My Lords, I regret to inform the House of the death of the noble Lord, Lord Chidgey, on 15 February. On behalf of the House, I extend our condolences to the noble Lord’s family and friends.

To ask Her Majesty’s Government what discussions they intend to have with the European Union concerning the post-Brexit position of the United Kingdom’s creative professionals touring in the European Union.

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

My Lords, the UK made proposals for permit-free touring and for specialist hauliers to be exempt from cabotage limits. Sadly, these were rejected by the European Union. We have raised touring at both the EU-UK Partnership Council and the EU-UK Trade Specialised Committee on Services, Investment and Digital Trade. Our focus is now on supporting the sector, including by working directly with member states. This approach has delivered results, most recently with Spain, meaning that 21 member states now allow some visa-free and permit-free touring.

My Lords, the music industry is frustrated that so little has been done to resolve touring issues in the 13 months since the TCA was applied, and is concerned that increased costs will rule out European touring for artists, companies and orchestras. Will the Government negotiate a cabotage exemption for the cultural and creative sector and an own-account exemption for groups that tour with their own trucks and now face extra costs of £16,000 per day? Does the Minister accept that dual registration, on which the Government are currently consulting, is not a workable solution for a UK orchestra with a single specialist touring vehicle?

My Lords, through our bilateral agreement, 21 of the 27 member states have confirmed that UK musicians and performers do not need visas or work permits for some short-term touring. As I say, we continue our discussions bilaterally with the six remaining member states. On own-account vehicles, such as those used by orchestras, the UK pushed hard for liberalised access for hauliers carrying equipment for cultural events during negotiations but the EU sadly did not agree to our requests. The Department for Transport continues to work across government and with the industry to consider what options may be possible for own-account operators.

My Lords, have the Government considered what they can do to help youth orchestras? For many years, they have toured Europe during the summer, to the enrichment of those who have played in them and the audiences to whom they have played. I declare an interest: both my children were members of the Stoneleigh Youth Orchestra, which travelled all over Europe under its conductor Adrian Brown. I just hope that, when the Government consider the wider questions triggered by the Question from the noble Earl, they will also take into account the important need to continue the cultural and musical links between younger people and Europe.

I strongly agree with the noble Viscount. It is important that people of all ages—professionals and amateurs alike—have the opportunities for cultural exchange. That is why the UK has a generous offer and is welcoming to musicians from around the world. Through our discussions with member states, we have clarified that arrangements are much more workable than at times has been reported—for example, splitter vans are not subject to the TCA market access rules. We continue to work with sector organisations, including youth orchestras.

My Lords, the creative industries are a huge success story in the UK. This year, the UK film industry is set to overtake Hollywood in its capacity. Will the Minister give an update on progress in building a website, so that people who want to tour in Europe can go to a one-stop shop to find out the requirements? Will he commit to publishing the papers that show the points that the UK Government are making to the European Union to try to unblock this blockage?

My noble friend is absolutely right. As we emerge from the pandemic, our creative industries are leading the way in helping us to build back stronger. On GOV.UK, landing pages for each member state explain the rules and the outcome of our negotiations with the remaining six states. I will take his point about publishing documentation back to the department and let him know.

The noble Lord, Lord Strasburger, wishes to contribute virtually and I think this is a good point to call him.

My Lords, the UK’s second largest industry, the creative arts, was left high and dry by the Government’s trade deal with the EU. Touring in Europe is now almost impossible for British musicians and other performers because of a mountain of new red tape and costs. Bilateral deals are not enough. When will the Government do what the Tongan Government were able to do for their performers and negotiate EU-wide cultural exemptions for visas, work permits and trucking restrictions?

The case is not as gloomy as the noble Lord puts it. As I said, 21 of the 27 member states have already clarified their offer, and the UK’s offer to the rest of the world is very generous. We made a similar offer to the one that was rejected by the EU to the EFTA nations, which was agreed, showing that our proposals were not just possible but can be agreed and made to work. Regrettably, the EU did not offer a visa waiver for paid activities during the TCA negotiations and no major G7 economy has agreed to lock in its visa systems with the EU, which was the proposal that was on the table.

My Lords, the Minister will be well aware that the music industry, particularly the classical music industry, is predominantly freelance and very much depends on international reputations being built. What assessment have the Government made of the impact on individual UK performers of the restrictions that they now face when they are likely to be offered work in the European Union? My information is that they are far less likely now to be offered work than they used to be. Can the Minister confirm that? Does he have any information?

The noble Baroness is right to point to the importance of freelancers in these sectors. Through my discussions personally with representatives of the music industry, including classical music organisations and orchestras, we have discussed the challenges faced by freelancers and the support that many organisations were able to give them, thanks to what went to them from the Culture Recovery Fund. As I say, GOV.UK makes clear the rules for travelling to each member state. Our own approach is very welcoming: we want people from around the world to come to the UK and perform here. The information that the noble Baroness seeks is on GOV.UK, listed by individual country.

My Lords, this is the time of year when major, high export-earning European tours are planned, featuring performers such as Ed Sheeran and Harry Styles, but the current rules, particularly relating to cabotage, make the transport and logistical arrangements for such tours impossible. What are the Government doing to address these issues, which are both urgent and specific to the creative performing sector, so that tours such as these can go ahead this year?

We do not believe that an EU-wide agreement would be feasible; instead, we are addressing each area in turn, including those mentioned by the noble Lord, working to provide clarity to the sector and implementing unilateral measures where relevant. For instance, on haulage, the Government are in the process of implementing dual registration to support specialist concert hauliers; and, on carnets, we have clarified that portable musical instruments, carried or in a vehicle, can be transported cost-free and should not require carnets.

My Lords, does the Minister agree that we have got into a situation where musicians are knee-deep in red tape? What are the Government going to do to release them from this, particularly those who do not have major backing—that is, journeymen musicians?

As I say, on GOV.UK, we make as clear as possible for those who are touring or are planning tours the position in individual member states. We are also working with the sector, including representatives from musical organisations of all types and sizes, so that we can understand the challenges that the industry still faces and make sure that we are tackling them.

My Lords, what are the main specific obstacles in coming to agreements with those countries with which we do not have agreements, such as Spain?

We do now have an agreement with Spain—that is the most recent to be added to the list. One of the six which remains is Portugal, which of course had its general election last month. That has slowed down the negotiations there, but those are continuing at ministerial and official level.

My Lords, perhaps this is an apposite moment for the House to acknowledge the contribution and sad death of Jamal Edwards, who has done so much to promote a new wave of musicians and artists to a global audience. Awarded an MBE at 24, he was an inspiration to a new generation. With that in mind, perhaps the Minister can tell us what support Her Majesty’s Government are giving to young new artists who are not signed to a label but who want to tour and take their first steps towards performing to overseas audiences. The new Secretary of State has said that a package of specific help is coming. When will she deliver on that promise and help to resolve the EU’s continuing border issues?

I was very sad to see the news about Jamal Edwards this morning, dying so tragically young. The Government are committed to making sure that emerging artists and new talent have opportunities. We are working on a refresh of the national plan for music education under the chairmanship of my noble friend Lady Fleet, and with the Department for Education to make sure that opportunities in schools as well as outside are available to everybody. Through our working group, we are engaging with the sector to make sure that those who face challenges in touring know that the Government are working to address them.

To ask Her Majesty’s Government what plans they have to deepen foreign policy and defence cooperation with European allies, in particular France and Germany.

My Lords, European allies are vital in building a network of liberty and in tackling shared challenges. The Foreign Secretary has spoken with many of her European colleagues in recent weeks, as has the Prime Minister, including on the situation in Ukraine. France and Germany are two of our closest partners, and we work with both countries at the highest levels. Our forces regularly operate alongside one another around the world, including defending NATO’s eastern flank.

My Lords, I thank the Minister for his reply. I tabled this Question before the Ukraine crisis reached fever pitch. I was pleased a couple of weeks ago that the Prime Minister said that he would bring together Europe in a united stance against President Putin, but now all I read is government briefing that Britain stands four-square with the United States, in contrast to the alleged weakness of France and Germany. Despite the Government’s temptation to scratch away at the Brexit issues that remain unresolved, will they now restate clearly and firmly the supreme and overriding importance they attach to a common European and NATO position with our European allies and friends, which in this moment of great crisis should come above all other considerations?

My Lords, European security is clearly directly linked to UK security, and I do not think anyone questions this. We share many security and defence interests with our European allies, from addressing climate change to tackling malign actors. As one of only two European nations with truly global military reach and the largest European spend in NATO, we remain an essential ally on foreign policy, security and defence for the wider European Union.

My Lords, does the Minister recognise—I pay tribute to what the Government are doing on this—that the key aspect of this crisis, in our hands and those of our European and NATO allies, is a tough sanctions response, if there is any invasion of Ukraine? Therefore, would it not have been rather more useful in the last few weeks if we had been part of the dialogue within the European Union—which we could have been if we had put that into the TCA—instead of having to operate purely from the outside on sanctions, which is an EU matter, not a NATO matter?

The UK will continue to work with the EU and other international partners to tackle this shared global challenge. For example, on 2 December, alongside the US, Canada and the EU, the UK imposed fresh sanctions on eight Belarussian individuals responsible for repression and human rights violations. Our departure from the EU has meant that we are able to move more quickly than we could through multilateral channels, where it is in our interests to do so. Only a week ago, the UK Government laid legislation in Parliament to toughen and expand the UK sanctions regime, specifically in response to Russia’s aggression against Ukraine. These powers will go further than ever before.

My Lords, does the Minister accept that getting behind France and Germany, particularly on the issue of NATO expansion, would be a positive contribution towards building a European position on this matter?

My Lords, we are already extremely closely aligned to both Germany and France on most overseas issues. Our defence relationship with France is closer than with any other country in the world, except the United States. We are working together to protect our people from shared threats. Germany is an essential ally and one of our most important international partners. We welcome the new German coalition’s description of the UK as one of Germany’s closest partners. The relationship is good and we have a shared interest in resolving this issue.

My Lords, while maintaining my deep concern for the sovereignty of Ukraine, I ask the Minister to confirm that no country has a right to join NATO and that allowing new members to join is a decision for all existing NATO members. By its nature, this imposes an obligation on any member to come to the aid of another, an obligation not to be undertaken lightly by any country.

My Lords, as the noble and learned Lord knows, Ukraine is a sovereign nation with a long and rich history of cultural and political independence. Ukraine has the absolute right to determine its own future. The sovereignty and integrity of Ukraine, and other partners, are not remotely up for discussion.

My Lords, could the Minister take back to the Foreign Office the strong message that it does not help the cause of close co-operation with France and Germany if Cabinet Ministers make comments which suggest that they are weak and we are strong? For example, the suggestion that there was a whiff of Munich in President Macron going to Moscow was not helpful for Franco-British co-operation. I am well aware that the Blair Government did much the same in criticising the French in the run-up to the Iraq war. That damaged our co-operation with our major European partners, too.

My Lords, I hope that what I have already said today in response to questions put to me reassures the noble Lord that we do not take lightly the importance of our relationship with major European powers when it comes to confronting these common challenges. What I have said today is a perfect reflection of the Government’s position.

My Lords, given that the official position, now established, is that NATO will not fight even if Ukraine is invaded, does it not effectively mean that Ukraine is not likely to become a member of NATO—and has not the President of the United States said that Ukraine is a long way from membership of NATO? Given that, why is it so difficult to come up with a formula that could assure Russia that the possibility of Ukraine joining NATO is very remote?

My Lords, I am not in a position where I can assess the likelihood or otherwise of Ukraine being accepted as a member of NATO, but I shall convey the noble Lord’s message to the Foreign Secretary.

My Lords, does the Minister not agree that, notwithstanding Brexit, at the working level the relationships between our Armed Forces and those of other European countries, whether bilateral, trilateral or multilateral, are extremely strong and should be nurtured at all costs?

I thank the noble and gallant Lord for his comment, but we have shown that we do not need a separate institutional treaty to work effectively with the EU on foreign policy, whether co-ordinating on sanctions, responding jointly to Russian aggression or on wider issues involving Iran. Although we have left the EU defence structures, we will continue to work closely with the EU across the common challenges that we face. We do so on a very wide range of issues, including Libya, climate change, Russia and so on, and the trade and co-operation agreement provides for future co-operation on emerging security challenges, where it is in the interests of both sides to continue to work together.

My Lords, what is the Minister doing to improve co-ordination with our EU partners on sanctions against Russia? Can he also tell us what the Government are doing now, independent of the EU, to implement long-overdue measures to prevent money laundering, including reform of Companies House, regardless of any further Russian attacks on Ukraine?

My Lords, we have cracked down on illicit finance through ground-breaking legislation in the Criminal Finances Act, and we have already published our ambitious economic crime plan. The National Crime Agency has increased investigations into corrupt elites, and the Government are reviewing all tier 1 investor visas granted before 5 April.

On the broader point that the noble Baroness raises, the UK will continue to work with the EU and other international partners to tackle shared global challenges. For example, on 2 December, alongside the US, Canada and the EU, we imposed fresh sanctions on eight Belarussian individuals responsible for repression and human rights violations. That was a consequence of co-operation with our European allies and those further afield.

My Lords, given the Minister for Europe’s comments yesterday that the conflict in Ukraine could lead to 5 million refugees fleeing to neighbouring countries, what forms of co-operation are Her Majesty’s Government preparing with European partners in response to this looming humanitarian crisis and other catastrophes on the world stage, caused through conflict, climate change or whatever?

My Lords, the Foreign Office is supporting the Home Office in its diplomatic engagement with European partners and is looking to strengthen co-operation, including a possible new EU-UK migration agreement, and on the immediate concerns relating to Ukraine.

To ask Her Majesty’s Government, further to their strategy papers on ending preventable deaths and global health systems strengthening, published on 14 December 2021, how they intend to implement the Organisation for Economic Co-operation and Development (OECD) Development Assistance Committee policy marker on nutrition across the Foreign, Commonwealth and Development Office portfolio.

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

My Lords, the Foreign Secretary has confirmed that the United Kingdom will spend £1.5 billion between 2022 and 2030 on nutrition, addressing the nutrition needs of mothers, babies and children, tackling malnutrition in humanitarian emergencies and making sure that nutrition is central to the FCDO’s wider work over the eight years to 2030. The marker will be embedded into FCDO systems later in 2022, recording relevant programmes making a contribution towards nutrition objectives from the point of programme design.

I thank the Minister for that Answer. Of course, evidence shows that combining the humanitarian response with a longer-term focus on improving nutrition can help improve resilience to future shocks and crises, thereby decreasing the need for, and cost of, future humanitarian assistance. With the average time spent as a refugee on the rise, how would the UK’s nutrition for growth commitments advance the scaling up of successful approaches, such as nutrition-sensitive social protection, and will the department consider incorporating an impact commitment into the next nutrition for growth pledge?

My Lords, first I recognise the valuable work done by the noble Lord, Lord Collins, in his work on the APPG, and I wish him well—I understand he is recovering from Covid. In this respect, I also recognise that he has consistently raised this issue and our commitment, underlying the ongoing commitment from the UK, to this important priority. The noble Baroness asks a very valid question about how we can fulfil key objectives. The whole idea is to ensure that, right at the point of planning, all these elements within nutrition are incorporated—not just in the direct commitments on nutrition but that they are recorded as nutrition programme objectives in the wider work that the FCDO does. We constantly review impact assessments as well to see the effectiveness of our work and, of course, I will take back the question of the specific programming that we will be doing as this comes through. As I have said already, we hope the markers will be in place later this year, and at that point I am sure there will be further discussions.

My Lords, I very much welcome the Government’s new eight-year commitment to nutrition. Can my noble friend the Minister share any more detail on this? What will be the split between nutrition-sensitive and nutrition-specific programming? And what will be the phasing of the spend? My noble friend will know the urgency of this work—by the end of this year, over 30 million additional children could be subject to wasting because of the impacts of Covid-19.

My Lords, I fully recognise the importance of both elements of our programming and ensuring that our £1.5 billion commitment covers both nutrition-specific and nutrition-sensitive interventions and investments. We are currently going through the business-planning process, and we will then be able to provide more information on the expected nutrition investments for the 2022 to 2025 spending periods, and I will update my noble friend accordingly. But I can reassure her that we remain among the top 10 bilateral donors in investing in nutrition.

My Lords, the noble Baroness, Lady Brinton, would like to participate virtually, and I think that this would be a good moment to call her.

My Lords, whilst the Government’s commitment to investing £1.5 billion in nutrition over the next eight years is a start, it is still less than one quarter of what the International Coalition for Advocacy on Nutrition has recommended. Will this reduced amount meet the UK’s commitment to achieve the WHO global nutrition targets by 2025, which include a 40% reduction in the number of children under five who are stunted, and a 50% reduction in anaemia in women of reproductive age?

My Lords, as I have already said, we remain fully committed to ensuring our key objectives on nutrition are met. We are working very closely with organisations, including the World Health Organization, to ensure that the pledges made recently at the Tokyo summit also go towards achieving the very objectives that the noble Baroness has laid out. Specifically, by having every programme of the FCDO in bilateral support that we provide to key countries also focus specifically on nutrition and fulfilling our reporting back on an annual basis to OECD, I think we will see much more focus spent on achieving the targets we are setting ourselves across the piece.

My Lords, the stark statistics—I am sure the Minister will agree—on the whole question of nutrition show that one 10th of the world’s population are suffering from being undernourished, and nearly half the deaths of children under five are caused by malnutrition. Does this not underline the need, yet again, to return to the 0.7% of GNI spent on overseas assistance, and not to wait any longer? Perhaps the Minister, in response to what the noble Baroness, Lady Sugg, has already said about the urgency of this and the size of the commitment that we need to make to deal with this problem or to help deal with this problem, could tell the House how much longer we have to wait for the promise the Government have made to return to 0.7% to happen?

My Lords, as I previously said, the Government are absolutely committed to returning to the 0.7% pledge. Indeed, my right honourable friend the Chancellor has already laid out the pathway towards that objective. However, notwithstanding the reduction in ODA spend, I believe we have again illustrated our commitment on nutrition. On the specific areas raised by the noble Baroness, we have examples of how our programming funding has assisted. In Bangladesh, for example, the Suchana multisectoral nutrition programme has targeted close to 240,000 households and impacted positively 1.4 million people. In Nigeria, our child development grant programme is a six-year investment that provides cash transfers to mothers during pregnancy. There are other, notable examples of in-country support specifically focused on nutrition. As I have already said, our commitment to ensuring that those markers are now integrated in all FCDO development programmes on nutrition going forward will also allow us to provide fully comprehensive reports to the OECD on our nutrition spend. I believe that some of the issues that the noble Baroness raised will be addressed quite directly.

My Lords, can the Government confirm that they will continue to work with NGOs in areas of warfare, such as Myanmar, where the military regime is preventing any aid getting through but the Shan Women’s Action Network is able to get healthcare and food into areas that are otherwise not reached? The history of doing that in that country has been very good; we provided aid to Chin State during the mautam famine, which prevented some of the mass starvation that was going on.

My Lords, I can give that commitment to the noble Baroness. I have seen over a number of years the direct impact of working with civil society organisations on the ground in terms of the support they can provide. I believe very strongly that it is part of our duty to support the infrastructure of their continued work. The noble Baroness talked of Myanmar. More recently, we have seen work of that kind in Afghanistan, Yemen and Syria. I now look after the civil society organisations portfolio within the FCDO, so I would of course be willing to hear any suggestions the noble Baroness may have relating to Myanmar and to work with her.

My Lords, population and family size are of course a real problem. Could the Minister confirm that we are still helping women in poorer countries to be able to access proper family planning?

I can certainly give that reassurance to the noble Lord.

Would the Minister agree that, although half the world is starving to death, the other half is gorging itself to death? Could he persuade the Department of Health and Social Care to stop advocating a low-fat diet when in fact the right kind of fat is what limits obesity?

My Lords, I bow to my noble friend’s expertise in this area and totally concur with him. When one travels the world and sees the challenges of famine—I think the latest UN estimate was that 223 million people will face acute food shortages and insecurity—one sees that global actions on fighting famine and looking at dietary-specific solutions are a vital part of our work.

My Lords, could the Minister say what further investment there will be in women’s secondary education, which is closely linked to preventing an increase in population numbers and improving the nutrition of children who are already alive?

My Lords, my right honourable friend the Foreign Secretary has put the whole issue of women and girls very much at the heart of our work. The noble Baroness will be aware of our commitments through the Global Education Summit. We currently provide £430 million for girls’ education. There was an earlier question on the World Health Organization; we are working with the WHO on fulfilling its recommendations about breastfeeding within an hour of birth and nutritionally adequate and safe complementary feeding methods. These are part of our quite extensive programmes, working both with international agencies and partners and bilaterally in support of development programmes focused on girls and women around the world.

To ask Her Majesty’s Government what progress they have made in correcting State Pension underpayments and arrears for women; what is their latest estimate of (1) the number of women who have had their State Pension increased so far, and (2) the proportion of the total affected by underpayments that this represents; and what steps they are taking to ensure such errors do not occur again.

Between 11 January 2021 and 30 September 2021, 38,507 cases were reviewed, 9,491 underpayments identified and arrears of £60.7 million made. We cannot break this down by gender. A further update will be published around the time of the next fiscal event. The department has undertaken steps to prevent future error, including changes to the checking approach, additional learning for staff and, as a failsafe, regularly running a scan to pick up any cases that may have been missed.

I thank my noble friend for her helpful response and for her department’s work. I have two questions: please could she explain why interest is not being added to back payments, as it was earlier for women whose underpayments were corrected after these official errors? Also importantly, I understand that the poorest women are at risk of losing benefits or social care funding when an arrears lump sum exceeds, for example, the £23,250 social care capital disregard. Most of these pensioners probably needed higher pensions and would also almost certainly have spent the money in past years but now risk the arrears being taken back in care fees straight after finally receiving the money. Will the Government consider introducing regulations—as happened after the Manchester bombing—requiring local authorities, to disregard these specific state pension back payments, not future higher pensions, from financial assessments for social care funding or means testing?

Consistent with other large-scale LEAP exercises, special payments under the DWP discretionary scheme are not routinely made to those who have been underpaid state pension. However, under exceptional circumstances, such as where severe distress has been caused by the way an individual case has been handled, a case may be referred for consideration of a special payment.

On the point that my noble friend raises on social care and the impact of back payments, where a local authority charges a person for their care and support, regulations set limits below which a person’s income and capital must not be reduced by changes. Local authorities may take most of the benefits people receive into account unless it is specifically required to be disregarded by regulations. The responsibility for interpreting and applying the regulations and guidance tests rests with local authorities. I will take the point about legislation back to the department and write to my noble friend.

My Lords, that was quite a long response, but I think the short version is no—the Government are not going to make any special arrangements. The point was made very clearly by the noble Baroness, Lady Altmann, that these people, particularly women, were in very straitened circumstances and suffered and paid a high price for not receiving the pension to which they were entitled. Can the Minister reconsider this? This is a case where the Government got it wrong. Surely some special action should be taken to properly correct the errors that were made.

The noble Baroness makes a very good point. All I can say at the moment is that the Government do not have any plans to change. However, I will take the point back to the department, because it is a very fair one.

My Lords, should my noble friend not be taking the point back to the Treasury? Is this not an example of the Government hiding behind the skirts of local government? The Government provide guidance to local authorities; why can they not provide guidance saying that they should disregard these payments?

I am very happy to take the point back to the Treasury, although I would not hold my breath—I will probably get told off for saying that. But again, I will take the point back to the department. My noble friend has made the point very clearly, as has the noble Baroness.

Let us get some gender into this. The noble Baroness talks about “people” and “persons”, but we are talking about women. When was the last time tens of thousands of men were short-changed with their pension? I do not recall that happening. When the Government took their long-term holiday from paying into the National Insurance Fund, they deprived hundreds of thousands of women of the pension that they were entitled to. Why cannot that be redressed?

My Lords, I have no idea about underpayments to men. In terms of underpayment to women, we are doing an exercise; we are going through the whole system to work out who should have had the money and we will get it to them as quickly as possible.

My Lords, the Government have explicitly ruled out divorced women from this exercise, yet divorced women’s pensions are really complex and the scope for error is huge. Does the Minister agree with me that to discriminate against divorced women in this way is indefensible? When will the Government act on this, as the Public Accounts Committee recommends, and put an end to such obvious injustice and discrimination?

Even if somebody is divorced, their ex-husband’s contributions to NI will still be taken into account when deciding their pension award. That has always been the case and it will be the case on this.

My Lords, when more than £60 million that should have been paid has not been paid, surely somebody should be held responsible in the end for that error. In the private sector, the sum of £60 million would be taken very seriously. Can the Minister tell us, therefore, who was ultimately responsible for this failure to pay such a large sum of money?

The shortfall or underpayment was identified as a result of a marker on the computer system not working correctly. We put it right and we are doing our best to pay people what they should have. It should not have happened, but ultimately the Government must take responsibility.

My Lords, given that many of the people involved are particularly vulnerable and poor, what steps are the Government taking to ensure that those people are prioritised? Government departments do not have a good historical record in ensuring that people who suffer at the state’s hands get redress very speedily.

I would like to take the opportunity to wish my noble friend a very happy birthday. To answer her question, resolving these errors is a priority for the department. We are committed to doing so as quickly as possible. We have started by reviewing cases where the individual is alive; in doing so, we are initially focusing available resources on older cases and on those people whom we believe are most likely to be vulnerable.

My Lords, in her response, the Minister indicated that various steps had been taken by the department to put things right. That was welcome, except that the Public Accounts Committee made a series of very specific recommendations to the department in its very damning report. Can the Minister tell us exactly how much progress has been made specifically on those recommendations? If enough progress has not been made, will she ensure that she reports to the House on just how much the department is monitoring them?

The department is considering the content of the report, including the recommendations. As is the case for reports such as this, the Government will provide their response to the House in due course through the publication of a formal Treasury minute. Until then, it is not appropriate for me to comment any further on the report, but I am prepared to make a commitment that, when such a decision is made and the response is ready, I will make sure that all noble Lords are appraised of it.

My Lords, one of the points made in this very critical report last month by the Public Accounts Committee was that the DWP lacked any plan to contact the next of kin of deceased pensioners who were shamefully short-changed. Can the Minister tell me what is happening on that score? On the question from the noble Baroness, Lady Altmann, will the Government ensure that any sum ever paid—we live in hope—is not taken into account for, for instance, inheritance tax purposes?

My understanding of the situation is that, where people have died, a payment will be made to their estate to make up for the underpayment. I cannot tell the noble Baroness when that will happen, but the department will be communicating with and contacting the various people. I have already given an answer in relation to the underpayment and the impact on other benefits and costs.

That the Bill be read a second time.

My Lords, the Bill establishes a new funding model for new nuclear projects, known as a regulated asset base—RAB—model. This funding model would allow a company to receive funding from consumers through their energy suppliers in relation to the design, construction, commissioning and operation of a new nuclear project. By using a RAB model, a company’s investors share some of a project’s risks with consumers. This can lower the cost of finance for funding new nuclear plants, which is the main driver of project cost. This could deliver nuclear plants at a lower overall cost to consumers than if we relied on existing funding mechanisms alone.

As the National Audit Office observed in its 2017 report on Hinkley Point C, by using a model such as a RAB, which shares more project risk while providing the developer with a revenue stream, the required return to investors could be lower, resulting in lower project costs overall. As well as introducing a RAB model for nuclear, the Bill takes steps to remove barriers to private investment to further incentivise the development of new nuclear projects in the United Kingdom. These measures will reduce the UK’s reliance on overseas developers for finance and deliver better value for money for consumers. This legislation is vital in getting new nuclear projects off the ground and will help the UK meet its decarbonisation targets. As well as contributing to achieving our net-zero commitments, new nuclear will complement renewable energy to ensure that the UK has a resilient, low-cost, low-carbon electricity system for the long term.

With all but one of the UK’s current nuclear reactors scheduled to close by 2028, representing 85% of our existing nuclear capacity, the need for new nuclear projects is more urgent than ever. The UK was the first country in the world to establish a civil nuclear programme and the sector has a proud history of innovation and of creating high-skilled jobs across the length and breadth of the country. The Bill is an opportunity to boost this vital sector and its supply chain by getting projects off the ground, while supporting the Government’s recent levelling-up White Paper.

With construction of Hinkley Point C under way, the Government are aiming to bring at least one large-scale nuclear project to a final investment decision by the end of this Parliament, subject to value for money and all relevant approvals. The recent spending review provided up to £1.7 billion of direct government funding to support this objective. The Government have also provided further funding to support the development of future nuclear projects, including small modular reactors, led by Rolls-Royce.

This funding has been made available to develop and mature prospective projects. In addition, we need a new funding model that unlocks cost-effective nuclear power. This is the main objective of the legislation before us today. We must harness the potential of private capital to be partners in our nuclear sector and widen the pool of available finance for new projects. This will naturally take us away from reliance on single developers financing new projects at their own risk, something which has contributed to the cancellation of recent projects at Wylfa and Moorside. The effectiveness of the RAB model has been seen in the successful financing of other complex and large infrastructure projects, including the Thames Tideway tunnel and Heathrow terminal 5. With nuclear projects, the RAB model has the potential to bring in new sources of capital at a value for money cost to consumers.

In terms of international comparisons, it is important to stress that there are key differences between the RAB model and projects in the US that used the early cost recovery model. At projects such as those in South Carolina and Georgia, the economic regulatory approach taken was driven by unique company ownership models, which had implications for how costs were passed on to consumers. Other differences include the level of regulatory oversight and how incentives were established for projects to be delivered to cost and on schedule.

There were also several project-specific issues, including the maturity of design work at the start of major construction, the experience of the project supply chain, and the structures in place to manage the project. All potential nuclear projects in the UK will be subject to very rigorous due diligence, including the designation process set out in the Bill, which would mitigate against such issues arising in this country.

The Bill consists of four parts. Two of these establish the RAB model. The others take additional steps to incentivise investment and protect the interests of consumers. The first part of the legislation creates a framework for the implementation of an economic regulatory regime for the RAB model. The regime will be designed to share risk in a way that reduces the cost of financing projects, while incentivising investors to manage project costs and schedules.

This part of the Bill will allow the Secretary of State to designate a nuclear company for the purposes of the RAB model, as long as it meets specific criteria and relevant persons are consulted. The designation criteria require the Secretary of State to be of the opinion that the development of the relevant project is sufficiently advanced to benefit from the RAB model and that designation is likely to result in value for money. Once designation has occurred, the Secretary of State will be able to amend the nuclear company’s electricity generation licence, allowing it to receive a regulated revenue stream to support the design, construction, commissioning and, of course, the eventual operation of the nuclear project.

The second part of the Bill covers how funding will flow to a nuclear company that has been given access to RAB funding. This mechanism draws on the contract for difference model. Ofgem will calculate the nuclear company’s allowed revenue for a given period in accordance with its modified generation licence and how much will need to be collected from electricity suppliers. Suppliers will then pay their appropriate share of this to a counterparty, which will be responsible for passing the total amount on to the nuclear company. This will enable a steady flow of funding between domestic and non-domestic consumers and a nuclear company.

The third part of the Bill introduces a special administration regime, which will come into effect in the unlikely event of a project company’s insolvency. Unlike an ordinary administration, a special administrator must prioritise the commencement or continuation of electricity generation from a nuclear power plant which is benefiting from a RAB model. This seeks to ensure that consumers benefit from the investment they have made through RAB payments in the form of the electricity generation that the project will ultimately provide.

The fourth part of the Bill makes technical clarifications to the regime of funded decommissioning programmes in the Energy Act 2008. The Bill clarifies that entities such as security trustees and secured creditors will not be bodies “associated” with nuclear site operators simply by virtue of holding or exercising certain rights relating to the enforcement of security. This will facilitate these bodies’ involvement in the financing of nuclear projects. This part of the Bill also contains a financial provision that provides an indication to Parliament of the spending that may be incurred under the Bill’s provisions.

Finally, the commencement clause sets out the limited number of provisions in the Bill which are subject to early commencement. This is crucial in ensuring that the Government can bring at least one large-scale nuclear project to final investment decision in this Parliament, subject, as I said earlier, to value for money and all relevant approvals.

I have already touched on a number of the benefits that the Bill provides. As mentioned earlier, this legislation could significantly reduce the cost of financing new nuclear projects and reduce the UK’s reliance on overseas developers for financing new nuclear, while providing low-carbon, reliable energy. Consumers will therefore benefit from lower system costs than if the UK relied solely on intermittent power sources.

More broadly, this legislation also represents a significant opportunity for UK businesses. As Hinkley Point C proves, new nuclear build projects create jobs locally and nationally to support the supply chain and boost economic recovery. The nuclear sector employs approximately 60,000 people, which includes a significant proportion of highly skilled jobs, and the nuclear RAB model will help create thousands more.

In terms of the devolved Administrations, the nuclear RAB regime would extend to England, Wales and Scotland only. We understand that the Scottish Government do not share our position on the need for new nuclear projects. However, this Bill does not alter the current planning approval process for new nuclear projects. In addition, the Secretary of State would need to consult with Scottish Ministers before designating a nuclear company whose proposed project was wholly or partly in Scotland.

I was pleased to see the support expressed for this Bill by numerous MPs from all sides in the House of Commons representing constituencies in Wales. We will continue to work closely with the Welsh Government on options for a future nuclear project at Wylfa, and a RAB model remains an option for financing a nuclear project at this site. I was pleased also to see the support that the Bill got from Her Majesty’s Official Opposition as it passed through the other place. I look forward to further constructive engagement—indeed, we have already commenced it—and co-operation as the Bill proceeds through your Lordships’ House.

At Committee and Report stages in the Commons, there were broadly three key areas of debate. One of the issues raised was the role of foreign investment in the UK’s civil nuclear projects. The Government welcome investment but never at the expense of our national security. We recognise the importance of having appropriate protections and scrutiny in place to ensure that any investment aligns with our core interests. The National Security and Investment Act gives the Government significant oversight of acquisitions of control in a nuclear project. It is also important to note that national security considerations will form part of the wider approvals process.

Another issue raised in the Commons was costs to consumers. We recognise that the rise in global gas prices has increased the cost of energy for households. However, in the medium to long term the Government are clear that new nuclear is crucial to providing consumers with reliable, low-carbon and affordable energy.

The Bill also contains measures that will allow the Government to incentivise project developers to avoid cost overruns, providing protection to consumers prior to the approval of a project, as well as during its construction and operation. Ensuring that a project has matured to a suitable point of development will be a central criterion for approving a project under the RAB model. The Government will submit project proposals to a thorough business case process, and intensive due diligence will take place throughout project negotiations. This due diligence will allow the Government to produce a robust estimate of a project’s cost. Developers will then be incentivised to manage costs and timings effectively, overseen by the economic regulator.

Finally, the other place also had constructive debates around transparency. The Government fully recognise the importance of transparency, which is why the Bill places clear requirements on the Secretary of State to publish information and consult key stakeholders at each stage of the project.

The Government are clear that nuclear energy has a vital role in reducing our reliance on fossil fuels, thereby protecting us from volatile global gas prices. Nuclear power will need to play a significant role in the UK’s future energy mix to ensure reliable, low-cost, low-carbon power as we transition towards net zero. I hope that noble Lords will recognise the exciting opportunity that this Bill represents to further develop the UK’s civil nuclear sector, while stimulating economic growth and job creation in support of the Government’s levelling-up strategies. I beg to move.

My Lords, I strongly support the Bill. I recall some years ago being on a boat on the Thames with Thames Tideway and being briefed about the massive new tunnel. When the financing was explained, I was not alone in asking whether it had been used for any other big infrastructure projects as, frankly, it seemed too good to be true. That sounds simplistic, but the fact is that I was sold, as were others, on the system of finance. An operational nuclear power station is not the same as a tunnel taking sewage away from London, but the cost, infrastructure and quality-of-life implications are very similar. At the end of the day, of course, the consumer will pay. You cannot hide that fact and nobody seeks to do so. But over the next 30 years, the use of electricity in the United Kingdom will double compared to the 2019 figure. The overall use of energy will go down, and we will use a smaller proportion of oil and gas, and, of course, introduce renewables and hydrogen. This this makes electricity absolutely fundamental. We will always need a baseload, and nuclear is the best form.

I do not think you can be taken seriously as a political party in 2022 if you are not in favour of civil nuclear power: it is as simple as that. I do not want to disparage people, but I am reminded of the brown bread and sandals brigade attacking nuclear not on a scientific basis but on an almost mythical, quasi-anti-religious basis, yet it is clean, green and cheap to operate. We know from our regulatory information powers that it is safe. We started it—we invented it—and we used it to make electricity. We cannot do nothing, given that our older Magnox stations will be phased out in a few years. We have to prove that we have learned the lessons from Hinkley Point C. The National Audit Office has given its approval for the use of alternative financing models, hence this Bill.

I want to be brief, and I have just two key points to make. One relates, as the Minister very fairly pointed out, to customers. The Government have to ensure that customers do not pay more than twice. They will pay twice for this, of course—that is the system; it is split—but they do not need to pay three times. Paying for construction and operation is one thing, but they should not pay for aborted projects or massive cost overruns. There has to be something which gives a degree of confidence. The Government have to prove that they have customers’ interests as a top priority, as energy policy requires that customers change their behaviour. We are asking the citizens of this country to massively change their behaviour, and they have to understand why. We know from the pandemic that behaviour will change if people understand why. We have to be transparent and open about this.

My second point concerns security. There is no reason at all why the UK, along with other democratic states, cannot ensure security and stability of nuclear technology and get control of it itself. My view is that there should be no finance from China or Russia at all. They cannot be trusted with commercial contracts these days. I remember someone once telling me, many years ago, that the Soviet Union had never reneged on a commercial contract. We do not have the Soviet Union now; we have Russia, and it is reneging on commercial contracts. Leave the security bit aside, if you will—I am worried about that as well—but it cannot be trusted on commercial contracts, and we are talking here about very long-term commercial contracts.

We started the process. Okay, it never came about that electricity was so cheap that it was not worth recording, but we are in a different age. We will not have coal and gas to fall back on for a quickie. Nuclear is going to take on an importance beyond keeping the lights on, whether it is the small modular reactors or new build.

I do not want to turn the clock back—it was never the “good old days”—but when I left school, you could get an apprenticeship with the Central Electricity Generating Board. What I cannot see today among the 20 or more different organisations is the replacement for that, so that we can upskill and give careers and a future to the people of this country. We have lost that. I would like to believe that this Bill could be one of the most important that the Government introduce. It could actually be a factor in restoring that from a bygone age.

My Lords, first, I declare my interest as a director of Aldustria Ltd, which is an energy storage company. I thought the noble Lord, Lord Rooker—who I have huge regard for—was back into Corbynism there for just a moment. I knew someone who worked for the Central Electricity Generating Board. It was a great time in history.

The Minister mentioned both value for money and zero carbon, and I want to come back to both. One of the basic things about zero carbon is the circular economy, and one of the first questions on the decision tree of circular economy is whether you need something or not. I will go down that route in a minute. I have always been favourable to nuclear power but, over the last decade, facts have changed. That is why I am sceptical about the need for this type of nuclear development altogether. Let me say why.

First, we still have not solved the nuclear waste issue—and it is a real issue. Conversations with local authorities and communities are going on throughout the UK about finding a way forward but, even if we do, those facilities will not be ready for many decades, as we have seen from previous experience in Finland. Secondly, I come to the area of baseload because this is, if you like, a 1990s argument. One thing about nuclear power—particularly with Hinkley C, which I have visited, and Sizewell C—is that, for it to be effective, it needs to operate consistently: it does not go up and it does not go down. If we have large renewables in this country, nuclear must go up and down from hour to hour, day to day, week to week. It is not a technology suited to that. It becomes inefficient. It is inefficient not only operationally but in terms of what the Bill is trying to do, which is minimise capital costs. I know from my experience in industry that, when you have capital, you work it day and night as long as you can: you sweat the assets. With a large renewable input into our electricity system, that becomes not possible with nuclear power after a certain threshold.

Also, you come to costs, and this is where facts come in: the cost curve for nuclear has gone up while the cost curve on renewables has come down significantly, as we know. I congratulate the Government on part of their work in making sure that is the case. In terms of value for money, which was the Minister’s caveat on this nuclear project, it seems to clearly fail. The trend is going that way, but we have the largest energy cost crisis that we have had in many years at the moment, and we are told that it is not going away any time soon. Yet the Bill actually adds costs to consumers, when we have a cost-of-living crisis—fuelled by energy—that is more of a problem than it has been for some time. If I was an adviser to the Government—which I never have been or will be—and I wanted to use nuclear power, I would probably go down the Korean route: you build a fleet of 20, you get your economies of scale and you finance it through the public purse, which has minimum interest cost. What do you have? You have a much cheaper capital cost, zero carbon and greater efficiency. The Government are not going down that route, but that has been shown as probably the only way that you can make nuclear power successful in the modern world.

There is an alternative—and, strangely enough, it is not renewables. It is that boring thing called energy efficiency. The Minister shakes his head, but every government publication with comparisons says that energy efficiency shows the highest return in terms of capital investment that there is. For the £20 billion that this will cost—probably more at the end of the day—it is my rough calculation that you can retrofit 2 million to 3 million homes; those would be some of the worst ones to bring up. This is important for social fuel poverty but also means that energy costs for consumers go down—whereas the Bill makes them go up. Page 55 of the 2019 Conservative manifesto says:

“We will help lower energy bills”—

somewhat ironic—

“by investing £9.2 billion in the energy efficiency of homes, schools and hospitals.”

Fantastic, but it is not enough. Here, twice that could be put towards it. I ask the Minister: how much of that £9.2 billion has already been spent, half way through the Parliament?

My Lords, I declare an interest, as I am advising a company involved in the power construction sector—Mitsubishi Electric—and a long-standing interest as a former Secretary of State for Energy. That was many decades ago, I am afraid, when I tried to get a nuclear power replacement programme going but failed, which is why we are back at the same issue now.

The Bill has excellent intentions and purposes, so I of course welcome it, as does the noble Lord, Lord Rooker, but some questions must be asked and, if not answered here in Parliament, will be asked again and again by investors. Let us be clear: the basic aim of the Bill is to make future nuclear power projects more widely attractive to private capital, such as pension fund money, of which there is plenty around to invest today. With the regulated asset base model, it is eventually consumers, via the licensed suppliers, who will find themselves bearing more of the risk from the start.

There are two key questions which investors, licensed suppliers and consumers will want answered. First, for how many years can consumers be asked to pay this extra levy on top of everything else and carry the risk of all the delays and vast cost overruns so familiar in this industry to date? Of course, the answer depends on what sort of nuclear plant is being financed and “on offer”. The one immediately before us and mentioned in the Bill is Sizewell C: a very large-scale project billed as a “replica” of the only other one being constructed in the UK, which is at Hinkley Point in Somerset. Is it a replica? Perhaps it is technologically, but definitely not financially. That is the reason we are here looking at a new financing model.

At Hinkley, the returns to the two main investors, Électricité de France and China General Nuclear, are due to come through by requiring that electricity produced, when it finally flows, is purchased by wholesale distributors at what looked at the time of the deal to be an enormously inflated “strike price”—although, ironically, it is not that inflated compared with the current soaring electricity prices which we are now suffering. Why will this so-called replica at Sizewell, or other future projects for that matter, look any better? These big plants take 10 to 15 years to get up and running, and it so happens that the history of Hinkley Point C, the evolutionary power reactor—evolutionary it certainly is—is not at all encouraging in that respect. None of its EPR design predecessors is successfully operating, has stayed anywhere near planned construction time or is anywhere near planned budget. Now at Hinkley Point C there is talk of parts having to be totally redesigned and further delays and costs. The reactor plant being constructed jointly by CGN and EDF at Taishan in China was meant to be the poster—the model—for being on time and working, but even that has now been closed for security reasons. As for the prototypes at Okliuoto in Finland or at Flamanville on the Cherbourg peninsula—which I visited some years ago with the noble Viscount, Lord Hanworth—one hardly dares look at their time overruns: years and years late.

Are investors ever going to wait that long for payback? However guaranteed the cash flow from consumer bills during construction—which may, incidentally, have to be jacked up to cope with construction risks—private money will not find that very attractive. Smaller scale, quicker built models, such as the small modular reactor type, or the advanced smaller reactors, are bound to be far more attractive when they can be built in series with lower waste, fabricated at factory level and begin operating and earning in two or three years. That means a much shorter period of risk for consumers paying up in advance and, of course, capital can be lent at cheaper rates because of a quicker return and less risk. That is obvious.

That is the first key decision, or choice, right now in our nuclear fleet replacement programme which confronts Her Majesty’s Government: a programme which has already had its share of setbacks. Do we plug on with these mammoths at Wylfa, Moorside, Oldbury and Sizewell or turn all our efforts to small and more advanced nuclear power plants? I appreciate that this is a choice the Government would rather not make.

There is a second and really awkward issue to be resolved; namely, how to deal with the Chinese involvement. There is not time in the allocated five minutes to go into detail, but 10 years ago the mood was to welcome everything Chinese and give them a central role in our nuclear replacement programme, and now the mood has swung 180 degrees. There will be little private investment attraction at all at Sizewell until all that is sorted out, even if the EPR design could be assured of working, which none of its predecessors is yet doing.

For this Bill to work and for the RAB model to function, there will have to be a major change of strategy here. Low-carbon nuclear replacement is vital for security, for climate, for cheap green hydrogen and to avoid the kinds of energy bill explosions we are suffering right now. This Bill should help get us back on the right track—eventually—but there are these key decisions to be taken before we can be anything like sure of that.

My Lords, I broadly support the principle of this Bill and the mechanism proposed, but with some reservations and with the need to put this decision and decisions on nuclear policy in general in a wider context. I have long been a supporter of nuclear power, ever since, as a very young man, I worked at Harwell and was infected by the evangelical commitment of scientists to that alternative energy source. I did not entirely buy it, even then. I never really thought we were going to get completely free electricity; nor did I believe our colleagues down the road at Culham that fusion technology was only five years around the corner. Nevertheless, I think—much more so now than all that time ago, because we now need rapidly to move to a carbon-free energy system—that we do need nuclear power.

The problem has been that despite the investment in research and in earlier generations of nuclear power, for 30 years successive Governments have shied away from key decisions. The noble Lord, Lord Howell, mentioned examples during his time. There was a piece of evidence produced for us in a briefing for this debate that rather chilled me because it said the best time for nuclear investment is 20 years ago. That shook me, because 20 years ago, the Labour Government decided not to proceed with a new nuclear plant, just as their predecessors had. I was a junior Minister at Defra at the time and was party to that decision. It was taken largely because of the cost, which was then envisaged as being entirely on the taxpayer—whereas this puts the cost on the consumer and on business—but also because the enormous success of North Sea gas meant that we were going to have relatively cheap power for a long time and we did not need to take a decision at that time. The position of that Government was that we did not absolutely oppose nuclear power and that there would be new stations. We did not completely adopt the more extreme green agenda, although we did take it into account. We left it on the table, as it were.

We also made a number of provisos. I remember saying in the course of making that decision that while we may have not needed nuclear power at that time, we might eventually, and that even if the UK did not need nuclear power, the world would. So, we had to ensure that we retained the UK’s capability in industry and research, which was at that point—to use a phrase that is current now—still world leading. It had already been run down fairly substantially but we had a strong nuclear capability. The other provisos were that we needed to continue to identify potential nuclear sites, which we have started to do, continue to find options for dealing with nuclear waste, which the noble Lord, Lord Teverson referred to, and reduce the eventual cost of decommissioning, which has distorted our energy cost programme and the Government’s contribution to it over the last few years. These were important caveats but regrettably successive Governments ignored those caveats.

The research and operational expertise have been run down and dispersed, and we are almost entirely dependent on overseas technology, whether it is French, Japanese, Korean or, indeed, Chinese. Not enough new sites have been identified, and the public in those areas have not been fully consulted. Decommissioning costs of the AGRs, and now the Magnox, have soared, and we are still not clear on waste disposal. Instead of cost considerations reducing the upfront cost of nuclear projects, which is now met entirely by private capital, those costs have continued to escalate with the delays in the various schemes here and elsewhere in the world. Some of this is a worldwide issue, and some of it reflects non-decisions by previous Governments, as I say. But whatever form of finance that we adopt now has to be accompanied by addressing those other dimensions.

The Bill does not sufficiently protect consumers or small businesses. Interestingly, the impact assessment says that there will be no cost to small business. That is not true; there will be costs, and, particularly in the current climate, we will have to explain the fact that we are asking consumers and businesses to meet costs the benefits of which they will not see for many years.

So I am in favour of the Bill, but it needs to be extended and the Government need to surround it with some broader commitments. For example, if we are to have big nuclear sites such as Sizewell, we ought to require them to meet other objectives, such as attaching to such sites major provision for the production of hydrogen. There are other possibilities: CCS and storage. Some equivalent of Section 106, as was, needs to be applied to any nuclear projects, because other aspects of energy provision need to be addressed as we approve the provisions within the Bill.

My Lords, I support the Bill because it is both urgent and important. It is urgent because, as the history of Wylfa recently demonstrated, the lack of ability to provide funding for new nuclear energy has become a serious obstacle in the way of new building. That applies whether it is a big site or project or SMRs and AGRs.

We need the Bill because, as the Minister has said, it provides an alternative funding method that, as the noble Lord, Lord Rooker, pointed out, has been used for other utilities—it is not quite the same, but nevertheless there has been good experience. We need to get it on the statute book as soon as we can, with early commencement, so that the detailed work on financial flows via the RAB model can go ahead, with some prospect of Sizewell and other possible nuclear sites coming on stream in a reasonable timescale. It is not too much to say that, absent a Bill like this or the funding method that it would give us, it will be very difficult to support and fund Sizewell. So the stakes are high.

I am not an expert on funding mechanisms and will not compete with those who are more competent than I am in discussing them, but I will make a couple of points. As the Minister said, the RAB model enables private sector capital to be brought in, reducing the burden on the taxpayer. As has also been pointed out, we do this by getting a contribution from the consumer—this reduces the loan element and drives down the overall cost. There has been comment on this aspect both in this Chamber and in the other place, and I share the concern that the consumer should not be taken for a ride. The experience in South Carolina was cited, certainly in the other place. It is fair to say that any method of finance can be discredited by poor management and, indeed, fraud.

But the concern for protecting the consumer is legitimate, and I hope that the Minister can assure us that there will be due diligence on the project costing so that we are not faced subsequently with unprovided cost overruns. I hope that he can also tell us that incentives will be placed on the builders to keep costs down and that they will be real and effective.

I said that I thought the Bill was important as well as urgent. The truth is that this country is not going to achieve its statutorily embedded climate change goals of net zero by 2050, nor the decarbonisation of electricity production by 2035, without a contribution from nuclear energy generation, which, as has also been said, is at the moment declining. We need that base power when renewables are not performing. I know there is a big divide on this issue, but it is not just the Government who say we need it; so does the Climate Change Committee. We need the contribution of nuclear-generated power. Frankly, Parliament cannot deny the means to the end that it has ordained.

We need to bear in mind something else that is often forgotten. In a data world, we need a much greater quantum of electricity, above all, to power the world that we are going into, which is going to be so desirable and green. If we want the greenness, we need to provide the means to get there.

I also strongly suspect that, for the foreseeable future, which is quite some time, the era of cheap energy is over and that people will take a different view of what the appropriate strike price is likely to be in an upwards direction.

Lastly, I have a couple of thoughts on safety and security. The UK’s record on nuclear safety is of the highest order and we can have confidence in it. I do not come to the same conclusion as the noble Lord, Lord Teverson, who legitimately mentioned this issue. We already have sound methods for dealing with nuclear waste, but it is absolutely true that we must find a permanent solution. I hope the Minister will confirm that finding that solution remains a high priority. It is important for future generations to be able to cope with the outcome of nuclear power.

On security, if ever the world needed a demonstration that high dependence on international energy markets carries a considerable risk to the economy, Mr Putin is giving us a masterclass. Do we really need more persuasion that we must exploit our undoubted ability to become more self-reliant in energy? Secondly, as discussed in the other place, there is the participation of foreign state money in funding nuclear energy plants. I am not in favour of a blanket ban on this, but I am sure the Government need to be vigilant on the issue and use, if necessary, the power of the special share and the terms of the recently passed foreign investment Act. That is what those bits of legislation are there for. I hope the Minister can assure us that, if we are going to counter it, this would be the case.

My Lords, I first declare my interests as an engineer and project director in the nuclear industry, working for Atkins. I welcome the Bill, and given that finance and costs dominated the £92.50 per megawatt hour strike price agreed for Hinkley C—approximately two-thirds of that price—it is clear that the proven RAB mechanism will be transformative in reducing the costs of new nuclear. It will reduce the weighted average cost of capital in new nuclear and, as the Minister said, bring a new range of investors, including pension funds and other institutional investors.

It is worth reiterating why we need new nuclear. I have taken part in many debates in my time in Parliament on the need for nuclear in our energy system. I have always been struck by how often the argument is reduced to nuclear versus renewables, so I would like to say a few words on the economic case for new nuclear, to counter what the noble Lord, Lord Teverson, said.

I started my career a long time ago, as a systems engineer, using systems thinking to design, integrate and manage complex systems. Applying that thinking to the energy system shows that we cannot consider elements of the system in isolation. For example, renewables are achieving competitive costs of power at the generator, in levelised cost of electricity—or LCOE—terms. But as the percentage of renewables on the system increases, so, too, does the cost of system modification and back-up to cover those periods of low renewable outputs. At high penetration, when there are high percentages of renewables on the system, the marginal cost of renewables, measured on a whole-system basis, will be far higher than the reported LCOE. We should therefore be comparing costs on a whole-system basis, rather than on a simplistic comparison of levelised costs of electricity between technologies, and investigating the system architecture that minimises the costs of electricity to the consumer. A multitude of studies confirms that having reliable firm power on the grid, such as that provided by nuclear, working together with renewables—that is the important point—makes the system cheaper. With the further cost reductions provided by the RAB model, not to mention fleet build, which, it must be emphasised, led to the great cost reductions that we have talked about in renewables, nuclear will be a vital part of the 2050 energy system.

The Bill is critical for the future of the energy system, helping to ensure that it is low carbon, secure and cost effective. But I suggest to the Minister an opportunity that could be taken with the Bill, involving another aspect of the net-zero system—hydrogen production, to build on what the noble Lord, Lord Whitty, mentioned. The Minister may recall that in July last year I asked him to consider whether hydrogen produced from nuclear energy should be eligible for the renewable transport fuel obligation, or RTFO, alongside other low-carbon sources. He replied that the Government’s aim was to remain technology neutral but that energy change to RTFO sources would require primary legislation. Now we have an ideal vehicle, in the shape of the Bill, to undertake this change. Now that we have left the EU, we are free to determine our own definitions for clean, non-emitting sources of energy. I am sure that the Minister would agree that the Government’s strategy should be technology-neutral across all sectors, and that opening policies such as the RTFO to a wider range of eligible solutions would create more resilience and cost-effective outcomes.

I know that there are ambitious plans to use the construction of Sizewell C as a world-leading example of UK hydrogen-powered construction, using hydrogen buses, diggers and other construction equipment. The early large-scale use of these vehicles will help drive down manufacturing costs and increase hydrogen demand, helping UK companies to get ahead and invest in long-term job creation. A simple change, adding nuclear-derived hydrogen to the list of zero-emissions sources defined by the Energy Act 2004, could unlock millions of pounds of private investment into hydrogen production in the UK and accelerate the Government’s hydrogen production targets, while also supporting the nuclear industry. I would welcome the Minister’s thoughts on this and look forward to discussing further with him and his officials.

Finally, I support what the noble Lord, Lord Rooker, said—although maybe without wishing for the return of the Central Electricity Generating Board. However, I mentioned the system architect. Who defines the overall system architecture? It is not clear at the moment who that is. I agree with the noble Lord that that is something to which the Government need to give serious thought.

My Lords, I am delighted to follow the noble Lord, Lord Ravensdale. I agree very much with what he said, particularly his reference to hydrogen. I also wanted to comment on the speech by the noble Lord, Lord Rooker, who was spot on, not only in his content but in the passion with which he put forward his points.

I speak in a personal capacity, as Plaid Cymru, like most parties, has a spectrum of views on nuclear matters. Plaid MPs did not oppose Second Reading and the two local authorities, Gwynedd and Ynys Môn, which cover the nuclear power sites of Trawsfynydd and Wylfa, are both Plaid-led. Both councils support re-establishing nuclear energy generation on those sites, subject to safety, environmental, employment and community provisions. Indeed, we were moving towards securing Wylfa Newydd when Horizon proposals faltered on financial issues and Hitachi pulled out, so the Bill is very relevant. There is particular support for SMRs at these sites and, while I appreciate that the Bill is a facilitating measure, not tied to specific technologies, I hope that the Minister can indicate greater urgency by the Government for the SMR programme and for securing from the Nuclear Decommissioning Authority a freeing up of land at Trawsfynydd for Cwmni Egino, the site development company created by the Welsh Government, to facilitate an SMR demonstrator plant and develop medical radioisotope production there.

The main purpose of today’s Bill is to speed up investment in a new generation of nuclear power plants. I support the Government’s aim of fully decarbonising the generation of electricity by 2050, but will the benefits of this Bill be felt in time to meet the 2035 interim target of a 78% reduction in carbon emissions compared to 1990?

I accept that nuclear has a key role in guaranteeing electricity supplies for everyone in these islands when full decarbonisation is reached. This is implicitly part of the energy decarbonisation contract between government and the people.

We do not know what the constitutional relationships within these islands will be by 2050, but I believe that all four nations will be part of an integrated European electricity network through which the sale of low-carbon electricity will offer substantial financial returns.

Writing recently in Social Europe, Sarah Brown of the Ember think tank, warned:

“Europe is still in denial about fossil gas.”

She stated that there is an overwhelming consensus that limiting global warming to 1.5 degrees requires

“the rapid and complete decarbonisation of the power sector”.

A United Nations Economic Commission for Europe report, published in October, showed that for each kilowatt hour of electricity generated the grams of carbon dioxide released into the atmosphere are, for coal, 1,000 grams; for gas, 430 grams; for solar, 37 grams; for wind, 14 grams; and for nuclear, 5 grams. These full-life cycle figures include the carbon implications of mining, construction, operation and decommissioning of relevant plant.

We need a complete end to the use of coal, oil and gas for generating electricity and their replacement by dependable low-carbon sources of energy. There is an important role for renewables—solar power, wind generators and tidal and estuarial energy such as the Severn barrage—but they cannot generate all our electricity on the consistent, reliable, 24/7 basis necessary to meet in a timely fashion the needs of each household and place of work. Developments in hydrogen technology and battery capacity will play a role, but the basic challenge remains. Eventually, we may see a renewable, fully decarbonised electricity generation sector if we have the political will, but the clock is ticking towards a global warming profile in which human life on this planet will be snuffed out. Our present trajectory is unsustainable.

Over time, we shall see new clean sources becoming available. We have long awaited fusion as a better source than nuclear fission; recent developments at the Joint European Torus facility at Oxford are encouraging. I hope this Bill might facilitate nuclear fusion investment in due course, but we cannot base our 2050 target on the assumption that fusion will be in place. We have a period of perhaps half a century when the gap between low-carbon supply and demand must be met from a dependable source. Over that timescale, nuclear electricity is an essential part of the clean energy mix.

There are valid questions about the cost of nuclear power. If we are going to support nuclear with this type of financial intervention, how do we ensure that we maximise the UK’s industrial opportunities with technologies and manufacturing capabilities that can be exported as well as used for our own clean energy needs? With the UK taxpayer funding nuclear in this way, we must ensure that the UK economy benefits fully from the opportunity this affords. One major issue of concern relates to the cost of clearing up nuclear power sites; this must be factored into the equation.

I also want assurance that the Bill can cover a variety of sources of nuclear generation, including SMRs and eventually nuclear fusion. We must ensure that the model which has been developed can benefit other developers, and should not be seen as one customised solution for the benefit of EDF at Sizewell C. What commitment can the Minister give that other technologies and potential projects can benefit from this Bill?

I shall also be seeking greater clarity on the role of devolved Governments in designation, licence modification, consultation, transfer schemes and decommissioning.

Because of the pressing need for a new generation of safe, clean, low-carbon nuclear generation facility to underpin our carbon footprint commitments, I am content for this Bill to have a Second Reading.

My Lords, it is a great pleasure to follow the noble Lord, Lord Wigley. I remember with great pleasure visiting Trawsfynydd and Wylfa in his former constituency when I was a junior Minister of energy, almost four decades ago. I was pleased to hear from my noble friend the Minister that further investment up there is now envisaged.

I strongly support the Bill. We have no prospect of achieving a goal of net-zero carbon emissions by 2050 without new nuclear power. All but one of our current reactors are due to close and we urgently need to make up for lost time and get on with building their replacements, faced as we are with the doubling of electricity demand over the next 30 years.

We have discussed today the other sources—wind and solar power, which the Government have very successfully promoted and will continue to promote—but as we have seen, they are very much victims of the weather from time to time. Oil and gas currently provide a very large proportion of our electricity and will continue to do so, on a diminishing basis. I entirely agree that they should be sourced locally and domestically, rather than being imported, so far as is possible; I only wish more of my compatriots north of the border saw it that way. The Government are rightly supporting investment in small modular reactors—good luck to Rolls-Royce—but that is down the line, as are hydrogen and fusion, which are well down the line.

Increased energy efficiency—which we have heard about from the noble Lord, Lord Teverson—both domestic and industrial, has to my knowledge been a theme of government for at least four decades. That remains a work in progress; much low-hanging fruit has already been gathered, but there will always be room for new carrots and sticks. The Government have made commitments in that direction, which my noble friend the Minister may wish to comment on.

If we are to avoid electricity rationing as demand doubles, we do not have the luxury of time. We need the certainty of new baseload nuclear electricity very soon. That is what this Bill, through the proposed new financial arrangements, will enable, showing the project costs for consumers, investors and developers. The impact assessment has shown that the RAB model for building a large-scale plant is hugely cheaper than the alternative, and for that reason the Government are quite right to choose it.

In the debate on civil nuclear power in your Lordships’ House on 9 December, it was suggested in a most brilliant speech that alternatives to the present proposals could include the issuing of designated bonds backed by the security of the Government, or creating

“a supply of funds to enable the projects to pre-empt the necessary resources by increasing the supply of money.”—[Official Report, 9/12/21; col. 2078.]

Since the Government can borrow money more cheaply than anybody else, it is clear that there is some attraction in this. The noble Lord, Lord Teverson, referred to it as the North Korean model.

South Korean.

South Korean! I beg his pardon. My hearing aid has been letting me down. The South Korean model. Well, that may be so, but that is not the way the Chancellor of the Exchequer sees it, faced as he is with an enormous borrowing requirement already, and that is not the proposal before us.

One of the lamentable side effects of the lack of investment in nuclear power in recent decades has been the serious reduction in this country’s relevant skills and expertise. Sizewell C, following Hinkley Point C, will be essential in keeping in existence this expertise. It is salutary to remember the role of British expertise in the construction of the pressurised water reactor at Daya Bay in China, the first nuclear reactor. How the world has changed, but we are where we are, and I hope that we can yet again lead the world in nuclear technology if we show the will to do so, as we can.

I hope that this Bill will enjoy a relatively swift passage through this House, as it did through the other place, with the encouragement of the noble Lord, Lord Rooker, who spoke as eloquently as ever in its support. I hope also that work can be carried out with the urgency that the situation requires.

My Lords, I declare my interests as a consultant to the Japan Bank for International Cooperation and as a member of the advisory board of Penultimate Power UK Limited.

I welcome this Bill, which adds to the range of financing structures available for nuclear power station projects. Construction of gigawatt-sized nuclear reactors involves enormous investments in excess of £20 billion, with very long periods before revenues begin to accrue. The nuclear sector deal of June 2018 set out an ambition to reduce capital costs by 30% by 2030. This Bill should facilitate a reduction in the cost of capital for such projects. As Humphrey Cadoux-Hudson, managing director of EDF UK, explains, out of Hinkley Point C’s contract-for-difference price of £92.50, only £12 to £13 was the cost of construction. Operation and waste management represented another £25, and the rest is the cost of finance.

The RAB model is already established in the UK as a way of financing large infrastructure projects. There were around £160 billion worth of RAB assets in the country in 2018, such as Thames tideway, a £4.2 billion project whose weighted average cost of capital will be 2.5% until completion of construction and testing. That compares with around 9% for Hinkley Point C, which is borne by consumers.

The RAB model increases the options for financing nuclear projects and supports the Government’s recognition of the essential role that firm baseload nuclear power must play in meeting both our rapidly increasing demand for electricity and our much bigger need for low-carbon industrial energy. Many people are not aware that the two are different and that currently only 20% of our total energy consumption is electricity, while 80% is domestic and industrial heat, transport, and industrial processes, which at present are principally supplied by gas. Renewable energy cannot replace fossil-fuelled industrial heat.

As I mentioned in the excellent debate on nuclear power introduced by my noble friend Lord Howell of Guildford on 9 December 2021, there are many reasons why the Government should prioritise any opportunities to collaborate with Japan on nuclear energy, to mitigate the damage caused by the cancellation of the Horizon project and Toshiba’s NuGen project at Sellafield Moorside.

The Government have committed to provide £385 million towards advanced nuclear research and development. I welcome their decision to support Rolls-Royce’s SMR programme. The 10-point plan committed the remaining £175 million to research and development of AMR technologies. My right honourable friend the Energy Minister confirmed on 2 December that the Government had decided to focus on high-temperature gas-cooled reactors as their technology choice moving forwards, with the objective of building a demonstrator by the early 2030s. I suggest that this is too modest an objective. As my noble friend Lord Goodlad said, we do not have the luxury of time.

The HTGR technology developed by the Japan Atomic Energy Agency is based on an early British design, the Dragon reactor, developed at Winfrith in Dorset in 1965. The 21st century version has been licensed and operating in Japan for more than 10 years. It is inherently safe and would complement Rolls-Royce’s SMRs well as HTGRs produce heat up to 950 degrees centigrade and would serve a different but essential sector of the UK economy, such as replacing fossil fuels in industrial processes, manufacturing and the production of green hydrogen. The reactors are much smaller than the relatively large Rolls-Royce SMRs, producing around 50 megawatts thermal or 22 megawatts electrical, ideal for embedding in industrial clusters.

Does my noble friend not agree that the Government are proceeding much too slowly in seeking only to establish a demonstrator? The Japanese Government and JAEA are keen to commercialise this already proven technology in the UK and would welcome ministerial engagement at an early date to discuss how this might be best achieved. The RAB model enabled by the Bill we are debating today will provide increased opportunities to finance smaller nuclear projects as well as very large ones such as Sizewell C.

However, I have reservations about saddling consumers with too much by way of additional levies on their electricity bill. Does the Minister agree that the allocation of risk must be fair, transparent and robustly regulated to protect the consumer if the burden is to be applied through regressive electricity bills rather than general taxation? I look forward to other noble Lords’ contributions and the Minister’s winding-up speech.

My Lords, the recent history of the nuclear industry is evidence of the failure of the Government’s energy policy. The coalition Government of Clegg and Cameron recognised the need to renew Britain’s fleet of nuclear reactors. In 2010, it was agreed that the construction of eight new nuclear power stations should be called for. Several contactors expressed willingness to undertake the projects but one after another they withdrew. The list includes Scottish and Southern Electricity, the German companies RWE npower and E.ON, and the Japanese companies Hitachi and Toshiba.

This has left the French company EDF as the sole nuclear contractor, and at one stage it was doubtful whether it would be prepared to proceed with its project, given the difficulty in raising the necessary funds and the paucity of its own resources. The principal difficulty has arisen from the Government’s insistence that infrastructure investment in the nuclear industry should be financed by private capital.

One is reminded that the construction of our existing nuclear plants was invariably financed by central government. Money borrowed from private lenders is subject to burdensome surcharges comprised within exorbitant rates of interest. These charges consist of a risk premium, a scarcity premium and a discount rate. The discount rate reflects the time preferences of the lenders, whereby future receipts are valued at far less than current receipts. It is a consequence of this short-term perspective that half the cost of constructing a new nuclear power station, which can take as long as 10 years, will be attributable to interest charges. These will eventually constitute a massive transfer payment from the consumers of electricity to the financial sector.

As a provider of finance, the Government should be expected to take a long-term perspective. It should be one that envisages the consequences of global warming and the need to provide a stable baseload of carbon-free electricity, which only nuclear power can provide. The free market ideology of the Government has resulted in a system of contracts for difference, under which the guaranteed payments are entailed in a so-called strike price. Any returns to the investment that are below the strike price will be supplemented and any returns above it will be taxed.

This system has been an invention of neoclassical economists. It has accorded perfectly with their theoretical vision of how the economy ought to work, but it is at variance with reality. Among the economic fictions that support this system is a belief in the efficiency of intertemporal financial intermediation, whereby lenders can be prevailed upon to accept future repayments with little in the way of monetary inducements. In reality, it has proved impossible for prospective contractors to acquire the investment funds without incurring a heavy burden of payments to the financial sector.

The Government’s latest attempt to square the circle is represented by the Nuclear Energy (Financing) Bill. The Bill proposes to provide a stream of revenues to the contractor during the period of construction. The revenue will be derived from a charge levied on existing consumers of electricity. The supposition is that, with a guaranteed revenue stream and the alleviation of some of the risk, the contractors will be able to acquire capital funds from the private sector with greater certainty and at a reduced cost.

This begs the question of where the funds will come from and whether they will be adequate to cover the costs. The Government have also reserved the right to judge whether a proposed nuclear project will represent value for money and there is a risk that they will declare or decide that it does not. The common understanding is that the capital will come from the pension funds. I believe that this is the Government’s assumption. We have yet to hear any assessment of the likelihood that the funds will be forthcoming. Perhaps the Minister could address this point. To my knowledge, the Government have revealed no plans to meet the eventuality that the funds to sustain the regulated asset base will not be forthcoming from the private sector. Perhaps, in that case, the Government should derive funds by issuing designated nuclear bonds, as has been suggested.

In January, the Government announced £100 million of funding to support the continued development of the Sizewell C project, in the hope that this would attract further financing from private investors. This is a trivial sum. It might seem odd to describe £100 million as a trivial sum, but it is small in comparison with the £4.3 billion that is reported to have been lost through Covid-related fraud. The cost of the Hinkley Point C power station, which should open in 2026, is estimated to be between £22 billion and £23 billion. The cost of Sizewell C has been estimated at £20 billion. One should be mindful of the fact that, under existing arrangements, at least 50% of these sums will be paid to the financial sector in interest charges. Stripped of interest charges, the true cost of constructing a massive power station at Hinkley Point or Sizewell can be compared with the cost of the 2012 Olympic Games, which is supposed to have been £14.8 billion. These costs seem small when set beside the accumulated profits of banks and the tax paid by the banking sector.

These figures have been bandied about because I wish to pose a rhetorical question: can we afford to secure our future energy supply and fulfil our carbon reduction ambitions? The Government’s economic philosophy might suggest to them, absurdly, that both of these questions should be answered in the negative and that it will be too expensive to achieve these goals.

My Lords, it is a pleasure to follow the noble Viscount, Lord Hanworth, with his arguments about the financial sector, although I would make the point that we of course cannot afford the cost of not having a liveable planet—there are no jobs on a dead planet. I feel I have to begin by restating the Green Party’s long-term opposition to new nuclear power, but I will focus today on particular elements of this Bill in the short time available to me. I am particularly opposed to the point made by the noble Lord, Lord Teverson, about forcibly adding to the debt burden of energy users—the same people who are already going to be made to pay for the Government’s cost of living “rescue” package.

I do not have time today to go into detail about all the excellent reasons why local campaigners are so vehemently opposed to a new nuclear plant in Suffolk or to revisit all the arguments about why new nuclear is a terrible idea. Top of the list is that it is way too slow to deal with our climate emergency, together with the demonstrable fact that it crowds out the investment and attention needed on renewables and energy conservation—a point that I will come back to. I will not list the woes of EDF: its shares down almost half in the last three years; its French reactors expected to produce 10% less energy than forecast this year; and its regulatory and safety problems.

Instead, I will focus on two short cautionary tales. One comes from South Carolina. The story starts in 2008 with a decision to build two new nuclear power plants commissioned from Westinghouse Electric Company, owned by Toshiba. I could go through a long and sorry tale, but I will cut it short and get to the final cost—$9 billion, which consumers in South Carolina will be paying for over 20 years; and, for that, they have got a hole in the ground that has now been filled back in. Commenting on the project, former US Nuclear Regulatory Commissioner Gregory Jaczko said:

“It used to be that you didn’t start charging for a plant unless it was done and operating. Whether it was a nuclear plant, or a coal plant”.

That is particularly relevant to our debate on this Bill because the former commissioner was talking about a time before the costs and risks were socialised and the profits were privatised—those profits going very much to the financial sector, as the noble Viscount said. It was interesting that the Minister acknowledged in his introduction that RAB shares risk and said, with an interesting use of the word, that it “could” deliver at lower overall cost.

I come secondly to a cautionary tale somewhat closer to home, to which a number of noble Lords have already referred: the filthy, incredibly dangerous UK former nuclear sites, which the Nuclear Decommissioning Authority acknowledges it still does not even fully understand. The Public Accounts Committee estimates the cost of the clean-up at £132 billion, a sum it has rightly described as “astronomical”. Other noble Lords have referred to the private contract to clean up the Magnox site. In 2018, four years after it had been let, the Government had to take it back; the cost of that alone was £140 million. It is interesting that we have not worked out what to do with the waste, and that we can have no idea of the final cost that will be charged to the public because we do not know how we will get rid of the waste—and that is part of the whole project.

Back in 2012, I attended a fascinating meeting of the local group in Cumbria opposed to deep nuclear waste disposal, chaired as I recall by the former Conservative head of the county council. I say “fascinating” because it was perhaps the most politically diverse meeting I have ever been at, ranging from representatives from the Allerdale and Copeland Green Party to fervent advocates of new nuclear power, but all were opposed to a nuclear disposal facility in Cumbria—and, of course, Cumbria, through its county council, said no. In the other place, the Minister said that they were looking to accelerate dealing with this problem. Well, you cannot accelerate something that is absolutely stationary; or not without an awful lot of force.

I come back to the point I started with, about nuclear crowding out other opportunities and ways of dealing with our climate emergency and poverty crisis. There is a sure bet for the future for people and planet: renewables and—as the noble Lord, Lord Teverson, said—energy efficiency. I note that the Office for National Statistics has just reported that these green industries have essentially flatlined between 2012 and 2020. While the Government have been focusing on their approach, they have utterly neglected the proven, certain practices that would deliver jobs in every community up and down the land.

What we should have is a “Green New Deal (Financing) Bill”, perhaps funded by those who could afford it, such as the private landlords who the Green Party proposed last autumn should face a one-off land value tax to help deal with our energy issues. That would be a Bill fit for our climate and poverty emergencies. Instead, we have a Bill trying to resurrect a failed, expensive, outdated industry—benefiting the few while we all pay the price.

My Lords, I strongly support the Bill and agree very much with the things that were said by my noble friend Lord Rooker. There is no doubt that an energy crisis is looming, as we move towards net zero. Indeed, it could be argued that the energy crisis is already here. The amount of electricity used in this country will at least double, as my noble friend Lord Rooker says, if not increase by even more. The noble Lord, Lord Teverson, mentioned insulation, and I agree that it is very important. However, it is not that easy and straightforward. I have just visited one of my sisters in the West Country and she has had made her house amazingly well insulated. She had to basically demolish the house, almost rebuild it and put everything back together. It is now fantastically energy efficient. If we were to think that millions of people in this country could easily do that, we would have to be in cloud-cuckoo-land. When we are all driving around in electric vehicles, there will be that additional demand and those vehicles cannot be insulated.

Why are we in this position? It is because of the failure of successive Governments—as has been mentioned. It is a national disgrace, actually. We have gone from being the world leaders in civil nuclear—we made masses of money exporting this stuff to Japan—to a position where we cannot build even one of these large reactors ourselves. That is appalling. Reliance on the Chinese, for example, as has been mentioned by a number of speakers, is extremely dangerous and not good. In terms of Sizewell C, could the Minister let us know exactly what the Chinese involvement in finance will be with the new scheme? Will they still be involved in that? I presume so. Will he let us know whether there is any thought about Bradwell going ahead? I imagine that it cannot, because it is too dangerous in terms of our security.

Some people have said that nuclear should not be used because it is not safe. Let us not kid ourselves—more people die every year in the petrochemical and other energy industries around the world than have died in all the nuclear reactor accidents put together. This is nonsense; we have very strict regulations and do this very well. As regards—

I hesitate to interrupt, but I do not think that anyone in this whole debate has said it is unsafe, actually.

The noble Lord is quite right. What I am raising is: why have we got to this position? It is partly because parties such as the Greens are so anti this, and one of the things they threw around casually was how dangerous this is. I do agree that, in terms of waste and its disposal, we are currently able to do it quite safely on a temporary basis—but there is a need to resolve the long-term issue. The noble Baroness, Lady Neville-Jones, is absolutely right, and I hope the Minister will say that this will be pushed forward. From what I have seen, it seems that we are moving down that route very quickly.

Basically, we need to pull our finger out and get going on this. Sizewell C and Hinkley Point C are absolutely necessary. Looking to the future, we absolutely have to go for SMRs, AMRs and the use of hydrogen. This can all be encapsulated somehow in this. I think we would all agree with that.

I ask the Minister: will the problems at the Taishan plant, mentioned by the noble Lord, Lord Howell, have an impact on Hinkley Point C or have those problems been resolved?

Finally, when I had responsibility for more than 20 nuclear reactors two decades ago, only the Navy was training people and awarding nuclear degrees, which universities in this country had stopped doing. I know that they have restarted, but a number of noble Lords have made the point that this is an opportunity for us to get apprentices and to start training people. I am not sure about a CEGB—but I must say that we need something like it. This sort of training is needed because, at the moment, they are nicking all the people we trained in the Navy to go and do these jobs, and that is not a good way to go ahead.

My Lords, I declare my interest as the chair of the advisory committee of Weber Shandwick UK. I am very pleased to follow the noble Lord, Lord West, and to take part in what has been a very interesting and informative debate. It follows on from a debate we had just before Christmas where I found myself the only person on one side of the argument. I see a little bit more support here today.

The Liberal Democrats are opposed to the provisions of this Bill on two principal grounds. The first is that we believe that new nuclear power generation is neither feasible nor a desirable means of reaching our net-zero targets. Secondly, we believe that, even if new nuclear projects were a feasible mechanism for reaching our decarbonisation requirements, this Bill, and the regulated asset base funding model for new nuclear that it establishes, are fundamentally flawed. The Bill imposes a double whammy on consumers, hitting them both with the upfront cost of construction and then with the huge, uncompetitive cost of nuclear generation. It takes no account of the ability of consumers to pay. Costs will fall equally on the richest and the poorest; those already struggling with the massive spike in the energy price cap will feel the charges most acutely.

The Bill is completely opaque in relation to the assumptions and models used to arrive at the estimated RAB charges. In the discussions that we had ahead of the Bill, the Minister’s own department described some of this as “a little bit arbitrary.” It gives the Secretary of State unacceptable powers to prevent publication of relevant material simply on the grounds that it might prejudice a commercial interest, regardless of the public interest in such disclosure. We hope that the Minister will recognise the need for far greater transparency in these matters than is currently proposed.

The Bill takes no account of willingness to pay. Some consumers have contracted explicitly with electricity suppliers that they do not receive nuclear-generated power, but they will be just as compelled to pay as anyone else. It proposes a funding model that has been used for new nuclear only in the United States, where, as we have heard from the noble Baroness, Lady Bennett, it was an unmitigated disaster. It cost consumers billions of dollars, with not a single new plant coming online as a result. The Minister tells us that the circumstances for the RAB are different because of different company structures and a different regulatory approach, but at the heart of both is the fact that risk is being transferred from an unwilling private sector to the consumers, who will not be given a choice. These are just some of the flaws in the Bill that we will attempt to correct in Committee.

Liberal Democrats, for a number of reasons, have a more in-principle objection to new nuclear projects. The noble Lord, Lord Wigley, quite rightly pointed out that we need to rapidly decarbonise our energy sector, but the new projects envisaged in the Bill cannot feasibly come online in time to meet the target to decarbonise our electricity supply by 2035, which the Government themselves say is necessary if we are to hit our 2050 net-zero target. The noble Lord, Lord Howell, underlined the huge difficulties that face these large-scale reactor projects. Even the notoriously optimistic EDF does not believe that Sizewell C could start generating before 2034 at the earliest. Given that it was wrong by a factor of 12 years for Finland’s Olkiluoto EPR, and that in January of this year EDF announced yet another delay to its Flamanville 3 EPR, which is already running a decade late and at quadruple the cost of its first estimate, I hope the Minister can agree with me—on this, if on nothing else—that EDF’s predictions are not ones on which to bank our net-zero plans.

Nuclear is not a feasible global strategy for meeting net-zero targets. We cannot possibly envisage nuclear power being the solution across the world. It is just not going to happen, so we need to find other ways. Nuclear is also, as we heard from my noble friend Lord Teverson, a particularly bad technology for complementing renewables. It is designed for baseload generation and, despite the ability of PWRs to load-follow, it is limited. As my noble friend said, the astronomical costs of construction mean that it does not make economic sense to run these plants at less than full capacity.

However, we also have to take into account the fact that delayed completion and outages can leave huge holes in supply. When Hinkley Point C finally comes online, should it suffer further delay or an outage once operational, we would lose 7% of all UK power, so we have to have an ability to backfill that. We should be aware that at this present moment, 10 of the French reactors are currently offline—nearly 20% of their fleet.

Thirdly, new nuclear is a costly distraction from the urgent need to radically rethink our energy system. As the noble Baroness, Lady Bennett, said, with the Bill we will be crowding out capital that is vitally needed for rethinking and reshaping that energy system through demand reduction, demand repositioning, and energy storage and release. The Bill is stuck in outmoded thinking.

As we heard from my noble friend Lord Teverson, the most cost-effective way to reduce CO₂ emissions—I think I saw the Minister nodding his head in agreement—is to reduce energy use. For the amount that Hinkley Point C will cost we could retrofit enough homes to save all the energy it will produce.

I mentioned that with regard to this sort of work that is very easily said, but the complexity of doing it is immense when you are talking about people packed into tower blocks and all the different houses. It is not easy and straightforward. It is very important, but it will not resolve that problem, in exactly the same way that over the last weekend renewables did not provide us with that much energy. Luckily—I suppose—power lines went down so people were not demanding it that way, but my goodness me, renewables were not providing it.

A huge amount of work could be done. Huge numbers of homes that are in very poor housing stock and in very poor condition could easily be brought up to speed. That is the urgent thing that needs to be done now instead of becoming obsessed with huge power plants which are immensely expensive, highly complex and cannot possibly come online in time to meet the targets that the Government have set themselves.

Does the noble Lord agree with me that the noble Lord who just intervened on him—

The noble Lord, Lord West.

I am sorry; I was trying to get the terms right. The noble Lord, Lord West, might like to go to Portsmouth to see where there was a wonderful passive house refurbishment of an entire council house block.

I am grateful to the noble Baroness. I am sure that the noble Lord, Lord West, is very familiar with Portsmouth and that he will take the opportunity to visit such projects.

As we know, electrical use is highly cyclical, both in terms of daily peaks and troughs and annual swings. Therefore, we have to show much greater urgency about how we use smart pricing to reposition demand rather than simply piling on more production to meet peak load. We also have to invest in energy storage and integrate it into grid planning through batteries, green hydrogen production, pumped hydro, compressed gas storage and other solutions.

Finally, nuclear power generation produces high-level nuclear waste which is deadly for longer than any human civilisation has ever survived. It is notable how few noble Lords who contributed as nuclear proponents to this debate addressed that fundamental issue.

The Minister was keen to tell us, as other noble Lords were, how the UK was the first country in the world to begin a civil nuclear programme, yet decades after that and after promising that a solution to this problem is just around the corner, the Government and industry have still failed to supply one. It is our contention that, quite apart from the other powerful arguments against nuclear, it is morally unjustifiable to build new nuclear stations until we first have a geological disposal facility in operation for the long term to deal with the existing high-level waste we have produced. That is key.

In our view, the case for new nuclear generation projects falls down at every hurdle. They cannot contribute to our 2035 electricity decarbonisation target, they cannot effectively complement renewables, and they cannot even clean up the mess they have already created. So laden are these projects with risk, so staggeringly unable are they to keep to time or budget, and so eye-wateringly expensive is the electricity they generate that the only way to finance them is by passing the risks and costs to consumers and taxpayers who are given no choice over whether to accept them.

It is hard to improve such a fundamentally flawed project, but in Committee we will do our best to bring forward amendments to deal with the specific flaws in the Bill that I identified earlier. We look forward to working with noble Lords across all parties in the House to at least make the best of a bad job.

Before the noble Lord sits down, may I ask him to clarify how he proposes that we should accommodate the variability of wind and solar power, which I believe are the sources of power that he prefers or proposes?

If the noble Viscount had listened to my speech, I set out a range of areas in which we need to completely rethink our energy system, including significant investment in energy storage that we can bring online, demand repositioning and demand reduction. Those are the solutions, but I am happy to discuss them further with the noble Viscount outside the Chamber.

My Lords, I thank the Minister for his introduction and all noble Lords who have spoken in today’s short debate.

I start by declaring an interest—not a financial one, like many other noble Lords, but a personal one. I grew up in Thirdpart, west Kilbride, on a small holding about one mile from Hunterston nuclear power station. My dad, Iain McNicol, worked at the power station as an operator for 17 years in the 1980s and 1990s, so my experience is far more on a personal level.

I do not think there is a contradiction between encouraging and driving new nuclear build, investing in and expanding renewables, and retrofitting and insulating. All the different parts of creating a future energy system and the better use of energy can be complementary and fit together.

This Bill is about finance as much as it is about nuclear power. As my noble friend Lord Rooker said, Labour believes that new nuclear has an important supporting role to play in the future energy mix, alongside the decisive shift towards renewables that is needed to deliver the climate transition and secure our energy security. As my noble friend Lord West touched on, energy security for the future is critical.

If we are going to build new nuclear power stations—which we agree with—the fundamental question is: how are we going to fund them? We could use the Hinkley Point CfD model, but, as my noble friend Lord Rooker said earlier, if not discredited, the CfD model has at least had its value for money questioned and challenged. We saw that in the NAO 2016 and 2017 Hinkley Point review.

As the noble Lord, Lord Teverson, and my noble friend Lord Hanworth, said, we could fund it by direct government financing, which I am not opposed to. On the impact assessment, when the different funding models were considered, was direct government funding considered as one of them? If not, why not?

In front of us we have the system of the regulated asset base—RAB—model. As I said, Labour supports the building of new nuclear power stations for a number of reasons. Nuclear energy is the only proven technology that can supply low-carbon baseload electricity at scale, notwithstanding the comments and points made by the noble Lord, Lord Teverson. We heard that when Hinkley Point C comes on stream, it will provide 7% of the UK’s energy at any one time—that is from one station.

This is at a time when we face a global climate crisis. The further rolling out of nuclear energy will play a crucial role in the UK meeting its climate targets. Nuclear energy will help ensure that the UK has control over the transition to net zero, due to its small land footprint and it being a low-carbon generating technology, as the noble Lord, Lord Wigley, said.

Rebalancing—it is rebalancing—the use of nuclear energy could also see the further use of hydrogen, as my noble friend Lord Whitty and the noble Lords, Lord Ravensdale and Lord Wigley, mentioned. More specifically, the production of green hydrogen is another key to decarbonising our electricity economy. Hydrogen can be used, without any carbon emissions, as a vehicle fuel and industrial or domestic heat source, if produced using renewable or nuclear energy sources. Although there may be issues around the baseload and the effect of the use of energy across the grid, you can use both renewable sources and nuclear, through electrolysis, to change the hydrogen and create hydrogen that can be stored for use when required.

Although some renewable energy sources, such as solar and wind, are dependent on weather conditions, as we have just heard, nuclear energy has no such constraint: it does not matter if the wind is not blowing or if it is cloudy. Nuclear power plants are essentially unaffected by external climatic factors and can create predictable and steady energy output. Come 2028, Hinkley Point C—if it is constructed on time—and the existing Sizewell B station in Suffolk will be the only nuclear plants generating power in the UK.

We have not even touched on the energy security issues or the socioeconomic and financial reasons for the UK to continue the use of nuclear energy. Nuclear power stations sustain thousands of well-paid and highly skilled jobs, most of which are outside the south-east of England. They also support thousands of supply-chain jobs across the country.

As we have heard, the regulated asset base model is tried and tested. When delivered reliably, it can help to save on capital infrastructure costs, especially those encountered in the CFD model. We will scrutinise the Bill to guarantee fairness for bill payers, including protecting consumers against any potential cost overruns, protecting the poorest households and scrutinising the balance between public spending and the bill payers.

Sizewell C will supply 6 million homes with low-carbon energy for up to 60 years. It will bolster Britain’s network supply chain, providing up to 70,000 jobs and 1,500 apprenticeships. It can reduce Britain’s reliance on energy imports, which is critical for our energy future.

We of course need to proceed with caution in anything as costly and crucial as this. We must learn the lessons from Hinkley; some have been learned in the move from the CFD to the RAB model. But we always need to ensure that consumers are the ones who benefit from these projects in the long run.

This is why Labour had previously proposed amendments around foreign state control, which would mandate nuclear stations to use UK-manufactured fuel and stick to UK consumer charges. As the Bill progresses, the Government can expect Labour’s overall support but also a proper critical eye on aspects of the mechanisms they are adopting and an emphasis on protecting people.

I agree with the noble Lord, Lord Oates, on one point: transparency. We are debating transparency in the Subsidy Control Bill and there will be further such discussions on this Bill. The Government and the country will only benefit from wider and greater transparency. There is no time to waste. Nuclear and low-carbon energy projects are crucial for the future of our environment, economy and energy security. It is therefore critical that we act now.

I start by thanking all noble Lords who contributed to this excellent debate. I was encouraged by the widespread support for the Bill across the House, with the honourable exception of the Liberal Democrats and the Green Party. I particularly welcome the support of Her Majesty’s Official Opposition. These are long-term projects and it is good that the only two serious parties of government support the Bill and the need for new nuclear power.

Before I address the questions raised, I remind noble Lords of the importance of the Bill. The legislation will create a new funding model for future nuclear projects, which can reduce the cost of nuclear power stations when compared to existing funding mechanisms. This will substantially widen the pool of private investors in nuclear projects and, in turn, reduce the UK’s reliance on overseas developers for finance. The lack of a funding model has been the biggest barrier to nuclear projects getting off the ground in recent years and the Bill will help to resolve this issue.

The RAB model will help ensure a cost-effective approach to new nuclear projects, which will play a critical role in the UK’s future energy mix in support of intermittent renewables, such as wind and solar. That is the key point missed by contributions from the Liberal Democrats and the noble Baroness, Lady Bennett. Of course, we want to encourage renewables; they are good thing. We have some of the largest renewable capacity in the world but, by their very nature, renewables are intermittent and we need stable baseload power to keep the lights on. It is no good telling people that they cannot run their car or cook their dinner because the wind is not blowing in the North Sea. This is an unrealistic way to finance the future energy mix. I think this is the key point that the noble Baroness misses.

I also agree with noble Lords on the importance of home insulation schemes. The noble Baroness mentioned the figure herself; we are spending £9 billion on insulation schemes. I will come to that later. These are all important things that we need to do—and in fact are doing—but they are not either/or approaches; we need to do both.

I start by welcoming the support of the noble Lord, Lord Rooker. He does not often support my Bills, so I am pleased that he is doing so on this occasion. I am delighted that he agrees that the funding model will be of benefit to consumers and that he recognises the opportunities for new apprenticeships. As the noble Lord, Lord McNicol, remarked, Hinkley Point C has already trained 800 apprentices and it is on track to meet the EDF target of 1,000 apprenticeships during the construction phase of the project.

The noble Lord also raised some important questions, to which other noble Lords added, about protections for consumers under a regulated asset base model—a point also made by my noble friend Lord Howell and the noble Lord, Lord Whitty. My noble friend Lady Neville-Jones was particularly keen that the Government should adopt a rigorous commitment to value for money in their approach. Of course, that is a point I completely agree with.

The Government totally agree with noble Lords that consumers should be protected. Recognising the unique risks of nuclear construction projects, our proposals for the RAB model include multiple mechanisms for ensuring that consumers are protected from unacceptable costs. This includes undertaking robust due diligence before a final investment decision so as to ensure that the project will be effectively managed. As well as satisfying the requirements of the RAB designation process, for a project to reach a final investment decision it will need to undertake a successful capital raise, complete a government business case and satisfy all other relevant approvals from Her Majesty’s Government. I reassure my noble friend Lady Neville-Jones that any decision to commit taxpayer or consumer funding to a nuclear project will be subject to negotiations with staged approvals and value-for-money tests in line with the Treasury Green Book. Also, during construction a project will be incentivised to deliver to time and to estimated costs through an incentives regime overseen by the economic regulator. I hope that the assurances I have been able to give will provide some comfort to noble Lords that we are very much on the case.

The noble Lord, Lord Whitty, referred to the Bill’s impact on small businesses, which is indeed an important point. We addressed that in the impact assessment accompanying the Bill, which stated that, if a nuclear RAB model is implemented on a new nuclear power plant in future, it would impact small and micro-businesses by creating jobs in a supply chain and would indirectly impact them as a result of any costs or cost savings passed through to electricity suppliers and then to consumers. The illustrative analysis in the impact assessment shows that society as a whole, including small businesses, could save significantly on the cost of a generic large-scale nuclear power plant, using an RAB as opposed to existing fundamental mechanisms.

The noble Lord, Lord Rooker, asked me about the role of foreign financing in future projects, an issue also raised by the noble Lord, Lord West, and my noble friends Lord Howell and Lady Neville-Jones. It is important to point out that we welcome overseas investment in the UK’s nuclear sector. We value the important role that international partners have in our current nuclear programmes and potential new projects. Let me emphasise that this will not and should not come at the cost of our national security. The RAB model will help us to attract the significant amount of investment needed for new nuclear power plants, including from British pension funds and institutional investors, as well as from our closest international partners. In doing so, it will reduce our reliance on overseas developers for finance, and open opportunities for British companies and investors to work with our closest international allies to develop projects across the United Kingdom.

Investment involving critical nuclear infrastructure is subject to thorough scrutiny and needs to satisfy our robust national security and other legal and regulatory requirements. In particular, as my noble friend Lady Neville-Jones highlighted, the recent National Security and Investment Act 2021 allows the Government to scrutinise and, if necessary, intervene in qualifying acquisitions that pose risks to the UK’s national security. As well as that Act, the independent Office for Nuclear Regulation, the ONR, applies a range of strict regulatory requirements to all organisations seeking to operate nuclear sites in the UK. That includes assessments of the organisation’s capability, organisation and resources to manage nuclear material safely and securely.

My noble friend Lord Howell mentioned the history of EPR reactor constructions. The projects he highlighted, at Olkiluoto and Flamanville, are first-of-a-kind builds in each of those countries. This brings unique risks and challenges with the construction process. Developers have learned lessons from these projects and several EPR reactors are now under construction or in operation around the world, including, of course, at Hinkley Point C.

The noble Lord, Lord Teverson, made a number of points about the underlying economic case for new nuclear capacity. He asked specifically about the Government’s action on investment in energy efficiency. As I said earlier, I agree with the noble Lord. The Government recognise the importance of increasing the energy efficiency of homes. It is a difficult and complicated task, as the noble Lord, Lord West, pointed out, but we are spending considerable sums of money on insulating the country’s homes, particularly those of low-income families, both to reach our decarbonisation targets and to tackle fuel poverty in the longer term. That is why we have introduced, among many schemes, the energy company obligation, the value of which we have just increased, to provide energy-efficiency and heating measures for fuel-poor households. In the next iteration, which will run from April this year to 2026, the funding will go up to £1 billion a year.

We have also released today the results of the sustainable warmth competition. If I remember the figures correctly, another £980 million of investment will be delivered through local authorities to insulate homes up and down the country. A number of other schemes are contributing to the £9.2 billion insulation scheme that the noble Baroness, Lady Bennett of Manor Castle, mentioned. So these are not either/or decisions. We need to do both, and, indeed, we are.

The noble Lord, my noble friend Lady Neville-Jones and the noble Lord, Lord Oates, raised the important issue of the long-term solution for nuclear waste. It is important to remember that around 94% of the waste arising from nuclear power stations and other sectors is low in radioactivity and is disposed of safely every day in existing facilities such as the UK’s Low Level Waste Repository. The remaining higher activity waste is currently stored safely and securely in facilities around the UK. We have a process in place to identify a suitable location for a geological disposal facility to permanently dispose of higher activity waste. We are making good progress on four areas in discussions with the developer, Nuclear Waste Services, which is a division of the NDA. The vast majority of the higher activity radioactive waste to be disposed of in a geological disposal facility is waste that already exists.

I thank the Minister for giving way. Very briefly, can he identity those four areas?

When we have announcements to make on those areas, I am sure the noble Baroness will be here to question me, but I am not in a position to release the names at the moment.

The noble Lords, Lord Whitty, Lord Wigley and Lord Ravensdale, all made important points about nuclear projects’ potential for the cogeneration of hydrogen. As the noble Lord, Lord Ravensdale, said, the Sizewell C project is in the initial phase of exploring the potential of using electricity and low-carbon heat for a range of cogeneration applications such as the production of low-carbon hydrogen and direct air capture of CO₂ for carbon capture. While these cogeneration opportunities are currently outside the scope of consumer funding through the RAB model, they could provide benefits to consumers by enabling Sizewell C to be utilised as a more flexible asset. I look forward to exploring that further with the noble Lord. This could provide greater flexibility for the energy system, thereby facilitating a greater number of potential pathways to meet the net zero target by 2050. If used in this way, Sizewell C could become the first nuclear low-carbon heat source, setting an example that we can emulate at other future nuclear power plants.

The noble Lord, Lord Wigley, and my noble friends Lord Howell and Lord Trenchard asked about the application of legislation to small and advanced nuclear modular reactors, for which we see a vital role moving forward. The Prime Minister’s 10-point plan for a green industrial revolution highlighted that SMR technologies have the potential to be operational by the early 2030s in the UK. The recently published net-zero strategy committed to take measures to inform investment decisions during the next Parliament on further nuclear projects as we work to reach our net-zero target. This will of course include consideration of large-scale and advanced nuclear technologies, including SMRs and, potentially, AMRs. As part of this, the net-zero strategy announced a new £120 million future nuclear enabling fund to provide targeted support to barriers to entry. Let me reassure noble Lords that the Bill is not product-specific and could apply to all civil nuclear technologies, and we will make decisions on appropriate investment portfolios on a case-by-case basis when presented with specific project proposals.

The noble Lord, Lord Wigley, as he always does, asked me about the role of devolved Administrations in the process of designating a project company to benefit from the RAB model. Although the ultimate decision to designate a nuclear company for the purposes of the RAB model will sit with the Secretary of State, given that nuclear energy and electricity are not devolved matters for Scotland or Wales, the Bill takes steps to ensure there is both strong transparency in decision-making and involvement of the devolved Governments. The Secretary of State will need to consult the relevant devolved Government before designating a nuclear company where any part of the site of the relevant nuclear project is in Scotland or Wales. It is important to make the point that the Bill will not alter the current planning approval process for new nuclear or the responsibilities of the devolved Governments in the planning process. Nothing in the Bill will change the fact that devolved Ministers are responsible for approving applications for large-scale onshore electricity generation stations within their own territories.

To move on to address some of the points made by the noble Lord, Lord Oates—I addressed some earlier—renewables represent an important and ever-growing source of electricity, but it is important that we have a diverse mix of sources to ensure a resilient electricity system in which the lights do not go off. Just as consumers paid for the previous generation of nuclear power plants, which, according to EDF, have generated enough electricity to power all Britain’s homes for 20 years and saved something like 700 million tonnes of greenhouse gas emissions, it is right that all consumers should share the costs of these projects to help realise their overall longevity and ensure that future generators bear the cost of the low-carbon infrastructure that we need to reach our net-zero goals.

The noble Lord, Lord West—and, I think, the noble Lord, Lord McNicol—asked me about Chinese involvement. In a 2016 Statement to Parliament, the then Secretary of State, Greg Clark, set out Her Majesty’s Government’s intention to

“take a special share in all future nuclear new build projects.”—[Official Report, Commons, 15/9/16; col. 1066.]

This policy has not changed; as such, we intend to take a special share in the Sizewell C project at the suitable time and, of course, subject to negotiation.

My Lords, the Minister mentioned taking a special share in Sizewell C. Are the Government looking to take one in Hinkley as well?

These matters are subject to future negotiations. I will come back to the noble Lord on that.

I have addressed most of the points made in the debate. I am encouraged by the general support for the Bill across your Lordships’ House and I look forward to continuing the constructive engagement with all sides as it progresses. I therefore commend the Bill to the House.

My Lords, at the heart of this Question is almost £500 million of public money, awarded in two public health contracts to Randox Laboratories without competition. My honourable friend asked this Question in the Commons and raised the dissonance in what has been said by the Government over the months since the issue was first raised. I have two questions for the Minister. Does he agree with the former Minister of State for Efficiency and Transformation, the noble Lord, Lord Agnew, that the Government were paying dramatically over the odds for Randox products? If so, can he explain why the Government then entered into a second, more lucrative, contract with the firm? Secondly, the chief operating officer for the Civil Service requested the restoration of competitive tendering by March 2021. Can the Minister set out how many further contracts have been issued after that date without tender and explain why the emergency procurement rules are still in place almost a year later, given that we are coming, as the Prime Minister just told the Commons “out of Covid”?

I start by thanking the noble Baroness for those questions. On her first point, we should remember the stage that the Government were at at the beginning of the crisis. People were dying every day and there were panics; they were not sure what was out there. Clearly, they were going out looking for suppliers for testing and other equipment. There were a number of approaches and different meetings, but one thing that has been quite clear is that all contracts were awarded according to the Public Contracts Regulations 2015. I have been reassured about this by officials. Authorities are permitted to procure goods, services and works via direct award, using Regulation 32 of the Public Contracts Regulations 2015, in exceptional circumstances, such as extreme urgency, without competing or advertising the requirement. I contend that the beginning of the Covid crisis was such an emergency, and that is one reason it was awarded without competition. There are clear procedures, we are committed to openness and transparency and details of the contracts are available online.

The decision on whether to procure a product from a supplier ultimately sits with departmental officials once the offer has cleared assurance steps. These include clinical acceptability and financial due diligence. I often get emails from people who have sat next to me somewhere who say, “I have this fantastic product”, but I have to reply to them and say, “I’m very sorry—I will copy officials into this but I can take no further part”.

I shall try to answer on the emergency procurement procedures, but I want to make sure I have the right note. Clearly, there are unforeseeable circumstances such as, for example, the rapid onset of omicron at the end of 2021. That also required UKHSA to act with extreme urgency. We used Regulation 32 in some cases at the end of last year to supply LFTs over the Christmas and new year period due to increased demand. The use of Regulation 32 was necessary because our DPS 2 procurement had reached its limit of extension and there was no time to run additional procurement. I am sure the noble Baroness and others will remember the end of last year, when people just could not get hold of testing equipment and we were trying to buy as much as we could on the world market.

My Lords, since the start of 2020, Randox has secured almost £620 million of government contracts and the firm has been shown repeatedly to produce goods which are faulty or do not work. It got those contracts using personal contacts. Will the Minister undertake that there will be an independent investigation of those contracts and recovery of any public money spent on faulty goods?

At the time of the award of the original contract in March 2020, almost no UK supply was available and Randox was able to provide an end-to-end testing service. The department then engaged with a number of suppliers in its effort rapidly to build from scratch the largest testing industry in UK history. That has played an important role in stopping the spread of Covid-19 and saving lives. The service that Randox provided was a very important part of that.

A number of Randox home testing kits were recalled in the summer of 2020 after tests found that swabs were not sterilised. A Public Health England investigation did not find any instances of swabs causing ill health. Randox agreed to provide new Covid-19 self-test kits. The contract was necessary to meet the increase in testing needed. An independent assessment in June 2020 had placed Randox ahead of other laboratories, and Randox was meeting its delivery targets by September 2020. Without Randox, we would not have been able to meet the volume of testing needed over the winter period.

My Lords, I declare an interest in that Randox Laboratories is a major employer in a constituency that I represented for 10 years in the other House. It cannot be challenged that Randox Laboratories has been globally recognised in the diagnostics industry over many years. Therefore, can the Minister place on record the Government’s appreciation for firms such as Randox that rose to the health emergency and exercised their best efforts to achieve our unprecedented national effort?

I thank the noble Lord for reminding us of the importance of all the companies that supplied equipment or scaled up at pace or were able to meet the initial requirements. It was a time of panic; thousands were dying, and we did not have equipment. This was a time before the vaccine. The department and its officials tried to speak to as many people as possible around the world to find out what was available, what could be done and what the timescales were. Clearly, as the noble Lord said, Randox played an important role in meeting the testing requirements initially.

My Lords, the Minister suggests that the Government were panicking. Does he agree that panic in a laboratory or when one is dealing with tests of this kind is not satisfactory? Is not one of the problems that it is clear that Randox’s methods were not satisfactory and would not stand up to absolutely accurate testing? Is it not the case that the Government still cannot tell us what percentage of its PCR tests were inaccurate or in some ways contaminated?

I used the word panic because I think everyone was panicking. People just did not understand what was going on. They did not understand the pace of coronavirus; they did not even understand the disease itself and the transmission of it. I was reading over the weekend a couple of books on the history of the virus so far, where it broke out and what people thought it was originally, and some of the reassessments of historical epidemiology. Clearly, we needed testing performance. Randox was the only company at that time, in March 2020, that was able to provide that capacity at the scale needed. As I said earlier, where we identified problems, we made Randox aware of them and it supplied new kit.

My Lords, the Government held a full-scale exercise in 2016 based on pandemic flu, Operation Cygnus. Anybody who reads the report of that exercise today can see that there was a looming problem with PPE. Between 2016 and 2020, the Government did nothing about that identified problem, so that, when 2020 came, we domestically produced only 1% of the PPE that was required in the NHS. Why was so little done to be ready for something that had been predicted in advance?

The noble Lord makes a point about predicting it in advance, but it is very easy to say that with hindsight. Let us look at a number of different countries and the WHO: some people argue that the WHO and Public Health England had only one job, and they were not prepared for it. Clearly, people were caught unawares; we were not the only country to be caught unawares.

We did the exercises.

There were countries all around the world which were not prepared. That is why everyone scrambled on to the international market; it is why prices were paid at the time that, with hindsight, would not be paid nowadays. It is important to remember where we were at that stage, what we were trying to get hold of, the world market and our understanding of the virus, and at a time when there was no vaccine.

That the House do now resolve itself into Committee.

My Lords, I beg to move.

On a point of order, my Lords, questions on a Statement should have been for 15 minutes and not for 10 minutes.

My Lords, a Private Notice Question lasts for 15 minutes; a repeat of an Urgent Question lasts for 10 minutes. I believe we are now in Committee on the Bill.

My Lords, the reaction of most of your Lordships to Part 1 of this Bill at Second Reading was summed up in the memorable words of the noble Baroness, Lady Jones of Moulsecoomb, whom I am very pleased to see in her place:

“It is not as bad as I expected”.—[Official Report, 7/2/22; col. 1371.]

Part 1 could certainly have been worse, but that of course is no answer to the amendments that we are now debating.

I declare my interest as a barrister practising in the field of judicial review. My Amendments 1, 4 and 5 in this group are concerned with decisions of the court to quash a public law decision, whether in the form of a statutory instrument, a decision of a Minister or a decision of a local authority or any other public authority.

As your Lordships and the Committee know, when a public body is found to have acted unlawfully, the decision is usually—not always—quashed; that is, overturned. This is an important protection of the rights of the citizen and an important deterrent to unlawful action by public bodies.

Clause 1 gives the court a power to decide that the quashing order should not take effect until a date specified in the order—some later date—and a power to remove or limit any retrospective effect of the quashing. I am not troubled by the court being given a power to decide that the quashing order should take effect at a later date. That power was recommended by the noble Lord, Lord Faulks—who is in his place—and his team in their well-informed and wise conclusions in March 2021 after their independent review of administrative law which the former Lord Chancellor, Sir Robert Buckland, had asked the noble Lord to conduct. The noble Lord, Lord Faulks, explained in particular that there may be cases where the court considers it appropriate to suspend a quashing order to enable Parliament to decide whether it wishes to amend the law. That seems entirely acceptable, because it recognises the supremacy of Parliament in our constitution, so there is no difficulty about that.

What the noble Lord, Lord Faulks, and his committee did not recommend and what my Amendment 1 seeks to remove from this Bill is the power in new Section 29A(1)(b), set out in Clause 1, for the court to remove or limit “any retrospective effect” of a quashing order. New Sections 29A(4) and 29A(5) make clear that this would mean that the decision or policy which the court has found to be unlawful is nevertheless to be “upheld” and

“treated for all purposes as if its validity and force were, and always had been, unimpaired by the relevant defect.”

My Amendments 4 and 5 would remove those provisions.

What the Government are proposing would confer a remarkable power on our courts: a power for the court to say that what has been found to be unlawful shall be treated, and treated for all purposes, as having been lawful. Those adversely affected by the unlawful decision, including the claimant in the judicial review, would receive no remedy. If such a remarkable power is to be exercised, it should not be exercised by judges but by Parliament. Your Lordships will recall that one of the causes of the Civil War was Charles I’s use of a dispensing power. The monarch’s claim to such a power was abolished by the Bill of Rights 1689. I do not think it is wise to re-establish such a power in the hands of Her Majesty’s judiciary.

The decision on whether to validate what a court has found to be unlawful raises all sorts of policy considerations which are not for the judiciary to weigh up and determine. Indeed, to confer such an extraordinary power on our judges is, I suggest, inconsistent with this Government’s repeated expressions of concern that judges have or are exercising too much power. As my colleague at Blackstone Chambers, Tom Hickman QC, has pointed out, for the court to have this power to deny retrospective effect for its ruling and to do so permanently, not even only where the defect is technical, would be for the court to exercise a quasi-legislative power, including a power to override primary legislation —that is, the statutory provision which makes the impugned decision or policy unlawful.

Such a judicial power would undermine one of the key functions of judicial review, which is to encourage government to do its best to ensure that it behaves lawfully because it knows that illegality has consequences. It would deter judicial review applications: why bother to complain that the public body has acted unlawfully if the court may say that what was unlawful shall be treated as lawful? New Section 29A(1)(b) would have the effect—indeed, I suspect it has the intention—of seeking to protect government and other public authorities from the basic consequences of their own unlawful actions. I think that is a matter for Parliament and Parliament alone. I beg to move.

My Lords, I am slightly more relaxed than my noble friend Lord Pannick about the prospective-only quashing power in the new Section 29A(1)(b)—it is, in its essentials, already acknowledged in our law—but only so long as the courts are free to use it without constraint or presumption. In the Spectrum case of 2005, Lord Nicholls thought a prospective-only quashing order might be appropriate in some cases where a decision on an issue of law was unavoidable but a retrospective decision would have gravely unfair and disruptive consequences for past transactions. Each of his six colleagues agreed that it would be unwise to rule out the existence of such exceptional cases, even though Spectrum itself was not one of them.

My Lords, this is an area of complexity and difficulty and I think the difficulties are added to by the content of the Bill as the Government have brought it before us. It was not broken and it was not necessary to fix it in this respect. The noble Lord, Lord Anderson, has just explained how the previous use of common-law powers has dealt with this matter perfectly satisfactorily.

I share with the noble Lord, Lord Pannick, the dislike of anything that lessens the clear impact of the threat of judicial review on the public service. I say threat not because I am hostile to members of the public service but because it is a necessary discipline that things must be done within the law and they know that, if they are not, what they are bringing forward could well be nullified in the courts. The severity of judicial review is important to its role as the discipline for the rule of law.

There are, however, cases which do not fit easily into this pattern and which make an element of retrospection attractive. I think of licensing measures of various kinds—measures that render lawful things that would otherwise be unlawful. There are quite a lot of them in the area of game shooting, for example, and one caused quite a stir over the last couple of years: the power to shoot a predator bird if it is likely to enter an area where it would disturb the wildlife in a site of scientific interest which is subject to protection. In a recent example, there was indeed the threat of an action which did not take place in the end but which led Natural England to accept that its regulations were defective.

In those circumstances, you have people who have behaved in good faith and—they thought—lawfully, who, when the court in a judicial review determines that the action is not within the law, are left in a rather difficult position. You may say that nobody is going to prosecute them once it becomes clear that the law had been nullified. The case may already have started. However, in the real world, having been found to have acted unlawfully, even unwittingly, is not a good position to be in and not one that an employee wants to find themselves in. It presents some difficulties which I think Amendment 6, from the noble Lord, Lord Ponsonby of Shulbrede, attempts to address in so far as it affects regulations and delegated legislation. I will be interested to hear him set it out more fully and the Minister’s response to it.

That qualification—that we should remember the interests and concerns of people whose actions could unwittingly be rendered unlawful—is only a limited qualification to what, in my view, is the fundamental reason to object to what the Government are proposing, which is that the full rigour of the effects of judicial review should be something that the public service is always aware of.

My Lords, I find myself in the same position as my noble friend Lord Anderson and I would like to add just a few words to what he said.

One of the points made in the Explanatory Notes—and I am looking at paragraph 21—is that:

“The diverse circumstances of possible cases make it difficult to assume that any one remedy or combination of remedies would be most appropriate in all circumstances.”

My noble friend Lord Pannick invites us to address subsection (1), read together with subsection (4). If one asks oneself what these provisions are driving at, one has to bear in mind that there is a whole range of diverse circumstances, some of which may affect private individuals very much indeed; in which case, one would be very concerned that their remedies were not being cut out. Other cases deal with administration and circumstances where individuals probably are not affected at all, but the good administration or even the security of the country is very much at stake when a quashing order is made.

I hope I can be forgiven for coming back to the case of HM Treasury v Ahmed in 2010, which I was involved in. I mentioned it at Second Reading and when I was addressing this subject at an earlier stage. It is worth dwelling on that case because it is an illustration of a circumstance where the clauses that are under attack by these amendments could be valuable. It was a case where the Treasury had pronounced an order to give effect to our international obligations under the United Nations Act 1946, designed to freeze the assets of suspected terrorists. That was our international obligation and, understandably, the Treasury made the order. But when the case came before the Supreme Court, it was pointed out that there was no parliamentary authority for such an extreme measure. The Supreme Court unanimously decided that the order should be set aside.

I suggested in the course of the hearing and, indeed, at the end of my speech—the leading speech in the main case—that we should suspend the effect of the order to give time for the Government to remedy the situation in order to avoid the terrorists dissipating their assets. The risk was that the banks that were holding the assets under the order that was under attack would release them under demand from the terrorists. Clearly, that would not be desirable.

I was overruled by six to one for a reason which, I think, demonstrates why these provisions are needed. My noble and learned friend Lord Brown of Eaton-under-Heywood was in the majority of the six against me so perhaps he can explain more fully what their reasoning was. As I understand it, they were saying that if you quash the order you are declaring what the law always was; in other words, the Treasury order was of no effect at all—that was the effect of the order—and, as I think the noble and learned Lord, Lord Phillips, said, it would indeed undermine the effect of the quashing order to suspend it because it would be suspecting that there was something wrong with the decision to quash the order.

I could not understand that and I still cannot understand the sense of it. Indeed, one of the broadsheet papers, having spotted what was going on, asked: has the Supreme Court gone mad? I remember that certain people were rather discomfited by that but it was a very strange thing to do because there was no question of the banks releasing the money. But it was just as well to suspend the order so that they would be comforted by the fact that we were not actually making the order until Parliament had come in and produced a proper remedy to sort it out.

There you are. If you look at subsection (4), the “impugned act” was this order and what I wanted to do was to, in effect, allow the impugned act to be maintained—or, as subsection (4) puts it, “upheld”—so that the matter could be corrected. I cannot see anything objectionable to exercising the power in subsection (1)(b) in a circumstance of that kind. I wish we had had that power available to us at the time. It would have made my life a good deal easier in our discussions. It was not there and any idea that the common law could do that had really been exploded by the decision of the majority.

There is a problem and it would arise time and again if people were looking at the majority decision. There are, or could be, cases where for the protection of the public and in the interests of good administration the possibility of suspending the effect of the order so that the impugned act is regarded as valid until the defect can be corrected will be valuable. I suggest, with great respect to my noble friend, that it would be unwise to remove these provisions from the Bill.

My Lords, I feel I have to rise at this juncture. I supported Clause 1 at Second Reading and continue to do so today. Like other noble Lords who have spoken since, the noble Lord, Lord Pannick, I suggest, puts the case against the clause altogether too high. I say that Clause 1 and the powers that it confers on the judiciary valuably would add to the judges’ discretion, their powers to do justice not just to the claimant in a particular case but on a wider basis. I, too, was in the Spectrum case—Lord Nicholls’ case with the noble and learned Lord, Lord Hope, and others—and it was not a case in which we thought at that stage and in that context we should exercise this power, assuming we had it, to develop the law.

I am going to disappoint the Committee because I have insufficient recollection—I shall come back to this on Report, I promise or threaten—to deal now with the point from the noble and learned Lord, Lord Hope. But I see the force of what he says and, in a rather different context, I, too, wish to reminisce. I go back even further, a quarter of a century, to a case called Percy v Hall. It was so long ago that Mr Keir Starmer was the second junior with a very white wig. It was a case about by-laws in respect of Menwith Hill, a listening post, a secure station for GCHQ and the Americans, and the by-laws, not surprisingly, precluded public entry.

My Lords, I love these debates with our legal eagles, especially when they disagree. My only reminiscence of a court was when I was in the dock for not paying my poll tax. Being a very respectable housewife, having made a statement, obviously I paid.

I am feeling a little generous toward the Government —perhaps that is just the effect of recess—so I will accept that there could be situations where a court might usefully add constraints to a quashing order that either delay its effect or limit its retrospective effect. However, the way in which the Government have done this in the drafting of Clause 1 is far too prescriptive. Rather than giving courts these options as tools to deploy in the interests of justice and good government, the Government are trying to force them into being the default position.

Obviously, my legal knowledge is zero, but I will try to inject a little politics into all this, because the reason that the Government are bringing this is, as the noble Lord, Lord Paddick, said earlier, that they are trying to stop their own mistakes. It is already difficult for people to bring judicial reviews. They must be brought as soon as possible and within three months of the decision being complained of. This new scheme in Clause 1 would mean that for many judicial review cases, even if a claimant wins, they lose. That does not make any sense.

The Government have approached the whole issue by seeing judicial review as an enemy to good governance rather than as a fundamental part of enforcing good government. Judicial review is a fundamental part of the checks and balances of the UK’s messy constitution, and the idea that public decisions which are either unlawful, irrational, or procedurally unfair should be left to stand is anathema to good governance. If the Government want to lose fewer judicial reviews, they should simply make better decisions. I know that is not easy for them. I have a lot of sympathy, but they are making a mess. If their decisions are lawful, rational, and procedurally fair, then the Government will not lose. That seems obvious to me. They should not be asking Parliament and the courts to validate their unlawful decisions. To do so is to unpick the rule of law and the delicate system of checks and balances, and now the Government seem absolutely determined to push the UK constitution to breaking point.

Of course, the Green Party’s view is that we should have a constitutional convention and produce a clear written constitution which can be understood by everyone. However, until then, we will oppose the Government’s attempt to stop exposure of their bad decisions. I do not understand why this has been put in when it is so clearly an effort by an elected dictatorship to shut people up.

My Lords, I have the disadvantage of being a lawyer, an interest which I declare, and I was the chairman of the Independent Review of Administrative Law. Our task, as we saw it, was to review whether the balance of our constitution was fairly reflected in particular by the scope of judicial review. We did not make radical suggestions, but one suggestion that we did make—and it was simply a suggestion—was that legislation on what remedies would be available in response to a successful application for judicial review would be required if the courts are to have the option of awarding a suspended quashing order, as the possibility of issuing a suspended quashing order in a judicial review case was ruled out by the UK Supreme Court in Ahmed—and of course, there was one noted dissension, from whom we have heard this afternoon, the noble and learned Lord, Lord Hope.

That was our suggestion. We were not prescriptive as to how best that power should be given to the courts, but what seemed important to us was that there should be some flexibility to stop some of the hard edges which can arise with a quashing order. What seems fundamental to the way the Government have framed this clause is the use of “may” on more than one occasion. The judge, when he or she looks at the act which is being impugned, has the power to do various things and to take into account the sort of things that a judge would probably take into account anyway. We suggested that that flexibility would help do justice to claimants and to defendants, and one should not lose sight of either party in these claims. We have heard the relevant quotation from the judgment of Lord Justice Schiemann on how third parties can be affected by these orders—people order their affairs—but, equally, I accept that it is very important that claimants should not have their remedies in any way frustrated by judges taking an overprescriptive view.

In one of the amendments put forward by the noble Lord, Lord Ponsonby, on behalf on the Labour Party, he is concerned, I think, about potential convictions based on something that might be regarded—retrospectively, at least—as invalid. We considered this in the report, and said the following on page 75:

“in the case where a claimant who brings a civil case against a public defendant, and the public defendant seeks to justify its conduct by reference to some rule or decision under which it operated, the ‘metaphysic of nullity’,

referred to by the noble and learned Lord, Lord Brown, at Second Reading,

“allows the claimant to argue that that rule or decision was null and void and cannot provide a defence to his or her claim.”

We were not concerned about this because, as stated in paragraph 3.67, the

“possibility of such collateral challenges could easily be retained under the more flexible approach to the consequences of unlawful administrative action that we favour. The courts could simply take the position that an administrative rule or decision cannot be relied on as a basis for criminal proceedings, or as a defence in civil proceedings, if it would have been the subject of a quashing order or a declaration of nullity had that rule or decision been the subject of a timely application for judicial review.”

So, I understand the concern; I simply do not think it exists in the way the clause is framed.

I am afraid I simply fail to follow why the noble Baroness says this clause is creating an elected dictatorship. It is giving judges a power to do what is appropriate in the particular case. In some ways, it may allow judges to make quashing orders they might have been reluctant to make before, because of the hard edges of a quashing order. As it is, they have sufficient flexibility to tailor the remedy to what is appropriate in the case in order to reflect the balance between the claimant and the defendant. I am disappointed too that the noble Lord on the Labour Front Bench opposes this clause entirely. Some of the rhetoric about the ability or desire to constrain judicial review did not seem to be reflected at all in the way this Bill is framed.

Governments of all colours, from time to time, to some extent resent judicial review. For example, we looked at a great many comments by the Labour Government—even that of the noble Lord, Lord Blunkett, who is no longer in his place—about the inappropriate comments by judges and restrictions on the ability of the Government to govern. There is the example of the Human Rights Act preventing the Government—so they said—from doing what they needed to do to deal with the threat of terrorism. All Governments from time to time find this irksome. Simply to oppose a provision in a Bill because it has the subject of judicial review does not seem to me to be a very scrupulous and sensible way to approach legislation.

Before the noble Lord sits down, may I correct him? I did not say that this clause suggested an elected dictatorship. I am saying that an elected dictatorship is running the country at the moment, and we see that in every single Bill that comes to this House.

I am grateful for that clarification, but I am afraid to say that I still fail to follow how bringing forward a fairly balanced Bill is somehow the Government reflecting an elected dictatorship. But I hear what the noble Baroness says.

My Lords, this is a very important debate and in this part of it, I will focus only on whether it is appropriate to empower a delayed quashing order—as proposed in new subsection 1(a)—and whether it is appropriate to give a power to say it shall be prospective only. My overall position is that if the courts want these powers, let the courts develop them. Do not do it by legislation.

The noble and learned Lord was kind enough to refer to the case that I was referring to. However, I was suggesting that the court should have power, in effect, to direct that the order made under the United Nations provisions be treated as valid until Parliament could introduce a measure giving authority to the making of the order. That is indeed what happened afterwards; Parliament had to remedy the problem and some time was needed to allow it to do that.

The banks were holding on to the money; of course, they were not going to release it unless it was demanded by these suspected terrorists, but had they demanded it, it might have been quite difficult for the banks to refuse to release some money. My point was that something should be done to prevent that happening. The last thing one wanted was to give these terrorists the opportunity to make off and dissipate all the assets that had been protected by the order made under the international obligation.

The problem that the noble and learned Lord is grappling with is that there is a huge range of circumstances in which these provisions may come into effect, some of which, I quite agree, would be offensive. I would hope that the courts would be sensible enough not to exercise the power. There are various provisions later in the Bill, which we will discuss and which might be better removed to preserve the court’s flexibility. The question is whether the power should be there at all. My point was that, yes, it should be there because there can be cases where the interests of good administration, and possibly national security, require the possibility of doing that to prevent the event—or whatever it was that the defective order was designed to prevent—taking effect.

New subsection (1)(a) deals with that point. The effect of the order stood until the Supreme Court set it aside, and everybody would accept that that is the position. If the Supreme Court had had new subsection (1)(a)—which it could have—it could have said that the order freezing the money continues for six more months and in six months’ more time it is then quashed. That is my understanding of a (1)(a) order: the quashing order means getting rid of the restraint on dealing with the money and does not take effect until the date specified in the order.

If the Supreme Court had said, “This order stands until six months’ time”, and a bank had then been approached and told, “Excuse me, the terrorists want their money now”, the answer would have been no because there would still, in effect, be a restraining order. It would have dealt with the problem that the noble and learned Lord posits; I think Clause 1(1)(a) would have dealt with it.

I recommend that the noble and learned Lord refers to Treasury 2 because I made exactly the point that he was trying to make and I was overruled by the others. They said, “You can’t do that”, and they would not make the suspended order. We are in Committee and we cannot prolong the discussion, but that is the problem that I was faced with. I tried to do exactly what the noble and learned Lord suggested but I was overruled. That is the problem that I think the Government are trying to address; the Minister will correct me if I am wrong.

My Lords, I enter this discussion with some trepidation. Nevertheless, it raises very important points of principle, which have been essentially analysed in the last few minutes and the last few exchanges. As we have heard, the effects of Amendments 1, 4 and 5, in my name and those of the noble Lords, Lord Pannick and Lord Ponsonby, would be to remove from the Bill the power to make a quashing order prospective only. That is the problem: it is prospective only. We are not arguing for the removal of the power to delay. I will come back to that in a moment, but I start from the position that I agree entirely with the analysis of the noble and learned Lord, Lord Falconer, that a (1)(a) order could solve all the problems outlined by the noble and learned Lord, Lord Hope, and the noble Lord, Lord Anderson.

I venture to suggest that it is significant that when the committee chaired by the noble Lord, Lord Faulks, considered its recommendations for this type of order, it recommended only the power to delay, not the power to validate past unlawful action in the way that a quashing order made prospective only would do. Our amendments are premised on the proposition that, when the courts find that an Act, or a decision or regulation of any organ of government, is unlawful, it should not then be able to decide only to quash it with future effect. As the amendment’s explanatory statement puts it, and as the noble Lord, Lord Pannick, explained, the proposed power would thereby validate

“what would otherwise be quashed as unlawful”,

and unlawful for all purposes. The noble and learned Lord, Lord Falconer, emphasised the provisions in proposed new Section 29A(4) and (5) for the all-embracing effect of a prospective-only quashing order.

New subsection (4) makes it absolutely clear that the impugned act—which is ex hypothesi an unlawful act because a quashing order is being made—is to be upheld in any respect in which the provision under new subsection (1)(b) prevents it being quashed. That has no flexibility. If the noble Lord, Lord Anderson, and the noble and learned Lord, Lord Hope—as well as the noble Lord, Lord Faulks, as referred to in his speech—are seeking flexibility, a (1)(a) order is not the way to do it. Our Amendments 1 and 4 do not seek to debar a court on judicial review from permitting either officials to put right a decision taken unlawfully by remedying the unlawfulness or, as the noble Lord, Lord Pannick, pointed out, Parliament to alter unlawful regulations without the need to wield the blunt instrument of a quashing order immediately.

We suggest that the power to suspend by delaying the quashing order eliminates that risk. It mitigates the risk that a quashing order would have the effect of indiscriminately overruling all government action, for example a regulation, without distinguishing between what was lawful, or ought to be lawful, and what was unlawful. We say that enabling a decision to take effect on a delayed basis would enable the law or the government action to be corrected so as to regularise the unlawful government action. So, the quashing order, if it took effect immediately, would be senseless, but it must stand once the delay is over, to deal with the past unlawfulness. It deals with the Ahmed point, as suggested by the noble and learned Lord, Lord Falconer, and it is a far cry from the courts permitting past unlawful action to go uncorrected.

The prospective-only quashing order power undermines the central principle on which judicial review jurisdiction is based: government action is required to be in accordance with law, and if it is not in accordance with law, it will be corrected. The noble Baroness, Lady Jones of Moulsecoomb, sensibly conceded in her speech that there may be conditions or limits but they can all be dealt with by the power to delay. A crucial point that a prospective-only order ignores is that “corrected” means corrected for everyone; that is, all litigants, future and potential, even those who have not yet brought cases.

I am most interested in the way in which the noble Lord analyses this. Is he essentially saying that this Bill is giving too much power to judges—power that ought to be vested in Parliament—and that a judicial review reform of this nature goes far too far and that judges should not be allowed to have these powers in case they exercise them inappropriately?

It is a two-pronged attack. I do not believe that the judges should have the power to make lawful what they have already found is unlawful with retrospective effect. That means that prospective-only orders are, in principle, wrong. However, if there were a case for changing regulations or for altering government action so as to bring it within the limits that Parliament wanted, that is for Parliament; that is for legislation, as the noble and learned Lord, Lord Falconer, argued. It is not for the courts to say, “We find the act unlawful, but it is only going to take effect as unlawful for the future.” It is, in the example of the noble and learned Lord, Lord Brown of Eaton-under-Heywood, an ex tunc approach; but an ex tunc approach, frankly, is right, whereas the removal of flexibility by ruling out the Part A power—the power to delay—would be a removal of flexibility, which would be unnecessary, and we support that. We do not support the presumption, but that is a different point.

The real important point, about retrospective charges and the points in Amendment 6, in the name of the noble Lord, Lord Ponsonby, is that they accept the unlawfulness—if that was the only amendment that was passed—but would go on to say, “You can rely on the unlawfulness as a defence in criminal proceedings and you can still apply for other financial remedies for judicial review, but the quashing order will only take effect prospectively.” That, in my respectful view, is to fudge the whole point of unlawfulness, and the universality and the universal application of judicial review, which lies at its heart.

My Lords, I agree with the opening remarks of the noble Lord, Lord Marks—I too enter this discussion with some trepidation. I will first set out the Labour Party’s overall view, since the debate on this group has been fairly wide-ranging. We believe that the proposals for judicial review in Clauses 1 and 2, which we will come to in group 4, are regressive and uncalled-for. More especially, when many aspects of the justice system are in crisis, we do not believe that there is a need for this review in the first place. The Ministry of Justice is trying to fix something that is not broken, a point made by the noble Lord, Lord Beith. We believe that overall, the Government’s changes to the judicial review process will have a chilling effect on justice, deterring members of the public from bringing claims against public bodies and leaving many other victims of unlawful actions without redress. These are proposals that will make it harder for individuals to hold this Government to account. As a result, unlawful decisions made by this Government, or by any government or public body, will go unchallenged.

I put my name to Amendments 1, 4 and 5. The noble Lord, Lord Pannick, as ever, introduced those amendments very fully. The noble Lord, Lord Anderson, asked me about Amendment 3. In my brief, I am embarrassed to say, it says that Amendment 3 is consequential on Amendments 1, 4 and 5; I have had a look at it while the debate has been progressing, and I cannot add any more to that. It may be that what I have been provided with is wrong in that respect.

Amendment 6 would, as set out in the explanatory statement,

“protect collateral challenges by ensuring that if a prospective-only or suspended quashing order is made, the illegality of the delegated legislation can be relied on as a defence in criminal proceedings. This would prevent individuals from being criminalised under defective and illegal ministerial powers.”

The noble Lord, Lord Faulks, said that he did not think that the problem existed. It would be very useful if the Minister could confirm that he too does not think that the problem exists, because, in a sense, it is an inquiry about whether there is any potential for this problem existing. It would be helpful if the Minister were to confirm what the noble Lord, Lord Faulks, has said.

My noble and learned friend Lord Falconer entered into a very interesting debate with the noble and learned Lord, Lord Hope, about the development of suspended quashing orders through common law and whether that was appropriate. My noble and learned friend was very much against proposed new subsection (1)(b); he thought it was quite wrong to give power to judges to, effectively, change the law unilaterally and retrospectively. He argued very strongly that that was not the case.

That point was dwelled on by a number of noble Lords. It is not the point, really, that comes out in this group. We may return to some of the elements which were discussed on that point, but as I said, I enter this discussion with some trepidation, as I understand the amendments in my name—Amendments 1, 4 and 5—much more clearly. We will be debating further amendments to quashing orders in the next group, where we can further look at other prospective amendments. For now, I lend my support to the amendments in the name of the noble Lord, Lord Pannick.

My Lords, the previous two contributors to the debate noted that they spoke on these matters with some trepidation. In responding to the amendments in this group, I declare a non-interest: unlike so many of your Lordships, I confess that I did not sit on, or even appear in, any of the various cases cited to the Committee. Therefore, with that significant handicap, I will instead start by reminding the Committee of the rationale for including Clause 1 in the Bill. However, in these remarks I will not address the list of factors in subsection (8), or the so-called presumption in subsection (9), because we will deal with those in later groups.

The clause aims to expand the remedies available in judicial review proceedings to provide more flexibility to the courts. As I put it at Second Reading, we want to put another couple of remedial tools into the judicial toolbox so that they can be used when appropriate. I say to the noble Baroness, Lady Jones of Moulsecoomb, that this has nothing to do with dismantling judicial review or an elective dictatorship. The Government and I recognise the importance of judicial review to good government, which is lawful government. But one also has to recognise that, as the noble and learned Lord, Lord Hope of Craighead, reminded us, we have lots of different sorts of cases where we want flexibility of remedy—and that judicial review applies to many decision-makers who cannot sensibly be described as “government” in the way that the noble Baroness was using that word.

The current position is that quashing is typically both immediate and retrospective, depriving the decision of ever having had legal effect. It is as if the decision had never been made; it is a legal nullity. This makes a quashing order something of a blunt instrument, and it can have unintended consequences when applied to nuanced problems.

The clause seeks to give the court a discretion to change quashing orders in two ways, as we have heard. The first is to allow the effects of a quashing order to be suspended for a period, as the court sees fit. The Independent Review of Administrative Law—I listened very carefully to the contribution of its chair, the noble Lord, Lord Faulks—recommended this additional remedial flexibility, and the clause therefore seeks to implement its recommendation. I agree with the noble Lord that the word “may” is critical to the way that this clause operates. The suspended quashing order allows courts to suspend the effect of an order for a period of time to allow the decision-maker to prepare for the effect of the quashing. This could give them time lawfully to make a new decision before the unlawful decision is quashed or to implement some other transitional arrangements.

The amendment in the name of the noble Lord, Lord Ponsonby of Shulbrede, which aims to remove the whole clause, would remove this new remedy, which I had thought was broadly supported. Although I heard the noble and learned Lord, Lord Falconer of Thoroton, say, “If the judges want this power, they can create it”, we have heard that it is far from clear, to put it at its lowest, that the common law would actually enable the judges to do this. More importantly, there are circumstances where suspending a quashing order will allow the court to provide a remedy that better serves the interests of justice, and we should therefore ensure that it is a tool available to the courts.

The second modification, which would be removed by Amendment 1 and the consequential Amendments 4 and 5 in the name of the noble Lord, Lord Pannick, is the ability to make a quashing order prospective only. I accept that that has been more controversial in the Committee this evening, so I will set out some of the parameters of the debate, as the Government see it.

We have heard examples from those in the other place, and indeed from some noble Lords this evening, where, prima facie, a prospective quashing order could cause significant injustice to the claimant, the applicant or third parties. There will be cases where a prospective quashing order could cause injustice, which is why we are not forcing the courts to use the powers in any case where it would cause injustice or, indeed, be inappropriate. Therefore, I suggest that we leave those discussions aside, because there is remedial flexibility, and concentrate on whether prospective orders make sense in principle, given the wide variety of cases that come before the courts. We could therefore answer the question: are there cases in which their use could be appropriate?

If the court determines that regulations that impose a tax charge are unlawful but decides that this should be prospective only, is the consequence that the taxes raised before the date are “treated” as having been lawfully raised?

If the noble and learned Lord will forgive me, I will come to precisely that point later in my speech, because it arises under the amendment put down by the noble Lord, Lord Ponsonby.

I am raising it now because the noble Lord is placing huge emphasis on the word “treated”. I would be interested to know whether that word means that tax raised under unlawful regulations in the past remains treated as if it were raised lawfully.

I will come to this point because these are two sides of the same coin. The short answer to the noble and learned Lord’s point is that it would be almost incomprehensible that a court would use a prospective order in circumstances where people have paid taxes that were necessarily unlawfully raised—so the question would not arise. It is a nice theoretical question, but it would not arise. That is why I will deal with it later, and I am happy to take further interventions at that stage, if we can try to deal with the points separately. I see where the noble and learned Lord is going, but at some point one has to live in the real world and consider whether a prospective-only order would be appropriate. Remember, the court has to look at the factors in subsection (8), including paragraph (f), which refers to

“any other matter that appears to the court to be relevant.”

It also has to look at where subsection (9) says

“unless it sees good reason not to do so.”

The idea that that could survive an unlawfully raised tax case is, I suggest, almost incomprehensible.

I will go back to where I was. We are not making an unlawful act lawful. The real question is: what is a remedy at all? In particular, what is a quashing order? This is something that has, frankly, bedevilled public law for some time. It is not clear that public lawyers, or indeed anyone else, have come up with a good answer to it. I suggest, however, that the remedy that the court gives, whether a quashing order or an order of prohibition, does not determine whether something was unlawful or not. It is the judgment and any declaration as to the state of the law that do that. The remedy decides what the effects of that unlawfulness should be, because there are cases where the court will declare that something was unlawful but not actually give a quashing order—but the action is still declared unlawful.

So this new power allows the court to modify the remedial effect of the quashing order so that, up to a point, the action or decision in question would be treated as being valid for all intents and purposes. The court is therefore doing its traditional job of declaring what the law is and what the law was, but it has greater flexibility in determining the real-world effects of its determination. I therefore respectfully agree with the way in which the noble Lord, Lord Anderson of Ipswich, put it. I heard his slightly in terrorem threat as to when we come to the presumption—but I will deal with that at that time.

That approach is consistent with public law as we understand it today. Judges are faced with situations where, despite a finding of unlawfulness, a quashing order does not issue, for a variety of reasons. I do not think therefore that it follows on principle that a finding of unlawfulness should always result in the voiding of the decision ab initio. I am grateful therefore for support on this point from the noble and learned Lords, Lord Hope of Craighead and Lord Brown of Eaton-under-Heywood, although I will avoid getting into any relitigating in this Committee of either Spectrum or Ahmed—we will leave that for later groups and possibly further editions of memoirs.

We need to avoid an approach which would take us right back into the straitjacket of nullity, and the academically interesting but practically frustrating doctrines that characterised decisions from Anisminic to Ahmed. We are not giving the court a binary choice of quashing retrospectively or giving declarations that state the law but do not necessarily deal with the effects of the impugned decision, even if it is declared to be unlawful. That is my response to the first main point from the noble Lord, Lord Pannick.

His second contention is that the new powers draw the courts into policy questions. I say respectfully that we are simply not doing that. We are asking the courts to do what in many ways they do already, which is to assess the possible effects of their judgment on the parties and the public interest. It may well be the case that having given the courts these two new tools—I think the noble Lord, Lord Faulks, made this point—they do issue quashing orders in cases where they would not have done so if the only option open to them was an ab initio quashing order. Well, so be it. If Parliament has given them these extra tools, that is the way matters will work out. Subsection (8) sets out what we believe to be the pertinent factors, but we made it expressly a non-exhaustive list.

Courts have long recognised the principle that the administrative burden of rectifying the effects of a past decision can outweigh its potential benefits, especially if the Executive are rushed into action. Importantly, there are cases where the courts have recognised that regulations or policies that have a wide effect can create expectations for third parties: plans could have been made, contracts signed and money spent, all in pursuit of what everyone thought was a lawful policy.

We must not get lured into the example of somebody paying tax under regulation which turns out to be unlawful. People might have signed contracts on the basis of a regulation which turns out to be unlawful. They may have spent money or set up businesses. To undo all that could give rise to far more injustice than making sure that present and future situations are rectified. The example I gave at Second Reading, which the noble Lord, Lord Anderson of Ipswich, also mentioned, was the case of BASCA v Secretary of State for Business.

There is a further benefit to good administration, which is really what judicial review is all focused on anyway, which is that public bodies can make good a decision without having to revisit what can sometimes be long and drawn-out policy processes for the sake of a small error.

In cases relating to Heathrow expansion, for example, one point of contention was whether the Government had to take into account the Paris climate agreement. If the court had ended up finding that the decision not to take it into account was unlawful, it would surely have been far better to give a prospective order, so that the overall process of expansion was protected and the decision could be amended properly to take into account the relevant agreement. Quashing retrospectively would mean that the entire process would need to begin again from square one. A prospective remedy would allow the unlawfulness to be corrected at lower cost and in a shorter time, while still recognising—I underline this point—that the initial decision was unlawful.

I also emphasise the points in subsection (8)(c), which ask the court to have regard to

“the interests or expectations of persons who would benefit from the quashing of the impugned act”

and subsection (2), which allows the court to set conditions on the remedy. I hope that those provisions assuage any concerns that individual rights would be prejudiced—on the contrary, they ought to be taken into account by the court.

I have gone into some detail on that point because it was focused on by the Committee. I hope I can deal with the other amendments slightly more quickly with that background.

Amendment 3 removes the ability of the court to attach conditions to a suspended or prospective-only quashing order. These are intended to give the court maximum flexibility. For example, a court might want to make an order prospective only to reduce administrative chaos, but only on condition that parties who may have lost out financially are properly compensated. The conditions may not be necessary in every case, but it is an option for the court where appropriate.

Finally, Amendment 6 aims to ensure that the invalidity of quashed regulations can be relied on in criminal or civil proceedings. As I understand it, the concern of the noble Lord, Lord Ponsonby, is twofold. First, defendants could be prosecuted under regulations that have been ruled to be unlawful yet, because of the powers in this Bill, are treated as valid. That point was made by the noble and learned Lord, Lord Falconer, and the noble Lord, Lord Marks.

Secondly, this might mean that claimants or victims would be less able to obtain damages, restitution or compensation. As I have suggested already, the amendment is unnecessary. As the noble Lord, Lord Faulks, said, collateral challenge is not at issue. The Bill does not necessarily prevent such challenges, because it gives the courts powers to formulate the remedies appropriately. In circumstances where provisions which create criminal penalties are being challenged, and have been challenged successfully, I find it very unlikely that a court would decide to use a prospective-only remedy. That is not only because the list of factors includes in subsection (8)(c)

“the interests or expectations of persons who would benefit from the quashing of the impugned act”

and, in subsection (8)(f),

“any other matter that appears to the court to be relevant”.

That would, I think, mean that the court would certainly find a “good reason”—to use the language in subsection (9)—to use a retrospective quashing order, so that any persons, for example, who had paid tax would have a remedy in restitution.

In similar cases where a court considers a suspended remedy, the ability to set conditions on the order would also mitigate any risk of injustice. For example, a court could use a suspended quashing order with the condition that the authority in question does not take any further enforcement action. This goes back to my main point about maximum flexibility. For those reasons, I invite the noble Lords who have tabled these amendments not to press them.

I am very grateful to the Minister and to all those who have spoken in this interesting debate. It is important to emphasise that this is not a technical legal issue. We are concerned here about the integrity of judicial review—a vital safeguard of the rights of all citizens.

I agree with the noble and learned Lord, Lord Falconer of Thoroton, that what is objectionable about Clause 1 is the power of judges to wave a judicial wand and to say that what they have found to be unlawful shall be treated—the word emphasised by the Minister—as if it were lawful.

If there are cases of concern—the noble and learned Lord, Lord Hope, said that there are or may be—a suspended order is quite sufficient to give Parliament time to act. Those in Parliament, not judges, are the appropriate people to validate that which the court has found to be unlawful. New Section 29A(1)(a) meets that need. Indeed, that was the issue in the Ahmed case, where the noble and learned Lords, Lord Hope and Lord Brown of Eaton-under-Heywood, had, as judges say, the misfortune to disagree with each other. It was what the noble Lord, Lord Faulks, recommended in his review.

My noble friend Lord Anderson mentioned the comments of Lord Nicholls for the Appellate Committee in the Spectrum case that prospective overruling might—I emphasise “might”—be appropriate, although not in that case. That was in June 2005. Such a power has never been exercised or come close to being exercised in any case since.

There is an important difference between the common law not ruling out the possibility of prospective overruling and Parliament including such a power in this Bill. I cannot understand why this provision is in the Bill. As I said, it was not recommended by the noble Lord, Lord Faulks. What has provoked the need for new Section 29A(1)(b)? The Minister said that the Government want to put new tools in the judicial toolbox—but why this tool? What case has provoked the need for this provision? When have judges ever lamented the absence of such a power?

My noble and learned friend Lord Brown of Eaton-under-Heywood emphasised the need for flexibility, but Clause 1 is not flexible in an important respect. If this power in new Section 29A(1)(b) is exercised, then under new Section 29A(5), as the Committee has heard, the impugned act

“is to be treated for all purposes as if its validity and force were, and always had been, unimpaired by the relevant defect.”

There is nothing flexible about that. With all due respect, the Minister’s reliance on “treated” is a matter of pure semantics; “for all purposes” means always and for all persons, whatever their circumstances, and even though they have not been represented before the court.

Therefore, I say to the Committee that there is no need for this power in new Section 29A(1)(b). It is inappropriate in principle. But for today, of course I beg leave to withdraw this amendment.

My noble friend just said that no case has come close to applying a prospective-only quashing order since a unanimous House of Lords said in the Spectrum case that they could imagine such cases. How does he explain the British Academy of Songwriters case, which he has heard both the Minister and I develop, and in which Mr Justice Green, as I read his judgment, gave precisely such an order? I should say that that is not the only case.

If he gave such an order, why is there a need for Parliament to step in and deal with the matter? In any event, such an order is more appropriately dealt with by a suspended quashing order so that Parliament, the appropriate authority, can deal with the matter if it sees fit to do so.

Amendment 2, not moved?

No, I am moving Amendment 2.

Amendment 2

My Lords, I will speak to my various amendments quite briefly, because while the detail of the amendments has not been covered, the overall debate around quashing orders has.

Amendment 2 seeks to limit the use of any new remedies issued under Clause 1 to where, in the court’s view, it is in the interests of justice.

Amendment 7 clarifies that the factors which the court considers before making a modified quashing order are a matter for the court’s discretion.

Amendment 8 removes one of the factors to be given consideration by the courts when deciding whether to award a suspended quashing order or quashing order with limited or no retrospective effect. The removal of this factor is intended to rebalance the factors to be given consideration so as not to disadvantage the claimant unfairly.

Amendment 9 would make an addition to one of the factors to be given consideration by the courts when deciding whether to award a suspended quashing order or quashing order with limited or no retrospective effect. This amendment would make it clear that the provision of a timely remedy to the claimant is a factor to be given consideration.

Amendment 10 would require the defendant to identify what the interests and expectations of persons who have relied on the impugned act are and to explain these to the court.

Amendment 11 would remove the requirement to take account of actions which the public body proposes or intends to take but has not yet taken. Such actions are too uncertain to form a basis for suspending a quashing order or making it prospective only. Any intentions indicated to the court could change in light of subsequent developments, leaving those affected potentially without any recourse.

The intention behind Amendment 12 is to clarify that the principle of good administration includes the need for administration to be lawful. The Executive and all public bodies are not entitled to act unlawfully. Therefore, in a society based on the rule of law, administration may rationally be categorised as fully good only when it is lawful.

Amendment 15 removes the extra weight which would otherwise be given to subsection (8)(e) by the courts when applying the test created in subsection (9)(b) to establish whether the statutory presumption is applicable.

This range of amendments looks at other aspects of Clause 1. I think we had a wide-ranging debate about Clause 1 in the first group, and I beg to move Amendment 2.

I apologise for getting things into a state of confusion—or nearly—by thinking that Amendment 3 was to be moved.

My Lords, I will take the opportunity to jump in briefly at this stage, even though the first three groups to some extent cover similar territory. I know that in the next group we will get into the presumption in particular.

I speak now having had the considerable benefit of listening to the debate on the first group, which the Minister described as being about just giving an extra tool to the judicial toolbox, to be used where appropriate. I think that was the thrust of his remarks. That begs the question of whether it is just a tool in the box and what is and is not appropriate.

It seems that we are dealing with a judicial review of administrative action—of executive action. I know that the Minister said, “Calm down, dears, it’s not all about government as we would understand it; it is about all sorts of administrative action”. I am sure that is right. However, the principle is the same. This is executive action. Some of it is very significant for citizens’ lives and some of it less so. However, it is the job of the judiciary and Parliament, together in different ways, to hold executive action to account.

The traditional method has worked rather well. There are discretionary remedies for the judiciary and the power to legislate for Parliament, including, in extremis, to legislate retroactively. We do not like that, but if anybody is going to do it, it should be Parliament, because it is sovereign and has the democratic legitimacy to do so. That is the debate between my noble and learned friend Lord Falconer of Thoroton and the noble Lord, Lord Pannick, on one side, and the Minister and his supporters on the other.

To that, I think the response comes from the Minister, “Actually, the new Section 29A(1)(b) is not doing what you think it’s going to do. This is just remedies; it is not about rewriting history and saying that the unlawful decision or subordinate legislation was always lawful. It is just about the effect of the quashing, not about changing history”. If that is the genuine intention of the Government with this provision, I respectfully suggest to the Minister that some clarification and comfort other than reassurances from the Dispatch Box may be required. That is to deal with the fact that we are not actually giving a retroactive legislative power —let alone duty, to which we will come—to the court.

Maybe, if I can be helpful, there is some room for explicit clarification to that effect. Having listened to the previous group, I too do not see the point of new Section 29A(1)(b) if this is just about giving extra tools to the judicial toolbox to use where appropriate. In all this I am mostly worried about the people not in the courtroom—the people who are not the litigants in the particular case but who rely on that particular judicial review, brought by one individual or a small group of individuals who had the means, either because they had personal means or the benefit of legal aid, which is not widely available these days. I am worried about anything that would shut out the possibility of good administration being provided for all the people—there could be hundreds or thousands or millions—who were not in the room and could then be shut out from justice because of something that it was not appropriate for the court to do. Why? The courts, unlike Parliament, are not best suited to polycentric decision-making. If there is to be emergency legislation because of a particular decision around illegality of regulations and so on, it is better dealt with in Parliament because Parliament will be able to look at all the potential cases in the round and will have the legitimacy to so act. The Government cannot have it both ways.

By the way, I agree with the noble Lord, Lord Faulks: Governments of all stripes get irritated with judicial review from time to time. However, whoever is in power, it is not for politicians to have it both ways and criticise judicial overreach on the one hand but then ask the judges to do their dirty work for them when they have been found to act unlawfully on the other.

I do not see this as a tool in the toolbox but as opening up a nest of snakes. When you use the phrase

“unless it sees good reason not to do so”,

it opens up some real complexity if people start to make further appeals on the basis that there was good reason not to do so or good reason to do so. I do not see that this is any sort of simplification. The Government will probably regret opening this system of quashing because it will add complications when the Government presumably want it to run more smoothly. I cannot see that there is any point to this. I hope that all those legal eagles over there will start circling round our little legal lamb here and explain to him that he has got this completely wrong.

These are important amendments. They address the botched way that, if these powers are to come in, the exercise of discretion is to be applied. My noble friend Lord Ponsonby is saying that you would use what the noble Lord, Lord Wolfson, describes as the tools in the toolbox only if it is “in the interests of justice to do so”. That is the starting point. That sounds to me a lot more sensible a starting point than the very strange wording in new subsection (9), which is, if the court is to make a quashing order in accordance with new Section 29A(1),

“the court must exercise the powers in that subsection accordingly unless it sees good reason not to do so”,

and the condition is that

“as a matter of substance”

an order under new subsection (1) would

“offer adequate redress in relation to the relevant defect”.

Obviously, there is a difference between adequate redress on the one hand and what is the best order in the interests of justice overall on the other. Can the noble Lord tell us why this strange wording has been adopted if all that is intended is the broadest possible discretion in relation to using these two new tools in the toolbox?

My noble friend Lord Ponsonby’s amendments also relate to new Section 29A(8). The Minister said, in reference to prosecutions and taxation, that you would never make a new subsection (1) order, whether a delayed quashing order or prospective only one, and that is clear, he says, from new subsection (8). He relied in particular on new subsection (8)(c), which refers to

“the interests or expectations of persons who would benefit from the quashing of the impugned act”.

If I have been prosecuted under a regulation that was unlawful, I would expect my prosecution to be upheld. But then, new subsection (8)(d), refers to

“the interests or expectations of persons who have relied on the impugned act”.

Therefore, if, for example, it is made unlawful to do a particular thing and I have had my dog put down as a result or I have bought lots of expensive equipment to comply with the criminal law as I thought it was, my interests or expectations under new subsection (8)(d) would be “Let the law stand”. So new subsection (8)(c) points in one direction and new subsection (8)(d) in another. If it is the Government’s intention that all prosecutions brought under unlawful regulations or laws will never be prospective only, and if it is their intention that taxation raised under unlawful regulations will never be prospective only, in my respectful opinion—I may be wrong, in which case let me corrected by the noble Lord, Lord Wolfson—new subsection (8) does not get him anywhere near that. Indeed, it leaves the judge to decide and the judge has to decide on the basis of new subsection (9).

I therefore strongly agree with my noble friend Lady Chakrabarti. A bit more work needs to go into this to get to a point where there is clarity about what the Government intend, if their intention is that these are only two tools in the toolbox, with complete discretion over how to use them. If that is what they want, my noble friend Lord Ponsonby’s amendments are giving them quite a good opportunity of getting there.

I hesitate, my Lords, to speak again. I feel that so much of what has been said has been dancing on the head of a pin. I have to say that I have come to see new subsections (1)(a) and (1)(b) in new Section 29A in Clause 1 not as dramatically different things but rather as a continuum. They cover a spectrum; indeed, there is an overlap in between them, in the middle. There is no question here of subsection (5), to which the noble Lord, Lord Pannick, objects so strenuously—the one about being treated, and so forth. It is always subject, be it noted, to new subsection (2) of new Section 29A. Any of these orders under new subsection (1)—in other words, whether it is an order under new subsection (1)(a) or (1)(b)—can be made subject to conditions. Those conditions clearly would control the extent to which there is to be any degree of retrospectivity or retroactivity, call it what one will.

I am a huge admirer and respecter of the noble Baroness, Lady Chakrabarti, but I do not see this as being, so to speak, comparable to Parliament infinitely rarely passing legislation retroactively. We must always remember, must we not, that judicial review is, at the end of the day, a discretionary remedy; you do not actually have to make these orders anyway. I still see this, as the Minister would urge, as a tool in our toolbox, giving us the maximum flexibility and discretion to do what justice requires to all—which includes, of course, to those who are not in the courtroom, who do not have legal aid, and all the rest of it. With criminal convictions—taxation and things—one trusts and assumes that the court is going to behave correctly. In the Percy and Hall case, with the good lady trespasser and PC Hall who was being sued for damages for having arrested people who on the face of it were invading this territory, contrary to apparently valid by-laws, I pointed out in the judgment that, if and insofar as she had actually had criminal convictions, of course they would be set aside. But that is merely an aspect of judges behaving, as one hopes and believes they will, in a judicial manner.

So I respectfully continue to support this clause. I said at Second Reading that I was agnostic or entirely relaxed—I think that was the term used by the noble Lord, Lord Anderson—as to whether it is “may” or “must” in new subsection (9), and I remain so. “Must” simply urges the judges to give attention to this new tool in their armoury or toolbox. But they do not have to, and they will not, unless by all the conditions that they wanted to impose, they have made it clear that what they are doing will not be contrary to justice.

My Lords, this group of amendments, tabled by the noble Lord, Lord Ponsonby, is designed to take the sting out of the provisions in Clause 1, both as to the circumstances on which suspended or prospective-only quashing orders may be made and as to the way in which the discretion should be exercised. If passed, the amendments would each mitigate the damage which in my view is inflicted on the rule of law inherent in Clause 1. However, if all were passed, they would still by no means eliminate it. As has been pointed out, the worst part of Clause 1—in a sense, the elephant in the room of the first two groups—is the presumption, which we shall come to in the next group, which has been spoken to by the noble Baroness, Lady Jones of Moulsecoomb, and the noble and learned Lord, Lord Falconer, and which is, I suspect, opposed by the overwhelming majority of those who have spoken. The noble Lord, Lord Anderson, spoke to it in the last group, and said that his support for the prospective quashing-order power was conditional on the removal of the presumption.

I suggest that there is also a flavour to Clause 1 that is inherently offensive. We are faced with a proposal that not only permits the suspension of a quashing order and the retrospective validation of unlawful acts—and we accept the power of suspension—but dictates to the court, by new subsections (8), (9) and (10), how the court should exercise its discretion. Once again, I have to say that I am impressed but dubious about the optimism expressed by the noble and learned Lord, Lord Brown of Eaton-under-Heywood, that the Government are concerned only to give judges tools in their toolbox which they would not use, and that they can exercise their discretion in any way that they wish, because that is not actually how these new subsections work—and they are wrong in principle to dictate the way in which the discretion is exercised. The court when considering judicial review—

I thank the noble Lord for giving way. Of course, new subsection (8)(f) refers to

“any other matter that appears to the court to be relevant.”

So a court can decide that there are other matters that it thinks are important. This is not restricting or fettering the discretion of the court. Why is it so offensive?

It is absolutely right that the court can consider any other matter, but it must consider all the factors in new subsection (8)(a) to (8)(e). That is mandating the court where some of those factors may not be of any interest to the court at all. The noble and learned Lord, Lord Falconer, was right to point out that there is a potential conflict between the factors in subsection (8)(c) and (8)(d). For Parliament to be telling judges how they should exercise their discretion and what factors they should have regard to without giving them the option of disregarding some factors is wrong.

The court is exercising, as we all know, a supervisory jurisdiction over executive action or the claimed abuse, or excess, of delegated powers. The noble Baroness, Lady Chakrabarti, was right to argue that the way in which judicial review has worked in practice—and I suggest that it is the most important development in civil or administrative law over the past 50 years, above any other development that we have had—is that the judiciary, the Executive and Parliament work not exactly together but in balance, so that the powers are exercised in accordance with the law. With respect to what the noble Lord, Lord Faulks, says, it is inappropriate and regressive for the Executive to tell Parliament what factors they should consider when performing that supervisory role. The courts should be left to consider executive action in accordance with the law passed by Parliament and to grant remedies accordingly. They do not need, and should not be tied down by, restrictive provisions that prevent them doing justice taking into account factors that they think are important.

Amendment 2, moved by the noble Lord, Lord Ponsonby, would at least limit the exercise of the provisions in Clause 1 to powers where the court was satisfied that it would be in the interests of justice to do so. I suspect that that amendment will be opposed on the basis that it would introduce an unnecessary fetter on judicial discretion—and I suggest that that is entirely ironic, because the whole of new subsections (8), (9) and (10) are precisely targeted at fettering the courts’ discretion, and it is to that that we object. It is also ironic that, if passed, this would be the only mention of the interests of justice in the clause.

Amendment 7 would make the new subsection (8) factors permissive, rather than mandatory. Therefore, it removes the point that I made in answer to the intervention of the noble Lord, Lord Faulks, that the court must consider factors which have an inherent conflict.

My Lords, I will respond to the amendments in this group in grouping order. I start by making a point about the list of factors. The purpose of the list of factors in subsection (8) is, as I said in the previous group, to allow the court to respond flexibly in the interests of delivering justice. However, it is important that the court considers—I emphasise “considers”—whether the remedies to be used are appropriate. These are the factors to which the court must have regard.

Is the Government’s intention that these two remedies—new subsection (1)(a) and (b)—should be in a different category from every other remedy the court has under judicial review?