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Lords Chamber

Volume 759: debated on Monday 9 February 2015

House of Lords

Monday, 9 February 2015.

Prayers—read by the Lord Bishop of Worcester.

Introduction: The Lord Bishop of Salisbury

Nicholas Roderick, Lord Bishop of Salisbury, was introduced and took the oath, supported by the Bishop of Worcester and the Bishop of Portsmouth, and signed an undertaking to abide by the Code of Conduct.

Death of a Member: Lord Gavron

Announcement

My Lords, I regret to inform the House of the death of the noble Lord, Lord Gavron, on 7 February. On behalf of the House, I extend our deepest condolences to the noble Lord’s family and friends.

Disabled People: Sports Stadia

Question

Asked by

To ask Her Majesty’s Government what steps they are taking to ensure that sports stadia in the United Kingdom are made fully accessible for spectators with a disability.

My Lords, the Government are working to ensure that all spectators have equal access to sporting venues and services, and that the owners of stadia are aware of their responsibilities towards disabled spectators. The Department for Culture, Media and Sport is working with the Department for Work and Pensions and the Equality and Human Rights Commission to ensure that the rights of disabled spectators are properly recognised.

My Lords, according to the charity Level Playing Field, only 15% of Premier League clubs are providing sufficient wheelchair space for disabled people, and access for people with other kinds of impairment is said to be “woefully inadequate”. The Equality Act 2010 makes it illegal for football clubs to treat disabled people less favourably than other customers, so is it not time to ensure that all football stadia are fully accessible so that disabled fans are supported? Should this not apply to every level of this beautiful game?

My Lords, I entirely agree with the noble Lord that more progress needs to be made. That is why the two departments’ joint survey of disabled sports fans is important, but there is also the issue of sports clubs. That is why the £1.9 million bid from the Equality and Human Rights Commission is designed precisely for a programme that includes support and guidance for improving the physical and cultural accessibility of sporting venues. Indeed, the EHRC is working actively with the Premier League, the England and Wales Cricket Board and rugby. It is very important that the momentum of the further work that needs to be done is continued very strongly.

My Lords, I must inform the House of a major structural defect in the main stand at Chelsea: it was built facing the pitch. I apologise to all Chelsea fans. This is a serious issue. Derby County has gone the extra mile, and Cardiff and Swansea have done great stuff on access. Arsenal’s Emirates Stadium is best in class. What does my noble friend believe should be done to clubs which choose actively to flout the law and not make their stadia accessible? If it is good enough for the Gooners, it should be good enough for any club. What should be done?

My Lords, again, I entirely agree with my noble friend. It is one of the reasons why the joint departmental project is both seeking good practice and wanting examples of bad. It is not just about seating; it is about transport, ticketing, sightlines and the whole operation, so that we ensure that people with a disability have a much greater chance to enjoy their sport.

My Lords, does the Minister agree that the one alibi which cannot work for the Premier League clubs is shortage of money? Is he aware that Manchester United, which received, according to the Daily Telegraph, £89.1 million in 2013-14, largely from television deals, and is expected to receive even more when the outcome of the present bidding is concluded, still provides only 43% of the spaces required under the accessible stadium guidelines? Is not the answer that the Government must legislate to make those guidelines mandatory?

My Lords, I have considerable sympathy with the noble Lord’s point—the noble Lord brings immense experience to this issue—that those large clubs with the resources really must do better. My honourable friend the Minister for Sport and Tourism is speaking to all the sporting bodies, particularly the Football League, to ensure that this point is made on every meeting agenda. I hope that what we are doing now will be part of a cocktail of activity that ensures that legislation is not necessary, but if clubs of Manchester United’s wealth are not prepared to do better, then everyone will have to think about that.

My Lords, in an earlier answer, my noble friend the Minister referred to the survey and said that this issue was about much more than the physical space for wheelchairs and other disabled spectators. Does the survey also assess the training of ground stewards and the percentage of ground stewards who have accessibility training?

My Lords, my noble friend makes a very good point. I will check precisely and let her know. Clearly, all that side of things is important. It is one reason why the survey is not just of disabled fans but of clubs, so that we can understand some of the challenges and what more needs to be done to help the clubs.

My Lords, sport makes a significant contribution to the health and well-being of those who take part, and access should be available for everyone who wishes to participate and to spectate. Volunteers play an essential role in making this happen. Research recently published by the Join In Trust, which I chair, shows the benefits to both physical and mental health for those who take part in sport. It also found that a huge contribution is made to the economy, of some £53 billion per annum, from sports volunteering alone. What plans do the Government have to invest in and expand this valuable resource to our economy?

My Lords, the track record is immense. We have only to look at the Olympic and Paralympic Games and the Commonwealth Games to see how vibrant volunteering is. We want to develop that across a broad piece, but I shall certainly take back what the noble Lord said.

My Lords, my noble friend in his earlier Answer gave a comprehensive and impressive list of things that people were undertaking and that the Government were doing. The slight danger in his Answer might conceivably be the implication that we were short of knowledge about what the problem was. When does my noble friend think that this will become an issue of political will rather than more and more about persuasion and trying to find out information that is readily available at the moment?

My Lords, one reason why we wanted to have the survey was that there was a lot of anecdotal evidence. We want firm evidence from both the clubs and disabled fans across a range so that we can properly address this matter. The survey concludes on 28 February. I hope that many more sporting clubs will contribute to that process. Then we can start to plan and remedy what has been unsatisfactory for too long.

I want to extend the Question to places other than sporting facilities. Will the Minister look at the need for handrails in areas such as theatres and cinemas as well as in sports stadia, because they are very important now? We are an ageing population, but we still love our sport.

I very much hope that all places the public wish to enjoy, whether the theatre, the cinema, sports stadia or wherever, are very mindful of safety. Certainly, within football, the Sports Grounds Safety Authority and, indeed, the Level Playing Field of the noble Lord, Lord Faulkner of Worcester, are all about ensuring better facilities.

Banking System

Question

Asked by

To ask Her Majesty’s Government what steps they are taking to rebuild confidence in the banking system.

My Lords, a successful and respected banking sector is of great importance to our economy. That is why the Government have taken wide-ranging action to ensure the integrity and stability of financial services in the UK. For example, the Government now require banks to ring-fence their riskier operations. They have also criminalised the manipulation of LIBOR and a further seven benchmarks and legislated to introduce a senior managers certification regime.

Does the Minister accept that the latest Bank of England financial stability report indicates that this is not just about financial resilience but also about governance? As reports today in the Guardian and elsewhere demonstrate, it is governance that is such a failure at the moment. Will he say, very specifically, whether he agrees with the British Chambers of Commerce that we need a British business bank which would enable growth to take place in the UK economy? It is a very important proposal and one that ought to get urgent support.

My Lords, we do have a business bank. This Government have created one and it is growing very rapidly. As for standards, I completely agree that the standards that are adopted by bankers need to improve. Of course, the industry has itself recognised this by establishing the Banking Standards Review Council.

My Lords, I am sure the Minister is aware that the recently publicised excesses of HSBC’s Swiss subsidiary occurred under the regime of the previous Government. Does he believe that the system of banking regulation introduced by this Government would have made the excesses of HSBC less likely?

My Lords, I think that all those involved in banking before the crash adopted laxer standards than they now accept are necessary. I know from discussions that I have had with senior representatives of HSBC before today that the new regulatory regime is far more intrusive and has been forcing them to address the way they do business in a manner which I am sure all noble Lords will welcome.

My Lords, should not those who ran HSBC when it was selling tax evasion packages be held to account? By whom should they be held to account?

My Lords, there are several elements of holding people to account. I think the shareholders need to hold them to account. If there has been any criminal wrongdoing it is obviously for the police and prosecuting authorities in the relevant jurisdictions to pursue those matters.

My Lords, I am sure the Minister will confirm that the agreement with Switzerland to reveal tax information was made in 2011, after the coalition Government took office. Does he believe that confidence in the banking system is enhanced by the fact that concrete evidence of a major bank aiding and abetting tax evasion was comprehensively ignored by the coalition Government?

No, I do not. As for the first part of the noble Lord’s question, the agreement with Switzerland, which he seems to deride, has generated £1.2 billion for the Exchequer. That is £1.2 billion more than was being generated under the previous Administration.

My Lords, this information was available to the Government when they took office. How is it, then, that the former chairman and chief executive of HSBC during this period was made a government Minister?

My Lords, the process by which people become Members of your Lordships’ House and are made Ministers involves them being vetted by the House of Lords Appointments Commission and the appropriate bodies within government. As far as I am aware, there is no evidence that the noble Lord, Lord Green, was involved in any of this sort of activity.

The Minister cannot be allowed to get away with this. He is being incredibly complacent. The governance problem with banks has been there for years under all parties and it is fair to say that none of them has done enough about it. He is still not saying what he will do to ensure that the governance of banks, not just their financial resilience, is dramatically improved.

My Lords, I have spent much of the past five years in this Chamber legislating to improve the governance of the banks. We have passed several major pieces of legislation to make long overdue improvements in the ways in which the financial services sector is managed. For example, we have introduced too-big-to-fail processes of various sorts, the ring fence and the bail-in, as well as new standards for senior managers in banks. All of these things will improve the way in which banks are managed and a number of them were actively opposed, when they were in government, by the previous Administration.

My Lords, on another aspect of banking and confidence, is the Minister aware that a number of well respected charities, particularly those working in developing countries, have had their bank accounts closed without any explanation or notice? Is he aware of that and, if so, has he had any representations from these groups? If not, will he accept a delegation of some of the groups affected disproportionately by this measure?

My Lords, I have not had any representations, and of course I would be very happy to meet a delegation.

I wonder whether the Minister feels encouraged by the strong and vocal level of support that he has had from the Benches behind him. One thing that has been very notable is that not a Conservative has got to his feet, and I wonder why. Would the noble Lord agree that for banks to become respected they have to earn that respect? Would he also agree that they have a very long way yet to go?

Council Tax: Low-income Taxpayers

Question

Asked by

To ask Her Majesty’s Government what assessment they have made of the impact on low-income taxpayers of the changes to the Council Tax Support Scheme and reduction in funding for the Council Tax Reduction Scheme.

My Lords, these are local schemes and it is for local authorities to ensure that the effect on specific groups of council tax payers is both proportionate and fair. We made a £100 million transition grant available in 2013-14 to help councils to develop well designed schemes and maintain incentives to work.

My Lords, in Newcastle alone, as a result of government cuts to council tax support, 18,000 working-age households, 4,500 of which are in work, have lost out, while 11,000 that were previously exempt have to pay 20% of the council tax and 7,000 that were formerly partially exempt now have to pay 20%. Arrears stand at £2.8 million. How do the Government justify this imposition on some of the most hard-pressed families and individuals in the country?

My Lords, we have given councils wide powers to design council tax support schemes for exactly the kind of people mentioned by the noble Lord, and the vast majority of local authorities are applying the same system of premiums and allowances as applied under council tax benefit. Many are also offering additional protection to vulnerable groups.

My Lords, will the Minister explain why a Government who talk so much about tax cuts are happy to countenance this tax increase on some of the poorest members of our society, many of whom are also struggling with cuts in benefits and tax credits and are too poor to benefit from increases in personal tax allowances? It is this Government who transferred responsibility to local authorities, with less money to fulfil those responsibilities.

The noble Baroness makes a point that I cannot agree with. Just recently we announced an additional £74 million for welfare support at local authority level. As we said we would, we have stressed localism and local empowerment, and we have delivered on that. Council tax bills have come down by 11% in real terms since 2010. That is worth up to £1,075 for the average household over this Parliament.

My Lords, can the Minister confirm that it is for each local authority to decide which council tax support scheme they will have? Can he tell us what assessment has been made of the extent to which councils have been able to mitigate the reduction in funding for council tax support by using their new powers to levy additional council tax on empty or second homes?

My noble friend is quite right that this is about ensuring that local authorities are empowered. We have also taken steps to ensure that we have released a greater number of empty homes. There are additional measures that councils can take. For example, I have responsibility for countering fraud, where a bigger effort is being made. Councils currently lose £2.1 billion from fraud and error. There are council reserves of £21.4 billion. It is really for local authorities to decide their priority and to initiate schemes appropriately.

My Lords, does the Minister recognise that there are some areas of the country where incomes are now so low that even the market is abandoning some services in smaller towns? In those areas, the public sector has a particular responsibility. Indeed, the social mobility task force, which was set up by his Government, is saying that it is people in work with the lowest incomes who will be the biggest crisis for this country in the next five years. Will the Minister recognise that the level of cuts on local authorities is making it difficult for those local authorities to help to protect these people who the market has already abandoned?

Local authorities of course have a primary role in ensuring the welfare of all their residents. The noble Baroness talks about particular areas, but I believe that it is also important that local authorities work with the voluntary and private sectors to ensure the provision of services. This Government have sought to prioritise actual budgets so that local authorities can prioritise in their own local areas.

My Lords, we know that initially some local authorities were treating disability payments—DLA and PIP—as though they were income replacement benefits in their local schemes, rather than support for extra costs: that is, they were treating them as income, which obviously reduced the council tax support. What have the Government done to address this concern, or do they see it as none of their business?

The Government have addressed all concerns. I think the noble Lord is being disingenuous about what the Government are seeking to do. We have ensured empowerment to local authorities to prioritise local spending. The impact and effectiveness of this policy, as I am sure the noble Lord is aware, will be reviewed by assessing three years of full data. It is also important to mention that the Government have sought to bring council tax spending under control. Sixty per cent of councils in England have frozen or reduced their council tax this year as well, and the Government have made these freezes possible for five successive years. I think it is about time that we acknowledged that.

My Lords, the Government have introduced universal credit, which we support, which seeks to bring together and simplify means-tested benefits for people of working age in a single benefit. Why, then, are the Government sabotaging that by extracting council tax benefit from the system and turning it into a postcode lottery, where the amount of help you get depends not on your need but on the accident of where you live?

I am sorry, but I do not recognise the noble Baroness’s description. I have already alluded to the fact that the Government will review this policy after three years. At that time, this element will be considered for possible inclusion in universal credit.

My Lords, would the Minister just say yes or no: have the Government transferred responsibility at the same time as reducing the budget? Local government is tired of having freedom to dispense even less money than this measly Government allowed before.

This Government’s priority is efficient local spending. That is exactly what we have sought to do with our transfer.

Gambling: Fixed-odds Betting Terminals

Question

Asked by

To ask Her Majesty’s Government what plans they have to mitigate the misuse of fixed-odds betting terminals in betting shops.

My Lords, new regulations come into force on 6 April this year that will end unsupervised high-stake gambling on fixed-odds betting terminals. All players using FOBTs are now presented with a choice to set time and money upfront. We are keeping this issue under review and remain focused on identifying gambling-related harm, wherever it is found, and devising effective measures to bear down on it hard.

My Lords, one man recently laundered nearly £1 million in drug money through these machines in Coral betting shops in the north-east. Can my noble friend the Minister explain why the Government’s rather feeble plan to set the maximum stake to £50 or £100 will make any difference at all to money laundering or to the extensive gambling addiction that these machines cause, given that four out of five of those staking just a quarter of the proposed new maximum limit show signs of problem gambling?

My Lords, as regards money laundering, the Proceeds of Crime Act 2002 places a duty on gambling operators to be alert to money laundering attempts and to report such attempts to the National Crime Agency. The Government expect all gambling operators to ensure that their anti-money laundering procedures are consistently and effectively applied to minimise risk and maintain good controls. On the point of the size of the stakes, the new measures will require those accessing stakes over £50 to use account-based play or to load cash over the counter. The Responsible Gambling Trust has said that in its view it is,

“overtly naïve and massively premature”,

to suggest that reducing the maximum stake size would help to reduce problem gambling.

My Lords, in a casino you will have at least a croupier, an overseer and a manager, all monitoring the behaviour of a gambler, yet on most high streets you can have a small shop with two of these machines and one person behind a screen. Does the Minister seriously believe that the assurances given by the bookmakers can be met as regards monitoring problem gambling?

My Lords, clearly, we will see how those measures work. We very much hope that they will work, and we are looking to the gambling industry to ensure that it co-operates on this. Of course, as I said before, the measures require all players of FOBTs to be presented with a choice to set time and money, which we think is an important stage in ensuring a redress of this problem.

My Lords, the Government have been a strong supporter of localism, so will they listen to the views of some 93 local councils, who have asked the Government to be able to cut the FOBT stake to £2 because they are worried about anti-social behaviour, crime and problem gambling in their areas?

My Lords, I know that DCLG is looking at that submission, and I very much hope that it will report on that shortly. However, of course we are also giving further powers to local communities by requiring planning applications to be submitted to local authorities for new betting shops.

My Lords, will the Minister confirm that, despite the new measures, it will still be possible for a gambler to spend £100 every 20 seconds? What further inducement could one give to people who have social difficulties and who are problem gamblers than to make it so easy to lose so much money?

My Lords, the new measures will require those accessing stakes of over £50 to use account-based play or to load cash. However, interestingly, the Gambling Commission reported on Friday on its wish to raise the bar on social responsibility and working with operators to ensure that there is much more adherence to assisting people who gamble.

My Lords, does the Minister see any connection between the gambling law and the problems of money laundering that have just been discussed, and what happened with HSBC five years ago, when the noble Lord, Lord Green, apparently was running the shop and 5 million Swiss francs in cash were handed over in a plastic bag?

My Lords, I am a fairly even-minded person, but we are dealing with a question where, in 2000, there were no FOBTs and, by 2010, there were 30,000 FOBTs. That is the situation that this Government now seek to address. The deputy leader of the noble Lord’s party has admitted that what happened was a mistake, and we are now dealing with that.

Care and Support (Business Failure) Regulations 2014

Care and Support (Children’s Carers) Regulations 2014

Care and Support (Eligibility Criteria) Regulations 2014

Care and Support (Market Oversight Criteria) Regulations 2014

Smoke-free (Private Vehicles) Regulations 2015

Motions to Approve

Moved by

That the draft regulations laid before the House on 3 December and 17 December 2014 be approved.

Relevant documents: 17th Report from the Joint Committee on Statutory Instrument, 19th and 21st Reports from the Secondary Legislation Scrutiny Committee. Considered in Grand Committee on 3 February.

Motions agreed.

Armed Forces Pension (Consequential Provisions) Regulations 2015

Firefighters’ Pension Scheme (England) (Consequential Provisions) Regulations 2015

Police Pensions (Consequential Provisions) Regulations 2015

Public Service (Civil Servants and Others) Pensions (Consequential and Amendment) Regulations 2015

National Health Service Pension Scheme (Consequential Provisions) Regulations 2015

Teachers’ Pension Scheme (Consequential Provisions) Regulations 2015

Motions to Approve

Moved by

That the draft regulations laid before the House on 17 December 2014 be approved.

Relevant document: 17th Report from the Joint Committee on Statutory Instruments. Considered in Grand Committee on 3 February.

Motions agreed.

Counter-Terrorism and Security Bill

Third Reading

My Lords, I have it in command from Her Majesty the Queen to acquaint the House that Her Majesty, having been informed of the purport of the Counter-Terrorism and Security Bill, has consented to place her prerogative, so far as it is affected by the Bill, at the disposal of Parliament for the purposes of the Bill.

Clause 1: Seizure of passports etc from persons suspected of involvement in terrorism

Amendment 1

Moved by

1: Clause 1, page 2, line 8, at end insert—

“( ) In Schedule 2 to the Access to Justice (Northern Ireland) Order 2003 (S.I. 2003/435 (N.I. 10)) (civil legal services: excluded services), in paragraph 2(d) (proceedings in court of summary jurisdiction in relation to which funding for representation may be provided), after paragraph (xx) insert—

“(xxi) under paragraph 8 of Schedule 1 to the Counter-Terrorism and Security Act 2015;”.”

My Lords, Amendment 1 relates to the availability of civil legal services in Northern Ireland for hearings of applications to extend the 14-day time period in which an individual’s travel documents may be retained under the power in Part 1, Chapter 1, of the Bill.

Your Lordships will recall that, in Committee on 20 January, the House agreed to an amendment that extended the availability of legal aid to those subject to the temporary passport seizure power in England and Wales, subject to individuals meeting the statutory means and merits tests. At that time, I advised the House that we were discussing the matter with the devolved Administrations and that further amendments may be required.

Accordingly, this amendment is necessary to ensure that, subject to means and merits tests, civil legal aid may be available in relation to applications to extend a temporary passport seizure to a district judge in the magistrates’ courts in Northern Ireland, as set out in paragraph 8 of Schedule 1 to the Bill. The Scottish Government have confirmed that civil legal aid is already available in Scotland under the Legal Aid (Scotland) Act 1986. The secondary legislation which sits under that Act may require some amendment and that will, of course, be taken forward through the Scottish Parliament.

Amendment 1 will amend paragraph 2(d) of Schedule 2 to the Access to Justice (Northern Ireland) Order 2003 to bring the proceedings in Schedule 1 to the Bill within the scope of civil legal services in Northern Ireland. The amendment also ensures that advocacy before the district judge in the magistrates’ courts may be included in the civil legal aid that may be available for those proceedings. The amendment does not alter the statutory means and merits tests, nor does it make available civil legal aid for any other civil legal services in Northern Ireland. Legal aid is already available for judicial review proceedings in Northern Ireland, subject to individuals meeting the statutory means and merits test.

The Government consider that an amendment to the scope of the civil legal aid scheme in Northern Ireland is appropriate in these circumstances due to the important nature of the proceedings set out in paragraph 8 of Schedule 1 to the Bill, the limitations on an individual’s ability to present their own case in these circumstances, and the absence of an alternative route to resolution.

The Joint Committee on Human Rights and a number of noble Lords have expressed an interest in this issue and I trust that this further amendment will also be welcomed by your Lordships’ House. I beg to move.

Amendment 1 agreed.

Clause 26: General duty on specified authorities

Amendment 2

Moved by

2: Clause 26, page 17, line 39, after “to” insert “the exercise of particular functions or to”

My Lords, in moving Amendment 2, I will, with the leave of the House, speak also to Amendments 3, 7 and 8. These all relatively minor and technical amendments in relation to the Prevent duty in Part 5, Chapter 1, of the Bill.

Schedule 6 specifies those authorities subject to the duty. Amendments 2, 3 and 7 increase the flexibility here to allow for the duty to apply only in relation to the performance of certain of a specified authority’s functions that we chose to refer to in the schedule. We do not have any intention of altering the current descriptions in Schedule 6 at the present time, but these amendments will allow for the possibility of such nuances to be included in the future.

Amendment 7 seeks to provide a clarification that functions caught by this duty do not include functions exercised outside Great Britain. This matches the territorial extent of this part of the Bill.

Amendment 8 follows on from the government amendment tabled on Report, which required that the Prevent guidance be subject to parliamentary scrutiny. This amendment allows for the power to issue such guidance to commence upon Royal Assent. This will ensure that the guidance can be issued and considered by Parliament at the earliest opportunity, prior to the duty itself being commenced, so that specified authorities have as much time as possible to make preparations in the light of the guidance before it takes effect. I beg to move.

My Lords, I welcome these government amendments, as I do all their amendments at this stage. I particularly welcome the proposal that only particular functions of authorities which are specified in the future may be caught. I wish I had thought of using the term “nuance” when I tabled a similar amendment at a previous stage about the current list of authorities.

I have a question for my noble friend on Amendment 7 and functions exercised outside Great Britain. I imagine that his notes include one or two examples of what that might comprise. I asked my noble friends sitting next to me whether they had any ideas. My noble friend Lady Ludford suggested that the measure might apply to the activities of UK Visas and Immigration. I do not know whether the Home Office would come down with a heavy fist on a Home Office body, but I am sure that it is a good principle. It seems that my noble friend may not have any examples, in which case I will let him off the hook as he has been so helpful on other matters.

My Lords, I am very grateful to my noble friend for her question on these amendments. We are happy to supply further examples but one which springs to mind is that of a university which has another campus outside the United Kingdom. However, if there are other examples which would be helpful to your Lordships, I am happy to write at a later date.

Amendment 2 agreed.

Amendment 3

Moved by

3: Clause 26, page 17, line 41, after “to” insert “those functions or”

Amendment 3 agreed.

Clause 31: Freedom of expression in universities etc

Amendment 4

Moved by

4: Clause 31, page 20, line 12, leave out from “of” to end of line 13 and insert “a description mentioned in Schedule 6 to the Education Reform Act 1988 (higher education courses).”

This is the third and final group of amendments. In coming to the end of Third Reading, it is appropriate that I conclude my remarks on the subject of academic freedom.

On Report, your Lordships’ House agreed a government amendment to require further and higher education institutions, when carrying out the Prevent duty, to have particular regard to the duty to secure freedom of speech contained in the Education (No. 2) Act 1986. This will require higher and further education institutions, when considering all the factors they need to consider when complying with the Prevent duty, to place particular emphasis on the duty to secure freedom of speech.

A number of noble Lords, in particular the noble Baroness, Lady Lister of Burtersett, argued that we should add to that provision so that particular regard must also be given to the principle of academic freedom. As I set out at the time, the Government do not believe that such a reference is strictly necessary: the description of academic freedom in Section 202 of the Education Reform Act 1988 is essentially a subset of freedom of speech as set out in Section 43 of the Education (No. 2) Act 1986.

However, your Lordships made the case that the principle of academic freedom itself should be explicitly referenced in the Bill. I committed to give this matter further consideration in order to provide reassurance. Therefore, I have tabled Amendments 5 and 6 to include “academic freedom” in Clause 31. This should provide unequivocal reassurance that the Prevent duty is not designed to undermine the principle of academic freedom. The Government have also tabled Amendment 4 to provide greater clarity as to which institutions the clause applies to. The new reference to Schedule 6 to the Education Reform Act 1988 makes it clear which higher education institutions are required to pay particular regard to freedom of speech and academic freedom when carrying out the Prevent duty. I trust that this provides greater clarity for your Lordships.

As this may be, without tempting fate, the last point I make formally on this matter—I am aware that the noble Baroness, Lady Lister, may wish to respond—I would like to place on record my deep thanks to your Lordships’ House for the consideration that they have given this very important Bill. We have spent seven days in Committee and we have had thirty-eight and a half hours of scrutiny. The Bill has been scrutinised not only by the excellent contribution of the current members of the Joint Committee on Human Rights, but by former council leaders, senior lawyers, former Law Lords, former judges, IT gurus, a former chief prosecutor, former diplomats, Cabinet Ministers, former Home Office Ministers, university vice-chancellors, academics, college heads, three former Cabinet Secretaries, two former directors of the security services and two former chiefs of the Metropolitan Police. That level of scrutiny has been reflected in some 237 amendments, which have been considered by your Lordships. People can therefore have some confidence that this important piece of legislation will leave your Lordships’ House in better shape than when it arrived.

I thank in particular Her Majesty’s Opposition—the noble Baroness, Lady Smith, and the noble Lord, Lord Rosser—and also my noble friend Lady Hamwee and the noble Lord, Lord Paddick, for their contributions, their scrutiny and their liaison which has been ongoing throughout the course of our proceedings on the Bill.

It is appropriate that we conclude our discussions on this key issue, which is all to do with freedom of speech and academic freedom. It reminds us that while the purport of this piece of legislation is very much to keep us safe, we are ever mindful that we need to protect the very freedoms which the people who would seek to attack us want to take away. We cannot do their work for them and therefore we have refined and sharpened the Bill to make sure that it is suitable for that purpose.

As well as thanking all the Members who have taken part in your Lordships’ House, on a personal note I pay particular thanks to my noble friend Lord Ashton of Hyde for his assistance during the process, and also to the Bill team. I am sure that everyone—my noble friend Lord Ashton of Hyde, the Bill team, and all your Lordships—would want particular thanks to go to those members of the security services, the police force, and the Border Force, who give of their time and safety every day to keep us safe from these particular crimes. All they ask in return is our support and the tools to do the job. I beg to move.

My Lords, I very much welcome Amendments 5 and 6, which write into the Bill the duty to,

“have particular regard to the importance of academic freedom”,

as defined in the 1988 Act, alongside the duty on freedom of speech, which was conceded on Report. I am really very grateful to the Minister. As a member of the Joint Committee on Human Rights, I thank him for listening and taking action so late in the day. I am sure he groaned inwardly when I burst into his office last week. No doubt he thought that everything had been sewn up. I am therefore particularly grateful that he was prepared to take action and go the last mile so late in the day.

I also thank the Bill team and the lawyers for executing the decision so neatly. I am sure that they also groaned—perhaps not quite so inwardly. I also welcome the Minister’s latest letter to noble Lords, in which he made clear that:

“‘Particular regard’ is stronger than ‘due regard’ because it elevates the consideration to the top of the list of factors to be weighed up i.e. freedom of speech is the most important other duty, rather than simply another one to be considered, such as health and safety”.

It might be helpful if he could confirm that, so that it is on the record.

I have one final question: what is the timetable is for finalising the guidelines and bringing regulations before both Houses?

For the sake of absolute clarity— because there has been a great deal of confusion about these aspects of the Bill—can my noble friend say whether it is correct that his Amendments 4, 5 and 6 make no difference whatever to the purport of the Bill, are merely clarifying and have no substance?

I join in thanking the Minister for what he has done in reaching the right conclusion, particularly with regard to academic freedom. Balancing security with liberty and freedom is a very difficult business, and he has brought to this issue sensitivity, intellectual rigour and great listening skills. He has performed his function as a Minister in the most exemplary way, and I hope that others will follow suit. I wanted to thank him formally.

My Lords, as another of those who argued in favour of the amendments on academic freedom that were put before the House, I thank the Minister very much for his co-operation. Like others, I am pleased with the overall result, even though some of us would have liked implementation of the Prevent duty to be postponed for some time for a review of it to take place. However, we are very grateful to him for what he has achieved.

One of the issues that I raised with the Minister was whether the duty under the 1986 and 1988 Acts, which extend to further education colleges, included sixth-form colleges. I have had confirmation from the Bill team that the provision indeed includes those colleges. That results in a slightly anomalous situation in which sixth-formers in schools are not included within the general duty to promote freedom of speech in the same way. It is possible that there will be some follow-through from the Association of School and College Leaders, for example, to obtain further clarification from him.

My Lords, I, too, add my thanks to the Minister and the Bill team for the amendments. As I said at earlier stages of the Bill, as someone who has had to deal with different codes of practice and work out which takes predominance over the other, the critical thing that came fairly early on in your Lordships’ House was the clear importance of the responsibility to hold on to the duty of freedom of speech. It was during that debate that academic freedom came up and I am very grateful that these amendments have been laid. Contrary to the question that my noble friend asked about whether this changed anything, I think that for people working in the academic world it is an important clarification. I received a number of questions from people in the academic community wondering exactly where these academic freedoms stood. Therefore, I am very grateful to the Minister.

My Lords, as one who pecked away as rather a nuisance in relation to Section 202 of the Education Reform Act 1988, I give special thanks to the Minister for his courtesy and understanding in this matter. There might well have been a technical argument that the wording of Section 43 of the 1986 Act already covered the point, because it refers to employees in the context of freedom of speech, but it would have been churlish to do so. I am very grateful to the Minister for his chivalry, courtesy, sensitivity and, indeed, his bounty and generosity in this matter.

My Lords, I, too, wish to echo the thanks to the Minister for his persistence and patience. I am also grateful to him for letting me know that he and his officials are discussing consultation with universities and students with regard to the guidance offered by the Minister. As it happens, I spent Friday with a group of young sixth-formers from, I suppose, every kind of ethnic and religious background, a substantial proportion of whom were Islamic. They all strongly took the view that it was very important to enable discussion and debate to take place at their age level. They suggested, very sensibly, that the Government could help by, for example, encouraging political parties and Cross-Benchers to suggest the names of people who might be willing to speak to sixth forms of that kind and to respond if a school asks for a speaker without itself having one in mind. That was a very good suggestion by these young men and women. I hope very much that the Minister will persist with his discussions with the officials. It is crucial that young people feel themselves involved and part of the whole effort to try to deal with terrorism in this country.

My Lords, I add my thanks to the Minister for the latest amendments that he has tabled, which met very clearly points made by me and others in the debate on Report. I hope that he will not feel the need to answer too clearly the question put to him. In the professional field in which I practised for many years, clarifications were what you called changes of substance that you did not wish the Opposition to be able to say was a change of substance.

My Lords, the Minister has been absolutely showered with garlands and bouquets. I am sure they are extremely well deserved and I am very reluctant to strike a discordant note—and I will not. However, I wish to follow the point made by the noble Baroness, Lady Williams, on the guidance notes. Everyone is talking about academic freedom but in the Bill it is not just about academic freedom; it is also about freedom of speech on campuses and meetings held in universities. I am concerned about this because recently a degree of intolerance has sometimes been shown, with people trying to ban meetings in universities. Therefore, I have been a little worried about some of the things in the guidance notes.

The Minister will recall that I was puzzled, as was the noble Lord, Lord Macdonald, by his concept of non-violent extremism. I was not altogether convinced by the Minister’s reply as to what that meant. However, what really alarmed me was the substance of the guidance notes. I come to this very fresh, compared to people who have been looking at this for a long time. I drew attention to this business of having to give advance notice of what your speech was going to be about, and rating speakers from seven to 10—or one to 10—on how much risk there was of them causing a disturbance on campus. How do we rate David Irving or Marine Le Pen? These are very difficult judgments to make.

I went through a number of the provisions. In reply, the Minister just said, “Some people made a lot of fun of the guidance notes”. He did not answer any of the points. As the noble Lord, Lord Butler, said, a lot of this is pretty unworkable. It reminds me, as I think it reminded the noble Lord, a little of some regulation put forward by the FSA and the FCA. There is a lot of box-ticking in this.

I am sure that the concessions the Minister has made on academic freedom are very important. I am sure that they have satisfied a lot of people. That is thoroughly to be welcomed, but I very much hope that the points made about the guidance notes will be taken into account in any reconsideration of them.

My Lords, I also congratulate my noble friend the Minister on putting the Bill into far better shape than it was in when it left the Commons, as is so often the case in your Lordships’ House. It shows your Lordships working brilliantly together, as we do.

I agree with everything that my colleagues on the Joint Committee on Human Rights, the noble Baronesses, Lady Kennedy of The Shaws and Lady Lister, said about the clauses we are looking at now. I also say to my noble friend Lord Lamont that if he had been with us at Second Reading and in Committee, he would have been rather more assured that some of the aspects that concerned him about the guidance have already been debated at great length. I am sure that my noble friend the Minister will have taken those issues on board.

On substance, I also say to the noble Lord, Lord Phillips of Sudbury, that this is about clarification, which will make all the difference to perception. Perception is hugely important; I think of the 500 signatories who attached their names to a letter in the Guardian only last week. The Minister has responded with clarity, which is exactly what we all asked for. I thank him for that.

Finally, and with respect to my noble friend, I remind all noble Lords of the need to put pressure on whoever is in government after the forthcoming election to bring back to the House debate and legislation regarding data retention. This is an aspect that remains in the forefront of many noble Lords’ minds. It needs to be addressed further and as quickly as possible.

My Lords, an acknowledgement of the Minister’s hard work, openness, patience and availability in numerous meetings applies not just to these clauses but to the whole of the Bill. He has been so helpful, as other noble Lords have said.

Having said that, I think it is right to say—noise from behind me suggests that I might be about to criticise the Minister; I am not—that there is a lot of work for the Government and local government, at all levels and in all sectors, to do. I will not be the only Member of your Lordships’ House who has had a number of emails this morning saying that the writer is very concerned about the Bill, or making points about the need for tackling radicalisation to be done from the bottom up. Such emails also mention issues around discrimination and all the things that many of us have voiced at some length during proceedings on the Bill. At this point, while giving ourselves a pat on the back for having got to here, it is only right to remember that the work done outside the legislation is probably more difficult than the legislation itself.

I gave very brief notice to the Bill team of one question. If the Minister is not able to answer it, since it arises from his most recent letter, which is not on the record in Hansard, I will of course understand if he would prefer to answer it by letter. The noble Baroness, Lady Lister, asked about due regard, particular regard and so on. The letter says, in terms, that the particular freedom of speech awareness and the principle of academic freedom are not elevated above the Prevent duty. On the last day of Report, I think, we heard a very helpful explanation of what “due regard” meant. Having said that, the letter goes on a couple of pages later to say that particular regard is stronger than due regard. I found it a little difficult to reconcile the two parts of the letter. The Bill team started to explain it to me, but I needed to get into the Chamber for the start of these proceedings. If that is better dealt with by letter, to have the same status as the letter that gives rise to the questions, perhaps that would be the way to do it.

My Lords, the Minister’s characteristically generous comments when he introduced these amendments illustrate his attitude to the whole Bill. I hope that the well-deserved praise that he has received so far does not damage his promotion prospects in the future, given where it is coming from. He said that the debate had lasted thirty-eight and a half hours. There were times when it flew by and there were times it did not, but it is a testament to your Lordships’ House—and I think noble Lords across the House, other than the noble Lord, Lord Phillips, have recognised this—that we have a substantially improved Bill from the one that we received, and with no votes, which is an interesting comment on the way we have proceeded in our discussions and debates both inside the Chamber and, as the noble Baroness, Lady Lister, referred to, outside the Chamber as well.

I thank the Minister for the number of occasions on which he has been willing to engage. We have all engaged with Ministers across parties in the past where we have engaged but have felt that they perhaps have not engaged in the same way. He has not been guilty of that on any occasion. He did engage properly. Even last Wednesday, I caught him at around midnight as he was leaving the Chamber, and he was willing to discuss the issue of academic freedom further. I think that says a lot about how we got to this substantially improved Bill.

My only question is to ask whether the Minister can place on the record the points that he made in his extremely helpful letter in that regard, as outlined by the noble Baroness, Lady Lister. I think that would be very important. I thank him and his Bill team, who have been available at all times for discussions and debate. I think that is what has led to the improvements.

Can I make one plea? I have also received emails and letters about this. There is some misunderstanding of the purpose of the Bill and how these measures will work. That is going to be very important. Legislation is one thing, but hearts and minds and understanding to make it work in practice in the way that it is supposed to—doing no less and no more than is intended—will be extremely important.

As well as the clarity that the Minister has given to the Bill as a whole, particularly on freedom of speech and academic freedom in Parts 1 and 2 of the Bill, the issues will now receive judicial review. That is extremely important. We pushed it to a vote in the Commons. We did not succeed, but we have succeeded in agreement across your Lordships’ House on that point during our debates.

On the issues of guidance, the fact that we have now increased parliamentary scrutiny by affirmative order is extremely important. I also recognise that during Committee, as the noble Baroness, Lady Buscombe, said, several changes were made to that guidance. She recognised that it would have to be changed before it was presented to your Lordships’ House through an SI.

We support these amendments. We are grateful to the Minister for putting them forward. We also welcome the spirit in which this Bill has been debated and discussed and the changes that have been made. It is a significant testament to your Lordships’ House that, as I said at the beginning, we have a much improved Bill in comparison to the one we received, and with no votes, by negotiation and discussion.

My Lords, I am very grateful for the comments that have been made from around the House. There is no need for the noble Baroness to worry about damaging my career prospects. As I am reliably informed, I do not have many, having already exceeded my mother’s expectations for my career some years ago.

The noble Baroness made a very important point about the fact that we have considered 237 amendments and there has been no Division, but that is not to say that there has been no difference, change or argument, or really passionate debate. I think of some of the debates that we have had, particularly on academic freedom and communications data, to which my noble friend Lady Buscombe referred. We have had passionate debate all the way through, and as a result of that 40 amendments have been made to the Bill, which will now go on its journey to another place.

I guess that is probably part of the reassurance that I would offer to my noble friend. Certainly I would never wish to deal in platitudes. We had made progress in recognising that the guidance put out for consultation was going to be unworkable in that form, to be quite frank, so we conceded that there would need to be changes. An added layer of commitment to that was the decision that this would not just be issued by the Secretary of State in guidance next month but be subject to the affirmative resolution of both Houses of Parliament. That is an added guarantee and something that will be welcomed.

I am conscious that I was asked by the noble Baronesses, Lady Lister and Lady Smith, and my noble friend Lady Hamwee to put on the record the comments made in paragraph 1 of page 4 of my letter, which states:

“If the further Government amendment is agreed”—

it just has been—

“it will also require academic institutions to have ‘particular regard’ to the academic freedoms referred to in section 202(2)(a) of the Education Reform Act 1988. ‘Particular regard’ is stronger than ‘due regard’ because it elevates the consideration to the top of the list of factors to be weighed up”.

My explanation means that it elevates it to the top, not that there are no other factors that should be considered and that it trumps all; it should be given the very highest consideration.

I am also grateful to my noble friend Lady Williams for her persistence on the issue of engaging students. That has been a very positive contribution in thinking through the shape of the guidance. We need to make sure that people see this not as a threat to freedom in any way but as a way of keeping our campuses and institutions safe, and keeping strong the values that we hold dear in our society.

In that regard, the noble Baroness, Lady Sharp, asked why the sixth form was being treated differently. The position reflects all other legislation that applies to the further education sector. It maintains the position of treating schools differently from further education, which has been the approach of successive Governments. The issue raised, therefore, goes far wider than the immediate provision in the Bill and may be something that a future Government will want to address.

I was asked about that guidance by my noble friend Lady Buscombe and the noble Baroness, Lady Lister. We hope to introduce the guidance in Parliament before the end of the current Session. That should be done so that people can start preparing and there can be greater clarity.

I think that my noble friend Lady Brinton responded to my noble friend Lord Phillips. I am seeking not to provoke him to rise to his feet at this point but to say that these are changes, and the more clarity that can be put on the record, either from the Dispatch Box or in guidance and codes of practice, the less likely it is that people will argue about this in the courts. They are more likely to see it as clear and how we ought to set about it and what the Government’s aim is. That will be for the benefit of all. With those responses, I commend the amendment.

Amendment 4 agreed.

Amendments 5 and 6

Moved by

5: Clause 31, page 20, line 15, leave out from “applies” to end of line 17 and insert “—

(a) must have particular regard to the duty to ensure freedom of speech, if it is subject to that duty;(b) must have particular regard to the importance of academic freedom, if it is the proprietor or governing body of a qualifying institution.”

6: Clause 31, page 20, line 18, leave out subsection (3) and insert—

“(3) When issuing guidance under section 29 to specified authorities to which this section applies, the Secretary of State—

(a) must have particular regard to the duty to ensure freedom of speech, in the case of authorities that are subject to that duty;“(b) must have particular regard to the importance of academic freedom, in the case of authorities that are proprietors or governing bodies of qualifying institutions.(4) When considering whether to give directions under section 30 to a specified authority to which this section applies, the Secretary of State—

(a) must have particular regard to the duty to ensure freedom of speech, in the case of an authority that is subject to that duty;“(b) must have particular regard to the importance of academic freedom, in the case of an authority that is the proprietor or governing body of a qualifying institution.(5) In this section—

“the duty to ensure freedom of speech” means the duty imposed by section 43(1) of the Education (No. 2) Act 1986;

“academic freedom” means the freedom referred to in section 202(2)(a) of the Education Reform Act 1988;

“qualifying institution” has the meaning given by section 202(3) of that Act.”

Amendments 5 and 6 agreed.

Clause 35: Chapter 1: interpretation

Amendment 7

Moved by

7: Clause 35, page 22, line 2, at end insert—

“( ) “Function” does not include a function so far as it is exercised outside Great Britain.”

Amendment 7 agreed.

Clause 52: Commencement

Amendment 8

Moved by

8: Clause 52, page 32, line 40, leave out “29” and insert “30, section 31(2) and (4) and sections 32”

Amendment 8 agreed.

Bill passed and returned to the Commons with amendments.

Taxation: Avoidance

Statement

My Lords, with the leave of the House, I shall now repeat in the form of a Statement the Answer given by my honourable friend the Financial Secretary to the Treasury to an Urgent Question in another place on tax avoidance by HSBC. The Statement is as follows:

“HMRC has a long-standing approach to tax evasion, which is based on collecting the tax and interest due, changing taxpayer behaviour to discourage them from evading in future, and enforcing the most appropriate and effective penalties. Overwhelmingly, this means providing disclosure facilities to encourage tax evaders to sort out their tax affairs, backed by civil penalties to fine them for the offence.

This Government have supported HMRC’s approach by increasing investment in HMRC’s enforcement capacity and by strengthening HMRC’s powers, including increasing the maximum civil fines for hiding money in tax havens to 200% of the tax evaded. There was no evidence for the possibility of prosecution of HSBC from the data provided to HMRC. However, if further evidence comes to light through the evidence published today, HMRC will of course respond appropriately.

This approach has been very successful in tackling tax evasion—whether from plumbers, barristers and medics in the UK or from the wealthy hiding money in offshore accounts. HMRC has collected more than £1.6 billion from 57,000 disclosures as a result of a wide range of UK and international initiatives. Internationally, since 2010, HMRC has brought in around £2 billion in previously unpaid tax as a result of the UK’s agreement with Switzerland on a withholding tax on Swiss bank accounts and the international Liechtenstein disclosure facility.

In a small number of cases, HMRC will institute criminal investigations into serial tax evaders and those who deliberately conceal information from us. But in most cases, disclosure and civil fines are the most appropriate and effective intervention, and that is how HMRC has approached the receipt of data from leaks and whistleblowers, including the Swiss HSBC data that were shared with the department in May 2010.

Using the civil disclosure approach, HMRC has systematically worked through all the HSBC data that it has received, and has brought in more than £135 million in tax, interest and penalties from tax evaders who hid their assets in Swiss HSBC accounts. HMRC received data about 6,800 entities, which, after removing duplication, resulted in information on 3,600 businesses and individuals. Of these, more than 1,000 were challenged and the cases were settled. HMRC believes the remainder are compliant but continues to monitor their activities. HMRC is examining whether we have all the same data that the ICIJ has, and will be asking the ICIJ for any data that we have not already been given.

HMRC received the HSBC data under very strict conditions, which limited the department’s use of the data to pursuing offshore tax evasion and prevented HMRC from sharing the data with other law enforcement authorities. Under these restrictions, HMRC has not been able to seek prosecution for other potential offences, such as money laundering. The French authorities have today confirmed that they will provide all assistance necessary to allow HMRC to exploit the data to the fullest.

HMRC’s powers to crack down on international evasion are being further strengthened by the new international common reporting standards, which more than 90 countries have agreed to as an extra tool for closing down the options for tax cheats to pursue this increasingly high-risk practice”.

My Lords, I fear the House and the country are going to regard that as a fairly lame Statement in the light of the disclosures today. The Minister has not made any attempt at all to answer the questions that are being asked about past actions. We and the country want to know: why did the Prime Minister, first, appoint Stephen Green to this House when the information was already in the Government’s hands and, secondly, make him Trade Minister? Did they not address the issue of due diligence at all with regard to Mr Green’s past actions and responsibilities at HSBC, as chairman and before that as chief executive? When the information was received by the Government, why was it not acted on?

Why is it that we are now hearing from the Government that we have had one successful prosecution, but the French are talking about the very many successful prosecutions that they have carried out? Why are the Government now boasting about the fact that they have been able to persuade the French to release their information and be helpful to the British Government? That looks as if the French have set about the issue with the due seriousness and urgency that were required, and our Government have not.

Finally, despite what the Minister says about the actions being carried out, the amount of uncollected tax has risen year on year on this Government’s watch, from £31 billion in 2009-10 to £34 billion in 2012-13. When will this Government take real, meaningful action to tackle this tax gap?

My Lords, as I explained at Questions earlier, before the noble Lord, Lord Green, was appointed to your Lordships’ House, he went through the normal rigorous vetting procedure that is undertaken by the House of Lords Appointment Commission, and the Cabinet Office went through its normal procedure. As for prosecutions, my colleague’s Statement in another place explained that HMRC received the HSBC data under very strict conditions which limited our use of them to pursuing offshore tax evasion, and prevented us from sharing the data with other law enforcement authorities. Under these restrictions, we have not been able to seek a prosecution for other potential offences such as money laundering. However, by pursuing the civil route, we have been able to recover some £135 million from people who were involved in this activity. The noble Lord is right in saying that, in monetary terms, the tax gap has increased very slightly but I think he will find that in real terms the tax gap has fallen.

My Lords, in the course of his Statement my noble friend said twice, I think, that it is more appropriate to deal with these issues by way of civil proceedings. He mentioned that the amount recovered was a sum short of £200 million. My own experience—I must plead guilty to being a practising lawyer of 57 years’ standing—is very clear that one conviction of one major figure in one major bank for tax fraud, such as that which HSBC has been carrying out for many years, reverberates around the City and the world of business and the professions with infinitely more force and effectiveness than any amount of civil penalties, which none of those who are responsible for the malefactions actually pay from their own pocket.

My Lords, the noble Lord asked about civil as opposed to criminal penalties, and whether an exemplary hanging might not be a good idea. I explained the difficulties about prosecutions in this case, but we have successfully prosecuted people for LIBOR manipulation and we have extended the scope of the criminal law in respect of people in senior positions in banks. The noble Lord will probably have seen that the very threat of criminal action against directors of banks, even though pretty remote, has made a number of non-executive directors of banks extremely nervous.

My Lords, anybody who knows the noble Lord, Lord Green of Hurstpierpoint, as many of us in this House do, knows that he is a person of the utmost integrity and great ability. Do not these revelations about HSBC, profoundly shocking as they are, demonstrate two things, among others? The first is that enormous international conglomerates such as HSBC are impossible to manage as they need to be managed. Secondly, does not this revelation demonstrate the cultural change wrought by the neo-liberal orthodoxy which has been dominant during recent decades and under which personal material self-seeking has been elevated far too far above other values?

My Lords, if noble Lords have read the statement by HSBC in today’s Guardian—it may be in other newspapers, but that is where I read it—they will have seen that it is clear that, in 2005, HSBC was run as a very loose confederation and that the centre sought not to exercise very great control. That has changed very dramatically, and the new regulatory authorities are much more intrusive in ensuring that management at the centre has effective control throughout the organisation. It is clear that there was a wholly unacceptable culture in many of the banks. Both regulatory and legal change and activities by the banks in setting up their own body to monitor standards—as well as statements by senior management at the top of banks—are trying to reverse that culture towards the kind of culture that I suspect most people would expect their bankers to follow.

My Lords, I have listened to several attempts by the Opposition to tie the name of my noble friend Lord Green to whatever was going on in HSBC Switzerland, which I know in intention he would not dream of defending. Does the Minister nevertheless accept that my noble friend Lord Green is a man of the utmost probity who has done an enormously valuable job as a Trade Minister for this Government? I have the privilege of working with him. His activities bring great benefit to this nation. Would it not be a little wiser, if we want to maintain the quality and integrity of our political discussion in this House, to avoid premature innuendo of the kind that we have heard frequently from the opposition Benches?

My Lords, can I endorse what the noble Lord, Lord Howarth, said? I know my noble friend Lord Green, who I agree is a man of great integrity. I agree also that the acquisition by HSBC at the time of a great many companies, producing a loose federation, caused management stretch in terms of organising it—I think that it has learnt the lessons of that. It is important that people outside this Chamber understand the measures that this Government have taken to strengthen controls on banking behaviour.

My Lords, I agree with the noble Lord. It is important to stress that, as a result of initiatives led by this Government, there will be in place automatic information exchange agreements with more than 90 countries within a couple of years, including Switzerland, which means that the kind of egregious behaviour which today’s revelations have brought to light simply will not be possible in future.

My Lords, I could not help noticing that the noble Lord, Lord Foulkes, was not here at all for the Statement that my noble friend Lord Newby repeated at the beginning of this Urgent Question. It is our convention that it is appropriate for a noble Lord to be present in the Chamber if he wishes to ask a question about a Statement. As I have taken time in order to make this point, it is of course the turn of a Labour Peer to ask a question of my noble friend should they wish, but I think that the noble Lord, Lord Foulkes, would not be in line with the Companion if he was to ask that question himself.

My Lords, our convention suggests, as stated in the Companion, that noble Lords must be here in this Chamber to hear the Statement being repeated if they wish to ask a question of the Minister repeating that Statement. The noble Lord, Lord Foulkes, was not in the Chamber to hear my noble friend repeat the Statement.

My Lords, the noble Lord, Lord Green, as everyone has said, is a man of great integrity. Can the Minister tell us whether the noble Lord was aware of the wrongdoing of the bank of which he was chairman? If he was aware, was the Prime Minister aware of that when he appointed him as a Trade Minister? If he was not aware, what judgment did the Prime Minister make about how effective he was as chairman of HSBC?

My Lords, I have no idea what was in the head of the noble Lord, Lord Green, but I am aware that when he was appointed he was held in extremely high esteem by everybody who had ever had any dealings with him.

Infrastructure Bill [HL]

Commons Amendments

My Lords, I have it in command from Her Majesty the Queen to acquaint the House that Her Majesty, having been informed of the purport of the Infrastructure Bill, has consented to place her interests, so far as they are affected by the Bill, at the disposal of Parliament for the purposes of the Bill.

Motion on Amendments 1 to 5

Moved by

1: After Clause 3, insert the following new Clause—

“Route strategies

(1) The Secretary of State must from time to time direct a strategic highways company to prepare proposals for the management and development of particular highways in respect of which the company is appointed (“a route strategy”).

(2) A route strategy must relate to such period as the Secretary of State may direct.

(3) The strategic highways company must—

(a) comply with a direction given to it under subsection (1), and

(b) publish the route strategy in such manner as the company considers appropriate.

(4) A direction under subsection (1) must be published by the Secretary of State in such manner as he or she considers appropriate.”

2: Clause 9, page 6, line 28, at end insert “, and

(c) the effect of directions and guidance given by the Secretary of State to a strategic highways company under this Part.”

3: Clause 9, page 6, line 42, at end insert—

“(8) The Secretary of State must lay a report published by the Office under this section before Parliament.”

4: Clause 9, page 6, line 42, at end insert—

“(9) In Part 2 (Office of Rail Regulation) of the Railways and Transport Safety

Act 2003, after section 15 insert—

“15A Change of name

(1) The Secretary of State may by regulations make provision for the body established by section 15 to be known by a different name.

(2) Regulations under this section may amend this Act or any other enactment, whenever passed or made.

(3) Regulations under this section are to be made by statutory instrument.

(4) A statutory instrument which contains regulations under this section is subject to annulment in pursuance of a resolution of either House of Parliament.””

5: After Clause 12, insert the following new Clause—

“Periodic reports by the Secretary of State

(1) The Secretary of State must from time to time prepare and publish reports on the manner in which a strategic highways company exercises its functions.

(2) The Secretary of State must lay a report prepared under subsection (1) before Parliament.”

My Lords, in discussing Commons Amendments 1 to 5, I shall also speak to Commons Amendments 24 and 42 to 45. I am very pleased to put forward this group of amendments, which I believe demonstrate the progress made since the Bill was first introduced and that the Government have listened to the views made known in this House and in the other place.

It is clear that we intend the route strategies to be a key building block for the second road investment strategy, which covers the period after 2020-21. The individual route strategies will help ensure that Highways England and the Government of the day are able properly to consider local roads, local transport, our cities and other modes of transport as the RIS is developed. As Highways England carries out the work on the route strategies it will have to work closely with local highway authorities, local economic partnerships, Network Rail and other local and national bodies. Through the statutory direction and guidance set out in the licence, the updated version of which was published on 29 January and attached to my letter of 2 February, which has been placed in the Library—I am sure noble Lords have studied it in depth—we have made it clear how we expect the route strategies to be developed and what they should cover, ensuring that integration and working with others will be a key feature of the process.

To provide even more reassurance, my right honourable friend the Minister in the other place moved Amendment 1, which puts route strategies on the face of the Bill. To quote my right honourable friend:

“The Secretary of State will require a strategic highways company to prepare and publish one or more strategies on the management and development of the highways to which it has been appointed, which will be known as route strategies. The strategies must be published, as must the Secretary of State’s directions to the company, so we have provided that the process will be transparent”.—[Official Report, Commons, 26/1/15; col. 667.]

The arrangements that we have put in place give certainty that the route strategies will be prepared, and recognise the important part that they play in managing and planning for the future of the strategic road network.

Government Amendments 2, 3 and 5 deal with reporting to Parliament. I know that noble Lords have been keen to ensure that there is a transparent process for parliamentary accountability for the company, so I think it is best that I present Amendments 2, 3 and 5 together, as they reflect the full picture of the Government’s intention.

Amendment 5 places a responsibility on Government to report periodically to Parliament on the performance of Highways England. I have described before the combination of governance arrangements that provides choice in how it is applied while retaining levers for Ministers to intervene if the company fails to perform. If necessary, Ministers can intervene through the use of statutory direction and guidance, which must be published, to shape how the company must act or deliver requirements.

In addition, through Amendments 2 and 3 to the monitor provisions, we make it clear that the monitor may report on the effect of direction and guidance given to the company by the Secretary of State, and we insert a specific requirement on the Secretary of State to lay before Parliament any report published by the monitor. These further requirements on the Government to report to Parliament, and to furnish Parliament with the independent assessment of the Highways Monitor on the company’s performance, will make the process even more transparent and provides a very strong way of ensuring that the company delivers.

I turn to Amendment 4. On Report, we briefly discussed the issue of a change in the name of the Office of Rail Regulation name, when the noble Lord, Lord Berkeley, who I see is in his place today, proposed to rename it. On that occasion, I said that we had concerns about the prospect of renaming the ORR in the Bill. However, the principle of ensuring that the ORR has an accurate name remains a sound one. We accept that there is a risk of confusion if its name does not correspond to its functions, though, as I emphasised in previous debates, the ORR is at liberty to use different brand names for these different activities, and always planned to do so.

We have therefore decided to take steps to remedy such a situation. Amendment 4 gives the Government the power to rename the ORR once an appropriate name is agreed. The ORR is in the process of discussing options with stakeholders and staff. As I say, this amendment does not rename the ORR directly because of the complications involved in doing so. Instead, it inserts a new power in the Railways and Transport Safety Act 2003, allowing the Secretary of State to rename it and make the necessary consequential amendments through secondary legislation.

Government Amendments 44 and 45 deal with transferred staff. Noble Lords will recall that on Report I made clear that the transfer of staff from the Highways Agency to Highways England would follow guidance under the Cabinet Office statement of practice, COSOP, and that this follows TUPE principles. I confirm again that the employment terms and conditions of existing Highways Agency staff will not change when they transfer but, in recognition of the assurance that many want on this point, Amendment 44 reaffirms this and, I hope, makes the Government’s intentions clear. I highlight that the Bill already provides protection that a transferring employee can terminate their contract if there is a substantial detrimental change to it after they transfer. This would amount to a constructive dismissal and the employee could bring a claim for unfair dismissal. This reflects regulation 4(9) of the TUPE regulations.

Amendment 45 is brought forward to reflect fully the intention of the TUPE regulations on this point. The amendment means that, where an employee resigns in such circumstances and seeks compensation, the employer is not liable to pay any damages in respect of any unpaid wages that relate to a notice period that the employee has not worked. It does not in any way prevent employees from claiming damages for constructive dismissal in other circumstances. The amendment provides a limited protection for the employer, and reflects regulation 4(10) of the TUPE regulations themselves.

I shall also cover government Amendments 24, 42 and 43, a group of minor and technical amendments which I shall briefly describe. Amendment 24 deals with transitional provisions. I brought forward an amendment in Committee in recognition of concerns raised by the Delegated Powers and Regulatory Reform Committee that the power to modify primary legislation generally should be subject to the affirmative resolution procedure. Amendment 24 addresses a risk we have identified that might cause unremarkable transitional provisions and savings made under Clause 17 in Part 1 of the Bill to be subject to the affirmative resolution procedure on the basis that they modify the effects of primary legislation. This was not our intention. The power would be used to ensure that processes or procedures started by the Highways Agency which are incomplete at the time of transition can be taken forward by Highways England. Transitional provisions are routinely required where functions pass from one body to another and to require a debate under the affirmative procedure for such regulations would be disproportionate.

Accordingly, Amendment 24 has been laid to ensure that transitional and transitory provisions and savings made under Clause 17(1)(b) attract the negative resolution procedure even if they may be said to modify the effects of primary legislation. Consequential regulations and other regulations under Clause 17(1)(a) will continue to attract the affirmative resolution procedure where they revoke, amend or modify primary legislation.

Amendment 43 deals with public records. The amendment adds strategic highways companies as a class to the list of those bodies whose administrative records are public records for the purposes of the Public Records Act 1958. This will ensure that any records that are produced by the new company will be properly considered for transfer to the National Archives or destruction at a suitable point.

Amendment 42 deals with the Bill as a whole and is the standard-form provision added on Third Reading in this House to avoid issues of privilege. Privilege issues would otherwise arise because the Bill authorises expenditure and the charges, which are set out in the Ways and Means resolution. In accordance with standard procedure, the privilege amendment was removed at Commons Committee stage. I beg to move.

My Lords, I welcome many of these amendments. There is a sense of déjà vu about today because we spent many hours debating this. I recall amendments put down by several of my noble friends and noble Lords on the Liberal Democrat Benches proposing many of the changes now coming back from the Government. It is great that they have taken so much of our advice. I welcome it. Let us hope that this is a precedent for many future changes.

I am pleased that Amendment 1 starts to provide a link between Parliament, Government and the SHCs because that is very important. We talked about that. It may not be what we wanted but it is a start to getting there. I am also pleased that we have an amendment that says that the ORR can give advice to the Secretary of State on the effect of its guidance. That is good. I hope that the ORR will feel able to give advice on many more things than that. I am also pleased that the Secretary of State must lay a report before Parliament on this—it is all obvious but it needs to be said—and it is important that this happens and happens regularly.

Would it not have been much easier to have changed the name of the ORR during the passage of the Bill rather than with all these amendments? However, I do not really mind and it does not really matter. That is fine. It is a shame that we have not been able to persuade the Government that the ORR, in addition to its work monitoring the SHC, should have powers to take action and require efficiencies as it is able to do for Network Rail. I hope that that will come one day as the ORR will have the capability to do that and it is a logical thing to do. It would be much better for an independent regulator to do it than to try to have the Secretary of State do it. We saw some problems with that with regard to the railways last summer. I also hope that in future we may be able to persuade whoever wins and becomes the Government after May that it will be useful to have the ORR responsible for road safety on the highways network as well. We did not quite get that far, but we are getting there.

Finally, I did not understand what the noble Baroness said about Amendment 45. It rather seems that if the staff of the Highways Agency do not feel that they will be properly reimbursed in whatever changes come they will be told, “That’s tough. You’re not going to get any compensation”.

However, this is a good step forward. We enjoyed the debates in Committee, on Report and at Third Reading and it was obviously a good use of parliamentary time. It is very nice to think that the Government have accepted many of the principles of what we proposed.

My Lords, I echo quite a lot of what my noble friend said. We have moved in the direction of a report to Parliament and the role of the Secretary of State vis-à-vis the strategic highways company. I accept, I think, although like my noble friend I find the wording a bit peculiar, that that reinforces the application of the equivalent TUPE in relation to the staff of the Highways Agency.

The one point I am disappointed by, which my noble friend also mentioned, was that neither the Commons nor the Government have seen fit to strengthen the reference to road safety in the terms of the duties of the new company. It is a very weak form of obligation. It is slightly stronger than it was originally. The road investment strategy says that the Secretary of State must “have regard in particular” to the effect of the strategy on the safety of users. Later on it says that the company should “have regard”—no longer “in particular” —to the effect of the exercise of those functions on the safety of users. The phrase “have regard to” is the weakest form of legislative obligation. I had hoped that during the passage of the Bill we would strengthen that wording so that it would be an objective of the company and of the investment strategy to improve the performance on road safety. We have not got that and we are now at quite a late stage during the passage of the Bill but I hope that the Government will keep that under review as we go forward and the company is created. I do need to point out that I am a chair of the Road Safety Foundation. The anxiety that safety should be part of the DNA of the new body is broader than just among those who have any vested interests and certainly I would have thought that the Government could have moved further. However, on the rest of it, I thank the Minister for having moved a bit in our direction.

I do not need to add much because my noble friends have emphasised certain weaknesses in the Bill as we are considering it today. That is not for want of trying. Both my noble friends—and I, from the Front Bench—were concerned about the issues that they have just emphasised. My noble friend Lord Whitty was concerned that road safety will not get the prominence in the Bill it surely deserves while my noble friend Lord Berkeley emphasised the significance of the Office of Rail Regulation. We all welcome the fact that there will be the possibility of a change of name as we could not see how the Office of Rail Regulation could intelligently deal with the road sector and operate under its present name. It is going to do so for a while, but at least the Minister has now ensured that there is provision for change at a later stage.

We support the thrust of Amendments 1 to 5, which we were pressing on the Government not so very long ago. We are still concerned that the Bill does not improve significantly the overall British performance with regard to roads, which clearly are a very important part of the national infrastructure. We know that other countries are more successful in establishing infrastructure. Those of us who from time to time are privileged to drive on the continent often appreciate the difference that obtains there. Even the French have begun at last to approximate to British standards of road safety. There was certainly a deficiency in the past. We support the five-year roads investment strategy that is underpinned by the Bill. It sets a long-term transport planning strategy to give the road sector the same certainty that the railways have. However, we have no evidence that justifies the main thrust of the Bill, which is unamended by these amendments, and the Bill is still overwhelmingly concerned to move the roads authority to an arm’s-length position. We were not persuaded of that argument through all the days of Committee and Report and I am not sure that those in the other place were persuaded about that fundamental part.

We are broadly in favour of Amendments 1 to 5. The Minister took a very serious and empathetic approach to explaining how TUPE was to be fulfilled with regard to the Bill. I understand Amendment 44 and could not endorse it more whole-heartedly. However, I am not quite sure what Amendment 45 is doing there and I therefore ask the Minister to spell that out in greater detail.

We are pleased at the progress that has been made. We think it was a long time coming, because we were debating this Bill several months ago and there is not much in these amendments that we had not articulated or advanced in argument at that time without winning too much support. We are pleased with the amendments that are before us and will be supporting them.

My Lords, to clarify, both Amendments 44 and 45 mirror TUPE arrangements. I confess that I am no specialist on TUPE, but I understand from those who are that for the purposes of the transfer of staff from the Highways Agency to Highways England, these amendments simply make it clear that staff will in effect enjoy the same level of protection that is available in the circumstances where TUPE arrangements would normally be in place. This is a reassurance that was asked for and one which has been very gladly given.

In terms of safety, the noble Lord, Lord Whitty, will be aware that there are very few duties on the new strategic highways company, Highways England. One of those duties is to have regard to the safety of users of the highways. That is a strong statement in the Bill. He will be conscious that there is great emphasis on safety in the directions and guidance, and that the road investment strategy has a great focus on safety. Highways England has been set a target of reducing the number of people killed or seriously injured on the network by 40% by 2020. Many of the RIS schemes are specifically focused on safety improvements—for example, improvements to Junction 10 of the M25 to create a freer flowing interchange with the A3 because that junction currently has the highest casualty rates on the network.

We have also set aside ring-fenced funding of £105 million to undertake further safety improvements on the network, which will be spent on improvements to the existing network and taking forward new safety-focused innovations and technologies. So Highways England is only one part of this safety picture. We emphasise that it is important that all the various players engaged in this process have to focus on safety, and it seems to me that the various collective actions coming together achieve that.

In terms of the name, I think that we have come to a satisfactory conclusion—we have clarified that the name can be changed, and made it easy for that to happen. However, the Government chose not to impose that name on the ORR but to let it go through the process of talking with its stakeholders and its staff and deciding what name it thinks would be most appropriate. The Secretary of State can then make that name change through secondary legislation.

I thank all who have participated in discussion on all these issues. We have made real progress in both Houses and have collectively created a very strong foundation for Highways England. I say to the noble Lord, Lord Davies, that one of the primary purposes for creating an arm’s-length body was to provide the certainty of long-term funding which the railways have enjoyed. That, along with all the other measures we have taken, means that we have the prospect of a stronger transport network in the future underpinning our economy and future prosperity.

Motion agreed.

Motion on Amendment 6

Moved by

6: After Clause 18, insert the following new Clause—

“Cycling and Walking Investment Strategies

(1) The Secretary of State may at any time—

(a) set a Cycling and Walking Investment Strategy for England, or

(b) vary a Strategy which has already been set.

(2) A Cycling and Walking Investment Strategy is to relate to such period as the Secretary of State considers appropriate; but a Strategy for a period of more than five years must be reviewed at least once every five years.

(3) A Cycling and Walking Investment Strategy must specify—

(a) objectives to be achieved during the period to which it relates, and

(b) the financial resources to be made available by the Secretary of State for the purpose of achieving those objectives.

(4) The objectives to be achieved may include—

(a) activities to be performed;

(b) results to be achieved;

(c) standards to be met.

(5) Before setting or varying a Cycling and Walking Investment Strategy the Secretary of State must consult such persons as he or she considers appropriate.

(6) In considering whether to vary a Cycling and Walking Investment Strategy the Secretary of State must have regard to the desirability of maintaining certainty and stability in respect of Cycling and Walking Investment Strategies.

(7) A Cycling and Walking Investment Strategy must be published in such manner as the Secretary of State considers appropriate.

(8) Where a Cycling and Walking Investment Strategy has been published the Secretary of State must from time to time lay before Parliament a report on progress towards meeting its objectives.

(9) If a Cycling and Walking Investment Strategy is not currently in place, the Secretary of State must—

(a) lay before Parliament a report explaining why a Strategy has not been set, and

(b) set a Strategy as soon as may be reasonably practicable.”

My Lords, in moving Amendment 6, I will speak also to Amendments 26 and 35. The Government are committed to cycling and walking, and making these the natural choice for shorter journeys. Government spending on cycling overall since 2010 has more than doubled compared with the last four years of the previous Administration: £374 million has been committed between 2011 and 2015. Spend on cycling is currently around £6 per person each year across England, and more than £10 per person in London and our eight cycling ambition cities. Furthermore, in November, the Deputy Prime Minister announced a further £114 million for the cycling ambition cities and, through the roads investment strategy, a further £100 million between 2015 and 2021 for additional cycle provision on the strategic road network.

As I am sure the House is aware, in October we published our draft Cycling Delivery Plan. This is a 10-year strategy on how we plan to increase cycling and walking across England. This plan illustrates this Government’s long-term commitment to cycling and walking and it is in that spirit that the Government have laid this amendment which provides a duty on the Secretary of State to have a cycling and walking investment strategy for England.

Each such strategy will be set for a given period, and must specify objectives to be achieved and the financial resources which will be made available for that purpose. Furthermore, the Secretary of State will be required to report to Parliament on progress on achieving those objectives, and—where a strategy applies for a period longer than five years—ensure that it is reviewed at least once every five years.

We have also provided that the Secretary of State must consult when setting or varying a strategy, and must bear in mind the desirability for certainty and stability when considering whether to make a variation to a strategy which has been set. This amendment provides a legislative framework for an investment strategy. We also intend shortly to respond to the consultation on the draft Cycling Delivery Plan, published by this Government last year.

My Lords, my comments on these three amendments reflect my comments on the first group. I welcome them. Again, we spent a lot of time debating them, and it is really good that the Commons listened to the very strong pressure from the various cycling organisations and persuaded the Government that the new clause under Amendment 6 should go in. It covers everything that one could have asked for. It follows on, as the Minister said, from the delivery plan. A duty to deliver a strategy was needed, and what is in these amendments is very good. Subsection (9) even says what happens if the Secretary of State does not produce a strategy, which is very welcome. It would be nice if the Minister could give an indication as to when the first one might appear. Is it this year, next year or sometime never? I know it is always difficult for Ministers to commit themselves.

One thing occurred to me on reading this amendment. I read it as applying to all roads, not just trunk roads, but maybe the Minister will confirm that. I know that there are not many cyclists on trunk roads, as most find it much too dangerous, but trunk roads are useful highways, connecting towns, villages and cities that are a little further apart with a bit more capacity and higher speed. In the Netherlands, they are making high-speed cycle lanes where people are expected to go a bit faster.

However, it is a really good start. I congratulate the Government on listening to all the pressure that has come from the cycling organisations. I look forward to participating and taking this forward.

My Lords, from these Benches, I, too, very much welcome these amendments. As we discussed in Committee and on Report, as the noble Lord, Lord Berkeley, said, we felt that this was an important bit that was missing from transport strategy. The Infrastructure Bill is an excellent opportunity to put that right. The early clauses sounded very woolly to me, but as the noble Lord, Lord Berkeley, pointed out, new subsection (9) makes it rather clear that this is expected to happen rather than being something that is optional. That is a major step forward. I assume and hope that this will go forward and that we will approve it as soon as possible.

My Lords, I join the two noble Lords who have just spoken in very much welcoming these amendments. Throughout the passage of this Bill there has been very consistent pressure from the cycling organisations. They have established their case against a background, which we are all too aware of, where cycling is still too dangerous a pursuit in certain parts of the country, particularly in our great cities.

I always think of Lord Dormand, who was in this House for a number of years. When he was in the Commons, he used to cycle from Westminster to the National Executive Committee meetings at Walworth Road. That meant a journey around Parliament Square, the roundabout at the far end of Westminster Bridge, and Elephant and Castle. I thought that it was the most dangerous journey in the world as a cyclist, which is why, every week he threatened to do the journey, I sought to dissuade him. He always made the journey and always lived to tell the tale.

However, subsequently there has been an increasing number of cycling accidents, if not on trunk roads, often on large roundabouts, which are difficult to negotiate with a very slow vehicle such as a bicycle as you go past a number of exits from which other vehicles will make definitive and often rapid moves. We have a lot to do to make cycling safer, but I am pleased that the Government have been persuaded of the case that the cycling organisations, the general public and we on these Benches have pushed as hard as we could. We are delighted with the outcome that the Minister has described.

My Lords, I join others in this House in saying that I am personally delighted with these amendments. As your Lordships’ House will be aware, when the Bill started here, there was slight frustration because the Cycling Delivery Plan was out to public consultation and we were somewhat limited in what we could do in those circumstances. That consultation has been completed, the Government will shortly give their response to it and the strategy itself will follow in due course. The plan is for all of England, not just the trunk roads, and it is anticipated that there will be a great deal of work with local authorities, local enterprise partnerships and all the other stakeholders as this progresses. This is another good example of co-operative working, across Benches and across both Houses.

Motion agreed.

Motion on Amendments 7 to 11

Moved by

7: Clause 20, page 13, line 8, at end insert “or

(c) a person who for the time being exercises powers of management or control over the land.”

8: Clause 20, page 14, line 23, at end insert—

“Notice of compliance

8A Where an environmental authority considers that an owner of premises has complied with all the requirements in a species control agreement to carry out species control operations, the authority must give the owner notice to that effect.”

9: Clause 21, page 23, line 4, at end insert—

“NOTE. The common name or names given in the first column of this Schedule are included by way of guidance only; in the event of any dispute or proceedings, the common name or names shall not be taken into account.”

10: Clause 21, page 23, line 8, at end insert—

“Beaver, Eurasian (but not in relation to Wales)

Castor fiber”

11: Clause 21, page 23, line 9, at end insert—

“NOTE. The common name or names given in the first column of this Schedule are included by way of guidance only; in the event of any dispute or proceedings, the common name or names shall not be taken into account.”

My Lords, I shall begin with Amendment 7. As originally drafted, the definition of an “owner” of land in the Bill referred to a person who is entitled to dispose of the fee simple of the land or a person in possession under a lease. However, it was brought to our attention that this definition does not include owners of “inalienable land”, which is land that cannot be disposed of due to legal restrictions. This would mean that owners of certain land, which may include trustees, would be unable to enter into species control agreements or be made subject to species control orders, even though they may be the only or most appropriate persons with an interest in the land concerned. Amendment 7 resolves this anomaly by extending the definition of an “owner” beyond freeholders and leaseholders to persons who may exercise powers of management or control over the land.

Amendment 8 ensures that the environmental authority provides a clear statement to an owner that it considers that they have complied with all the requirements of a species control agreement. This “Notice of compliance” will provide certainty to an owner that an agreement is no longer in effect. We made a similar amendment on Report in respect of species control orders. On reflection, we now consider that this requirement should also extend to agreements.

Amendments 9 and 11 clarify that should doubt ever arise in a dispute or legal proceedings, the scientific name of a species listed in Parts 1A or 1B of Schedule 9 to the Wildlife and Countryside Act 1981 is determinative rather than its common name. The wording introduced by these amendments is consistent with that which already appears in the existing Schedule 9 and other schedules to the 1981 Act.

Amendment 10 adds the Eurasian beaver to the new Part 1B of Schedule 9 to the Wildlife and Countryside Act 1981 in relation to England. Currently, it is an offence to release the beaver into the wild without a licence as it is a species that is not considered to be “ordinarily resident” in Great Britain. Defra ran a consultation exercise in 2013 on whether to add the beaver to Part 1B of Schedule 9 to the 1981 Act to ensure that licences for their release would continue to be required, should the completion of the trial reintroduction currently under way in Scotland result in the animals remaining in the wild. At that point, they would become “ordinarily resident” and thus would not require a licence to be released.

The majority of respondents supported listing the beaver on Schedule 9 to ensure that the current licensing requirements remained in place. Listing the beaver on that schedule will ensure that licences for their release will continue to be required, while their trial reintroduction is considered. However, listing it in Part 1B of Schedule 9 will ensure that species control provisions cannot be applied to any beaver in the wild where its release has been licensed by Natural England. This, of course, includes the family of beavers on the River Otter in Devon, which are now subject to an approved reintroduction trial.

I know your Lordships are interested in the family of beavers on the River Otter so I will take this opportunity to provide the House with a brief update. Natural England has now issued a licence to the Devon Wildlife Trust permitting the managed release into the wild of beavers currently resident in the River Otter, on a five-year trial basis. This trial will provide valuable evidence on potential impacts to inform any decisions to allow further releases in the future. This decision is subject to the beavers being confirmed as European beavers, and tested and found to be free of EM. Now that the application is approved, it will be important for Natural England and the Devon Wildlife Trust to ensure that the trial is implemented properly and monitored effectively. Our priority is to ensure humane treatment for the beavers while safeguarding human health.

I turn back to these provisions. Changes that we made in this House on Report will also ensure that where an environmental authority is minded to use these provisions in relation to a beaver in the wild that has not been licensed by Natural England, it must satisfy itself that there is no appropriate alternative way of addressing any adverse impact from that animal before proceeding.

Before my noble friend leaves that point, I ask what arrangements are going to be made in relation to Wales and why it is done in this way.

I will address my noble friend’s point in a moment if I may. We intend to commence Clauses 21 and 22 shortly after Royal Assent to provide legal certainty that licences are still required for the release of beavers into the wild. Now, these matters are devolved and I understand that Welsh Ministers are currently considering whether to make a similar amendment in relation to beavers in Wales.

Could my noble friend confirm that “a person” in new paragraph 5, which she is amending, is also a trust and a limited company?

I am sorry to put this point but it is a worry and it comes from my own period as Minister of Agriculture. I remember a case in which the rules about poisoning squirrels in Scotland were different from those in England. One has to make the delicate point that neither beavers nor squirrels know when they cross the border. I therefore hope that we have adequate methods of dealing with this issue, simply because it makes a nonsense of this if we do not have a common view where we have a common land border. I know in many people’s minds this is a trivial comment, but it is an issue for all these devolved concerns. I wonder whether we are totally satisfied with the careful relationships between the nations and the English Government—otherwise, people will find themselves technically liable for having broken the law, simply because of the fact that animals move where they wish to and do not obey anybody’s law.

My Lords, perhaps I can also tackle beavers? The bigger problem, diplomatically, would be if they crossed the Tamar, rather than the Bristol Channel to Wales. I will leave that aside for the moment.

Whether these are Eurasian or American beavers has been a question for some time. I find it strange that it is so difficult to determine this. It is presumably a question of DNA, rather than their accents. Can we hear from the Minister when this might be resolved? Presumably if they are not Eurasian, a much darker alternative has to be faced.

I apologise to the House because I am going to make a very technical and limited statement. We very much approve of this group of amendments but we have one concern, which has been articulated by those who know a great deal more about beavers than I know about anything. Consequently, we listened to their advice with the greatest care. It has come from a number of well intentioned sources—by “well intentioned” I mean those who want to ensure that our environment and natural life flourish. We are concerned about the welfare of species.

Our concern is that the European beaver—a native species that has established populations in the UK—has been excluded from the species control order. The classification of the beaver under Part 1B of Schedule 9,

“Animals no longer normally present”,

is regarded as bizarre. It lists them alongside the wild boar, hence our anxiety. It seems strange that, despite European beavers being recognised as a native species to the UK and a natural component of British river systems, they will need a licence from Natural England to continue to exist in the wild.

The Minister will know that we proposed an amendment in Committee, which was supported by a number of NGOs including Friends of the Earth, that the Government’s definition of invasive, non-native species should correspond to the European Union habitats directive, which was adopted in 1992. That will clarify exactly the status of the European beaver. I hope that the Minister can reassure me that that representation is a worthy one and is taken account of by these amendments.

My Lords, I have a number of clarifications, which I hope will satisfy your Lordships. Yes, the definition of owners includes trusts and limited companies. We found that places including, I think, Epping Forest and some National Trust properties would not have been covered. It was important to make that amendment and give that clarification.

On Wales, Welsh Ministers are considering this issue and will make their decision shortly, but your Lordships will know that it will be necessary in that process for the Welsh Government to debate an amended legislative consent Motion, which we await. In the mean time, it is still an offence under Section 14 of the 1981 Act to release a beaver into the wild in Wales, so I do not think there should be concerns about release as a result of the changes that we have made here.

It is important to recognise that where we have species that are formally resident—I know people do not like the phrase, but it describes the situation quite well—it is important that we consider releasing them only under licence. The beaver is perhaps a very good example. First, we do not know for certain that they are Eurasian beavers, although vets will be able to answer that question. More importantly, in continental Europe the species is afflicted with a really very terrible disease—a parasite known as EM. I do not wish to trouble your Lordships, but essentially the beaver is a carrier, and many mammals, including human beings, can be devastated by this parasite, which effectively eats your organs from the inside out. It really is important that this country remains EM free and that the parasite does not get out into the general population of foxes and other creatures, because the consequences would be very undesirable.

There is therefore very widespread agreement that the licensing process is the right approach, and where we reintroduce animals we want them brought in in the right way and to the right place with all the consequences considered. The reason for the delay in testing the beavers is fairly straightforward: they have had young kits which have been nursing, and now that the kits are weaned it is much safer to find the animals and bring them in for testing. We expect that to happen shortly.

I hope with that range of reassurances, your Lordships will be very comfortable supporting the Motion.

Motion agreed.

Motion on Amendment 12

Moved by Baroness Kramer

That this House do agree with the Commons in their Amendment 12.

12: After Clause 26, insert the following new Clause—

“Mayoral development orders

(1) Schedule (Mayoral development orders) (Mayoral development orders) has effect.

(2) The Secretary of State may by regulations make consequential provision in connection with any provision made by that Schedule.

(3) Regulations under this section may amend, repeal, revoke or otherwise modify the application of any enactment (but, in the case of an Act, only if the Act was passed before the end of the Session in which this Act is passed).

(4) In this section “enactment” includes an enactment comprised in subordinate legislation within the meaning of the Interpretation Act 1978.”

Baroness Kramer: In speaking to Amendment 12, I will also speak to Amendments 25, 27, 37, 41 and 46. This group of amendments follows Clause 26.

I begin by noting that this group is the first of three new uncontroversial groups of amendments that were introduced by the Government during the Commons stages. The details of these amendments were not available during the time this House considered the Bill last year. I hope, however, that your Lordships will understand that it was important for the Government to seize the opportunity to include them in the Bill as soon as they were ready.

In relation to this group, there is an urgent need to ensure that the planning system continues to support development, including for housing. As a further contribution to this, the Government have introduced these amendments to recognise the opportunity to plan proactively for housing and growth in London. The clause will give the Mayor of London the power to make mayoral development orders that grant planning permission for development on specific sites in Greater London.

The process of making a mayoral development order would be initiated by the relevant local planning authorities: that is, any London boroughs or mayoral development corporation in whose area any part of a site is located. The relevant authority would apply to the mayor asking him to make a mayoral development order. Thereafter, those authorities would have to agree before the draft order is published for consultation and again agree the final order before it is brought into force.

The Government have worked with the Greater London Authority and London Councils, the body that promotes the interests of London’s 32 boroughs and the City of London, and listened to their suggestions. As a result of this collaboration, the proposed power provides a positive tool to support the delivery of development in London. Your Lordships will be acutely aware that there is very significant unmet housing need in London. Census data projects that London’s population will increase by 2 million between 2011 and 2036. The mayor has identified a need for between 49,000 and 62,000 new homes per annum between 2015 and 2026. Further alterations to the London plan have identified a capacity of 42,000 new homes per annum.

This represents very significant challenges for the mayor in helping to deliver the housing needed in London. Mayoral development orders have the potential to help accelerate the delivery of housing and other development, including the infrastructure that is needed to support new housing. The fact that mayoral development orders can be tailored through planning conditions will allow the mayor and the relevant local planning authorities to impose specific requirements on any development so that it meets local needs.

In terms of other aspects of their design and scope, mayoral development orders have been closely modelled on local development orders that allow local planning authorities to grant planning permission for development. Local development orders have been successful in the Government’s enterprise zone programme by simplifying and speeding up the planning process and increasing developer confidence. A new power to make mayoral development orders will build on the success of local development orders by enabling the mayor to support London boroughs that want to plan proactively for development but do not have the capacity to do so. The power will be particularly helpful in relation to complex sites that cross local authority boundaries.

In conclusion, mayoral development orders are a positive planning tool that will allow London local planning authorities and the mayor to collaborate effectively on planning to deliver housing and growth. I therefore ask your Lordships to agree to this new clause, which provides powers that will help to deliver the jobs and homes that London badly needs. I beg to move.

My Lords, we can support the creation of a regime for mayoral development orders, which we see as being uncontroversial. We are certainly supportive of proposals that can improve the delivery of new housing in London, and we note that London Councils and the GLA have expressed support for MDOs.

From discussion in Committee in the Commons, it has been confirmed today that such orders have to be initiated by the London boroughs themselves, and a particular benefit will be supporting the development of complex cross-boundary situations. Can the Minister say a little more about the extent to which they might be used within a particular boundary and not on a cross-border basis? It is presumed that we will not get the underpinning regulations by the end of this Parliament, unless the Minister can tell us otherwise. We note that the negative procedure is to be adopted. Perhaps the Minister might say when they are expected to be ready.

On housing numbers for London, what the Minister said in the other place has been confirmed today: there is an annual shortfall in capacity of between 7,000 and 20,000 homes. It was less than clear from the exchanges at the other end the contribution that MDOs might make in addressing that shortfall. I think the proposition was that they might speed things up, but whether they will have broader impact will be interesting to hear.

A further point, for which there was no satisfactory answer, was how MDOs can contribute to more affordable housing. Can the Minister confirm that Section 106 agreements will not operate for MDOs? If that is not the case, how will MDOs impact on the obligation to provide affordable housing? If this is the case, how will it be assured that the provision of affordable housing will be forthcoming, and what is the mechanism? It would be helpful to have clarity on that point. Nothwithstanding that, as I have said, we do not oppose the new clauses and will support them.

My Lords, there is indeed a broad consensus across this range of issues. The noble Lord, Lord McKenzie, asked whether these orders could be used within a local authority rather than just across boundaries. Indeed they can, and of course local development orders are already available to local authorities, but they may wish to tap into the additional capacity and capability that is available in the mayor’s office for particularly complex projects. There may be occasions when that happens, and our expectation is that it will be primarily for the kind of sites that are complex enough to cross boundaries. Obviously, that happens quite often in London. Secondary legislation will appear in due course—a phrase with which I am afraid the House is probably very familiar—but at this point I think we can say with some confidence that that will be in the next Parliament.

I share the noble Lord’s understanding of Section 106, and he will be aware that the voice of local authorities is very powerful on this issue in shaping the kinds of development that they see as appropriate for their communities. It is not the mayor imposing a vision on local authorities, but rather local authorities looking to use the capacity that is on offer from the mayor in order to move developments forward proactively. Its primary purpose in all the discussions with London Councils and others has been to emphasise the importance of accelerating new housing development across the city.

Motion agreed.

Motion on Amendments 13 and 14

Moved by

13: Clause 28, page 33, line 21, leave out “which is” and insert “the freehold interest in which was”

14: After Clause 28, insert the following new Clause—

“Expenditure of Greater London Authority on housing or regeneration

(1) In section 31 of the Greater London Authority Act 1999 (limits of the general power) after subsection (5A) insert—

“(5B) Nothing in subsection (1)(a) above shall be taken to prevent the Authority incurring expenditure in doing anything for the purposes of, or relating to, housing or regeneration.”

(2) The amendment made by subsection (1) applies in relation to expenditure incurred before as well as after the coming into force of this section.”

My Lords, in discussing these amendments I shall include Amendments 28 and 36. These amendments deal with the Government’s public sector land programme, which has successfully released land for almost 98,000 new homes to date. We fully expect to meet our 100,000 homes target by March this year. Looking ahead to the next Parliament, we have an even more ambitious target, which aims to deliver land for a further 150,000 homes. This programme will be led by the Homes and Communities Agency and the Greater London Authority, and will mean transferring a significant amount of government land into their ownership.

Clause 28 will ensure that future purchasers of land owned by the Homes and Communities Agency, the Greater London Authority and the mayoral development corporations will be able to develop and use land without being affected by easements and other rights and restrictions. Clause 28 will bring the position of purchasers of land from the HCA, the GLA and the MDCs into line with those presently enjoyed by purchasers from local authorities and other public bodies involved in regeneration and development. This in turn will enable us to increase the attractiveness of surplus public sector land to developers, thus ensuring that we can facilitate the development of much needed new homes and support economic growth by removing obstacles to development while achieving best value for the taxpayer.

I want to be clear, however, that where the HCA or the GLA currently retains the freehold in the land and leases that land to developers, the powers to override third-party rights and restrictions are already exercisable on that land under existing legislation. There has to date been a degree of uncertainty on this point, which I understand has resulted in delays to certain developments in London. Amendment 13 seeks to provide an assurance that where the HCA or the GLA retains the freehold of land, the powers to override third-party rights and restrictions in land already apply under existing legislation, and we are happy to provide that clarity.

I turn now to Amendments 14, 28 and 36. Perhaps I may move on to the related matter of the Greater London Authority’s powers to incur expenditure on the transport elements of housing and regeneration projects. This important issue was raised in the other place during Committee and the Government promised to look urgently at the legislative options available to address it. We concluded that it was necessary to make a minor change to the GLA Act 1999 and have therefore made the proposed amendment.

Amendment 14 removes a prohibition in Section 31 of the GLA Act 1999 that prevents the GLA incurring expenditure on anything that may be done by its functional body, Transport for London. We are making this change to the GLA Act because the GLA has said that TfL’s powers are wide-ranging and therefore preclude the GLA from incurring expenditure on anything transport-related when undertaking housing or regeneration projects.

The prohibition excludes the GLA from incurring expenditure on projects that the GLA has been responsible for since 1 April 2012 when it took on the roles, land and contracts of the former London Development Agency and the Homes and Communities Agency in London. Without this amendment, around 50 projects worth over £200 million would have to stop. This includes work which the GLA has been funding with the London borough councils to revitalise high streets, including in Deptford, Bromley and Cricklewood. It also affects new initiatives to deliver new homes such as housing zones and at Barking Riverside.

Amendment 36 allows for the clause to come into effect on the day the Bill receives Royal Assent and that it will apply in relation to expenditure incurred by the GLA before as well as after the coming into force of the new clause. This is because it was clearly the intention of Parliament that the GLA should have equivalent powers to the former London Development Agency and the Homes and Communities Agency, following the Localism Act 2011. Amendment 28 limits the geographical extent to England and Wales.

Making these changes to the GLA Act 1999 is therefore essential to ensure that the GLA can deliver new homes and jobs for London. I beg to move that this House accepts these Commons amendments.

My Lords, we consider these amendments uncontroversial and are happy to support them. We particularly see the thrust of Amendment 14 and the need to change what is clearly an unintended provision in the 1999 Act. It is indeed perverse if because of the existing powers the GLA is precluded from incurring expenditure on anything transport-related, such as transport-related projects to deliver housing, jobs and growth in London. That cannot be right, which is why we support the amendments.

Motion agreed.

Motion on Amendments 15 to 19

Moved by

15: Clause 38, page 45, line 23, leave out subsection (5)

16: Clause 39, page 46, line 12, leave out “or delict”

17: Clause 42, page 47, line 39, leave out “the Scottish Ministers or”

18: Clause 43, page 48, line 34, leave out from “area”” to end of line 36 and insert “means those parts of the landward area (within the meaning of the Petroleum Licensing (Exploration and Production) (Landward Areas) Regulations 2014) that are in England and Wales or are beneath waters (other than waters adjacent to Scotland);”

19: Clause 43, page 48, line 46, leave out from beginning to end of line 47

My Lords, in the absence of my noble friend Lady Verma, I beg to move that this House agrees with the Commons in their Amendments 15 to 19. I will also speak to Amendments 29, 31, 33 and 33A.

Following discussions here and in the other place, the Government have tabled these amendments to remove Scotland from the scope of the provisions concerning the right to use deep-level land. Noble Lords will be aware that, as a result of the Smith commission’s recommendations and the Command Paper that has been published, it is planned that responsibility for mineral access rights for underground onshore extraction of oil and gas will be devolved to the Scottish Parliament in the next Parliament.

These amendments ensure that the provisions in the Infrastructure Bill do not change the current system that applies for granting access rights in Scotland. The Scottish Government and Scottish Parliament already have substantial control of onshore oil, gas and geothermal activities through their own existing planning procedures and environmental regulations, which are devolved. I hope that these amendments will be welcomed.

Motion agreed.

Motion on Amendments 20, 20B and 20C

Moved by

That this House do agree with the Commons in their Amendment 20, do propose Amendment 20B as an amendment thereto, and do propose Amendment 20C as a consequential amendment to the Bill.

20: After Clause 43, insert the following new Clause—

“Advice on likely impact of onshore petroleum on the carbon budget

(1) The Secretary of State must from time to time request the Committee on Climate Change to provide advice (in accordance with section 38 of the CCA 2008) on the impact which combustion of, and fugitive emissions from, petroleum got through onshore activity is likely to have on the Secretary of State’s ability to meet the duties imposed by—

(a) section 1 of the CCA 2008 (net UK carbon account target for 2050), and

(b) section 4(1)(b) of the CCA 2008 (UK carbon account not to exceed carbon budget).

(2) As soon as practicable after each reporting period, the Secretary of State must produce a report setting out the conclusions that the Secretary of State has reached after considering the advice provided by the Committee on Climate Change during that reporting period in response to any request made under subsection (1).

(3) The Secretary of State must lay a copy of any such report before Parliament.

(4) In this section—

“CCA 2008” means the Climate Change Act 2008;

“petroleum got through onshore activity” means petroleum got from the strata in which it exists in its natural condition by activity carried out on land in England and Wales (excluding land covered by the sea or any tidal waters);

“petroleum” has the same meaning as in Part 1 of the Petroleum Act 1998 (see section 1 of that Act);

“reporting period” means—

(a) the period ending with 1 April 2016, and

(b) each subsequent period of 5 years.”

20B: Line 13, leave out from “must” to end of line 17 and insert “—

(a) lay before Parliament a copy of advice received under subsection (1) during the reporting period, and

(b) lay before Parliament a draft of regulations under subsection (3) or a report under subsection (5).

(3) Regulations under this subsection are regulations providing for section 38 to cease to have effect to such extent as may be specified in the regulations.

(4) No provision made in regulations under subsection (3) has effect in relation to anything done in exercise of the right of use conferred by section 38 before the date on which the regulations come into force.

(5) A report under this subsection is a report explaining why a draft of regulations under subsection (3) has not been laid.

(6) Regulations under this section may make such consequential amendments or repeals of sections 38 to 43 and this section as the Secretary of State considers appropriate.”

20C: Page 52, line 31, after “42” insert “or section (Advice on likely impact of onshore petroleum on the carbon budget)

My Lords, I beg to move that this House agrees with the House of Commons in its Amendment 20, as well as with Amendments 32 and 38. I shall also speak to the subsequent Amendments 20B and 20C, which the Government have tabled in this group. I restate this Government’s commitment to reducing carbon emissions by 80% by 2050. To meet our challenging climate targets we will need significant quantities of renewables, nuclear and gas in our energy mix, and we are committed to listening to the experts and their advice on how to reach those targets. The Committee on Climate Change said that for flexible power supply, the UK will,

“continue to use considerable, albeit declining, amounts of gas well into the 2030s”,

which will leave,

“a considerable gap between production of North Sea gas and our total demand”.

The committee argues that this demand,

“can either be met through imports or UK production of shale gas”,

and concludes that,

“if anything using well-regulated UK shale gas to fill this gap could lead to lower overall lifecycle greenhouse gas emissions than continuing to import LNG. It would also increase the proportion of energy produced within the UK, improving our energy sovereignty”.

Notwithstanding this, concerns have been raised in both this House and the other place about how the UK’s shale industry will affect our carbon budgets. We therefore tabled amendments in the other place that will place a duty on the Secretary of State to seek advice from the Committee on Climate Change as to the impact of petroleum produced onshore in England and Wales on our ability to meet the UK’s overall climate change objectives over time. The Secretary of State must consider the advice of the Committee on Climate Change and report on his conclusions at least every five years.

The Government now seek to further strengthen this commitment by specifying that if the Committee on Climate Change advises that shale gas may adversely impact climate change objectives, the Secretary of State must either make regulations providing that the right of use for petroleum and deep geothermal exploitation will no longer be available for future projects or report to Parliament on the reasons for not doing so. Amendment 20B and the consequential Amendment 20C seek to address this commitment. By introducing these amendments we are making it absolutely clear that shale development will remain compatible with our goal to cut greenhouse gas emissions.

My Lords, I welcome these amendments and very much welcome what my noble friend just said. I do not point at my noble friend in saying this, but I am always disappointed, given the truism about gas being the future, that we have not made more effort to make sure that, in the short term, gas is substituted for coal and that we have a far more rigorous gas industry than we have at the moment. That was the route forward, but we have been unable to put it to bed during the passage of the Energy Bill and now of the Infrastructure Bill. I hope that it is something that can at least be given greater attention after the election. However, I welcome these new clauses.

My Lords, the government amendments in this group touch on the role of the Committee on Climate Change in advising on the impact which combustion and fugitive emissions from petroleum have on the carbon budget. I understand that this was introduced in the other place as a result of a Lib Dem initiative, and we are fully supportive. We have always said that, if fracking is to take place, we would need the appropriate framework for regulation and need to consider a wider range of issues on which it will have an impact, including climate change. The Climate Change Act 2008, which was introduced by the then Labour Government, was an important piece of legislation that subsequently established the Committee on Climate Change. We therefore support the Committee’s role in advising the Government.

Before the noble Lord, Lord Tunnicliffe, sits down, can I just point out one thing that I want to get off my chest? The Climate Change Act was a great thing that the Labour Government did, but among the amendments that they did not allow was one about excluding traded EU ETS certificates from the carbon budget. That means that the power sector is still largely excluded from the Climate Change Act and carbon budgets. It is a big hole in the system and it is regrettable that those changes were never made.

I am grateful to all noble Lords for their support for these amendments. I think that all noble Lords will agree that it makes great sense to ensure that we have the informed advice of the climate change committee.

Motion agreed.

Motion on Amendments 21, 21B, 21C and 21D

Moved by

That this House do disagree with the Commons in their Amendment 21 but do propose Amendments 21B, 21C and 21D in lieu.

21: Insert the following new Clause—

“Hydraulic fracturing: necessary conditions

Any hydraulic fracturing activity can not take place:

(a) unless an environmental impact assessment has been carried out;

(b) unless independent inspections are carried out of the integrity of wells used;

(c) unless monitoring has been undertaken on the site over the previous 12 month period;

(d) unless site-by-site measurement, monitoring and public disclosure of existing and future fugitive emissions is carried out;

(e) in land which is located within the boundary of a groundwater source protection zone;

(f) within or under protected areas;

(g) in deep-level land at depths of less than 1,000 metres;

(h) unless planning authorities have considered the cumulative impact of hydraulic fracturing activities in the local area;

(i) unless a provision is made for community benefit schemes to be provided by companies engaged in the extraction of gas and oil rock;

(j) unless residents in the affected area are notified on an individual basis;

(k) unless substances used are subject to approval by the Environment Agency;

(l) unless land is left in a condition required by the planning authority;

and

(m) unless water companies are consulted by the planning authority.”

21B: Insert the following new Clause—

“Onshore hydraulic fracturing: safeguards

After section 4 of the Petroleum Act 1998 insert—

“4A Onshore hydraulic fracturing: safeguards

(1) The Secretary of State must not issue a well consent that is required by an onshore licence for England or Wales unless the well consent imposes—

(a) a condition which prohibits associated hydraulic fracturing from taking place in land at a depth of less than 1000 metres; and

(b) a condition which prohibits associated hydraulic fracturing from taking place in land at a depth of 1000 metres or more unless the licensee has the Secretary of State’s consent for it to take place (a “hydraulic fracturing consent”).

(2) A hydraulic fracturing consent is not to be issued unless an application for its issue is made by, or on behalf of, the licensee.

(3) Where an application is made, the Secretary of State may not issue a hydraulic fracturing consent unless the Secretary of State—

(a) is satisfied that—

(i) the conditions in column 1 of the following table are met, and

(ii) the conditions in subsection (6) are met, and

(b) is otherwise satisfied that it is appropriate to issue the consent.

(4) The existence of a document of the kind mentioned in column 2 of the table in this section is sufficient for the Secretary of State to be satisfied that the condition to which that document relates is met.

(5) But the absence of such a document does not prevent the Secretary of State from being satisfied that that condition is met.

Column 1: conditions

Column 2: documents

1 The environmental impact of the development which includes the relevant well has been taken into account by the local planning authority

A notice given by the local planning authority that the environmental information was taken into account in deciding to grant the relevant planning permission

2 Appropriate arrangements have been made for the independent inspection of the integrity of the relevant well

A certificate given by the Health and Safety Executive that it—

(a) has received a well notification under regulation 6 of the Borehole Sites and Operations Regulations 1995,

(b) has received the information required by regulation 19 of the Offshore Installations and Wells (Design and Construction, etc.) Regulations 1996, and

(c) has visited the site of the relevant well

3 The level of methane in groundwater has, or will have, been monitored in the period of 12 months before the associated hydraulic fracturing begins

An environmental permit has been given by the relevant environmental regulator which contains a condition that requires compliance with a waste management plan which provides for monitoring of the level of methane in groundwater in the period of 12 months before the associated hydraulic fracturing begins

4 Appropriate arrangements have been made for the monitoring of emissions of methane into the air

An environmental permit which contains a condition requiring compliance with a waste management plan which provides for the monitoring of emissions of methane into the air for the period of the permit

5 The associated hydraulic fracturing will not take place within protected groundwater source areas

A decision document given by the relevant environmental regulator (in connection with an environmental permit) which indicates that the associated hydraulic fracturing will not take place within protected groundwater source areas

6 The associated hydraulic fracturing will not take place within other protected areas

A notice given by the local planning authority that the area in respect of which the relevant planning permission has been granted does not include any land which is within any other protected areas

7 In considering an application for the relevant planning permission, the local planning authority has (where material) taken into account the cumulative effects of—

(a) that application, and

(b) other applications relating to exploitation of onshore petroleum obtainable by hydraulic fracturing

A notice given by the local planning authority that it has taken into account those cumulative effects

8 The substances used, or expected to be used, in associated hydraulic fracturing—

(a) are approved, or

(b) are subject to approval,

by the relevant environmental regulator

An environmental permit has been given by the relevant environmental regulator which contains a condition that requires substances used in associated hydraulic fracturing to be approved by that regulator

9 In considering an application for the relevant planning permission, the local planning authority has considered whether to impose a restoration condition in relation to that development

A notice given by the local planning authority that it has considered whether to impose such a condition

10 The relevant undertaker has been consulted before grant of the relevant planning permission

A notice given by the local planning authority that the relevant undertaker has been consulted

11 The public was given notice of the application for the relevant planning permission

A notice given by the local planning authority which confirms that the applicant for the relevant planning permission has certified that public notification requirements, as set out in a development order, have been met

(6) The conditions mentioned in subsection (3)(a)(ii) are—

(a) that appropriate arrangements have been made for the publication of the results of the monitoring referred to in condition 4 in the table;

(b) that a scheme is in place to provide financial or other benefit for the local area.

(7) A hydraulic fracturing consent may be issued subject to any conditions which the Secretary of State thinks appropriate.

(8) A breach of such a condition is to be treated as if it were a breach of a condition of a well consent.

4B Section 4A: supplementary provision

(1) “Associated hydraulic fracturing” means hydraulic fracturing of shale or strata encased in shale which—

(a) is carried out in connection with the use of the relevant well to search or bore for or get petroleum, and

(b) involves, or is expected to involve, the injection of—

(i) more than 1,000 cubic metres of fluid at each stage, or expected stage, of the hydraulic fracturing, or

(ii) more than 10,000 cubic metres of fluid in total.

(2) For the purposes of deciding the depth at which associated hydraulic fracturing is taking place in land—

(a) the depth of a point in land below surface level is the distance between that point and the surface of the land vertically above that point; and

(b) in determining what is the surface of the land, any building or other structure on the land, and any water covering the land, must be ignored.

(3) Subsections (1) and (2) apply for the purposes of section 4A and this section.

(4) The Secretary of State must, by regulations made by statutory instrument, specify—

(a) the descriptions of areas which are “protected groundwater source areas”, and

(b) the descriptions of areas which are “other protected areas”, for the purposes of section 4A.

(5) A statutory instrument which contains regulations under subsection (4) may not be made unless a draft of the instrument has been laid before and approved by a resolution of each House of Parliament.

(6) The Secretary of State must lay a draft of the first such regulations before each House of Parliament on or before 31 July 2015.

(7) The Secretary of State must consult—

(a) the Environment Agency before making any regulations under subsection (4)(a) in relation to England;

(b) the Natural Resources Body for Wales before making any regulations under subsection (4)(a) in relation to Wales.

(8) These expressions have the meanings given—

“development order” has the meaning given in section 59 of the Town and Country Planning Act 1990;

“environmental permit” means a permit granted under regulation 13 of the Environmental Permitting (England and Wales) Regulations 2010;

“hydraulic fracturing consent” has the meaning given in subsection (1)(b);

“licensee” means the holder of the onshore licence for England or Wales;

“local planning authority” means—

(a) the planning authority to which the application for the relevant planning permission was made (unless the Secretary of State or Welsh Ministers are responsible for determining the application), or

(b) the Secretary of State or Welsh Ministers (if responsible for determining the application);

“onshore licence for England or Wales” means a licence granted under section 3 which authorises a person to search or bore for or get petroleum in those parts of the landward area (within the meaning of the Petroleum Licensing (Exploration and Production) (Landward Areas) Regulations 2014) that are in England or Wales or are beneath waters (other than waters adjacent to Scotland);

“relevant environmental regulator” means—

(a) the Environment Agency, if the relevant well is situated in England, or

(b) the Natural Resources Body for Wales, if the relevant well is situated in Wales;

“relevant planning permission” means planning permission to be granted, or granted, in respect of development which includes the relevant well;

“relevant undertaker” means the water undertaker or sewerage undertaker in whose area of appointment the relevant well is located;

“relevant well” means the well to which a well consent relates; “well consent” means a consent in writing of the Secretary of State to the commencement of drilling of a well.

(9) The power of the Secretary of State to make regulations under section 4 includes power to make such amendments of the definition of “onshore licence for England or Wales” in this section as the Secretary of State considers appropriate in consequence of any other exercise of the power under section 4.

(10) The Secretary of State may, by regulations made by statutory instrument—

(a) make such amendments of column 2 of the table in section 4A as the Secretary of State considers appropriate, and

(b) make such other amendments of section 4A or this section as the Secretary of State considers appropriate in consequence of provision made under paragraph (a).

(11) A statutory instrument which contains regulations under subsection (10) may not be made unless a draft of the instrument has been laid before and approved by a resolution of each House of Parliament.””

21C: Clause 48, page 54, line 26, after “37” insert “and section (Onshore hydraulic fracturing: safeguards)

21D: In the Title, line 13, leave out from “provision” to “geothermal” in line 14 and insert “about onshore petroleum and”

My Lords, I shall speak also to the other amendments in this group.

There is a clear and pressing need to ensure that this legislation is absolutely right. Shale gas is an exciting new energy resource for the UK, with the potential to provide greater energy security, growth and jobs, alongside playing an important role in the transition to a low-carbon economy. Unlocking the shale industry is too big an opportunity to pass up. We all agree that it must be done safely and sustainably, but we cannot throw away the opportunity to create thousands of jobs and economic growth for communities across Britain.

The Government’s position comes from careful consultation of relevant experts and draws on many authoritative reports from the US. More specifically, it is based on reports by the Royal Society and the Royal Academy of Engineering, and Public Health England, which have considered a wide range of evidence and looked at the UK regulatory system. Their advice has outlined the risks and 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”.

Following exhaustive discussions in this House and the other place, we have been considering the implementation and enforcement of operational best practices in the UK, which is why we accepted Amendment 21 during Report stage in the other place. We did so in order to show our acceptance of the intent of the 13 policy elements it sets out, but noble Lords—in particular, those with a legal background—will appreciate that, as currently drafted, the amendment cannot be included in the Bill. Although the courts would attempt to interpret the provisions, Amendment 21 is not viable as law and simply would not work in practice. Amendment 21 as currently drafted would have been wrong to accept, so we have been working hard to ensure that its spirit is maintained.

The government amendments in lieu are designed to ensure that the regulations we seek to introduce deliver the intended outcomes and support the growth of the shale industry while reassuring local communities that this will be done in a safe and responsible manner. They also ensure clarity for all interested parties by proposing clauses that are capable of being interpreted and enforceable.

Regarding the scope of our amendments, they will apply to hydraulic fracturing, which will be defined in UK law. Geothermal operations will be excluded, as the amendments are being taken forward through the petroleum licence, for which there is no geothermal equivalent. Conventional oil and gas well stimulation techniques will also be excluded—something that noble Lords will agree makes perfect sense, as these have been used for decades onshore.

The territorial extent of the amendments will be limited to England and Wales. In other words, Scotland will be excluded from the requirements of the new commitments. Noble Lords will be aware that, as a result of the Smith commission’s recommendations and the Command Paper published, it is planned that in the next Parliament responsibility for mineral access rights for underground onshore extraction of oil and gas will be devolved to the Scottish Parliament.

I now turn to the commitments themselves. First, our amendments mean that the Secretary of State will not issue a well consent, something that is required by an onshore licence for England or Wales, unless it prohibits associated hydraulic fracturing from taking place in land at a depth of less than 1,000 metres. The right-of-use provisions will be left unchanged at 300 metres. In land at a depth of 1,000 metres or more, hydraulic fracturing will not take place if the licensee does not have the Secretary of State’s consent for it to take place—something I will henceforth refer to as a hydraulic fracturing consent. For the hydraulic fracturing consent to be issued, an application for it has to be made by, or on behalf of, the licensee. Where an application is made, the Secretary of State will only grant consent if he is satisfied that a number of conditions have been met.

Some of these conditions relate to the planning systems in England and Wales. In particular, the Secretary of State will need to be satisfied that the environmental impact of the development has been taken into account by the relevant planning authority. He will also need to be satisfied that the relevant planning authority has taken into account, where material, the cumulative impact of the development proposed and any other development involving hydraulic fracturing to obtain oil or gas. He must be satisfied that the relevant planning authority has considered whether to impose a restoration condition in relation to the development and that the relevant water companies have been consulted before any planning permission is granted.

Similarly, a well cannot be drilled, and associated hydraulic fracturing cannot take place, within protected areas. The precise definition of protected areas will be decided at a later stage, as our clauses put a duty on the Secretary of State to bring forward secondary legislation to be laid before and approved by a resolution of both this House and the other place no later than the end of July this year. We must be very careful not to put in place restrictions in areas that do not achieve the intended aim of the condition or that go beyond it and needlessly damage the potential development of the shale industry. In order to satisfy himself that the conditions relating to planning have been met, the Secretary of State may rely on notices given by the local planning authority. A notice, which, in practice, means specifically that the process of an environmental impact assessment has to have been carried out, would be sufficient to satisfy the Secretary of State that the environmental impact had been taken into account.

Similarly, notices from the relevant local planning authority confirming that the cumulative effects of permitted developments have been taken into account where material, that it has considered whether to impose a restoration condition, and that local water companies have been consulted before a decision to grant the relevant planning permission is taken, would allow the Secretary of State to be satisfied that the relevant conditions have been met. It would also be sufficient to receive a notice indicating that the area in respect of which the planning permission has been granted does not include any land which is within protected areas, once these have been clearly defined. I note that the absence of these documents does not necessarily prevent the Secretary of State satisfying himself that the conditions have been met. This is to ensure that if, for example, the kind of notice listed is not available, the Secretary of State could grant hydraulic fracturing consent provided he is satisfied that the conditions listed in the clause have been met. I should stress that it is not possible for the Secretary of State to grant hydraulic fracturing consent if these conditions have not been met.

Other conditions that would need to be met concern the environmental permitting regimes in England and Wales. Consent will not be granted unless the level of methane in groundwater has been monitored 12 months before hydraulic fracturing begins. Arrangements have also to be made for monitoring emissions of methane into the air for the period of the environmental permit, and for the monitoring results to be published. The substances used, or expected to be used, in associated hydraulic fracturing have to be approved by the relevant environmental regulator.

In order to satisfy himself that these environmental conditions have been met, the Secretary of State may rely on permits granted by the relevant environmental regulator. These environmental permits must contain conditions requiring compliance with a waste management plan providing for the monitoring of methane in groundwater for a 12-month period prior to hydraulic fracturing, and of methane emissions for the period of the environmental permit. The permit will also need to contain a condition requiring approval of substances used in associated hydraulic fracturing by the environmental regulator. I note that the absence of these permits does not prevent the Secretary of State from satisfying himself that the conditions have been met. Again, this is to ensure that the Secretary of State could be able to grant hydraulic fracturing consent if satisfied that the conditions listed in the clause had been met.

With regard to the environmental permitting regime, hydraulic fracturing consent cannot be granted if operations are to take place within protected groundwater source areas. For the same reasons as outlined above, the precise definition of protected groundwater source areas will be specified in secondary legislation at a later stage. Our clauses put a duty on the Secretary of State to define protected groundwater source areas in secondary legislation to be laid in draft before and approved by a resolution of both Houses by no later than the end of July this year. Once this has happened, the Secretary of State may satisfy himself that this condition has been met through the receipt of a decision document given by the relevant environmental regulator, in connection with an environmental permit stating that hydraulic fracturing will not take place within these areas.

The three final conditions that need to be fulfilled before hydraulic fracturing consent is given concern notification, well inspections and community benefit schemes. On the first, before granting a hydraulic fracturing consent, the Secretary of State will need to be satisfied that the public were given notice of the application for the relevant planning permission. The Secretary of State will look to the relevant planning authority to confirm that the notification requirements in respect of the relevant planning permission have been met. It is not feasible to require separate notifications for each individual resident as there would be no way for the Secretary of State to confirm that an operator had fulfilled this condition. If the Secretary of State were required to satisfy himself of such a condition despite being unable to obtain the evidence that he would need in order to do so, it would leave every hydraulic fracturing consent issued by the Secretary of State wide open to legal challenge by third parties.

On the second condition, appropriate arrangements have to have been made for independent inspections of the integrity of the relevant well. The Secretary of State may satisfy himself that this has happened if the Health and Safety Executive provides him with a certificate stating that it has received a well notification and the necessary information about the well, and that the HSE itself has visited the site of the relevant well.

Lastly, a scheme would have to be in place to provide financial or other benefit for the local area before the Secretary of State granted a hydraulic fracturing consent. This puts in legislation the requirement to provide financial or other benefits to the local area. We have already welcomed a package of community benefits that was brought forward by the industry, through which operators will pay £100,000 for each hydraulic fracturing site at exploration and 1% of revenues at production. Operators will publish evidence each year of how these commitments have been met.

We have worked tirelessly over the past week to come up with a set of clauses specific to the shale industry that, in keeping with the spirit of each of the points in Amendment 21, will provide the public with confidence that it is being taken forward in a balanced and responsible way. I hope my explanation of the government amendment in lieu satisfies noble Lords that this has been done. I restate that shale gas is an exciting new energy resource for the UK. It offers huge potential when countries all over the world are looking to greater self-sufficiency. Now is the time to seize, not lose, the opportunity to develop the United Kingdom’s shale industry. I beg to move.

Amendment to the Motion

Moved by Baroness Jones of Moulsecoomb

Leave out from “do” to the end and insert “agree with the Commons in their Amendment 21 and do propose Amendment 21F as an amendment thereto”.

21F: Line 21, at end insert “and have consented to the carrying on of the activity”

Baroness Jones of Moulsecoomb (GP): My Lords, I shall try to reintroduce the original Amendment 21 that went through the other place. It was a Labour amendment, supported by the Government. The Minister has said that this government amendment has the spirit of the original Amendment 21 but, to be quite honest, the Government have missed out some detail that is absolutely crucial. I am also quite interested in some of the scientific advice that the Government have taken; some noble Lords may know that in Wales there was a vote last week to pass a fracking moratorium, as there was in Scotland the week before, until the risks could be assessed. It is those risks that I would like to mention today. A scheduling farce has meant that there has been very little time to debate this, and no time for a vote on Report in the Commons.

I feel that the Government are doing a U-turn here. It is not good enough to pass something in one place and then change part of it quite substantially. There are two issues in particular that I want to raise. The first, crucial point is the possibility of fracking near groundwater sources. There is also the issue of trespass under people’s homes. The amendments that went through the other place were already probably not sufficient to protect against all sorts of risks, but at least they were there. The amendments submitted by the Government today may overturn even those quite limited protections.

On the issue of fracking within groundwater source protection zones 1 to 3—that is, the areas around aquifers that safeguard our drinking water—we have heard that the Government might possibly redefine those areas, but they have already been defined by the Environment Agency. There is no reason to redefine them when they have been defined for many years. Our drinking water needs protection; I cannot believe that anyone here does not agree with that.

I hope that the noble Baroness will not forget to inform the House that groundwater, in aquifers, is very close to the ground—that is why it is called that—while the fracking occurs between one mile and a mile and a half deep, and that what she is saying therefore has no merit whatever.

I thank the noble Lord for his intervention. Fracking of course risks earth tremors and earthquakes and therefore water could be polluted very easily, so I would argue that his comments have no merit.

It is very close at hand if the noble Lord would like to look at it. I can give him any number of sources; I do not have them to hand at the moment but I would be delighted to give them to him afterwards. I am sure that Friends of the Earth and so on would be very pleased to send him a briefing on all this, as they have gone into it extensively.

I remind the noble Baroness of what was said in the Committee on Economic Affairs:

“On the evidence we have heard, there should be no risk that seismic activity caused by hydraulic fracturing would be of sufficient magnitude to constitute any risk to people and property”.

I thank the noble Lord for that intervention. The noble Lord, Lord Smith, who was then chair of the Environment Agency, reported to that Economic Affairs Committee that,

“groundwater contamination is the biggest environmental risk in the Act”.

The Labour spokesperson in the other place said that it was all or nothing: if the Government did not accept the amendment, including banning fracking near aquifers, the Labour Party would oppose fracking altogether. I look forward to that party reaffirming its opposition today. People might assume that as this is an unelected House, nobody watches what goes on here, but people do watch and they care out there. Fracking is a very controversial issue; people have already voiced their concerns and will continue to do so. A government U-turn on this is unforgiveable.

The second issue is that of trespass. I think there is a later amendment that deals with this, but it does not go far enough.

Groundwater contamination is one of the key environmental public health risks from fracking and is a huge risk to the well-being of the population. In some parts of the UK, more than 70% of public drinking water comes from groundwater. As for the Government promising to redefine groundwater source areas, that is a secondary legislation issue. The original idea from the Labour amendment was, however, that this should be in the Bill; it should be primary legislation, not secondary.

A leaked letter from the Chancellor had instructions to pull out all the stops to make for an easier life for fracking companies. This is probably not surprising when our Prime Minister has said that we are going “all out for shale”. I can accept that that side of the House is very gung-ho on fracking but I hope for something better on this side. The original Amendment 21 would also give us an opportunity to vote against the issue of trespass within this Bill.

Despite assertions that shale gas is a fantastic new source of energy, it is time for us to consider whether and by how much it would have a lower carbon footprint. It probably would not, if CO2 and methane are included.

Fracking is one of those things that we can go for very hard when we do not know all the risks, but we have to understand that those risks exist. This House has a duty to people outside who know that there are risks. Some 360,000 people voiced their concerns about issues such as trespass. Many people also responded to a consultation on the risks of fracking. There is concern out there that I feel is not well represented in this House and I urge the Government to think again about this amendment.

My Lords, I confess that I am somewhat mystified why we are discussing a fracking moratorium. It was not in the Bill as it left the Lords and the Commons declined to insert an amendment. What is there left for the Lords to consider?

There are two approaches for analysing this issue. The first we might call the appeal to reason. That was the title of the book by the noble Lord, Lord Lawson. What is the logic of the moratorium? It seems to me to be completely incoherent. It is argued, first, that we do not know enough to permit this technique to be deployed in the UK, but the moratorium would prevent drilling under careful restraints of the kind that the Minister has pointed out and it would prevent us advancing our knowledge. In my view, it is the logic of the GM-crop tramplers.

The next argument is that we cannot allow our shale reserves to be exploited as this would be inconsistent with the decarbonisation targets of the Climate Change Act. Setting aside the fact that our exploitation of shale is pretty immaterial in a world where China has said that its CO2 emissions will continue to rise until 2030 and India refuses to set any such objective, this proposal ignores the fact that the largest part of gas usage is for heat in our homes and the feedstock for chemicals. That is not going to change for a long time given the slow turnover in our housing stock for several decades.

This morning, I looked at where the various sources of energy came from. At 11 am on a very cold and still day, we were using 46 gigawatts of energy. Of that, 6% came from wind and 43% from gas. This proposal ignores the fact that we need access to gas to provide the back-up when the wind does not blow in precisely these climatic conditions, which are repeated quite often each winter.

The second approach to analysis is the appeal to authority. Who supports it and who is against it, and to which witness do you attach the greatest credibility? The attempted Commons amendment, which the noble Baroness, Lady Jones, has commended, received only derisory levels of support and was based on the findings of the House of Commons Environmental Audit Committee. The committee identified a number of environmental risks which in its view justified a moratorium—water extraction, wastewater disposal, fugitive methane, land use, noise and so on. We should remember, however, that the House of Lords Select Committee on Economic Affairs went over exactly the same ground but its conclusions were radically different. It saw substantial benefits to the UK and concluded that the environmental risks cited by the Commons committee were either not as serious as represented or could be managed by an effective regulatory framework.

Why do I attach greater weight to the Lords’ findings? It is not just because this is our House, or that I have greater faith in the judgment of the noble Lord, Lord Hollick, than that of Ms Joan Walley, or that the Lords’ findings are consistent with those of the Royal Society and the Royal Academy of Engineering; it is also because I believe that there is a structural flaw in the remit of the Environmental Audit Committee, which is to consider to what extent the policies and programmes of departments contribute to environmental protection and sustainable development.

A decade ago, government documents on energy policy cited four objectives: consistency with our environmental objectives on climate change, enhancing competition, reducing fuel poverty and strengthening energy security. The problem with the EAC and, I would say, the climate change committee, is that they have concentrated on one of these objectives to the detriment of the other three. As a result, I believe that their recommendations are flawed.

I have some misgivings about the heavy apparatus of steps that have to be gone through and the safeguards which the Minister has set out for us, but provided that we operate within a four-pillar and not a one-pillar framework, I think we should support them.

My Lords, I speak in support of the spirit of Amendment 21. As a former Energy Minister, an investor in the hydrocarbon sector and a former non-executive director in hydrocarbon companies, I have given a great deal of thought to whether I support the development of fracking in the UK.

Quite apart from the environmental risks in such drilling—and, although the degree of risk can be debated, there is always a risk when drilling for hydrocarbons, particularly given that we live on such a densely populated island—I think we should look at the broader picture. What has been ignored so far is the picture of global demand and supply that we are witnessing. The Chancellor has said that we should try to emulate the success of the United States with shale oil and gas. However, what we are witnessing globally today is a supply glut. The success of shale in the United States has partly contributed to that. Perversely, we are seeing that this glut is pushing down the price of oil and gas across the world—particularly oil—and the impact of that on a number of smaller companies is that they are going to the wall. We are already seeing a decline in shale oil production in the United States and we should not forget that with shale oil we have seen quite a dramatic decline over a couple of years. So there is a dramatic fall-off in investment in the United States in shale, a fall in employment, a number of smaller companies going to the wall and all the majors have now announced that they are cutting back investment in major oil and gas projects. Therefore my fear is that we are entering a period of greater volatility as regards energy prices.

To a certain extent the success of shale in the United States has been quite limited, both as regards scale and duration, and we are now entering a period of quite dangerous volatility with regard to investment. Therefore, although consumers currently benefit from lower energy prices for oil and gas, that may well be short-lived. In addition, with the majors pulling back on major investment and with a number of smaller shale companies going to the wall, once the existing number of companies have cut back on production in the United States, in two to three years’ time we may well see the price of a barrel of oil go back up to $200.

Therefore, if we look at the United States as a model for a number of the companies that are involved in shale—and a lot of the communities that will depend on that local investment—it appears that it is not seen as a wonderful model, so maybe it is not a model we should adopt for the UK. Shale takes a huge amount of investment to develop, and it has its environmental risks. In the UK it will take many years to go through the planning process, yet the success of shale can be relatively short-lived. In the mean time, we will have these huge peaks and troughs in the price of hydrocarbons.

Will the noble Lord agree that if the oil or gas price shoots up, as he says, we should be all the more encouraging towards the shale industry in this country?

No, because that would be a short-term benefit. We should look at the long-term planning. That is the difficult thing with shale at the moment: it is destabilising the market for oil and gas, with the majors cutting back quite dramatically. You can have shale production, but it is short term. If, for example, you invest in a major field, it can take 10 or 20 years to develop—Kashagan in Kazakhstan, for example—it needs billions of dollars of investment, and takes many years to develop, sometimes decades. Companies have to be able to plan ahead, as that gives medium to long-term relative stability to the oil price. If you are talking about shale, you are talking about a two to three-year timescale for the development of a field, which does not provide the sort of stability we are talking about.

Of course, we should also look at increasing investment in renewables as well. Shale is one thing you can look at, but you can also look at investing more in renewables.

The noble Lord may be confusing two different things: a well, which may have a short life, and a field. I can see that wells might run out quite quickly, but then other wells will be drilled, so that does not mean that the field runs out in the period as he is explaining.

What tends to happen is that in the United States, for example, a shale oil rig—a well—may cost $1 million to develop. You then drill in that well for a couple of years, and then you have to invest further in the next well in the same field. A number of shale oil companies in the United States at the moment face not getting the funding to invest in the next well, because it is very cash-flow intense. Therefore if you want energy security, shale oil and gas is not the way to achieve it. It is a very expensive short-term hit, and it adds to the volatility of the price of oil and gas. In a way, the success we are seeing in the United States is already unravelling. I therefore wonder whether it is worth the cost as regards the overall benefit.

We are also seeing the impact on businesses, both large and small, in the hydrocarbon sector. Ask any of the majors at the moment whether they are happy about where they are as regards medium to long-term planning, or go to Saudi Arabia and ask people what they think about the impact of shale oil and gas development in the United States and on the global market. You can say that they are game-playing, but nevertheless, it is destabilising. Is that the way we want to go? Is that a great success story? I am not so sure that when we look back on the development of shale in the United States it will look as successful as we all initially thought it would be. Therefore from that point of view, is what happened in the United States the right way for the United Kingdom to go? I am not so sure.

My Lords, before the noble Lord sits down, can he tell me whether he knows of any company of any size, in any part of the world, which invests to not make a profit?

That is exactly the reason. The noble Lord may know that that is why some companies are going bust—today Max Petroleum, which develops oil and gas in Kazakhstan, said that it was facing insolvency because it can no longer raise the funds to develop new fields. When the price of oil is under $50 a barrel—and we are already seeing the effect on companies such as BP, which is laying off people in Aberdeen because the price of a barrel of oil makes it uneconomic to continue to develop mature fields in the North Sea—we are facing a problem, are we not?

My Lords, I welcome this government amendment and thank my noble friend for clarifying some extremely important points. I am particularly pleased that it is now clearer that the clauses apply to hydraulic fracturing, with any ambiguity removed. However, there are some further points that I hope will be addressed in secondary legislation.

We have delayed shale exploration for too long. We have to get going so that we can show the public that there is nothing to fear. Once we start, the public will surely say, “What was all the fuss about?”. It is therefore extremely important that drilling boreholes for groundwater quality monitoring is delinked from the planning process. Permitted development rights under the general permitted development order can be used to install boreholes for monitoring water quality; that is common in the water industry. However, it is different for any development that is subject to environmental impact assessment regulations. Then, any part of the development, including the drilling of boreholes for monitoring water quality, cannot take place until full planning consent is granted. That would apply in the case of any development which includes hydraulic fracturing. It would mean, in practice, that no baseline data could be collected until full planning permission was granted, leading to a minimum of 12 months after planning before hydraulic fracturing would be permitted to take place. That would be a significant and unnecessary delay.

We should therefore allow baseline monitoring during the planning process for shale exploration. That would drastically cut the delay: doing the monitoring, then putting in the planning application, and monitoring while the planning process continues. Even if it is not a positive planning decision for industry, at least some useful data will have been obtained in the mean time during the monitoring process. More baseline data would be very welcome, so delinking from planning is a win-win whether the planning decision is positive or not. Can my noble friend therefore assure me that these concerns are noted in the amendments and will be strongly considered as the secondary legislation is formulated?

The treatment of groundwater protection zones was one of the worst outcomes of the amendments made in the other place. The Environment Agency already effectively prohibits operations in what is known as source protection zone 1, and in the lesser zones 2 and 3 the industry already has to make a convincing case to the Environment Agency. That strikes me as the right balance of regulatory oversight. That could impact on other industries, too. Shale operations take place well over 1,000 metres below any aquifer, whereas a lot more industrial activity from other sectors takes place on the surface, directly on top of the same source protection zones.

Moving away from the current regulatory framework of the Environment Agency regulatory position could have dire consequences for other industries. Furthermore, if a licence has already been purchased, it may be of no use whatever. There is no chance of that company receiving its investment back. Every investment is risky—rightly so—but this will make future investment in shale exploration all the more risky than it ought to be. Changing the rules after the licences have been awarded will not increase future licence revenue.

The government amendments mean that a decision on what is groundwater area is referred to secondary legislation. Can my noble friend assure me that those concerns will be taken into consideration as the secondary legislation is formulated?

My Lords, I declare my interests in energy as listed in the register; they include coal, which is of course threatened by shale.

Unlike the noble Lord, Lord Truscott, I think that the people whom we should be concerned about are not those looking for oil in Kazakhstan or the Saudi oil companies but the people who are struggling to pay their heating bills this winter. That is what this is all about: trying to get the cost of gas down. We need gas and, whatever happens, we will continue to need gas, as the Minister said on a previous amendment. We need gas for heating and will continue to need it—84% of British homes are heated by gas. Where there is fuel poverty, it is nearly always associated with electric, rather than gas, heating. We need gas as a chemical feedstock for the chemical industry; we need it to make fertiliser to feed the world.

So we have a golden opportunity. We have found one of the biggest gas resources ever, right under an area with high unemployment—the north-west of England—and not far from a concentration of our chemical industry. Some 10% of the Bowland shale gas could give us 50 years’ full supply of the gas consumption in this country. As we have heard, because of the community benefits funds being offered, it would offer great public benefit. It would lower our carbon dioxide output because it is certainly lower than imported gas, some of which comes in the form of liquefied gas, which has a carbon cost associated with it. It is certainly lower than coal in terms of its carbon emissions.

Much of the opposition to shale gas—some of which we have heard today—is based on myths that are popular among the upper middle class in grand rural areas. The myths are also very popular in Russia and are frequently repeated by Vladimir Putin in press conferences, because he does not like the idea of us getting our own cheap gas. We should listen to the words of the US Secretary of Energy, Ernest Moniz, who said a year or two ago,

“I still have not seen any evidence of fracking per se contaminating groundwater”.

He said that after tens of thousands of wells had been drilled and millions of fracking operations had happened in them.

It is clear that the opponents of fracking will do anything to delay and raise the cost to try to kill this industry. In that light, the amendment of the noble Baroness, Lady Worthington, is unnecessary and mischievous. It is just trying to put another hurdle in the way of shale gas by insisting that every resident nearby be written to. As has been said, it opens the way to legal challenge on everything. As it is, with all the regulations we have put around shale gas, it still may be touch and go as to whether we have killed the golden goose already. However, it looks as though we have not, yet—there is still an opportunity to have this wonderful, indigenous resource and to lower the cost of gas for people in this country.

We have put in place far greater environmental protection than for other industries. The situation with earthquakes and shale gas is that, if fracking shakes the ground, it has to do so 40,000 times less than the quarrying industry is allowed to do. That is completely mad: they are both earthquakes. I welcome the government amendments in lieu, which would adhere to the principle adopted by the oil and gas industry on environmental practices for many years: that is, the industry since Piper Alpha has always pursued the idea of goal setting rather than box ticking. It has already accepted or adopted many of the practices that are listed in these amendments. Crucially, the amendments also allow flexibility, so that the industry can learn, adapt and evolve as it is going on. That is why it is crucial to leave some flexibility in the Bill with respect to the definition of groundwater areas, protected areas and so on. As we demonstrate the safety of shale gas, we can adjust as we go on.

Finally, on the subject of trespass, I welcome the Green Party’s embrace of an extreme version of private property rights, of the kind normally associated with the libertarian right. However, the party goes too far, because imposing an offence of trespass on something that happens a mile and a half beneath your feet is like imposing an offence of trespass on British Airways for flying over your head. We sorted out that issue in the 1920s and decided that it was not a sensible use of the law of trespass. We should do the same with this.

These are sensible amendments.

My Lords, I support the government amendments, because in effect they are in keeping with the spirit of the Commons amendments and ensure a practical application so that shale gas exploration will go ahead.

I will address as briefly as I can some of the assertions —and they were assertions—made by the noble Baroness, Lady Jones of Moulsecoomb. She was invited to give the source of what she alleged and was unable to do so. That is really unfortunate.

I am perfectly able to do so, but sadly not at this precise moment. I am more than happy to do so in the future.

With due respect, I do not think that is good enough. If we are going to enter into a debate in your Lordships’ House in which assertions are made that in essence the exploration of shale gas and fracking is unsafe, it ought to be backed up now with the evidence. The noble Baroness has had the opportunity to do so.

I try to enter this debate sharing the same concerns as the noble Baroness—concern for the environment and for the benefit to the public as a whole—and I do not take any assertions from the companies that might be involved in it: I go to sources such as Durham University, which is conducting an independent assessment, I look at the House of Lords report. We keep hearing assertions about earth tremors and earthquakes, but I thought we had nailed that in the last debate. There will be continuous seismic monitoring. Operations will stop if there is a tremor of 0.5, and at 0.5, believe me, the earth would not move for anybody in this Chamber, whatever they were doing, so to allege that the Government and this House are somehow colluding with an unsafe practice is totally irresponsible.

Let us remind ourselves that we are still going to be dependent on gas. By 2025, something like 70% of it is likely to be imported. Let us remind ourselves what happens with imported gas. First, it could be fracked elsewhere, where the conditions are not likely to be quite as well protected and monitored as ours are. Then it has to be liquefied, transported and then de-liquified to be put back into its gaseous state. Are we saying that is preferable to using our own resources? I do not understand that analysis and I do not think it is borne out.

Of course, not all imported gas has to come as LNG. Some can come directly through the interconnectors with the continent or through pipelines from Norway, for example.

I thank my noble friend, but a significant amount will still be LNG and I do not think that undermines my point. I know that my noble friend Lord Truscott has lots of experience, but I must admit that I was surprised by his analysis. Even if we are sceptical, it was a British geological survey, after all, which identified 1,300 trillion cubic feet of natural gas. If we take only 10% of that as capable of being extracted, which is a reasonably modest assessment, that is something like 40 years’ supply of the gas that we use—and we are being invited to say that we should not even consider using it.

My noble friend suggested that it was all about the current price of oil and gas. Of course we should take that into account, but as he was invited to say, is he seriously thinking that companies will invest in shale exploration without any prospect of return? I talked to companies recently about this and said, “Aren’t you deterred by the current price?”. They said no, because they do not invest at today’s prices. They are talking about a plan that is likely to take five years. I do hope that the House will support the government amendment.

On protecting groundwater, of course we should be doing that. Again, I have looked at this carefully. Apart from the fact that there has been very little evidence of methane contamination from fracking, we are talking about a six-inch pipe being drilled down. When it goes through the aquifer, which is at approximately 300 to 400 feet, multiple layers of steel and concrete contain the gas on its way to the surface and prevent it escaping into surrounding rock and groundwater.

What about the myth about the chemicals? We should remind ourselves that 99.95% is just sand and water and that the 0.05% consists only of approved non-hazardous chemicals, one of which is polyacrylamide, which is used for contact lens solution. We would be unlikely to use that chemical for a solution like that if we thought that it was seriously hazardous.

I am just as concerned about the environment and the water supply as the noble Baroness, Lady Jones of Moulsecoomb, but I am also concerned about those who, frankly in my opinion, misapply science and deliberately distort data rather than convey to the public the facts and the independent assessment, which is what this House should be doing. On those grounds, I hope that this House will overwhelmingly support the government amendments.

My Lords, it may be for the convenience of the House if I set out the Labour Party’s position on this group of amendments, because what I hear is a gathering debate on the merits of fracking and I have no intention whatever of referring to that.

The essence of our position is to explore the difference between Amendment 21 and the other amendments in the group and to try to persuade the Government that their amendment may require fine tuning. However, we will not seek to divide the House on our amendment and we will not support the amendment in the name of the noble Baroness, Lady Jones of Moulsecoomb.

On Monday 26 January, the Government accepted a Labour amendment to the Infrastructure Bill to overhaul the regulations for shale gas. This was a huge U-turn by the Government and a big victory for the protection of Britain’s environment. Labour has always said that shale gas extraction cannot go ahead unless there is a system of robust regulation and comprehensive inspection, but David Cameron has repeatedly ignored people’s genuine and legitimate environmental concerns over shale gas. Now, thanks to Labour’s amendment, the Government have been forced to accept that tough protections and proper safeguards must be in place before fracking can go ahead. I must make it clear that we are very pleased about the Government’s U-turn and think that it is in the best interests of the nation and the environment.

On Thursday 5 February, the Government tabled their own redrafted version of the amendment that is before the House today. Our position remains as it has been for three years: namely, that regulatory gaps need to be filled to ensure the right conditions are in place before any drilling to explore or extract unconventional gas is permitted. The Government’s amendment accepts a number of the regulatory safeguards that we proposed, which we welcome. However, it also excludes protections that were agreed to in the other place, most notably on the monitoring of fugitive emissions, notification of residents affected by fracking, and safeguards for protected areas and groundwater source areas. I must make it clear to the House that if the Government’s amendment is passed today, it will be challenged, if necessary, in the other place. Therefore, we will listen to the Minister’s response with great care, and it will be considered with great care by colleagues in the other place.

While the Government have said that their version of the Labour amendment redrafts, but does not substantially alter, its terms, I have a number of concerns. The original Labour amendment referred to fugitive emissions. The government version limits this to fugitive methane emissions. Does the Minister recognise that there will be other emissions arising from shale extraction, including CO2? Why have they not included this in the scope of their amendment?

The original Labour amendment referred to mandatory environmental impact assessments. The government version refers only to the environmental impact, stopping short of a full EIA. Will the Government explain their rationale for this? What, in the eyes of the Minister, is the practical difference between a full EIA and the requirements of this proposed new clause?

The original Labour amendment referred to no fracking within or under protected areas. The government version refers to that only within protected areas. Does the Minister accept that this could still lead to hydraulic fracturing underneath national parks and other areas?

The original Labour amendment referred to a prohibition on developments inside groundwater protection zones. A definition of groundwater protection zones is already given by the Environment Agency, yet the government version refers to protected groundwater areas and suggests that these should be defined in a future statutory instrument. Why are the Government not using the existing definition?

The original Labour amendment required that residents should be notified individually. This is not required in the government amendment. The Minister has already set out some of the reasons for not accepting this requirement. It seems to me that she should go further in explaining why this requirement cannot be met. I believe that the requirement for individual notification exists in other legislation and that the practicality of the absolute concept which she used in her argument is overcome in other legislation. We certainly want to make sure that residents are fully informed and that there is a high probability of all individuals affected being informed.

I repeat that we will not divide the House on our amendment or support the amendment in the name of the noble Baroness, Lady Jones.

My Lords, I, too, will not make a Second Reading speech, as that stage took place last year. I very much welcome the Opposition’s amendment that was tabled in the House of Commons and the fact that the Government have brought back a version of it that is legally sound. In practical terms, I do not think that it adds a great deal to the environmental protections that we already have and which I consider are strong enough. However, it is good to clarify those and to make sure that the Bill has a more balanced approach to fracking.

However, I thank my noble friend the Minister for having excluded geothermal energy from the amendment, because the issues around that are quite different from those around hydrocarbon fracking and it is appropriate that these amendments do not deal with that particular sector. That is important because at last, after much effort by many people, that industry is starting to show dividends. Geothermal heat, which is relatively low-level in terms of ground exploration, is starting up under the renewable heat incentive. We have two planning permissions in the south-west for potential geothermal electricity generation. It would be tragic if that process stalled after the 20 years or more that a number of us have campaigned to make this very practical renewable energy come through and contribute to the UK’s energy. Clearly, certain regimes will have to apply to that process as well. It is excellent that the change on trespass has allowed that industry to move ahead as that was a major barrier. Therefore, I very much welcome these amendments and hope that the House will not divide on the issue and will decide unanimously to move forward quickly so that both industries can move ahead.

My Lords, I would like to say a few words about the relationship between fracking and our ancient woodlands. Sadly, I fear that it is not really appreciated by everyone responsible for planning and building projects of all kinds just how precious our ancient woodlands are. Individual trees, if lost, can be replaced. It is true that there is a huge loss to its surroundings because it takes many years to replace a mature tree, but it can in time be replaced, as can avenues and shelter belts, however much they are missed initially. Indeed, some might argue that they are better off being replaced when they get to a certain stage.

Similarly, our forests are planted for their timber—technically a crop, albeit a long-term one. While they provide an excellent contribution to the environment over a period of years provided the right species are planted, they are routinely felled for timber and replanted.

Our ancient woodlands are centuries old. Thankfully, they have survived, largely by chance. They are precious in a unique way and are quite simply irreplaceable. It is essential that they are given very special treatment, which recognises their importance, the contribution they make to our environment, and the truth that once they have been destroyed, however clever we are, they can never be replaced.

Whatever the pros and cons on the subject of fracking, the simple existence of our ancient woodlands need not be a barrier, provided the companies concerned understand their importance and the public concern for them. I quote the Woodland Trust:

“While we believe that, as long as the geological fracturing activity associated with fracking takes place at great depths underground it is very unlikely to have a direct impact on any ancient woodland located above the fracturing sites, we do have concerns about the potential significant impacts resulting from the construction and operation of the drilling wells necessary to enable fracking to take place, and the associated infrastructure that may be put in place to access and transport shale gas/oil. We would therefore like to ensure that areas of ancient woodland are specifically protected so that licences may never be issued for fracking within or adjacent to these highly precious habitats”.

The Minister said that the protected areas have not yet been decided upon. I hope that she will think very carefully about our ancient woodlands. I urge her to indicate in her response, if she can, in the clearest possible terms that the Government accept that our ancient woodlands need very specific protection.

My Lords, I agree with the noble Lord, Lord Teverson, that these amendments do not do very much for the Bill. All these points were going to be covered anyway. I do not think that the process over the past two weeks has done politicians any good at all. It was a hurried amendment in the Commons and the Government, under Liberal pressure, gave way. We now have a cobbled together lot of amendments which did not give the other case a decent chance for discussion. If anybody reads last Monday’s Commons Hansard, it is not an impressive debate. We have not had a sensible opportunity here, although the whole framework of what we are discussing has been discussed ad nauseam in this House.

I would like to ask my noble friend, particularly about item 6 in column 1 regarding what will take place in other protected areas, how many miles of coal-mine tunnel are under protected areas in national parks and areas of outstanding natural beauty? Of course, we must remember that these would not have been allowed under this amendment: the fracking pipeline is only about 6 to 9 inches, whereas a coal-mine tunnel is considerably more.

My noble friend Lord Framlingham has just mentioned ancient woodland. Will marine nature reserves will be classified as protected areas? How many more restrictions will there be on the industry? My noble friend the Minister was absolutely right when she said that health and safety risks can be managed with best practices. We need to show those best practices for the rest of Europe to follow.

Returning to point 6, is this a precedent for future development? If you are not allowed to drill a 6 to 9-inch pipeline a thousand feet down, presumably the Government will not build HS2 which will go smack through the middle of the Chilterns, an area of outstanding natural beauty. There will be 11 kilometres of tunnels there. It will do considerably more damage than any whipstocking under an AONB from a small well. Presumably we will not have any more development. The Liberal party has closed the door on development in national parks and closed the door on the opportunity of growth. I think that a lot of people will use item 6 as a precedent in order to stop any future development at all.

My Lords, I follow the comments of the noble Lord, Lord Teverson, about geothermal plants. People may have read an article in the Times last week on 2 February about the Eden project, which is trying to develop the geothermal plant mentioned by the noble Lord, drilling several miles underground. It says in the article—it is quite surprising to me—that the water that will come out will eventually be 180 degrees centigrade, which is well above boiling point. That is wonderful. It would heat 4,000 homes and all the biomes of the Eden project. I hope that this geothermal drilling—which is purely water based, I think; there are no chemicals or anything else—will not be caught by these various amendments. To quote Michael Feliks, chairman of the Renewable Energy Association’s geothermal group:

“It would be a shame if geothermal energy ended up as collateral damage in a debate about shale gas fracking.”

It is a completely different thing. It is drilling, and it should be allowed under the normal planning procedures rather than coming into this Bill at all.

My Lords, I am extremely grateful to all noble Lords for their contributions, but particularly to noble Lords who have supported the government amendments in lieu of the amendments that were made in another place.

A number of questions were raised. I want to make sure that I respond to all of them, but there will be one or two questions that I cannot commit to answering now and on which I will have to write to noble Lords, such as the question posed by my noble friend Lord Caithness about the number of miles of tunnels going underground. I do not think that information is at hand, unless of course the noble Baroness, Lady Jones, has the answer.

I reassure the noble Baroness, Lady Jones, that our regulatory regime is robust. It will ensure that no hydraulic fracturing will be permitted where groundwater and drinking water supplies can be affected. We had a protracted debate not that long ago in which we made it very clear that this Government take very seriously that operations will take place only if all of the environmental impact assessments are met. I had hoped that I had laid out today very clearly in my detailed speaking notes our response to what the other House came up with on Report. We have bettered the amendments that the other place made, so that they will be able to stand up to legal challenge and to ensure that the safeguards that she and other noble Lords, such as the noble Lord, Lord Truscott, have asked for can actually be delivered.

It would be wrong to return to the detail of a debate that has been well practised in this Chamber. The industry is already voluntarily doing a lot of what was asked in the amendments put by the Opposition. I am pleased with the response from my noble friends about what we have taken on board. It is never about a U-turn for a Government, it is about listening carefully and then making sure legislation works. If the noble Lord, Lord Tunnicliffe, wants to make a political point out of it, that is entirely up to the noble Lord. I would say, however, that it is really important that responsible and sensible Governments look very closely at legislation and then respond. I think that the general consensus in the House has been that we have listened, responded and returned with a much better set of amendments, which answer exactly what noble Lords opposite and their colleagues down the corridor have asked for.

The noble Baroness, Lady Jones, asked what policies were in place for protecting groundwater. The Environment Agency does not allow drilling and associated fracking for shale gas in source protection zone 1 areas. This ensures that a high level of protection is accorded to drinking water sources. The amendment provides for protected groundwater source areas to be defined in regulations by the end of July. I made that point clear in my opening remarks. Perhaps the noble Baroness missed that point as I was speaking.

The noble Lord, Lord Truscott, went into a long debate about global oil prices. As with all things, particularly in this sector, we do not look for what is happening today. As with all industry investment, we have to look for what will come up in the next five or 10 years. Had the Opposition considered the fact that 20% of our power was going to go offline by 2020, we would perhaps be looking at a different mix of energy. However, today we need a diverse mix. Shale is not the panacea or the golden or silver bullet, but it has the potential to be part of that mix.

We as a Government have also been precise in saying that we need the renewable sector to grow. I am pleased to say that in just under five years we have seen real confidence come to the UK in investment in the renewables sector, which has grown rapidly, with growth in jobs and local economies.

My noble friend Lord Borwick asked about de-linking the drilling of groundwater holes from the planning process. I can confirm that we are actively considering whether the drilling of boreholes for monitoring purposes should be classified as permitted development. We consider this to be an important matter to address, and look forward to that happening in the next Parliament. I should like to commit to delivering on our promise but we need more time to work out the details of exactly what will be in secondary legislation. I know that my noble friend would want that legislation to be absolutely right in its wording, and to demonstrate yet again that we have the right protections in place. I know that he would agree. My noble friend asked about the protections accorded to groundwater source protection zones. I reconfirm that the Environment Agency does not permit activities where there is a significant risk that pollution of groundwater will occur, including in source protection zone 1 areas. The precise definition will be laid out in secondary legislation. I hope that that will happen soon in the next Parliament.

I have made my political points to the noble Lord, Lord Tunnicliffe, and will put them to one side. He also asked whether the Government will require environmental impact assessments. A note from the local planning authority would be sufficient for the Secretary of State to satisfy himself that this condition has been met. This would state that the environmental information had been taken into account, which, in practice, would mean specifically that the process of environmental impact assessment would have had to have been carried out. The noble Lord also asked about other emissions in addition to methane. I undertake to write to him on that issue. I was asked whether there would be any exemptions for sensitive areas. Again, this will very much be in the secondary legislation, which, by the end of July, will state which areas will be protected.

My noble friend Lord Framlingham asked about planning permission in ancient woodland. Planning permission should be refused for development resulting in the loss or deterioration of irreplaceable habitats, a definition that includes ancient woodlands, and aged or veteran trees found outside ancient woodland—unless the need for and benefits of the development in that location clearly outweigh the loss. My noble friend can be reassured that it will be only under severe circumstances that we would press to do anything where ancient woodland is there.

My noble friend Lord Caithness asked about marine nature reserves. The term “nature reserves” can, depending on the context, be applied to a variety of sites, including marine nature reserves and those with an international designation for their biodiversity. Again, “nature reserves” encapsulates a range of sites of special scientific interest. National nature reserves and marine nature reserves can come under the term.

The debate has been informative and I am pleased that the noble Lord on the Front Bench opposite made it clear in his opening remarks that the Opposition were not going to press on this issue. As regards Amendment 21G, he referred to separate notifications for individual residents but there would be no way in which the Secretary of State would be able to confirm that an operator had fulfilled this condition, as I said in my opening remarks. If the Secretary of State were required to satisfy himself of such a condition, despite being unable to obtain the evidence, it would leave every hydraulic fracturing consent issued by the Secretary of State wide open to legal challenge by third parties. Such a requirement would not, therefore, be a practical addition to the legislation.

More broadly, we wish this to be seen as a package that is informative to the community. I therefore hope that I have been able to satisfy noble Lords and that they will support the government amendments.

My Lords, I thank everyone who took part in the debate, even those who did not agree with me. There were valuable points of clarification from the Minister—for example, the fact that water companies will be consulted is crucial because fracking takes a huge amount of water. That is important in these days of a sometimes erratic water supply.

I said at the beginning that my main point of concern related to the groundwater source protection zones 1 to 3. The Government are not taking that issue seriously enough. Those zones were protected in the original Amendment 21 and I see no reason to remove them and include them in secondary legislation. I said that in my speech but perhaps the Minister missed it. Additionally, Labour has flip-flopped badly on this, and I cannot help but feel that it does not understand how important this issue is. If the Government are actually going to listen to the Environment Agency on many of these issues, why not listen to it on those protection zones and take it as accepted that those zones will not be fracked? I do not understand why that is so difficult.

I am also glad that fuel poverty was mentioned. This is increasingly on peoples’ agenda and more people are suffering from it. If we provided help with insulation, that would probably protect and help more people than worrying about only the cost of fuel.

This Government could take a lead from Wales and Scotland—as well as France, Bulgaria, the Netherlands and even New York state—in opposing fracking, focusing on renewables and cutting energy waste. That seems a much more profitable way forward. Personally, I am against any fracking, but I equally accept that if it is going to go ahead then the protections have to be secure and strong. That is definitely not what this Bill supplies.

Of course, our water supply is absolutely crucial to our well-being, not only from a health point of view but also for farming and agriculture. It has to be protected. Again, I do not feel this Bill takes it seriously enough. In passing the Bill we are actually letting the Secretary of State decide on protected areas. I am a politician, and many people here perhaps are politicians, but even I would not trust a politician to decide on that. The Environment Agency ought to have the loudest voice here. I would very much like to divide the House on this—obviously—because I care very much about it. However, I am equally positive that it would be a crushing vote so I beg leave to withdraw the amendment.

Amendment to the Motion withdrawn.

Amendment 21G (to Amendment 21B) not moved.

Motion agreed.

Motion on Amendment 22

Moved by

22: After Clause 44, insert the following new Clause—

“Reimbursement of persons who have met expenses of making electrical connections

(1) The Electricity Act 1989 is amended in accordance with this section.

(2) In section 19 (power to recover expenditure)—

(a) omit subsections (2) and (3);

(b) after subsection (3) insert—

“(3A) Schedule 5B (reimbursement of persons who have met expenses) has effect.”;

(c) in subsection (4), after “this section” insert “and Schedule 5B”.

(3) After Schedule 5A insert—

“SCHEDULE 5B

REIMBURSEMENT OF PERSONS WHO HAVE MET EXPENSES

Power to make regulations

1 (1) The Secretary of State may, by regulations, make provision entitling the relevant electricity distributor to exercise the reimbursement powers in cases where conditions A, B, C and D are met.

(2) Condition A is met if any electric line or electrical plant is provided for the purpose of making a connection (the “first connection”)—

(a) between premises and a distribution system, or

(b) between two distribution systems.

(3) Condition B is met if a payment in respect of first connection expenses is made by one or more of the following persons—

(a) a person requiring the first connection in pursuance of section 16(1);

(b) a person who otherwise causes the first connection to be made (including by means of contractual arrangements).

(4) Condition C is met if any electric line or electric plant provided for the purpose of making the first connection is used for the purpose of making another connection (the “second connection”)—

(a) between premises and a distribution system, or

(b) between two distribution systems.

(5) Condition D is met if the second connection is made within the prescribed period after the first connection was made.

(6) “First connection expenses” are any expenses reasonably incurred by a person in providing any electric line or electric plant for the purpose of making the first connection.

(7) It does not matter whether the first connection, or the second connection, is made by an electricity distributor or a person of another description.

The reimbursement powers

2 (1) The “reimbursement powers” are—

(a) the power to demand a reimbursement payment from—

(i) a person requiring the second connection in pursuance of section 16(1), or

(ii) a person who otherwise causes the second connection to be made (including by means of contractual arrangements); and

(b) the power to apply the reimbursement payment in making such payments as may be appropriate towards reimbursing any persons for any payments they were expenses (whether that requirement arose by virtue of paragraph (a) or otherwise).

(2) A “reimbursement payment” is a payment, of such amount as may be reasonable in all the circumstances, in respect of first connection expenses.

Other provision about regulations under this Schedule

3 (1) The Secretary of State must consult the Authority before making regulations under this Schedule.

(2) Regulations under this Schedule may make provision requiring relevant electricity distributors to exercise a reimbursement power (whether in all cases or in cases provided for in the regulations).

(3) Regulations under this Schedule may make provision for the relevant electricity distributor to establish or estimate the amount of first connection expenses—or an amount of any aspect of those expenses—in cases where that distributor is not the person who made the first connection.

(4) Regulations under sub-paragraph (3) may not require any person to supply the relevant electricity distributor with information about any expenses incurred.

(5) Regulations under sub-paragraph (3) may provide for an estimate of an amount of first connection expenses to be calculated by a relevant electricity distributor by reference only to a combination of—

(a) expenses which that distributor would incur if that distributor were making the connection at the time of the estimate, and

(b) changes in prices since the time when the connection was actually made.

Interpretation

4 (1) In this Schedule—

“first connection” has the meaning given in paragraph 1; “first connection expenses” has the meaning given in paragraph 1;

“reimbursement payment” has the meaning given in paragraph 2;

“reimbursement powers” has the meaning given in paragraph 2;

“relevant electricity distributor”, in relation to the exercise of a reimbursement power, means—

(a) in a case where the first connection was made between premises and a distribution system, the electricity distributor that (at the time of the exercise of the power) operates that distribution system;

(b) in a case where the first connection was made between two distribution systems, the electricity distributor that (at the time of the exercise of the power) operates the distribution system into which the first connection has been, or is expected to be, incorporated.

(2) A reference in this Schedule to a payment in respect of first connection expenses includes a reference to such a payment made in pursuance of section 19(1).”

(4) In section 16 (duty to connect on request), in subsection (4), after “23” insert “and Schedule 5B”.

(5) In section 16A (procedure for requiring a connection), in subsection (5)(b)—

(a) omit “or regulations under section 19(2)”;

(b) after “19(2)” insert “or regulations under Schedule 5B”.

(6) In section 23 (determination of disputes)—

(a) after subsection (1) insert—

“(1ZA) This section also applies to any dispute arising under regulations under Schedule 5B between—

(a) an electricity distributor, and

(b) a person in respect of whom the electricity distributor exercises the reimbursement powers conferred by the regulations.”;

(b) after subsection (1C) insert—

“(1D) No dispute arising under regulations under Schedule 5B may be referred to the Authority after the end of the period of 12 months beginning with the time when the second connection (within the meaning of Schedule 5B) is made.”;

(c) after subsection (2) insert—

“(2A) Where a dispute arising under regulations under Schedule 5B falls to be determined under this section, the Authority may give directions as to the circumstances in which, and the terms on which, an electricity distributor is to make or (as the case may be) to maintain the second connection (within the meaning of Schedule 5B) pending the determination of the dispute.”;

(d) in subsection (4), after “(2)” insert “, (2A)”.”

My Lords, I beg to move that this House agrees with the Commons in their Amendment 22, and will also speak to other amendments in the group, Amendments 30, 39 and 47.

Obtaining a timely and affordable connection to the electricity distribution network is essential for our growth and energy ambitions. It means that customers, including private citizens, renewables generators, house builders and commercial property developers get access to the network either to supply to or to take electricity from the grid when they need to. When seeking a connection, a customer can either use the local monopoly distribution network operator or an independent connection provider. There are around 194 independent connection providers. Over the years, they have gained a growing share of the connections market.

The Government support competition in network connections, as it gives customers greater choice and drives up standards across the board. The Government want to ensure a level playing field for independent connection providers. However, currently the legislation that makes up the second-comer regime potentially places independent connection providers and their customers at a disadvantage. The second-comer regime is based on a power and regulations under the Electricity Act 1989, which allows the recovery of expenses for electricity connections. It is designed to ensure the cost of connecting to the electricity distribution network is shared between different parties.

Specifically, the regime provides that where a customer—the second comer—connects to and benefits from infrastructure paid for by an earlier customer, the second comer can be required to reimburse the earlier party for a proportionate share of the costs. However, independent connection providers are not currently covered by this regime. This reflects the fact that they did not exist in any meaningful number at the time the original legislation was drafted. This means that customers who have their original connection provided by independent connection providers may not be able to recover any costs from the subsequent connecting customers. This in turn can make using an independent connection provider less attractive. This is an anomaly and the proposed amendment will update the power in the Electricity Act to ensure that it reflects the current market in connections by allowing a wider range of connection providers to be included in the second-comer regime. This change will support competition in the energy market and a fairer sharing of costs. To implement the change, subsequent secondary legislation will be required to amend or replace the Electricity (Connection Charges) Regulations 2002.

The new clause after Clause 44, Amendment 22, replaces the existing enabling power in Section 19 of the Electricity Act 1989 to confer on the Secretary of State a power to make regulations that will enable customers of independent connection providers to recover a proportion of the cost of a new connection from customers who subsequently connect to the same infrastructure. The power is included in a new Schedule 5B to the Act, which sets out in some detail the matters to be specified in the regulations. In particular, the regulations will allow for electricity distributors to administer reimbursements and, in some cases, to estimate the cost of connections for that purpose. This new clause also amends the power of the Gas and Electricity Markets Authority to determine disputes relating to connections to bring it into line with the updated second-comer provisions. As before, the Secretary of State is required to consult the Gas and Electricity Markets Authority to make regulations under the power.

The other amendments are consequential to the new clause. Amendment 30 makes provision for the new clause to extend to England, Wales and Scotland, Amendment 39 makes provision for the new clause to come into force on the day appointed by the Secretary of State in regulations, and Amendment 47 amends the Bill’s title. I beg to move that this House agrees with the Commons in its Amendment.

Motion agreed.

Motion on Amendment 23

Moved by

23: After Clause 45, insert the following new Clause—

“Power to abolish Public Works Loan Commissioners

In the Public Bodies Act 2011, in Schedule 1 (power to abolish: bodies and offices), after “Plant Varieties and Seeds Tribunal.” insert—

“Public Works Loan Commissioners.””

My Lords, I beg to move that this House do agree with the Commons in their Amendment 23. In discussing Amendment 23, I will also include Amendments 34, 40 and 48. The Board of Public Works Loan Commissioners, commonly known as the Public Works Loan Board or PWLB, is a statutory body that dates back to the Public Works Loan Act 1875. It comprises 12 loan commissioners appointed by the Crown to administer making loans to local authorities. The commissioners are independent of government and unpaid by law. Under Section 4 of the National Loans Act 1968, the PWLB currently has a statutory lending limit of £70 billion. The current level of debt amounts to £64 billion. The original role of the loan commissioners was to approve and issue central government loans to certain categories of permitted borrowers. Under the 1875 Act and subsequent legislation, the commissioners have the power to refuse a loan on the basis of lack of security, and to appoint a secretary who can hold security and to whom the powers of the commissioners can be delegated. The commissioners are also required to issue an annual report to Parliament setting out details of loans advanced by the PWLB.

However, since 2004 decisions on borrowing have been fully devolved to local authorities under the prudential regime. As part of the local authorities’ self-regulated regime, local authorities are free to finance capital projects by borrowing without requiring government consent, provided they can afford to service their debts out of their revenues. This means that the decision-making functions of the PWLB commissioners are essentially obsolet