
The Minister is a very fine advocate but not even he can persuade me that the Bill is, as he suggested in his opening remarks this afternoon, significant.
In opening Second Reading in the House of Commons, the Lord Chancellor, Mr Grayling, said that the Bill,
“is about bringing back common sense”.—[Official Report, Commons, 21/7/14; col. 1187.]
Your Lordships have heard about common sense this afternoon; it was mentioned by the noble Baroness, Lady Hodgson, among others. As far as the courts are concerned, common sense never went away. Leading judgments have established that: they establish that where appropriate and on the facts of any particular case, the court gives weight to what this Bill describes as social action, responsibility and heroism.
Let me give two examples. Sixty years ago, in the case of Watt v Hertfordshire County Council—this is from 1954 and in Volume 1 of the Weekly Law Reports, page 835—Lord Justice Denning, as he then was, said in the Court of Appeal that in assessing claims of negligence, it was necessary for the court to balance the risk against the end to be achieved. He said:
“The saving of life or limb justifies taking considerable risk”.
More recently, there was the case of Tomlinson v Congleton Borough Council, in Volume 1 of the appeal cases 2004 at page 46, which was already mentioned by the noble and learned Lord, Lord Brown of Eaton-under-Heywood. That case concerned a hearing before the Appellate Committee of your Lordships’ House of a claim by a young man seeking compensation after he had dived into a lake in a country park. He had ignored safety warnings and, tragically, broken his neck. The Appellate Committee dismissed his claim. Lord Hoffmann, speaking for the Appellate Committee, said at paragraph 34 that, in assessing a claim for negligence or a claim under the Occupiers’ Liability Act, the court must consider,
“not only the likelihood that someone may be injured and the serious- ness of the injury which may occur, but also the social value of the activity which gives rise to the risk and the cost of preventative measures. These factors have to be balanced against each other”.
In his Holdsworth Club lecture on 15 March 2013, the Master of the Rolls, Lord Dyson, posed the question: “Compensation Culture: Fact or Fantasy?”. We have heard a lot today about compensation cultures. Lord Dyson analysed the case law and summed up for fantasy. There is simply no compensation culture in English law. I ask the Minister which judgments would have been differently decided if the Bill were in force. Mr Grayling’s answer at Second Reading in the House of Commons to such a question was to say that,
“this is not just about what happens in the courts … The Bill is designed to send a powerful message”.—[Official Report, Commons, 21/7/14; col. 1189.]
So the Lord Chancellor’s concern was with perception, not reality, and the Minister's speech today was to very similar effect.
If we are to bring forward legislation to deal with perception, three questions need to be answered by the Government. First, where is the evidence that such a damaging perception exists? I entirely recognise the force of the points made by the noble Baroness, Lady Browning, about her experience. I recognise that, but if legislation is to be brought forward by the Government, I would hope for some thorough analysis of available evidence. Where is it?
Secondly, if we are concerned about perception, why is it that the Minister and the Government think that a message, if sent by Parliament, will be received? As your Lordships have heard, the Compensation Act 2006 already gives power to the courts to consider very similar factors to those set out in the Bill. I recognise that the Bill goes a stage further, in that it would oblige the court to have regard to those factors, whereas the earlier legislation only empowered the court to have regard to such factors, but they are very similar factors. In any event, the Bill rightly still leaves the judges with the power to decide what weight, if any, to give to those factors. I cannot understand why the Government think that the Bill will be more effective in communicating a message than the 2006 Act. It is simply unrealistic to think that someone who is considering volunteering—far less someone who is thinking of jumping into a lake to save someone in peril—will consult Halsbury’s Statutes and reflect on the difference between the 2006 Act and the Bill.
The third question for the Minister on perception is whether this is really the most effective means of correcting a false perception, if false it be. The time, effort and money spent on enacting and publicising this Bill would surely be better spent on press releases and newspaper advertisements. The Bill is a public relations exercise unconvincingly disguised as a prospective Act of Parliament. The Minister is renowned for his ability to present the Lord Chancellor’s proposals in this House in a manner that makes them sound almost plausible—and I stress “almost”. The noble Lord is in this respect, as in all respects, the man who the draftsman of the Bill had in mind. He is concerned only to act for the benefit of society. The noble Lord is responsible and, to all of us, he is heroic but not even his admirable qualities, as utilised in defence of the Bill, can make it remotely credible.
I share much of the analysis of the noble and learned Lord, Lord Lloyd of Berwick, but I know that I am going to disappoint him because like the noble Lord, Lord Beecham, and others, I regret that I will not be able to support the noble and learned Lord if he chooses to divide the House on whether this Bill should receive a Second Reading. I hope that the noble and learned Lord will not divide the House because that may send precisely the wrong message about what it thinks of the Bill. This is a Government Bill that has been through the House of Commons. Its contents are not objectionable; they are simply pointless. Such a Bill is not worthy of provoking a fundamental conflict between the two Houses of Parliament.
My Lords, I am grateful to my noble friend the Minister for his explanation of this Bill, which I support. Before saying anything substantive, I would like to state how much I value our system of justice and the rule of law—JROL—which is the envy of the world. We know perfectly well that countries such as Russia will be in severe difficulties as long as they persist in loving a strong leader with a weak and corrupt JROL. But you can have too much of a good thing. We have a problem with the compensation culture in this country, and the Government have already taken some steps to deal with it. The problem is that many cases never get to court. Your Lordships have been talking about how the courts would deal with a case, but very often the claimant just gets paid out, because it is easier, and the plaintiff’s organisation decides to cease a commendable activity.
We are also getting into a situation where people are fearful of doing something wrong in an emergency, and then having to deal with litigation. Just for now, I will define an emergency as a situation where action has to be taken immediately in order to prevent the situation from deteriorating further. It is often much easier to do nothing, and frequently people are being incorrectly advised to do nothing. This is despite the fact that there are very few, if any, successful negligence actions in respect of emergency assistance, as your Lordships well know.
Only this morning my taxi driver explained to me that, on his statutory training course, he was advised that he should use his first aid kit only on himself, and not on a member of the general public or an injured motorist. Your Lordships will not be surprised to hear that this was because of the risk of being sued if anything went wrong. Now, we all know that this is completely wrong. But if that is what trainers are telling their students, we must not be surprised if the “do nothing” culture emerges. It certainly seems to me that there has not been much positive change since 2006.
All my life I have been trained that, if an emergency arises, I must do something. I have certainly never hesitated to get stuck in, because that is how I have been programmed. When I was 16 or 17, as a Stowe School CCF cadet, I went off on my own on a serious military internal security exercise with the local TA unit. At the time this was unexceptional, but now it would be a serious child protection matter. When I visited the Regular Army at about 17 years old I was allowed to drive heavy high-mobility vehicles over a severe cross-country route, including swimming the vehicle in the River Weser. This would be absolutely out of the question nowadays. Later, I did significant amounts of TA training involving military logistics. Although we took much greater risks than would be tolerated nowadays—for instance, with driver hours—I cannot recall any significant or life-changing injuries. The payback to society for the modest risk taken was very great indeed. In later years I was engaged in civilian aid operations in Bosnia and Rwanda, and in military operations in Bosnia and Iraq. I also survived for a considerable time as your Lordships’ government spokesman for transport matters in the House of Lords, despite the efforts of the noble Lord, Lord Davies of Oldham. So the seed was sown very early on.
Nowadays in my spare time I do a lot of work at the REME museum in Bordon, particularly with tanks and tank transporters. Obviously they are hazardous, but you can be trained in how to operate them safely and responsibly, and that is a useful skill for life. I have no doubt that there are youth groups and charities in the Portsmouth and Southampton areas that try to steer youngsters away from vehicle crime and perhaps gang culture. I could offer some fantastic opportunities for them in getting involved with operating a tank transporter or an armoured recovery vehicle. I know from experience that I could alter a youngster’s whole attitude and make it far easier to secure that all important first job, perhaps with a plant hire company.
The really sad thing is that I know any such scheme is quite impossible for health, safety and compensation-culture reasons. It is simply out of the question. These days, when cadets visit the museum, they cannot even be allowed to climb on the tank. Of course, youngsters outside of the cadets will still get their excitement and adventure but that might be from drugs, motor crime and other undesirable activities.
I turn to the Bill itself. As I understand it, the Bill is mainly concerned with negligence but also covers a breach of a statutory duty, though not a criminal matter. Does a statutory duty include the Health & Safety at Work etc. Act, particularly the Management of Health & Safety at Work Regulations? It would be helpful if the Minister could write to me explaining what is covered and what is not.
During the passage of the Bill in the House of Commons, Ministers seemed to be in some difficulty explaining what, if anything, the Bill did. In my time in government I found case studies very useful for explaining how the legislation worked, and particularly where the dividing line was. Officials hated case studies, and I suspect that this was because they did indeed explain exactly what was and was not intended. The alternative seems to be to let case law develop. I urge the Minister to use case studies to argue his position in Committee.
Some noble Lords think that the Bill goes too far or is unnecessary. I do not think it goes far enough. I do not think that a person should be liable for his actions in an emergency unless a perverse course of action was taken—in other words, no reasonable person with the experience of the person in question would have taken that course of action. In the unlikely event that your Lordships agreed such an amendment, that would surely change the law. It therefore seems to me that the Bill is amendable.
I do not have a problem with the noble and learned Lord, Lord Lloyd of Berwick, tabling his reasoned amendment, because the Bill is a relatively short and simple one. However, I disagree with the amendment’s merits. I think that we should give the Bill a Second Reading, while recognising that we will have quite a lot of work to do.
My Lords, I start by declaring my interests as a trustee of St John Cymru Wales and as vice-chair of the First Aid All-Party Parliamentary Group. No doubt like some other noble Lords, I have received a briefing from St John Ambulance, which is of course the counterpart in England of St John Cymru Wales. There has been much discussion about the purpose of this Bill and what difference it will actually make. During the debate on the Queen’s Speech in June, I welcomed the announcement of the Bill, which I felt could help to achieve the laudable aim of persuading more people to volunteer or to provide emergency first aid assistance when needed without worrying about possible legal consequences of doing so. Having now seen the text of the Bill, and read and listened to the debates on it, I am not so sure.
The principal purpose of the Bill, since it is not at all clear to me whether or how it will actually change the existing legal position, seems to be the often-touted idea of sending a signal, both to the courts and to the rest of us, including potential volunteers and providers of emergency first aid help. However, if you are going to send a signal with any effect, it needs to be clear and unambiguous. It would also be helpful for the signal not to conflict with other signals that people expected to follow it are likely to receive. This Bill seems to fall short on those criteria, in at least two respects.
First, the Bill seeks to address an apparent concern that bystanders sometimes do not try to help in emergency situations because of fear that they may subsequently be sued for their actions. St John Ambulance commissioned research from ICM in August—which the Minister mentioned—to find out what factors might deter people from giving such help and whether this Bill would help to overcome them. The findings show that the key factor determining the likelihood of someone taking action in an emergency is having been on a first aid course. Some 55% of people with advanced first aid training would help, even with a life-threatening injury; while 55% of those with no first aid knowledge would not give first aid at all, even for a minor injury. The main inhibitor is that people lack the skills and confidence to know what to do and fear, possibly with some justification, that they may make the situation worse. Some 63% mentioned that concern as opposed to the 34% mentioned by the Minister concerned about possible legal repercussions. A rather small majority said that this Bill would make them more likely to administer first aid. Some 18% answered “more likely”, against 14% “less likely”, giving a positive balance of just 4%. One clear conclusion of this research is that the best approach to increasing the number of people willing to give emergency first aid—surely better than this Bill—would be to ensure that more people receive first aid training. One obvious way of doing that, which your Lordships have heard me mention before, would be to make such training mandatory in schools.
Secondly, the reference in Clause 4 to acting,
“without regard to the person’s own safety or other interests”,
runs directly counter to accepted first aid practice, as set out in the standard First Aid Manual developed jointly by St John Ambulance, the British Red Cross Society and St Andrew’s First Aid. This clearly states:
“Protect yourself and any casualties from danger—never put yourself at risk”.
What signal is this clause trying to send? Does it seek to encourage people to pile into emergency situations without any thought of the risks and dangers to themselves, which might indeed be viewed as heroic, but possibly in many instances also dangerous and foolhardy? Or should it encourage them to assess the risks and then take appropriate action, without of course feeling constrained by lack of skills or fear of legal consequences? Surely it is the latter.
One of the ways in which people are likely to hear about the provisions of this Bill and their effect in providing protection from prosecution when people act in a socially responsible or heroic way is through the process of receiving first aid training, but with the Bill as it stands the organisations providing such training would be forced to point out that it might remove such protection from people who act responsibly by taking account of their own safety before acting, as they are taught to do as part of their first aid training. That seems quite contrary to what the noble Earl, Lord Attlee, wants to happen in first aid training. Is that the message we want to send? I have considerable doubts about whether this Bill will anyway achieve the useful outcomes to which it is supposedly directed, but it certainly will not do so unless Clause 4 is amended to remove the phrase relating to personal safety and, ideally, replace it with a form of words that would emphasise the value and importance of responsible citizens learning first aid from as early an age as possible, as a means to being effective rather than counterproductive heroes.
Like other noble Lords, I am not convinced of the appropriateness of the nuclear option of denying the Bill a Second Reading, but if it goes into Committee I hope the Minister will make every effort to address the concerns that have been expressed today, particularly in relation to Clause 4.
My Lords, I was brought up on a fundamental principle about legislation, which I sometimes feel your Lordships would do well to memorise. It is the following: if it is not necessary to legislate, it is necessary not to legislate. Of course, it is a sweeping statement, and everyone in this House will have occasion to disagree with it, but it is not a bad working principle—and it is a principle that is entirely neglected in this Bill.
Several of my noble friends—my noble friend Lady Hodgson in particular—made general speeches about the importance of volunteering and of not being frightened by the threat of prosecution. I entirely understood and agreed with all that, but where their analysis began to crumble seemed to be on the relevance of their concerns to the Bill in front of us.
The noble Lord, Lord Beecham, speaking for the Opposition, made an admirably cutting, caustic speech, and as he approached the crucial fence, I thought that he was going to take it in style—but, having glared fiercely at it, he turned resolutely away and did not take it. Several noble Lords, no doubt obeying some vestige of party solidarity, agreed with him, the argument being that the Bill is a tiddler, there is no particular harm and no particular good in passing it and we should preserve our nuclear explosives for some great cause—unspecified—which deserves it. I think that is a rather feeble way of running an Opposition, if I may say so: to make a very acute and shrewd, sometimes unfair, analysis of the Lord Chancellor’s proposals and then not take the obvious course of supporting the amendment.
I support the amendment moved by the noble and learned Lord, Lord Lloyd of Berwick, partly because I want to protect, so far as is possible, the principle I mentioned at the beginning, but partly because of the point he made about this business of sending messages. It is very common now to defend a Bill—a change in the law—on the grounds that it sends out a powerful message to some group in the population whom we wish to reach. We have all fallen victim to this at one time or another. I very rarely meet members of the population who have been bowled over or entirely convinced by the speeches made, or even by votes taken in this House. It does not work like that.
If you are going to encourage people to volunteer, you have to do what my son in the other place has been trying to do until recently—to persuade them to volunteer; to deal with their doubts and fears. It is a public relations exercise. That is not to say that it is useless or to be critical of it; it is necessary to persuade. Passing laws in this House or in the other place is not an adequate way of doing this, particularly when the differences between one text and another—for example between “shall” and “might”—are minimal, as has been analysed in this debate.
If you are contemplating a brave action which may carry some risk, such as diving into a pool or rescuing somebody from a dangerous situation, you are almost certainly taking a quick decision on the spur of the moment. You are not going to creep away and find a book to memorise the course of a debate in your Lordships’ House. So this is a bad way of sending a message. The message is good and well meaning, but we should not clutter the law book of this Parliament with such messages. If one were starting again and had plenty of time and no precedent, one could make a more glorious Bill than Section 1 of the Compensation Act. Nevertheless, we do not have that time and that luxury, and it is a mistake to think that we should gild the lily by passing this Bill.
My Lords, this has been an interesting and entertaining debate on a five-clause Bill that I am not convinced is very necessary. I agree with what the noble Lord, Lord Hurd, said, though I am sorry if he feels disappointed by how the Opposition are responding to the debate.
We have heard from other noble Lords, in particular from my noble friend Lord Beecham and the noble and learned Lord, Lord Lloyd of Berwick, that this Bill is unnecessary. The Government have suggested that the impetus behind this Bill is to increase volunteering and other forms of social action to provide reassurance to people, including employers, that the courts will take certain factors into account when considering claims for negligence and certain breaches of statutory duty. If the Government feel that there is a problem with people volunteering, it is probably more to do with their attitude to the sector and the policies that they are implementing.
I agree with the noble and learned Lord, Lord Lloyd of Berwick, and the noble Lord, Lord Pannick, that, if there is a problem with getting people to volunteer and they are under a misapprehension about their legal position, what is needed is some sort of media campaign. I do not see the fear-driven culture to which the noble Baroness, Lady Hodgson, referred, nor the compensation culture to which the noble Earl, Lord Attlee, referred.
I enjoy the area of south London and the vibrant community in which I live. I do voluntary work with no fear of being sued or taken to court for trying to be a good citizen. Where I live in Lewisham, I also serve as a local councillor. I have never heard anyone say to me in the voluntary projects that I visit and work with—either in the ward I represent, or elsewhere in the borough—that they cannot get more people to help because they are worried that they might be sued. No one has ever told me that they would like to be involved, but that the risk of a negligence claim against them is too much for them to bear.
I invite the noble Lord, Lord Faulks, to visit the Ackroyd Community Centre in Honor Oak Park, where I am a trustee, so that he can see for himself the wonderful work that the people there undertake. He can ask them how they think we can increase volunteering. I am certain that not one word of this Bill will be raised as a barrier to volunteering, and no one will suggest that the Government need to legislate on it.
I have the greatest respect for the noble Baroness, Lady Browning, but I do not agree with her that the Bill is necessary; all the important points she made are already adequately covered. Again, I agree with the noble and learned Lord, Lord Lloyd of Berwick, on this.
While we are on the subject of volunteering, what happened to the big society? No one from the Government ever mentions it—it has disappeared. Only the Opposition ever mention it to ask, “Where has it gone?”—but four years ago it was all the Government ever talked about.
I have concerns that the legislation could worsen the position of workers. Hugh Robertson, head of health and safety at the TUC, described the Bill as “gobbledegook” and said:
“There is not a shred of evidence that there is a problem”.
The Association of Personal Injury Lawyers, to which the noble Lord, Lord Faulks, referred, has also raised concerns, and Thompson Solicitors said that it is,
“nonsense before it even starts”.
We generally have a good health and safety record in this country, which we should be very proud of. I visited the Olympic park just before it opened, where both the noble Lord, Lord Coe, and Sir John Armitt proudly told us that the most serious accident over the whole construction period was one broken leg, because health and safety was such an important part of life on the construction site.
It is important for the noble Lord, Lord Faulks, and the Government in general to make it clear that no employer should be under any doubt that the Bill on becoming law will not in any way loosen health and safety provisions or place less importance on risk assessments—I hope that the noble Lord will have the opportunity to do that when he responds to this debate. Although an employer may have a good health and safety record—and it is quite right that their good record should be taken into account—if they are negligent, they should be found liable, whether or not it is their first breach.
The noble and learned Lord, Lord Lloyd of Berwick, and my noble friend Lord Beecham, referred to both the Fire Brigades Union and the St John Ambulance brigade, which made compelling comments on the issue of heroism and raised concerns about the present wording of Clause 4. They are worried that it could encourage people to engage in reckless behaviour. It is important that we are not seen to be encouraging people to act recklessly and risk becoming a casualty themselves. I hope that the noble Lord, Lord Faulks, will say something about that when he responds to the debate.
I pay tribute to anybody who through their work as a police officer or firefighter, or any other occupation—or as a member of the public—has acted heroically and saved others. We have seen that spirit many times in our country; nowhere was it more in evidence than on 7/7 in London. Some of the heroes on that day needed help after the event, in addition to medical care and in some cases counselling, but maybe they also needed a bit more protection from the media intrusion they suffered after those terrible events.
In addition, how would the Bill affect Armed Forces personnel and the difficulties they could face in obtaining compensation for injuries sustained while serving their country? Can the noble Lord reflect on that in particular in detail, and explain how the Armed Forces covenant would work there? I am worried that that could be an issue, so perhaps he could come back to me on that between now and Committee.
I have looked carefully at Part 1 of the Compensation Act. As the noble and learned Lord, Lord Lloyd of Berwick, points out in his amendment and his contribution today, the matters in the Bill are adequately covered there. The noble Lord, Lord Faulks, is a very skilled advocate, a Queen’s Counsel and an officer of the court, while I am just a lay person. It would be helpful if he could explain to me why the Bill is necessary. Would he not expect the advocate for a defendant in a negligence claim to put these matters before the court? Would he not expect the advocate for the defendant to make use of Part 1 of the Compensation Act, and would he not expect the court in considering a negligence claim to consider such matters and give them due weight in coming to its decision?
If the noble Lord, Lord Faulks, says to me, “Yes; I would expect the defendant’s advocate to put these matters forward and I would expect the court to consider them”, again I ask, why is the Bill necessary? I certainly found nothing in the risk assessment to convince me that it was necessary. As the noble Lord, Lord Pannick, said, the document is nearly as thin as the Bill itself, and phrases such as,
“slightly less likely to pursue a case … slightly reduced aggregate compensation paid … slight drop in the number of negligence cases”,
do not make compelling or convincing reasons as to why the Bill is wasting valuable Parliamentary time.
Having said that, the Opposition will not be supporting the amendment moved by the noble and learned Lord, Lord Lloyd of Berwick, if he presses it to a vote, for the reasons outlined by my noble friend Lord Beecham. We agree with him that the Bill is unnecessary, but do not believe that it is right to deny it a Second Reading. However, it is a depressing waste of valuable parliamentary time. When you look at the Order Paper and see the list of uncontroversial Private Members’ Bills—such as the Mutuals’ Redeemable and Deferred Shares Bill put forward by the noble Lord, Lord Naseby, from the Minister’s own Benches, which has much more merit and is struggling to get a hearing—it is a matter of much regret that we are here today. My noble friend ended his contribution by saying, “Let the grilling commence”. It has started, and the noble Lord has much work to do.
My Lords, this has been a very interesting, entertaining and helpful debate, in which a number of useful points have been raised. As I explained in my opening speech, our core aim in introducing the Bill is to provide reassurance to people who act in a socially beneficial way, behave in a generally responsible manner, or act selflessly to protect someone in danger that the courts will always take the context of their actions into account in the event that something goes wrong and they are sued.
The amendment tabled by the noble and learned Lord, Lord Lloyd of Berwick, seeks to prevent the Bill from receiving a Second Reading on the basis of two premises: first, that the subject matter of the Bill is already covered by Section 1 of the Compensation Act 2006; and, secondly, that the sole purpose of the Bill is not to make new law but to send a message to the courts, and that that is not a proper use of legislation. The Government do not accept that either premise is correct. As I explained, Clause 3 does change the law—albeit not in a major way—by requiring the courts to have regard to whether a person, in carrying out the activity in the course of which the alleged negligence or breach of statutory duty occurred, demonstrated a generally responsible approach towards protecting the safety or other interests of others.
In making that change, we want to ensure that the courts take a slightly broader view of the defendant’s conduct than at present by looking at whether a defendant’s approach to safety during an activity was generally a responsible one, taking into account all that he did or did not do. The court will be obliged to weigh that in the balance when considering the ultimate question of whether the defendant met the required standard of care. While that does not rewrite the law in detail, it is a substantive change. If it were to tip the balance in favour of the defendant in a particular case, then that is a result with which the Government would be happy.
Clauses 2, 3 and 4 also require the court to take particular factors into account. While, as I have said, Clause 2 relates to broadly similar territory to that in Section 1 of the Compensation Act, the approach that it takes is different. It requires the court to have regard to whether the alleged negligence or breach of statutory duty occurred when the person was acting for the benefit of society or any of its members. The fact that the fear of litigation remains so widespread almost a decade after Section 1 was introduced only goes to suggest that it has been ineffective and that firmer action, such as this, needs to be taken.
The noble and learned Lord, Lord Lloyd, said that I had paid scant regard to the Compensation Act in my opening remarks. Let me attempt to make good that omission. In her introduction to the Compensation Bill, the noble Baroness, Lady Ashton, said:
“The Bill will provide better safeguards for consumers of claims management services and will reassure those concerned about possible litigation that the law of negligence takes the social value of activities into account and that they will not be found liable if they adopt reasonable standards and procedures”.
After dealing with the regulation of claims management services, she went on to say:
“The Bill's provision on negligence reflects recent judgments of the higher courts. It makes clear that when considering a claim in negligence, in deciding what is required to meet the standard of care in particular circumstances, a court is able to consider the wider social value of … the context of which the injury or damage occurred. It provides that the court can have regard to whether requiring particular steps to be taken to meet the standard of care might prevent a desirable activity from being undertaken or might discourage people involved in providing the activity from doing so.
The Bill forms part of a wider programme of work which is being taken forward across government and, in partnership with stakeholders, to tackle perceptions that can lead to a disproportionate fear of litigation and risk averse behaviour, to find ways to discourage and resist bad claims and to improve the system for those with a valid claim for compensation”.—[Official Report, 3/11/05; cols. WS 29-30.]
At Second Reading, the noble Baroness said:
“This Bill is part of a much wider set of initiatives that is being taken forward across government. The Government are determined to tackle practices that stop normal activities taking place because people fear litigation, or have become risk-averse. We want to stop people from being encouraged to bring frivolous or speculative claims for compensation. The provisions in this Bill will help us do that. They will reassure people who are concerned about being sued that, if they adopt reasonable standards and procedures, they will not be found liable”.
Later, she said, referring to Clause 1, that:
“This provision reflects guidance given by the higher courts during a considerable period and renewed in recent cases. It will ensure that not only all courts but also litigants and potential litigants are fully aware of this, and will provide reassurance to the many people and organisations, such as those in the voluntary sector, who are concerned about possible litigation”.—[Official Report, 28/11/05; cols. 81-82.]
The noble Lord, Lord Beecham, seemed to imply that the notion of a compensation culture was entirely in the imagination of this Government, but it appears to have featured quite heavily in the imagination of the previous Government.
When I said that the noble Lord had paid scant regard to Section 1, I thought that I would be understood as saying that he did not attempt to say why Section 1 does not cover everything in this Bill. Indeed, what he has just read out makes it clear that it does cover everything in this Bill.
Indeed, but the noble and learned Lord is saying in his amendment that this Bill should not get a Second Reading because the matter is covered by Section 1 of the Compensation Act. I am identifying what lay behind the legislation when it was brought in, what it attempted to do and why, if the noble and learned Lord will bear with me, it failed to do so.
The noble Lord read out the words of the noble Baroness, Lady Ashton, in the previous Labour Government. I referred to Greek legend, and I concede entirely that the noble Baroness, Lady Ashton, and the previous Labour Government nodded, as did Homer. I would not defend the section of that Act but the noble Lord has to point to any distinction between the effect of that Act and the present Bill.
I am entirely aware of the question that the noble Lord asked and I am attempting to answer it.
Perhaps I may go on to refer to what happened following the passing of that Bill. Was there a fundamental change in the compensation culture? What happened? After the coalition Government came to power, my noble friend Lord Young of Graffham produced his report Common Sense, Common Safety, which was widely applauded by all sides of your Lordships’ House. He observed in his report that there was a growing fear among business owners of having to pay out for even the most unreasonable claims. The fear of business owners and small business owners, referred to by my noble friend Lord Cotter, is a reasonable matter to take into account. My noble friend Lord Young also identified a public misconception that,
“we can be liable for the consequences of any voluntary acts on our part”.
He described this belief as “particularly pernicious” because it might,
“deter people from engaging in organised voluntary activities in the mistaken belief that they can be sued should anything go wrong”.
He recommended that people who seek to do good in our society should not fear litigation as a result of their actions. He said:
“It is important to have clarity around this issue and at some point in the future we should legislate to achieve this if we cannot ensure by other means that people are aware of their legal position when undertaking such acts”.
My noble friend Lord Hodgson, whose report Unshackling Good Neighbours has been referred to, led a task force established by Nick Hurd, the son of my noble friend Lord Hurd, who has spoken on this issue. He may have observed that unfortunately his son did not share his lack of enthusiasm for the Bill when speaking in a brief intervention in the House of Commons. Fortunately, the family of Hodgson was more together than the family of Hurd. My noble friend Lord Hodgson said that the fear of becoming involved in litigation was a major preoccupation that deterred people from volunteering. The task force acknowledged the work of various government departments in producing guidance on health and safety, but argued that it was unlikely to provide volunteers with the general reassurance that they seek. The task force took the view that the Government’s efforts seemed,
“‘to fall short’ of Lord Young’s recommendation to clarify through legislation if necessary that people would not be held liable for any consequences due to well-intentioned voluntary acts on their part”.
The response of Dr Davis Smith in his evidence to the Public Bill Committee was also important. His perspective as the executive director of the National Council for Voluntary Organisations was interesting. He said:
“Parliament has a hugely important role in sending out messages about what is valued in society, and I think that sending out the message that volunteering and community and social action has a hugely beneficial role to play in society—recognising that there are barriers and difficulties that must be addressed—is a really important function that Parliament can play. Even the process of having discussions such as this and getting the debates out as part of the passage of legislation is helpful in raising awareness in society more broadly”.—[Official Report, Commons, Social Action, Responsibility and Heroism Bill Committee, 4/9/14; col. 14.]
The noble and learned Lord, Lord Lloyd, and the noble Lord, Lord Beecham, challenge me to say that this Bill effectively adds nothing to the Compensation Act. I respectfully suggest that since the Act we have had an explosion of claims. These have resulted in what I submit to the House is an extremely sensible part of the LASPO Act, which implemented the Jackson reforms and went a considerable way to stopping the explosion of claims by modifying the amount of cost that could be recovered.
We have improved the control of claims management. The question of claims management was touched on in the Compensation Act. It went nothing like far enough. We have reduced the number of claims management companies. We have introduced a successful unit to monitor carefully what claims management companies do. They have halved in number. We now have heavy fines if they transgress in any way. We have introduced in the Criminal Justice Bill, still before your Lordships’ House, provisions that will deter fraudulent claims.
Anyone who watches television or reads newspapers will, I suspect, share with me the feeling of depression and disgust at the vulgar advertising for claims brought, which are often meritless. People resent being telephoned and asked to take part in a fraud, and being told that they have been involved in an accident of which they have no recollection. For those who say that the compensation culture is a mere figment of the Government’s imagination, I say that they are not paying attention to what normal people say.
I will not give details of particular claims. In opening this Second Reading debate I said that this Bill is intended to reassure those who might be reluctant to volunteer. It intends to set out matters that the court is required to take into account when deciding on cases that potentially generate those factors with which the Bill is concerned.
Can we really conclude that the Compensation Act answered the questions posed by the noble Baroness, Lady Ashton? I say “posed”, though the noble Lord, Lord Beecham, disavows her concern. The answer, I fear, is no. What difference is there between the terms of the Compensation Act and the terms of this Bill? One said “may” and the other said “must”. Noble Lords may remember that the difference between “may” and “must” last week caused the House to be divided on more than one occasion, so crucial was it in the interpretation of the particular Bill. Furthermore, the Opposition in the House of Commons thought that it was a sufficiently important difference to table an amendment, removing “must” and inserting “may”. There is a difference, I respectfully submit, between the provisions in this Bill and the provisions in the Compensation Act.
What is not entirely clear—and I accept this on behalf of the Government—is that all Members of your Lordships’ House know the target at which the Bill is aiming. I readily accept, as was apparent from the previous Government, that it is a very difficult target to hit. We do not suggest that judges are routinely getting matters wrong, or that they ignore these factors. However, they will now have to take those into account, and in many cases that will be an unnecessary enjoinder. Clearly, on the face of the statute will be that obligation. This Bill will contribute to an increasing reassurance which I hope the public has and that volunteers have in approaching life, which inevitably has many risks.
This debate has divided roughly—only roughly—between lawyers who are hostile to the Bill and non-lawyers who seem rather more, with exceptions, in favour of it. We, as lawyers, should reflect a little on the occasional disconnect that exists not only between politicians and the public but sometimes between lawyers and the public. Should Parliament be legislating in this fashion at all if it is simply sending a message? I entirely accept what my noble friend Lord Hurd said about the fact that one should be very cautious indeed before legislating simply to send a message. But, on the other hand, I suggest that it would be idle to pretend that part of what we do is not conveying an important message.
One has to think only of the amendment that the Government brought forward, with considerable help from my noble friends on the Liberal Democrat Benches and with support from the Opposition, on the question of revenge porn. It sent a clear message that this House of Lords thoroughly disapproved of that activity. The reality was that the offence was probably captured by other specific criminal offences within the canon of criminal law. So strong was the general feeling that we should identify specifically this behaviour that we sent a message by legislation and made law. What is the Modern Slavery Bill about? Of course, it has important provisions in relation to modern slavery, but is accompanied by all the publicity about what to look for in slavery. Legislation is not always the dry dust of particular words. The context in which we legislate is extremely important.
I was asked many questions during the debate, and I will answer all of them in writing in due course. I hope that noble Lords will forgive me if I do not answer them all now. I can reassure a number of those who asked about the emergency services, for example. I hasten to add that we are very keen to encourage first aid, but nothing about this will alter the sensible practice that should be adopted by the emergency services. The law in that respect has been well visited by a number of courts of appeal and the Supreme Court. This will not change that.
The noble Lord, Lord Pannick, in an amusing speech, referred to that well known student of jurisprudence Sybil Fawlty, and expressed the view that the case of Tomlinson, which was the backdrop to the Compensation Act, was a statement of the obvious. Why then, I ask rhetorically, was it necessary for the case to go all the way to the House of Lords, which deals only with difficult matters of law on which there is uncertainty? If the case was so straightforward it should either have been settled immediately or been disposed of without an appeal to the Court of Appeal or the House of Lords. Unfortunately it can be the case that courts take a little time, when faced with appalling accidents which result in serious injury, to come to the—sometimes reluctant—conclusion that they must deny compensation in the face of an apparently deserving claimant.
Much has been said about the need to sometimes take risks. Few were more robust advocates of that approach than my noble friend Lord Attlee. Much of what he said was true: we want people to take sensible risks but we are not encouraging them to do anything or forcing them to volunteer or take part in activities if they do not want to. However, it is a sad fact that people are deterred: they are aware of the risk of compensation and I am sure that most Members of your Lordships’ House agree that this can act as a negative factor in both their ability and their willingness to volunteer. Indeed, it can reduce the enjoyment of life. The Bill’s core purpose is to reassure a wide range of people who should not be deterred from engaging in these activities. I do not accept that it is improper for legislation to have such a purpose. I suggest that it is a proper use of legislation and will provide valuable support for voluntary organisations and small businesses. They can make a contribution to society without being constrained or, at least, being far less constrained by worries about being sued.
Noble and learned Lords will, undoubtedly, examine the provisions of the Bill closely in Committee—if there is one—and on Report. I do not suggest, for a moment, that the noble and learned Lord, Lord Lloyd, is not entitled to take the course he apparently wants, of testing the opinion of the House at Second Reading. The Bill passed through the House of Commons; it received some support—albeit it has been criticised—in your Lordships’ House; it could certainly benefit from examination by those who are experienced in these matters when it proceeds further. However, I hope that he is persuaded that the Bill deserves our consideration. If it is sending a message, it is one that should be heard. It is making a small but important change in the law where there is a need for change. In all those circumstances, I ask him to consider carefully whether it would not be better to withdraw his amendment.
My Lords, I tried hard to persuade the Labour Opposition to support this amendment. They attacked all three clauses in the other place. I assumed that they were against the Bill in principle so I thought they would support this amendment: it would have been the logical thing to do. However, I am afraid that the ways of political parties are beyond my understanding. Try as I might, I simply could not persuade them. I was told they would definitely be opposing the amendment. If that is their intention now, it would certainly not be my intention to divide the House. However, as I understand it—and I may be wrong—they have decided at the last moment to abstain. Are they opposing or abstaining?
That makes it much more difficult. It puts me in a quandary. I believe there are very many Members on the Labour Benches who want to support this amendment, if they are allowed to do so. I believe there are Members on all sides who want to support this amendment. The noble Lord, Lord Hurd, wants to support this amendment. So what am I to do?
I will say that I wholly disagree with what the noble Lord, Lord Pannick, said in one aspect of his speech, which was that to oppose the Bill on Second Reading would create a fundamental conflict between this House and the other place. Did the Labour Party’s reasoned amendment in the Health and Social Care Bill create a fundamental disagreement between the two Houses? Did the Conservatives’ reasoned amendment in the fraud Bill create a fundamental conflict between the two Houses? Clearly not. Although the noble Lord, Lord Pannick, was right in every other respect in regarding the Bill as a wretched Bill which should have no support in this House, I cannot agree with the reason he gave that we should not agree the amendment now.
I come back to where I was. I do not want to disappoint Members who are here to vote for this amendment. I feel on the whole that the points that have been made, very forcefully, against the substance of the Bill have probably been enough for my purpose. My guess is that at the end of Committee, on which we will waste more valuable time, we will find that there is nothing we can do with the Bill—which is what I think they suspected in the other place. That is because essentially this is an unamendable Bill. I do not think that there is quite enough support for actually rejecting the Bill at this stage to justify wasting the time of the House in dividing on the amendment. I respectfully beg leave to withdraw the amendment.
Bill read a second time and committed to a Committee of the Whole House.
Shale Gas and Oil (EAC Report)
Motion to Take Note
My Lords, it is a privilege to introduce the report of the Economic Affairs Committee, The Economic Impact on UK Energy Policy of Shale Gas and Oil. I must declare an interest, in that I chair the pension funds of two energy companies.
I have served on this committee for seven years, four as chairman. I have to say that this subject turned out to be not only one of the most fascinating but potentially one of the most influential. At the outset I was uncertain as to whether we would get agreement, given the wide range of interests of the members of the committee as well as the wide-ranging nature of the issues—energy policy, environmental and safety issues and climate change, among many others.
The committee held 20 evidence sessions with a wide range of opinions from political, business and environmental groups. We had 30 witnesses in all covering government departments, academics, energy companies, government agencies, environmental groups, the European Commission and overseas witnesses. In the final outcome, based entirely on the evidence we received, the questions we asked and our own analysis, our report was unanimous.
I thank all our witnesses and give special thanks to our specialist advisr to the enquiry, Professor Nick Butler, visiting professor at King’s College London. His knowledge and analytical and drafting skills were especially valuable to us. I also pay special tribute to our retiring clerk, Bill Sinton, for whom this was the last report on which he served us. His administrative and organisational skills, always quietly and conscientiously undertaken, have been of great benefit to us. Thanks also to Ben McNamee, policy analyst, and Stephanie Johnson, committee assistant, for their unfailing help. I am also grateful to all the members of the committee, whose widespread interests, skills and experience, and great application to the work in hand, made it a joy to be their chairman.
Why did we choose this subject? It started with our fascination for the huge impact of shale gas and oil on the energy situation and the economy generally in the United States in a comparatively short time—the last decade or so. It led us to look at the production prospects in the UK, the potential benefits and the risks of not going ahead. We covered the progress, or lack of it, to date, the climate change effects, the environmental and regulatory concerns and what more needs to be done. I will briefly speak to each in turn.
As our report makes clear, the experience in the United States has been astonishing. I thought I knew a bit about it but the evidence came as a revelation. New production techniques to release gas from shale rock have brought abundant and growing new supplies of gas to market in a short time. Shale oil production is also growing rapidly. This has meant that the US energy mix has changed fast, with dramatic and beneficial effects for the US economy and customers. Gas prices have fallen to about one-third of the UK price level. Despite recent falls in oil prices on the world market, the benefits of shale oil and gas to the US remain substantial and long lasting, whereas world oil prices will continue to be volatile. Cheap gas has displaced coal from electricity generation in the US, with the result of substantial exports of US coal to Germany and, indeed, the UK, with corresponding climate effects.
Most significantly, energy-intensive and petrochemical industries are returning to the United States and building up their investment there rather than elsewhere as a result of the cheap shale gas now available. North America is expected soon to become self-sufficient in energy—and what a boon that is—and a large exporter of shale gas in the form of liquefied natural gas.
As to the UK, we identified substantial benefits if shale gas could be developed on a significant scale—I stress “if”. These include the obvious point about enhancement of energy security through a decreased reliance on imports, which recent developments in Russia and Ukraine have underlined; decommissioning of high-emission coal-fired generating capacity; reducing the risk of gas price increases or even possibly delivering a fall in gas prices; and, as has happened in the United States, the benefits for energy-intensive businesses and the petrochemicals sector, which could not only retain investment here but enhance it. Of course, there are benefits, too, for employment, and infrastructure, and other increased economic and community benefits for areas where shale is likely to be found and which have often suffered from industrial decline. BIS has supported the view in its response to our report that there could be more than 64,000 jobs at peak, with more than 6,000 jobs on shale gas pads, from a successful UK shale industry, and that these would be highly skilled, high-quality jobs, with pay levels higher than the UK average.
Recent geological surveys, particularly that of the British Geological Survey, have shown where the shale gas and oil prospects are likely to be, but the crucial point—and I must stress this—is that we will not know the extent of actual production capacity until the exploratory wells are installed. So far, not a single one has been.
Apart from the obvious geopolitical risks to our energy supplies from Russia and the Middle East, recent events have underlined the risks of, in the jargon, “the lights going out”. The recent closures, at least until the end of the year, of nuclear reactors at Hartlepool and Heysham, which supply 4% of total electricity supply, and the fire at Didcot, bringing the reserve over the winter to only 4%, underline the current precarious nature of our supplies.
Some might ask whether the recent fall in oil prices on world markets negates some of our arguments. On the contrary, the benefits of shale oil and gas to the US remain substantial and long lasting. We here in the UK are nowhere near the production stage, and who can say where our oil prices will be when that begins? So the arguments for swift development of our indigenous supplies remain compelling.
Media coverage of the current debate about shale gas and oil tends to be dominated by environmental and local pressure groups, as we found when our own report was published. Detractors and critics occupy the headlines much more than the proponents. I sometimes wonder what the public reaction would be some years hence if our energy supplies and prices were constantly under pressure and we had missed the opportunity of our own shale gas and oil production. Where would the blame then lie? Therefore, we need to do everything can to ensure, first, that environmental and safety questions are totally addressed and, secondly, that the positive case for exploring and developing our own potential and its importance is fully put over.
We devoted a great deal of our report to the concerns, because it is clear that they need thoroughly to be examined. On climate change, we found persuasive the conclusion that the carbon footprint of shale gas, including fugitive methane emissions, is similar to that of conventional gas production and substantially less than coal. We endorsed the recommendation for a monitoring programme to measure the level of fugitive methane when shale gas extraction begins in the UK. We considered not only that the development of shale gas in the UK is compatible with the UK’s commitments to reduce greenhouse gas emissions, because of the acknowledged role for gas, but that substitution of British shale gas for imported LNG would reduce the carbon footprint.
A large section of our report is concerned with examining the environmental impact of shale gas in the UK, covering ground water contamination, disposal and treatment of flow-back water, the effect on UK water supply, seismic activity and so on.
We also had an impressive amount of evidence about the robustness of the UK regulatory regime in relation to all these matters, and that is crucial. There is an impressive amount of scientific evidence that, with a robust regulatory regime, the risks to the environment and public health are low. We concluded that, with such a regime in place, the environmental risks are small, whereas the benefits, if shale gas development can take place, are substantial.
The one area where environmental concerns are undoubted is the increase in traffic and disruption in places close to the development of shale, especially in the exploratory stage and when the wells are drilled. We acknowledge that, as with any industrial activity of that nature, there would be these problems and they would be significant for that period. This is why an important role for the industry’s community benefit scheme is to compensate the communities and the individuals directly affected. However, once that initial work has been completed, the impact should be low. Who even in Dorset knows where Wytch Farm—the land outlet for one of our major undersea oil wells—actually is?
We heard much evidence that the UK’s regulatory framework is more rigorous than that of the US but, even so, we argued that it was crucial that the Government explicitly continue to address the safety issues. I warmly welcome the Government’s response on this aspect, which points out that the UK has more than 50 years’ experience of regulating the onshore oil and gas industry nationally and has an effective system for addressing safety risks; and stresses that the Government will continue to set this out.
However, while the UK’s regulatory framework for oil and gas exploration and production is highly regarded internationally, it is, as we say in our report, also dauntingly complex in this area and untested by large-scale onshore development of shale. While the Government’s response points out what they are doing on this front, many complexities remain; despite the attempts at co-ordination, many responsibilities are divided between different agencies. Are local authorities sufficiently resourced and geared up with the skills for the necessary technical challenges?
I welcome the Government’s swift response on one question where the UK is at a disadvantage compared with the US—namely underground access—and their proposal in the Infrastructure Bill for companies to be given a right of access below 300 metres, in return for a voluntary payment and notification to the community. However, there continue to be concerns about the costs, complexities and delays involved in the planning process.
I do not have time to go into all the aspects of the streamlining of the planning process that are listed in our report and the Government’s response. However, one of our American witnesses, when asked if he would consider applying for an exploratory well in the UK at present, concluded that it was clear that he would not, and for these reasons. However, the proof of the pudding is in what is happening on the ground, given the urgency of getting material, practical progress. The plain fact is that not even one application for an exploratory well is likely to be granted this year. At best, there might be three or four next year. This is an area which needs continuing urgent action by Ministers. We need to see results; otherwise, developers—which, at this stage, are largely private or comparatively small in terms of the industry as a whole—will be discouraged.
The Government’s response to our report on this area said:
“Development and production will take time. The first successful shale fracking demonstrations in the United States were in the early 1990s, but production at commercial scale did not get under way until the early 2000s”.
I hope that is not the timescale by which the Government intend to judge themselves. We simply cannot wait that long.
Let me be clear: our verdict was not to criticise the general policy of the Government or to oppose their direction. Indeed, we strongly endorse it. We simply feel that, for all the welcome developments in pulling together the planning complexities, in the encouraging fiscal measures that the Chancellor has introduced, and in the Prime Minister’s and the Chancellor’s own speeches earlier this year about,
“going all out for shale”,
not enough is being done.
We want a more strongly co-ordinated government campaign, and one given higher priority to put over the message constantly repeated and speed up the process. That is why we recommended in our report as one of our conclusions that,
“since several Departments share responsibility for policy on shale gas, the Government should take measures to improve coordination, clarity and speed of policy making and its implementation. We recommend in particular that the Prime Minister should establish a Cabinet Committee or Sub-Committee, chaired by the Chancellor of the Exchequer, to direct and coordinate policy on development of shale gas, with a mandate to promote well regulated exploration and development of the UK’s shale gas resource”.
However it is done, we need to ensure that the important potential benefits are constantly emphasised and the relevant measures urgently pursued. In short, exploration and appraisal of our shale resource has been too slow. Here is a potential economic prize which we should grasp without further delay. We need to get on with it.
My Lords, I thank the noble Lord, Lord MacGregor, not only for introducing the debate and chairing the committee during the inquiry but for his excellent chairmanship over the past four years. He has managed to keep a group of members, always of strong opinions and often unafraid to express them, in fairly good order. He has done that with quiet authority, charm and good humour. As he mentioned in his introductory remarks, he has kept us focused on the evidence. That has enabled us to reach unanimity on all the reports that he has chaired, which has given those reports a particular authority, helped to shape the debate and, in many cases, led to important change.
A couple of weeks ago, National Grid warned that the tightening balance of generating capacity and demand had forced it to enter into agreement with some customers to allow their supplies to be interrupted to keep the lights on. That extraordinary state of affairs has come to pass courtesy of a shambolic national energy policy and incompetence in Westminster and Whitehall. Although it has been evident for many years that our generating capacity was reaching a crunch point, the Government have failed to devise an attractive environment for encouraging the private sector to invest in new generating capacity to provide consumers with competitively priced energy and reduce emissions.
We are now using the most carbon-intensive fuel—coal—to generate 40% of our electricity. We are investing in very high-cost renewables but because those are intermittent, gas and some coal stations have to be held in reserve at very high cost, to be borne by the taxpayer in the form of capacity payments. As Sam Laidlaw of Centrica pointed out last week, we—that is, the consumer—are paying at the same time to replace coal and to keep coal capacity on standby.
The new nuclear generating capacity at Hinkley Point, built partially to replace our ageing nuclear fleet, comes at a dizzyingly high price. At a time when energy costs generally are falling, the Government have entered an agreement to pay EDF—partially owned by the French Government—twice the current wholesale price for electricity, index-linked for 35 years. The PM’s concern about the £1.7 billion payment to the EU pales into insignificance when compared with the payment to EDF to be borne by every household in the land for each of the next 35 years.
Professor Nick Butler, our excellent specialist adviser, called last week for an independent review of our energy policy before the situation deteriorates further. He is right. Does the Minister agree that such a review is a priority?
How would shale gas improve the energy picture? If shale gas can be developed in the UK it could play a valuable role in our energy mix, to the benefit of consumers and the overall economy. It will help to fill the gap as North Sea gas declines; it will halve emissions by replacing coal; and it will provide a home-produced source of energy which can help us to transition to affordable renewable sources of energy. Yet the search for shale gas in the UK, as the noble Lord, Lord MacGregor, said, has yet to start in any meaningful way. To date, only one well has been fracked—and that was in 2011. As the noble Lord said, the expectation in the industry is that there will be three wells drilled in 2015.
The British Geological Survey has identified sizeable reserves of gas, and in some cases oil, in Lancashire and Yorkshire, southern England and the Midland valley of Scotland. But until test drilling takes place no one knows whether those reserves are sufficient in scale and accessibility to make exploitation economic. The BGS survey suggests that the shale gas deposits identified could supply gas for up to 40 years at the current level of consumption, which means that shale gas could make a significant contribution to the UK’s energy needs. Shale gas would then reduce dependence on imports and provide important security of supply at a time when, as recent events in Ukraine have shown, overreliance on imported fuel carries risks.
While shale is unlikely to have the same downward impact on UK gas prices as it has in the US, because our gas supply is part of a Europe-wide interconnected network, it can moderate price rises. There is also a financial windfall. The public purse will benefit from taxes levied and, importantly, local communities will derive significant benefit from their share of the revenue generated by gas supplied from wells in their localities. Up to a quarter of a million jobs in highly energy-dependent industries will be preserved and an estimated 20,000 to 70,000 jobs will be created by the shale gas industry itself.
Communities where shale drilling is planned to take place have understandably raised concerns about its impact in their local environment, pointing to evidence from the US about groundwater pollution and the use of toxic chemicals. A seismic event in 2011 at Preese Hall, outside Blackpool, further heightened concerns. In 2012, the Royal Society and the Royal Academy of Engineering produced an extensive report into shale gas extraction, which concluded that the risks associated with fracking could all be managed with suitable regulation and care.
We took evidence from a wide range of academics and industry experts from the UK and the USA, and from UK regulatory bodies. Based upon the broad range of evidence we received, there was general agreement that while an industrial process like drilling for shale gas brings with it a level of risk, these risks can be satisfactorily managed by scrupulous adherence to best practice. We can take advantage of some of the significant technological advances in the United States in recent years, which have improved safety, eliminated toxic chemicals and reduced water depletion.
Mining and drilling are not new activities in the UK; we have long experience of managing such activities well. The regulatory regime in the UK is in some ways more rigorous than in the US, and although it remains to be tested in the shale gas industry, its excellent record in regulating offshore and onshore oil exploration gave us confidence that the shale industry can be effectively regulated. Companies with the necessary finance and expertise stand ready to explore shale gas opportunities. At the highest level, the Government have voiced their enthusiasm. The Prime Minister wants to go “all out for shale”, the Chancellor is offering tax incentives and legislation has been introduced to allow companies to drill horizontally under adjacent land.
What, then, stands in the way of rapid development of this promising natural resource? In a word, it is bureaucracy. The regulatory regime is complex, unwieldy and slow with many government agencies sharing responsibility for approving fracking applications. The process is bedevilled by complexity; it lacks transparency, accountability and consistency. Cuadrilla, one of the companies seeking to drill for shale gas, estimated that it could take up to 16 months to navigate the process of obtaining permission to start drilling. We were told that local authorities were not adequately resourced to deal expeditiously with the approval process. Will the Government take steps to ensure that local authorities have the necessary resources?
We recommended that the Government appoint a lead regulator to address these shortcomings. To get an overall grip and provide authoritative leadership of this important opportunity, we also recommended that the Chancellor chairs a sub-committee of the Cabinet to turn the Government’s enthusiasm into action. The Department of Energy and Climate Change’s frankly flaccid, complacent response to our report provides ample evidence of why that leadership is so badly needed.
My Lords, I join in the thanks to the noble Lord, Lord MacGregor of Pulham Market, and pay tribute to his leadership over the several years in which he has chaired us in several complex and important inquiries. This report is one of those and it is a very helpful contribution to the debate on shale oil and gas, which of course is primarily about gas.
As we say, the aim of the report is to focus on the facts. Some have been established, as far as we were able, but many have not because either they are unknown or they need further work. We need to know the extent of shale gas and oil that could be extracted. We need to know where it is, offshore and onshore; we need to understand the commercial viability of extraction, and thus the possible extent of applications for extraction; and we need to understand the negative environmental impact of extraction that might arise, in all its detail. I have much sympathy with residents in areas that could be affected who are asking legitimate questions about the environmental impact. Their concerns need clear answers. I think that this means there is a need for a regulatory regime that is fit for purpose, understandable to the general public, transparent and independent of commercial interests.
These issues all relate primarily to shale extraction policies—but, as we have heard, the role of shale in promoting security of supply remains a major consideration. I believe that we have to reduce energy imports. We have become over-reliant on North Sea output, which is declining, and on imports, which have grown over the past decade. The Department of Energy and Climate Change estimates that we could be importing three-quarters of our gas before 2030. We heard some convincing evidence that home-produced shale gas would displace imported gas rather than displacing renewable energy and would reduce the need for coal to be used more, with all the impacts of that on carbon targets. I want to be clear that I think that we have to maintain investment in renewables because shale gas cannot be the answer to all our energy needs—but shale can give the renewables sector time to grow.
I was impressed when hearing evidence from the British Geological Survey, which was cautious, refusing to jump to immediate conclusions on the capacity for extraction. It said, though, that 40 times the annual UK gas use should be extractable from the Bowland-Hodder area in the north of England. But as we conclude in paragraph 70, there are no well grounded assessments of economically recoverable reserves of shale gas, and we need to know what that potential is.
Mention has been made of the USA, and there are some comparisons that can be made. However, we have to remember that there are large differences between this country and the USA in the scale of the land area; experience and expertise; regulation; and landowner rights. Still, we can learn from the US experience, and I have become increasingly concerned about reports from the USA of a rising tide of opposition to shale extraction. We read recently in the Financial Times of rising public opposition to fracking in Colorado on environmental grounds. There are accusations that shale extraction is industrialising rural landscapes and being committed in city suburbs very close to people’s homes. North Dakota, another state that has substantial shale extraction, and which is perhaps more remote, is clearly facing social pressures, not least the very high cost of housing.
We say in our report that the development of shale gas cannot go ahead without public acceptance. We say that shale development has to be properly regulated and that we must reduce or eliminate risk, and I agree. But I want to express support for the rights of local people in areas that have been or could be subject to licensing applications. Such local concerns are understandable and must be clearly answered because fracking must be safe.
Public concerns relate to issues around ground-water contamination, flow-back water, tremors, noise, traffic, fugitive methane and destruction of the countryside. These all need clear answers. Fugitive methane, as the report indicates, can leap from well-heads during the extraction process or when being transported. As we say in the report, this will need to be monitored, even though levels of fugitive methane emissions are estimated to be similar to conventional gas production.
Concerns that ground-water contamination could arise from chemicals in the fluid used to fracture the rock have also been made. In the USA, leaks from faulty shale gas and oil wells have contaminated water supplies, but fracking itself is not to blame. Well integrity is essential. The Royal Society, as I think we have heard, and the Royal Academy of Engineering have told us that none of the claims of contaminated water shows evidence of chemicals found in hydraulic fluids. Cuadrilla said in its evidence that 99.95% of its fracking fluid is water and sand. The other 0.05% is polyacrylamide, as used in cosmetics. The regulators would need to confirm that this continues to be accurate to allay any public concerns. Concerns about flow-back water, traffic noise and impact on the natural environment are very understandable—which is why effective regulation is so important.
Some have given the public the impression—not in your Lordships’ House—that this report is calling for relaxation of fracking regulations. It most certainly is not. The trouble is that the regulatory system is so confusing even though we have a tighter regulatory regime than the USA—and I think it is pretty clear from all the evidence we have received that we do. That regulatory regime has to be applied and it has to be seen to be applied. The operators say it is a complex system, but it is complex for the general public, too. I support streamlining the system to make it more robust.
There are three different UK bodies responsible for licensing and regulating above and beyond the planning system. The Department of Energy and Climate Change issues exploratory licences, requires environmental risk assessment, approves hydraulic fracturing plans and grants final consent to drill to mitigate the risk of induced tremors. The Environment Agency grants environmental permits, jointly inspects well sites with the Health and Safety Executive and is responsible for mitigating risks to public health. The Health and Safety Executive approves well design and jointly inspects well sites with the Environment Agency to prevent ground-water contamination.
I find the relationship somewhat confusing and wonder how it can work in practice, which is why the report’s recommendations to identify a lead regulator to oversee all stages of licensing is important and why we should consolidate all regulatory provisions relating to onshore oil and gas development into one clearly titled set of regulations. My last point is that there should be an explicit recognition in the regulations that well examiners must be independent of the well operator—not appointed by the operator. This would create a more robust and more transparent regulatory system, because nothing less will build public confidence.
In conclusion, we have heard about the potential benefits; the difficulty is that we do not know how great those are. We think that energy-intensive industries might grow. We think that there will be benefits to the balance of payments and to tax revenues, but the truth is the benefits will be unknown until exploratory drilling takes place. We need that evidence but we also need strict environmental protection in place in the areas affected.
My Lords, I shall follow the noble Lord, Lord Hollick, our new chairman—who I welcome most warmly to a job that he has been carrying out with aplomb and finesse—and my noble friend Lord Shipley in paying tribute to my old and noble friend Lord MacGregor. He knows what a high regard I have for him. From the bottom of my heart, I thank him for his brilliant service as chairman of the Economic Affairs Committee. The report that we are debating was the last report produced under his chairmanship. It is an excellent report and he deserves more credit than anybody else for it, and for the other reports that we have done.
It is well over 30 years since I was Energy Secretary, and since then I have followed the energy scene quite closely. In all that time, I have never known as big a game-changer as the technological revolution which has made it possible to extract economically the vast amount of shale gas and shale oil distributed over the world. Geologists—and all of us, I think—have long known that this existed, but there was not a means of extracting it commercially and economically. Such means now exists and it is a huge game-changer. As has been pointed out, there has been a game-change in the American economy and it has dramatically changed the strength of the American economy. Indeed, the main reason why the American economy has recovered considerably better from the banking meltdown of 2008 than the European economy has, despite the subprime crisis and all the banking difficulties, is the development of shale gas and shale oil in the United States.
It is not just a game-changer for the American economy; it has been a game-changer for the world energy scene. I have never been a believer in the peak oil thesis. When I was appointed Energy Secretary in 1981, one of the first things I did was to ask the chairmen of the two British-based oil majors—Shell and BP—to come and see me. They came to see me and I said, “Tell me what I need to know”. They said, “The first thing you need to know, Secretary of State, is that there are only 30 years of commercially exploitable oil left in the world”. That was in 1981, 33 years ago, but it has always been like that. They never need to look beyond 30 years in their plans, so why should they be interested in beyond 30 years?
It is true that, through a thoroughly incompetent energy policy—I shall not go into it now as I am sure there will be another occasion to do so—we have managed to get very close to peak electricity in this country. However, that is a different matter altogether. Oil and gas have never been in greater abundance in the world. We see that in the declining prices of oil and gas, which are highly beneficial to all those who use energy—not that it ever happens in this country. Unlike other countries, prices have not fallen in this country. Again, that is because of the energy policy that I alluded to earlier. However, shale has completely changed the global energy scene.
The question now—and this is what our report addresses—is whether shale could be just as big a game-changer for the United Kingdom. The answer is that we do not know. The British Geological Survey has shown that the actual mineral resources of shale gas and shale oil in the United Kingdom, particularly the Bowland shale, in the north-west and particularly in Lancashire, are absolutely massive. The Bowland seam is a particularly thick one, which is good.
The potential for something possibly on the scale of North Sea oil and gas—which is now in decline—is before us. On the other hand, some people say that it might be very much less. Nobody knows because nothing has happened. Until the exploratory drilling takes place it is impossible to know whether we have the biggest bonanza since North Sea oil and gas or something rather small. We need to find out. It is all very well for the Prime Minister and the Chancellor of the Exchequer to wax enthusiastic about UK oil and shale but we need action, not words. So far it has been all talk and no action.
The problem lies partly in the lack of real interest or enthusiasm but more particularly because of the nature of our regulatory system. I disagree with my noble friend Lord Shipley on only one point—when he referred to the regulatory system in the United States. There is no regulatory system in the United States. The United States has decided that this should be at the discretion of the individual states, so each individual state has its own policy towards shale and its own regulatory system. That is why, in some states, they have developed shale tremendously; in others they have not developed it at all. The regulatory systems vary considerably in efficacy from state to state. It is pretty good on the whole, but not in all of them.
A proper regulatory system is needed here, as it is in many other areas, such as—to confine myself to energy—for nuclear power. We have a good, strong and rigorous regulatory system for nuclear power. We need a similar system here but we do not need anything as cumbersome, as inefficient or as time-consuming in this case because it creates an almost impossible barrier.
The biggest company seeking to operate in this country is Cuadrilla, in which Centrica has about a 30% stake. After almost interminable talks and discussions, five months ago, Cuadrilla put in a complex, detailed planning application for two wells in Lancashire to Lancashire County Council. It has now been told that it has to wait for another three months. After that, there will probably be a further delay. That is just Lancashire County Council. The Environment Agency is equally slow moving. There is enthusiasm in words but not in deeds from DECC. So nothing happens at all.
We took evidence on the environmental issues, as my noble friend Lord MacGregor said. Under pressure, it became quite clear that the nature of the objectors’ objection was to fossil fuels in principle, despite the fact that gas has only half the carbon emissions of coal. The environmental objections are all completely spurious. I will mention three. First, there are the so-called earthquakes. These are minor tremors which happen from time to time. They are considerably less than the tremors that regularly occur both in coal mining and in nature. They are about on the scale of a heavy lorry passing along the road—that sort of thing. Then there is the contamination of groundwater. That would be very difficult to achieve, even if you wanted to, considering that fracking happens at least a mile if not more below the surface, while the groundwater is, as its name implies, near the ground. The risk of contamination from one to the other is negligible—it is nonsense; in fact, it is zero. As for the chemicals, as my noble friend Lord Shipley says, dangerous chemicals are not used in the mixture that Cuadrilla proposes and which will be used elsewhere. It is 99.95% water and sand and 0.05% polyacrylamide, which is widely used in the manufacture of cosmetics. No dangerous chemicals are involved in the slightest.
We have got to get to grips with this problem—which is impeding this development, this possible huge game-changer for the British economy—of the regulatory system. Again, shale is a game-changer in a particular way. Some points have already been mentioned but I will mention just one other which has not. North Sea gas is running down and we are going to be reliant on imported gas. I am not concerned about the so-called security problem of imported gas. However, the only way that you can import gas is first to have it liquefied into liquid natural gas, which is a very expensive process; and then when it comes to the country of destination—to this country—it has to be gasified again, which is also very expensive. Therefore the overall transport cost of gas is far higher than the transport cost of anything else because of the process that it has to go through. The Government have to get their act together.
As my noble friend Lord MacGregor said, we proposed that a government committee or Cabinet sub-committee should put everybody together in order to knock heads together, but that was rejected by DECC. There is an extraordinary number of Cabinet sub-committees dealing with totally trivial matters but there is no Cabinet committee or sub-committee dealing with something as important as shale. That is despite the fact that a large number of different departments—this is why onshore is different from offshore, which involved just the energy department—have a locus and their own point of view, and a number of government agencies also have a locus. If anything needs co-ordination, this does. People used to talk about joined-up Government. How about joining up the governance of shale? Nothing could be less joined up than it is at present. People have decided that it is not worth investing in UK shale if you cannot even get to the exploration stage. Other countries, such as China and Argentina, are going ahead with it—America is by no means the only one although it was first in the field—and we are left languishing behind.
Many people recognise that there is a malaise in this country. It might not exist exclusively in this country but it is certainly here. There is a great gulf between the people and the elites. Elites are needed, but they are needed to provide leadership in the interest of the people, and the people do not feel that they are acting in their interest at present. We could make a start in changing that by making the development of UK shale “an urgent national priority”, to quote the concluding words of our report—and we did not say that lightly. Action, not words, is needed, and not just for the economy. It might restore a sense of optimism in place of the debilitating pessimism that is so prevalent in our country at present.
My Lords, I will speak briefly to support the noble Lord, Lord MacGregor, who so ably chaired the Economic Affairs Committee during its consideration of the report.
The evidence we heard convinced us that the Government should create opportunities for shale development and persuade the public of its desirability. We were convinced for five main reasons. A thriving shale gas industry will contribute to our commitment to reduce our carbon imprint and to mitigating the effects of climate change. The environmental impact of fracking will not be damaging in the way it has sometimes been portrayed—most of my speech will be on that. Moving towards greater self-sufficiency and less dependence on importing our energy supply will have advantages for energy security, and for our balance of payments and tax revenues. New jobs will be created, a substantial proportion of them outside London and the south-east. The longer-term benefits of developing and retaining energy-intensive industries was also something that we thought important.
I will expand on the first of those reasons, the impact on climate change. I endorse what was said by my noble friend Lord Hollick. While the case for renewables is strong, they are expensive and they are a long-term solution. However, the exploration and exploitation of the extensive reserves of shale gas in the UK should be seen not as an alternative to renewables but as an additional source of energy that is much superior to burning coal. The carbon footprint of shale gas extraction is about half that of coal. That is a huge benefit that it would be irresponsible to ignore.
I will now focus on the environment, mainly because that is the issue about which there has been some public disquiet, as well as quite a lot of misinformation. As the noble Lord, Lord Shipley, said, in considering the issues we can learn from the experience of the US, although it is important to recognise that there are differences, not least in the location of US shale in the wide-open spaces of relatively remote rural areas.
The committee took this issue very seriously and received extensive scientific evidence from a variety of government and independent sources, as has been said. We were convinced that the potential long-term benefits of shale gas outweigh any potential environmental damage in a well regulated system. It was therefore somewhat disappointing to read the strident reaction to the report from a couple of the green environmental groups, which seem unwilling to adapt their views in the light of the evidence.
On the claim that ground-water will be polluted by the chemicals used in fracking fluid by operators, we were convinced that there is no reason why that should happen in the UK. The regulators here do not allow the use of hazardous chemicals. The companies concerned have clearly set out their intentions to avoid their use. As long as the regulators insist on enforcing the prohibition, there is no risk to ground-water from fracking fluid.
On the escape of methane into ground-water, leading to flames coming out of taps when they are turned on, we accepted evidence from the Royal Society and the Royal Academy of Engineering. The risk of methane migrating up natural faults in aquifers is hard to imagine. However, it is important that wells are properly constructed and well sealed. The Environment Agency is well aware of the need to ensure this. Nor did the committee accept the claims of the Frack Free Balcombe Residents Association that wastewater treatment from fracking would not be safe. We were convinced that the low percentage of wastewater from fracking—estimated to be about 3%—could be handled by the tough regulatory system already in place for mining.
The claim that water shortages would arise as a result of shale gas development has also been greatly exaggerated. The demand for water from the operators will be similar to that from other industrial users. Moreover, technological advances will allow the use of saline water and recycling of flow-back water, reducing the need for fresh water. It is inconceivable that the regulators would allow levels of water consumption that would threaten supply to households.
Perhaps the most serious misinformation is about the threat of earthquakes from fracking. The scientific evidence is clear that the likelihood of tremors from fracking is negligible and that their magnitude is likely to be so small as to be—I repeat the quotation cited by the noble Lord, Lord Lawson—
“no worse than a heavy lorry driving past the house”,
in the words of one of the scientists who gave evidence to the committee.
It is, however, important that any risk of seismic activity should be mitigated by strong regulatory controls. All the evidence that we heard about the stringent measures that are in place was compelling. We took evidence from the Health and Safety Executive and others about air pollution, which might have an effect on public health. Again, the conclusion of a review by Public Health England of all the evidence on the risk to public health of both air emissions and radon levels in people’s homes was convincing. Once again, with proper regulation the effects would be very small.
This brings me to the last of the possible environmental effects: traffic and noise pollution. Here, the committee accepted that there would be some disruption to local communities from increased traffic, as with any industrial activity. Two things follow from this. First, the planning procedures in local authorities and the environmental permit provided by the environmental regulators must mitigate these effects through requirements on noise levels. Secondly, the operators must work with local communities to provide compensation for the disruption through the industry’s community benefit scheme, to which they are already committed and to which they must be held.
I have argued that the environmental disadvantages of fracking have been exaggerated, leading to unnecessary public disquiet. It is important that the Government tackle these unwarranted fears, and they need to do so along with the regulators and the industry.
I conclude by saying that it is vital that we have a strong regulatory system in place. Everything that I have said about the environment requires this. This may mean that in a few areas the existing environmental regulations and voluntary measures from industry need some strengthening, if only to reassure the public. The Environment Agency will in any case have to take on additional work to regulate the industry. Will the Minister reassure us that it will have adequate resources to do so, and will the principle of full cost recovery from the industry be applied?
As other speakers have said, we also need an efficient and well run system, as well as one which is rigorous and thorough. As the noble Lord, Lord MacGregor, said at the beginning, we were not convinced that the current system is sufficiently clear. There is a lack of transparency and it is overcomplex. I am sure that the Minister will want to respond to these concerns when she replies.
My Lords, I, too, begin by congratulating the committee on this excellent report. As has already been pointed out, it is the last in a long line of distinguished reports produced under the chairmanship of my noble friend Lord MacGregor. I am honoured to have been a member of the committee for part of the time that he was chairman, so I can, with great sincerity, pay my tribute to the skills that he deployed in that role, to which others have referred.
My noble friend Lord Lawson referred to his background in the energy industry. I have a background which goes back further even than his, although it is of a less distinguished nature. Back in the 1960s, I was energy editor of the Financial Times. In that capacity, I covered the discovery and development of North Sea oil—and how very exciting that was for a young journalist. It was exciting for me but it was also very exciting for the country. I remember clearly how something which at first seemed like a dream came true, and how what seemed as though it might be a peripheral contribution to the national economy turned into a major contribution. I remember how first the Wilson Government and then the Heath Government did everything possible to encourage the development of this great new resource. When I was energy editor of the FT, which was before my noble friend was Secretary of State, world oil reserves were reckoned to last for 20 years, not even 30 years. That gives some idea of the importance that the North Sea assumed in the national imagination.
As has been pointed out, we do not know whether shale gas or even shale oil reserves will have anything like the impact on the British and wider European economy that the North Sea has had. The one point that I really want to make in this short speech is that it is of major importance that we determine whether we have a real bonanza lying under our island or something less important. If it is something very important we cannot let the opportunity slip: it would not only be of great significance to the British and the wider European economy but would also contribute, as the discoveries in the United States have done, to depressing the oil price and reducing the dependence of this country and the economies in the rest of the EU—which play such an important role in our prosperity or otherwise—on those suppliers. To the extent that it would help other countries it would help us. To the extent that developments in this country could encourage developments in other countries, the benefit of shale gas would be increased.
As my noble friend Lord Shipley and others have pointed out, the environment must be effectively safeguarded and a stringent safety regime put in place. That applied in the North Sea. There were many people then who argued that it would be impossible. The predecessors of some of the organisations that gave evidence of a rather doleful and pessimistic nature to the Select Committee were saying exactly the same things back in the 1960s, but an effective safety regime was put in place. The North Sea environment has also been sufficiently safeguarded.
Due account must also be taken of the economic interests and the quality of life of those who live in the areas where production takes place. It has, however, been pointed out several times that we are not talking about the sort of massive disruption that coal mines constituted in the 19th century or the early 20th century; we are talking about inconvenience of a much more modest nature.
My noble friend referred to the effects on the areas where this is taking place. I am sure that he will agree that in the United States some of the most impoverished parts there have, as a result of the development of shale gas, been enormously enriched. In the case of England it is fortunate that the big deposits of gas are in the north, and everyone agrees that it would be great if we could strengthen the economy there. There is a huge plus for areas where this takes place, which is very important.
I certainly agree with my noble friend. I was going to touch on a related point, which I will now make. One of the most disagreeable things about many of the protests against the development of shale gas is that they come from prosperous people in prosperous areas, and these people may very well prejudice the development of a resource that would help less prosperous people in less prosperous areas. I agree that the regime must safeguard as far as possible the quality of life of the people in the areas concerned, but it would be quite intolerable if a small minority of people in the most well-to-do parts of the country was allowed to prevent the development of a resource which could have such a very great and beneficial impact on the country as a whole—and, as my noble friend said, in particular on that part of the country which has benefited least from the great development of the British economy over the last 20 to 30 years.
If we do not get ahead with exploiting this possibility we will be doing a great disservice to the nation. Nobody can foresee the future but we know that the electricity margin of safety is now so tight that supplies might well be interrupted during the winter. We are investing huge sums in renewables and in nuclear power, but when will they make a decisive contribution? As the noble Lord, Lord Hollick, pointed out, the cost in the case of nuclear power will be very considerable indeed.
Can we be sure that we and our European Union partners will never again be blackmailed by Russian or Middle Eastern suppliers, or that we will never suffer interruptions as a result of war or civil disorder? One only has to consider these possibilities to realise the importance not just in terms of our prosperity but in terms of our security of developing a new natural resource. If things go wrong and we are not safeguarding our future, the people who will suffer will be the least prosperous people because it will be impossible to keep our manufacturing industry going at the rate at which it could have been kept going if power supplies act as a brake instead of an accelerator on national economic development.
Looking back to the 1960s when development of the North Sea began we have a great deal to learn from the foresight, enthusiasm and political courage of those who made sure that we had a regulatory regime that enabled companies to go forward and develop those resources. All of us have benefited from that and I hope that in 50 years’ time, those who are sitting here will be able to say the same for the present.
My Lords, I am not sure whether anyone will be sitting here in 50 years’ time.
I, too, should like to thank the noble Lord, Lord MacGregor of Pulham Market, for introducing this debate and join all my colleagues in thanking him for his excellent chairing of the Economic Affairs Select Committee over the past four years. I also want to thank our clerk, Mr Bill Sinton, and wish him well in his retirement, and Professor Nick Butler, our very knowledgeable specialist adviser. As has been said, the noble Lord, Lord MacGregor, successfully contrived to get the committee members to produce unanimous reports during his term. That is a commendable record given the contentiousness of the subjects investigated by the committee. That, of course, includes the question of shale gas and oil, which is the topic of today’s debate.
In the wider context of the UK’s energy supplies, it must be recognised that successive Governments over many years have abysmally failed to produce effective and coherent energy policies. The cumulative result, as my noble friend Lord Shipley said, is that our energy supplies are now at their lowest level in the living memory of most people. Recently, it has been reported that the margin is down to a mere 4%. Long may the recent mild weather continue, to avoid another catastrophic supply failure if a severe cold snap occurs. Some of us recall what happened in 1947, and more will recall the shivering conditions at the turn of the year in 1962-63.
The very feeble response from the Government to our report revealed a lack of urgency bordering on irresponsibility by Ministers that is frankly unacceptable. As the noble Lord, Lord Lawson, pointed out, “energy requires energy”, to coin a phrase. If successive Governments have found it impossible to produce a coherent, credible and robust energy strategy that would endure in the medium term, perhaps the obvious approach is to spread the risks by fostering a diversity of energy resources that would embrace nuclear, solar, wind and tidal power and, now, shale. As has been remarked, all sources have their advantages and drawbacks and all, of course, are subject to the vagaries of both climate change and prices in the international markets. The recent developments that have enabled the exploitation of shale deposits as a source of oil and gas, most noticeably in the USA, have added to the range of supplies of which we should seek to take advantage.
The case for shale, as the committee points out, is not without its problems. The fracking methods involved contain potential environmental dangers, but it is said that fracking may also lead to an excessive demand for water and the possibility of its pollution. Disturbances caused by greater use of lorry traffic and the fumes and noise emitted, together with toxic gas escapes, are all risks that need to be assessed, properly regulated and kept under continuous review by both the industry and government. That is only common sense. However, as many noble Lords have remarked, the risks have to be placed alongside the advantages that are likely to accrue from shale exploitation. Very important among these would be lessening the UK’s dependence on foreign supplies, particularly prudent in the increasingly turbulent times we are currently witnessing. There would be increases in employment and great benefits for our energy-intensive and petrochemical industries. This would help to promote the UK’s manufacturing capacity, which is much needed if we are to reduce our economic reliance on the financial services sector of the economy.
There is now an urgent need to commence shale extraction, not least to ascertain more accurately the extent of our potential reserves. Time is of the essence. The vast majority of people will want to secure our energy supplies overall, including shale exploitation. However, there is likely to be a strong element of nimbyism among the public, which will be played upon by pressure groups who—in principle and never mind the evidence—are totally opposed to shale exploitation whatever the safeguards imposed. The Government and their successors should offer the necessary guarantees to rebut nimbyism and encourage the creation of a fracking industry to exploit the use of shale as a new source of energy.
My Lords, the report of the Economic Affairs Committee is extremely sensible. It quite rightly stresses the urgency with which the Government must act to start the shale revolution. We have seen what economic benefits gas extraction can bring. North Dakota’s economy grew by 13.4% in 2012, according to a report by the US Bureau of Economic Analysis. That was nearly three times the next fastest state, Texas, and dwarfed the national average of 2.5%. I would love to see that kind of growth in the north-west and other regions of the UK. However, the community benefit schemes seem to be a tax pretending to be something else. Are local councils the winners here, rather than local people?
By giving these taxes a nice name, we seem to be just trying to make them more acceptable, although one up side is that this shows that tax has become a dirty word. However, it just goes to show that Governments devising new taxes would rather not call them what they are. Most key services are funded through a central government grant anyway, so it would be a tragedy if new revenues were used badly, or squandered on pet projects. Therefore, these community benefit schemes may mean that the central grant is reduced, leading to a further reliance on hidden revenue streams such as this. Of course, those living in an area that sees a boom from gas extraction should benefit, and they will. Shale extraction will bring new industry, more jobs, more skills and knock-on growth for the whole local economy. It just seems to me that the local authority need not be the conduit for those benefits, as I am not convinced that the proposed methods will actually benefit people as much as they should.
We should also consider the environmental benefits of shale extraction as an economic opportunity. It has been estimated, most notably by Peter Atherton of Liberum Capital, that the cost of renewing our energy infrastructure and implementing both the EU carbon reduction strategy and our own renewables strategy will run into the hundreds of billions of pounds. In short, meeting renewables targets and pursuing them with inefficient methods of energy production will be very expensive.
The environmental benefits of fracking should not be forgotten. As an excellent paper by Professor Richard Muller for the Centre for Policy Studies found, shale gas extraction can reduce not only greenhouse gas emissions but a deadly air pollution known as PM2.5. It is currently killing more than 3 million people each year worldwide, primarily in the developing world, where traditional fossil fuels are still burnt in larger proportions than in the western world.
Of course, the IPCC announced just last week that the use of fossil fuels should be phased out entirely by the end of the century. But even if the IPCC’s target was feasible—or desirable—surely the switch from coal to natural gas must be encouraged as soon as possible. Perhaps we can then rethink our energy mix—and relieve taxpayers and bill payers of the burden of massive subsidies for inefficient methods of energy production.
We should not forget that climate change is a global issue. The volume of CO2 produced worldwide is the problem, not just the amount produced in the UK. The task is huge. What we do here is of course important, but a year’s worth of reducing our CO2 emissions would be wiped out in a matter of days by China’s energy growth. That is why time is of the essence with regard to shale extraction, and we should be sharing the technology across the globe.
Perhaps the most important benefit of getting on with shale extraction will come from increased energy security. At the moment Europe imports about 30% of its natural gas from Russia—and the Russians certainly want it to stay that way. At a global economic conference last year, Putin said fracking means that, “black stuff comes out of the tap”. He has also previously said that shale extraction would directly reduce Europe’s competitiveness, as it would be “more expensive” than Russian gas and oil. That indicates he is worried about Europe breaking free of dependence on Russian resources. Again, we can look elsewhere to see how crucial it is to break that dependence.
On current projections, America will be energy self-sufficient by 2035, with some predicting it might come even sooner. The pattern is the same elsewhere. Estonia is the world’s first country to meet all its power needs from shale gas. It even has enough left over for fuel exports for the shipping industry. We should be doing all we can to emulate that here.
The Economic Affairs Committee made a very sensible suggestion; namely, its recommendation that a Cabinet committee should be established to ensure that the Prime Minister’s commitment to shale gas extraction is matched with action. But the Government’s weak response is easily mistaken for that of a Civil Service that does not understand the importance of action. Will my noble friend the Minister assure me that that is not the case?
My Lords, I congratulate the noble Lord, Lord MacGregor, and members of the committee on their report, and on using the term “fracking” only once in it, thereby skirting some of the corny humour that could otherwise ensue. Other noble Lords have not been quite so parsimonious in this respect.
We live in a world of huge risks, most of which we have created for ourselves. Irrevocable climate change is one of them. Yet at the same time this is a period of massive technological innovation, much of it positive and most of it global in implication. The shale gas revolution—and I would not hesitate to call it that—is a very interesting and consequential example. Its roots stretch back some 60 years. The Breakthrough Institute in the United States has demonstrated that it would not have come about without a history of federal intervention and support, just as in the case of the internet. George Mitchell’s extraordinary accomplishments would not have been possible without that.
The Breakthrough Institute pioneered the thinking that became the basis of President Obama’s climate change policy. It is one based more on technology than on any legal framework. Essentially, it is progressive replacement of coal as a source of energy by gas, with shale gas to the fore, and by renewables. The US, as the report notes, as a consequence has reduced its greenhouse gas emissions substantially in recent years.
I would dissent from very few of the points and recommendations made in this admirable and thorough report. I note the Government’s positive response to it. I would like, however, to add to it by mentioning further lessons to be taken from the American experience. These, I feel, are not stressed enough in the report, and I draw attention to three here.
First—this echoes partly what the noble Lord, Lord Shipley, said—the successful cultivation of shale gas need not and must not distract from investment in renewable energy. Here I disagree a bit with what the noble Lord, Lord Borwick, said. In the United States it has certainly not done so. Wind and solar have seen dramatic advances. More than 50% of the new US energy sources installed in the first half of 2014 consisted of renewables, including hydro. The cost of wind power has dropped, on average, by 40% in the United States over the past four years. Advances are being made in reducing the impact of intermittency. Texas is a pioneer in shale gas, but it is also a national leader in wind power—and why not?
Secondly, contrary to what many people here seem to think, “Not in my backyard” has been a major problem with shale gas in the United States, and we should reflect on that very carefully. Shale gas production has been implemented mainly in regions in the US where drilling for oil and gas or open-cast mining were already very familiar. Those are the regions in which it has been readily accepted. In other parts of the country, such as New York State, Michigan or California, and not only in prosperous areas, it has met with fierce resistance. I think the same or worse could happen here. After all, this is a small country, about the same size as California, which is only one state among 50 in the US. If we are not very careful, “Not in my backyard” could sink the whole show. The American experience on this, not just on a macro level but on a micro level, therefore, should be studied in detail and with great care.
Thirdly, the American experience shows that “Not in my backyard” so far as shale gas is concerned does not derive only from prejudice and misinformation, although there is a lot of that around. If successful, the American evidence shows, shale gas production changes the nature of local communities more than renewable energy. It can also expose them to a cycle of boom and bust. Providing economic incentives for local communities to accept shale gas exploration and production is therefore not enough. I do not think government policy in this area is sufficient. More rounded forms of community involvement and planning are needed. I strongly advise the Government to enrich their community policy on the basis of research available from the United States, which has to look in comparable areas to those which we have in this country. I would be pleased if the noble Baroness would respond to those three points.
My Lords, I, too, congratulate the noble Lord, Lord MacGregor, and his committee on their powerful and evidence-based report. I declare my interests in the energy sector as listed in the register, but I do not think that they include shale gas.
The title of the report is The Economic Impact on UK Energy Policy of Shale Gas and Oil. There has already been a significant impact on UK energy policy even without pumping a teaspoon of shale oil or a cubic metre of gas in this country.
As my noble friend Lord MacGregor said, America’s shale revolution has driven down the price of fossil-fuel energy. It has pushed Qatari and Algerian oil out of the US market, and has done the same for coal and oil, which benefits the UK by lowering energy prices generally. The US has doubled its oil output in six years as a result of the shale revolution. It has overtaken Saudi Arabia as an oil producer. A McKinsey report last year said that the effect of shale gas and oil on the US economy will be such that, by 2020, the economy will be $500 billion to the better, representing 3% of GDP, and it will have 1.7 million extra jobs. These are enormous impacts. And, of course, the oil price is down: from $115 per barrel to about $85 now, and falling further. That is largely because of the shale revolution.
World gas prices have come down despite the fact that the Fukushima accident and Middle East turmoil in recent years would normally have been things that pushed them up, as would the economic recovery. UK wholesale gas prices are down to levels last seen about four years ago. That is largely because of the US shale revolution. As my noble friend Lord Lawson said, shale is definitely a game-changer.
So, yes, we have already felt some benefits from shale, but not nearly as much as we could have felt. That is for several reasons. The first is that we have backed the wrong horse in the decarbonisation race. As my noble friend Lord Borwick and the noble Lord, Lord Giddens, said, the US has cut its carbon dioxide emissions, using gas to replace coal, by three times more than Europe has cut its carbon emissions using solar and wind. Whereas decarbonisation has cost Europe hundreds of billions of dollars, US decarbonisation with shale gas has benefited that economy to the tune of $200 billion. In 2010, the Department of Energy and Climate Change forecast that there would be a doubling of gas prices by 2020. They are now falling, and every fall puts up the subsidy cost of renewable energy and therefore, in effect, insulates us against falling world energy prices.
The second reason for our not having been able to benefit as much as we could from the shale gas revolution is that gas costs a lot to transport by sea, as my noble friend Lord Lawson said. Therefore, even if US gas prices fall, we will not see the full benefit over here—it is not like oil; it is not a fungible commodity with one world price. So we have to produce domestic gas to get the full benefit of lower gas prices. But we have twiddled our thumbs and listened to every discredited theory about environmental harm from shale, including fugitive emissions, flaming taps, aquifer pollution, damaging earthquakes, radioactivity and heavy water use. As the noble Baroness, Lady Blackstone, said, these have been greatly exaggerated.
I hear it said that there has been exaggeration at both ends of the spectrum: that people have exaggerated the potential benefits of this technology as well as its potential environmental drawbacks. I do not think that this is true. Shale’s boosters have, if anything, been found to underplay its impact; they have been too cautious—and I know because I was one of them. Back in early 2011, I went to Pennsylvania, found out what was going on, wrote a report for the Global Warming Policy Foundation of my noble friend Lord Lawson, and worried when it came out that I was overhyping this revolution. But, in fact, if you go and look at what I wrote, you will see that I was far too cautious about what was going to happen. Had we pushed ahead then with shale gas in this country we could have been roaring now.
The third reason why we have not fully benefited from falling world energy prices in this country—and I hate to bring an element of partisan disagreement to this thoroughly bipartisan debate so far—is the impact of last year’s announcement by the leader of the Opposition, Ed Miliband, of an energy price freeze. I would be very interested to hear the response of the noble Baroness, Lady Worthington, to this point. It had the effect of telling energy companies that it would not be a good idea to drop their prices now lest Labour win the election next year. Paul Massara, the head of npower, said in August:
“Then we are acutely aware that if the Labour Party were to implement their proposed price freeze, we will be living with the consequences of our standard rate tariff price for a very long time and beyond the level of risk that we could manage in the wholesale market”.
The effect of our policies has been that we have, to some extent, insulated ourselves in this country against the benefit of falling oil and gas prices. As a result, we face a real economic threat from the shale gas revolution: the threat that the reshoring of energy-intensive jobs to the United States will leave us without so many opportunities in those industries. As the noble Lord, Lord Hollick, said, technology in this industry is getting better all the time. There is no sign of diminishing returns in the improvement of shale; the drilling time per well is down by two-thirds, compared with six years ago in the Fayetteville shale. Gas production per day is eight times as high today in the Marcellus shale as it was in the beginning. Oil production is five times as high in the Bakken as it was a few years ago. The break-even price at which shale is profitable is coming down all the time and is somewhere around $60 a barrel for oil now. It is nonsense to say that this revolution could not happen quickly in this country and could not have a big impact over a relatively short number of years.
What about shale in this country? We thought that there was not very much to start with, but we now know, as the noble Lord, Lord Shipley, said, that we possibly have enough to last us for 40 years if it is economically recoverable. We have one of the biggest, thickest and highest quality shales in the world. As my noble friend Lord Tugendhat said, it exists in an area with high unemployment. In parts of North Dakota where shale oil is being exploited, the unemployment rate is 0.8%.
I will make a few suggestions for the Minister to consider. First, as has already been said, we need to address the streamlining of permitting. We have to be able to drill many wells, because we will not get the recipe right the first time—or at least the industry will not. It was clearly mentioned in the report that you cannot be required to file a separate application every time you drill a well: you have to be able to drill several.
Secondly, there is no incentive at the moment for local government application- handling to be quick. There is nothing to prevent it delaying applications—as we heard in the case of Cuadrilla in Lancashire—several times. Thirdly, we need to keep an incentive in this country to burn gas as electricity. At the moment, we have brand new gas stations that are being mothballed to make way for renewables—indeed, sometimes to make way for coal, which surely is madness. It is important that the Government encourage the use of gas as a heating fuel. That is something that we obviously use a lot of at the moment, but there has been a lot of talk about displacing gas with electric heating in the future. I do not think that is an efficient way to do it, either economically or environmentally. A statement saying that there is a great future for gas in this country would help the industry.
In conclusion, shale gas has already had a big impact, but not as big as it could have had. Letting others do it and not doing it ourselves is a threat to us as well as an opportunity. We must get an energy policy that does not insulate us from falling energy prices.
My Lords, before we hear the winding-up speeches, and although my name is not on the list of speakers, I would like to make a few brief remarks. Before I do so, like others, I would like to pay tribute to the outstanding chairmanship of my noble friend Lord MacGregor. He was very fair and even-handed—and he was determined, when there was an issue that we were not sure about, to really get to the bottom of it. He was frankly a huge pleasure to work with.
I will make three points. First, I emphasise once again the huge benefits that there potentially are—and not just the benefits of oil and gas coming out of the ground, but the secondary benefits because of falling energy prices. One of the most remarkable things we found in producing the report was the impact on the petrochemical industry in America. There had been no new investment in petrochemicals for 25 years in the US; now, 11 major facilities are under construction and seven are in the planning phase. The reason for this is that production of oil and gas has gone along with the production of products such as ethane, propane, butane and the higher alkalines. In fact, it has been so successful that European producers are reported to be moving their operations to the US.
Secondly, I have found the arguments of those who oppose fracking unconvincing. The reason is that I never felt that they were based on evidence: they were based on opinion. They raise important issues. Fracking involves legitimate concerns, which all of us should be interested in and respect. Fracking involves risks, which we have to manage, and we should not brush them under the carpet. They have been mentioned this evening.
The committee examined each one of them in detail, and our conclusion, which, by and large, is very supportive of fracking, was backed by the best available research from technical experts in the field. We discovered that some of the concerns were not really an issue. On those that were, we discovered that, in the UK, we have a strong, detailed and rigorous regulatory framework through which we can manage those risks.
Thirdly, I have a personal view that does not come out in the report. I have found a great contrast between those giving evidence from the US—from US citizens—and those giving evidence from the countries which make up the United Kingdom. For the US people, the cup was always half full; for too many of our fellow citizens, the cup was half empty. The US people involved in the industry showed an enthusiasm, urgency and intensity which, I have to say, was lacking in colleagues from this country.
The result is that we have a section in the report that refers, in my noble friend Lord Lawson’s phrase, to moving at a snail’s pace. That sums up the problem. The Government have made very clear that they support fracking. However, their intention has become mired in a cautious bureaucracy. There is a great prize to be won, as so many people have said. I think that now, as a matter of urgency, the process of exploration and development must be made quicker, simpler and easier.
My Lords, I add my congratulations to the noble Lord, Lord MacGregor, on the production of his last report for the committee and thank all noble Lords for their contribution to the debate this evening.
I want to inject a note of optimism. I do not often find myself agreeing with the noble Lord, Lord Lawson, but in this case I agree that we need to have less pessimism. We are moving along quite rapidly towards a new energy system. I may support the Minister when I say that this is not a simple problem. Moving away from the fossil-based economy that we are used to, where the externalities of the use of those fuels is largely borne by society, to a cleaner, more sustainable future is not simple. There is no silver bullet and no one technology that will deliver the answers—and we do not have a crystal ball, so we have to try to move forward in a diverse way that respects our need to keep costs low and to keep the security of supply strong. That is challenging, but we are making progress.
On shale gas, we have the vocal support of the two most senior politicians in the Government. They have made it very clear that they want to pursue it to find out exactly what resource we may be sitting on. Several noble Lords have rightly pointed out that there is great potential but we do not have very much information at the moment about the total recoverable resource and what it will cost.
Either it might be that the two most powerful men in politics just are not very good at their job—we could debate that—or it must be true that this is a complex issue. Not only energy in general but shale is complex. The noble Lord, Lord Tugendhat, pointed out that we have had gas revolutions in the past. We were fortunate enough to discover North Sea gas. In comparison to shale gas it was quite a simple process: not simple in engineering terms but simple politically, because it took place a large distance from the crowded island that we all share, and it was simply a case of drilling and then the gas was relatively easy to extract. I do not want to trivialise the effort, but in engineering terms it was doable, and in political terms very easy.
Shale is not quite that simple. We do see advances, and it is true that in the US they are learning by doing, and getting better at it. But the very nature of shale is that it is largely onshore, more visible, and it has some environmental implications. A number of noble Lords have pointed out that these have, perhaps, been overemphasised. Nevertheless there is often a grain of truth in many of the concerns, and it is true that the UK has a rich heritage of regulatory standards and a regulatory framework that we should be very proud of.
We will probably not be able to do what they have done in the US: we do not have the same geographic conditions of large open spaces with very few people in them; we do not have the same land ownership rules; and we have a world-class environmental regulatory system. That is not to say that fracking and shale gas cannot be developed in that context, but it is going to be different, and it is going to mean that we will be a bit slower to start, but when we do start, hopefully it will be more sustainable.
I do not want to pick up on all the comments that have been made about the various environmental impacts. Noble Lords will know that in the course of debating the Infrastructure Bill, our party has tabled amendments to encourage the Government to look again at whether we have covered all the bases in our environmental regulations. We will probably return to that issue on Report. The key thing for me is that we are relying on a fairly old regulatory framework. Old is perhaps a relative term but regulations were passed in 1996 that cover “Offshore Installations and Wells”. The title slightly gives it away; they were focused on the offshore industry. It might have been sensible for the Government to look again at those regulations and consider whether, in moving forward on fracking, we did not need a comprehensive review of the regulatory framework and to have had government time given to bringing in those regulations.
We have obviously seen some movement on the trespass issue—again, we will discuss that—but we have not seen enough consideration of some of the unique elements of fracking and shale gas. Those will require changes to the way that our regulatory system is currently conducted, not just to try to harmonise it and make it more efficient but to ensure that we have the absolute integrity of the environmental protection completely encapsulated.
One of the issues that we need to think about is fugitive emissions. A number of noble Lords have mentioned this. This is not to say that it will necessarily be a huge issue but, as we move from a fairly centralised system of extraction of energy resources to one which is quite distributed, we will need to have a careful and well resourced environmental regulatory framework to ensure that fugitive emissions are being properly monitored. One of the key recommendations from the report was that we put that monitoring in place. I think it was Professor MacKay who gave that evidence. The report recommended that it was taken on board that we should have a proper monitoring regime for emissions. It would be a shame if the detractors of shale gas were continually able to say, “Oh but it’s going to be worse than coal”, purely because we do not have the information. It would seem sensible to ensure that that monitoring is there, and that it is well resourced and developed in an independent manner.
I support a lot of what the noble Lord, Lord Shipley, said about the need for independence to build the public’s confidence that this is being done fairly, not in a way that compromises integrity because of a lack of independence. Again, that was a clear recommendation from the report. I would be very interested to see the Minister’s response to the recommendation that those inspecting the integrity of wells should be independent of the company that benefits from them.
This has been a fascinating debate. As I say, we can be reasonably optimistic. We in Europe have moved from a system of energy policy that was very focused on renewables and energy efficiency and, in the time that we have been focusing on those two areas, we have seen quite a lot of development. As much as we might want to cast our eyes westwards to America and see the great impact of shale gas over there, we also ought sometimes to look eastwards at some of the things that are happening on the European continent. There we have seen similarly game-changing technologies coming to market. Indeed, we are part of that with our offshore wind industry and other developments in the renewables sector. These show that we have not reached peak electricity—far from it, actually; we have an abundance of mechanisms for generating electrons now. That is a good thing and that diversity will be a huge strength for Europe.
There is no one-size-fits-all solution to the energy trilemma. We need to keep our options open. We were right to press Europe to allow us the flexibility to pursue different technologies; if Germany tries to do it one way and we try another, we will benefit from that diversity. As I say, while we do not have a crystal ball, the last couple of decades have seen big advances in people’s understanding of the different ways in which we can improve our security of supply and reduce carbon at the same time. We must always of course focus on keeping costs manageable and reducing them. This is the energy trilemma and that is what we are undertaking.
I feel amazingly privileged to be involved in this debate, which has been a very rich one. I look forward to hearing the Minister but the debate today is symptomatic of other debates that we need. We need to have a sensible, grown-up discussion that is evidence-based rather than getting too dogmatic about particular technologies.
My Lords, I want to put on record our appreciation of the work of the Economic Affairs Committee for this report. I thank in particular my noble friend Lord MacGregor and all noble Lords who have contributed to the debate today, as well as to the report, for the opportunity to discuss this really important issue.
We welcome the committee’s conclusion that realising our shale potential in a safe and sustainable way could enhance energy security and provide jobs and opportunities for economic growth. The Government have not been, and are not, complacent about responding quickly and being able to ensure that realising the potential for shale oil and gas is not hindered by unnecessary regulations. I hope that during the passage of my contribution, noble Lords will feel reassured that the Government are taking active steps to ensure that the environment in which this is happening is streamlined as quickly as possible. We are working very closely with other departments.
Home-grown gas, just like home-grown renewables and new nuclear, will of course assist our energy security, be compatible with our climate goals and provide jobs and tax revenue for our society. The Institute of Directors estimated that UK investment in shale gas could, at peak, reach £3.7 billion a year and, as my noble friend Lord MacGregor rightly points out, support 74,000 or 75,000 jobs in the oil, gas, construction, engineering and chemicals sectors, mostly highly skilled and highly paid. The Royal Society, the Royal Academy of Engineering and Public Health England have concluded that the risks in shale development are manageable if industry follows best practice, enforced by regulation.
I hope that my comments will illustrate to noble Lords, as my noble friend Lord Ridley pointed out, that we are supporting every opportunity and taking every action to ensure that opportunities to explore shale gas and oil are there for companies to take advantage of. The Government are putting legislation through this House to ensure that drilling for shale oil and gas can go ahead without undue delay or cost and with the right environmental protections in place. The right to underground access, which is part of the Infrastructure Bill, will simplify the procedure for onshore gas and oil and deep geothermal developers to get underground drilling access. These new rules will help us unlock exploration for shale gas and deep geothermal, as we move towards a low-carbon economy.
This does not take away from our strong regulatory system, which provides a comprehensive and fit-for-purpose regime for exploratory activities. As has already been said, the UK has more than 50 years’ experience of regulating the onshore oil and gas industry to draw on. This is supported by an authoritative review of the scientific and engineering evidence on shale gas extraction conducted by the Royal Academy of Engineering and the Royal Society in 2012. This concluded:
“The health, safety and environmental risks associated with hydraulic fracturing … as a means to extract shale gas can be managed effectively in the UK as long as operational best practices are implemented and enforced through regulation”.
My department’s Office of Unconventional Gas and Oil will work closely with regulators, such as the Environment Agency and the Health and Safety Executive, and industry to ensure that regulation is robust enough to safeguard public safety and protect the environment, imposes no unnecessary burdens on operators and is as simple and easy to understand as possible. On the point made by the noble Baroness, Lady Worthington, about the resourcing of the Environment Agency and the Health and Safety Executive, they have both said that they have at this time enough resources to meet current demands. Of course, if the demand gets bigger, we will review the situation.
We have already put in place appropriate measures to address seismic issues. As rightly pointed out by my noble friend Lord Lawson, seismic risks measured previously have been very small. I want to assure all noble Lords that it is very much the will of this Government to ensure that we have a regulatory road map so that operators and citizens can see the overall process and how it applies to the different nations in the UK. It confirms the roles and responsibilities of all the different regulators. We have also looked for opportunities to simplify regulations and speed up processes, while continuing to maintain a robust system. For example, we are reducing permitting times for low-risk activity from 13 weeks to around four weeks. Already, all onshore oil and gas projects, including shale gas, are subject to scrutiny through the planning system, which addresses impacts on local residents such as traffic movements, noise, working hours and so on.
Planning guidance has been produced by the Department for Communities and Local Government, making clear the planning and appeals processes for operators. It also encourages the planning authorities to engage with the regulator at an earlier stage, identify any issues and ensure that they are all involved at that earlier stage, rather than later, as has been the case in the past. The guidance also makes clear that operators can make all relevant required permit and planning applications in parallel.
In November 2012, the Health and Safety Executive and the Environment Agency published a “working together” agreement for shale gas sites, which specifies when and at what stages they will conduct joint inspections. It confirms that they together must be satisfied that wells are designed, constructed and operated to standards that protect safety and the environment. The Health and Safety Executive is also committed to visiting jointly with the Environment Agency all shale gas sites during the current exploratory phase of shale gas development.
The Office of Unconventional Gas and Oil based in my department co-ordinates across Whitehall. We have a very close working relationship with all departments to ensure that the policy is well informed, coherent across government, alert to the risks and challenges and delivered in the right order at the right time. That is why we have not sought to set up a sub-Cabinet committee on this. It is being led at the front by the Prime Minister and the Chancellor. They are fully supportive of it. We think that the work we are doing across government satisfies all the concerns and issues raised as we are making progress.
Planning permission underscores the need to engage the public. Noble Lords have rightly pointed out that by properly engaging we will gain support and take communities with us. That is why the Government believe that a social licence is key to operate, so we are ensuring that there is access to evidence-based information that can address any questions the public may have. We have a range of materials on the gov.uk website which help to explain the processes involved in shale gas operations to the public. We agree with my noble friend Lord Shipley that proper public engagement is crucial.
All noble Lords have identified that the benefits that can be brought to communities are potentially huge. The communities that would benefit most are those where this potential has already been identified. We want to work actively with local communities. At their request, staff from my department regularly take part in events held by local councils and residents. We engage, address concerns that are raised and explain policy and regulation, and we bring along regulators and expert scientists so that we have proper public engagement. Events range from national events to local authority exhibitions and parish level. We engage at that level as well because we want to work with local communities and local authorities to ensure that concerns raised by some groups are addressed and the public are well informed about what will happen in their localities if exploration takes place there.
I came across an important point. We often say that we have to win public trust before we can do this, but the best way of winning public trust turns out to be to drill a well. I was told this about Poland. People’s reaction is: is that all there is? Is that little box of tricks behind that hedge all that is needed?
I accept my noble friend’s comment but evidence has also shown that real engagement, right from the start of the process, explaining what will happen within those communities, how it will impact on those communities and the benefits that come with the exploration ensures that you have public opinion on side before anything has to take place. That evidence is perhaps slightly more informed than the example my noble friend gave.
We are working with the industry, and the industry has committed that it will include at exploration stages £100,000 in community benefits per well where fracturing takes place, and 1% of revenues from wells that go on to production will be paid to communities. That could be worth between £2.5 million and £10 million for a typically producing well. These are key benefits to local communities. Each operator will have to publish evidence of how it has met these commitments.
The industry is looking to present positively the case for shale gas developments. It has recently launched a campaign called Let’s Talk About Shale” which has been providing answers to public concerns on shale. Both the Government and the industry continue to work with the public to present the positive case for shale development. We cannot do enough. It has huge potential, but there are questions to be answered, so it is right that we engage thoroughly.
At this stage, I shall quickly touch on some points that were raised by noble Lords before I finish with my concluding remarks. The noble Baroness, Lady Worthington, asked about the independence of well examiners. They will be separate from and in addition to the Health and Safety Executive well inspectors. The well examiners will be employed by the company but, under health and safety legislation, the company will be responsible for the safety of its operations. The HSE has also undertaken that well inspectors will visit and inspect all shale sites during the exploratory phase.
I refute the opening remarks by the noble Lord, Lord Hollick, who asserted that this Government have done nothing to respond to the massive underinvestment that the energy sector faces. I remind him that this underinvestment went on for many years while his party was in government. It knew that 20% of our energy supply would be coming offline by 2020. As the noble Baroness pointed out, we need to have a sensible debate about investment in the infrastructure to ensure that we do not face the massive underinvestment that we are seeing today. That inevitably puts costs on to consumer bills because we are having to catch up now; whereas we should have spent many years looking at how the ageing infrastructure needed to be upgraded as it was coming offline. Since we came into government, we have seen more than £40 billion-worth of infrastructure investment as well as the biggest reform of the electricity market through the Energy Act, which came into force in 2013.
The noble Lord asked if there would be an expert group set up to look at shale gas. A task force has been set up which will be independent of government. It will be chaired by the noble Lord, Lord Smith, the former chair of the Environment Agency, and it will provide impartial opinions on the impact that the exploitation of shale gas will have on the UK. The Government look forward to reading its report.
My noble friend Lord Shipley referred to the Bowland basin. The probable amount of gas in there is estimated at around 1,300 trillion cubic feet, so there is huge potential. We are at the exploratory stages. Noble Lords asked when we would see first drilling. We hope to see something happening in the new year. Other noble Lords asked about water contamination. My noble friend Lord Lawson and the noble Baroness, Lady Blackstone, referred to the fact that drilling is so deep down—over 1,000 metres below groundwater—that the layers of rock in between stop gas and fracking fluids from escaping into the water. Any wastewater will be stored in closed metal tanks before being treated, in accordance with strict environmental regulations. This is common practice, as with other industrial processes, so we are sure that water contamination will not take place.
A lot of work has been done in preparation for this new industry. There is still much to be done. We look forward to further debates as to how we can take this huge potential forward. There are challenges ahead but we need to ensure that the public are informed with a proper, evidence-based debate. I hope this will be the start of it.
My Lords, I thank all my colleagues for the very kind remarks they made about my chairmanship. I will say only that I found this a most rewarding experience. Both chairing that committee, and this debate tonight, demonstrate one of the great benefits and values of the House of Lords. We have come together from different backgrounds, had different experiences, have different areas of knowledge and come from different parties, but I suspect that those looking down on our debate and listening to it would not know which party we belonged to if they could not see where we sit. That is a reflection of the very real benefit that the House of Lords can give, as well as the very valuable experience we had from outside our committee. I thank in particular my noble friend Lord Ridley for a very knowledgeable and splendid contribution to our debate. That is my first point: this shows the House of Lords at its best and has real value.
Secondly, I have to say to the Minister that when we got the response from the Government I felt that it was somewhat complacent. To a certain extent it argued, “We understand all these things; we are doing all that, and don’t worry”. The noble Lord, Lord Smith, described it as feeble. Whether it is complacent or feeble, that is still the impression that has been given to the House, and the impression out in the country. I absolutely accept everything the Minister has said about what the department is doing, but this needs real promotion. Of course the industry must do that, but the Government must do it in a much more forceful way, by getting across the benefits that shale gas could potentially give us. I suspect that that is not happening strongly enough at the moment, which is why we made the recommendation for a Cabinet sub-committee. I do not mind how it is done, but it has to be done much more forcefully across the board. If you go out and ask the general public what the contribution of shale gas to the UK could be, I am sure that they would not have a clue. However, they are aware of the problems in local communities. Therefore, there is a big job to do to put the case over, as well as all the policies to be made by government. That was one of the messages that came out of the debate tonight.
In conclusion, this has been a very useful debate. It is extremely important to keep pressing the case for shale so that the general public understand it. With those few remarks, I beg to move.
House adjourned at 7.42 pm.