Grand Committee

 Grand Committee

Thursday, 6 March 2008.

The Committee met at two o'clock.

[The Deputy Chairman of Committees (LORD FAULKNER OF WORCESTER) in the Chair.]

The Deputy Chairman of Committees (Lord Faulkner of Worcester)
It has been agreed that, should any of the Questions for Short Debate not run for their allotted hour this afternoon, the Committee will adjourn during pleasure until the end of the hour. Therefore, each of the Questions for Short Debate will start on the hour.

Motorsport

14:01:00

Lord Astor of Hever
asked Her Majesty’s Government what plans they have to improve support for the British Motorsport industry to ensure it does not lose its global leadership.

The noble Lord said: I start by declaring an interest, as the unpaid president of the Motorsport Industry Association, the MIA.

Five years ago, the DTI Minister, Patricia Hewitt, announced government support of £16 million,

“to sustain and develop the British Motorsport Industry”.

She went on to say that,

“this industry is the jewel in the crown of our British Automotive Industry. In such a fiercely competitive market, we cannot afford to be complacent. This industry is exactly where the future of British manufacturing lies”.

The following year, the noble Lord, Lord Sainsbury of Turville, in reply to a question that I had asked, confirmed the Government’s commitment to provide £16 million over five years from four regional development agencies, the DTI and the DCMS. In January 2005, the House of Commons Trade and Industry Committee report on the UK automotive industry clarified that 50 per cent of the £16 million of public investment into the motorsport sector was earmarked for “skills”.

Anyone reading those positive statements would applaud the Government for their positive plans to sustain one of the few globally successful British business clusters. However, the reality has proved to be a long way from the rhetoric. The scheme has failed to live up to its promise. It is time to admit this and move back to the traditional sector relationships with government.

In January, Motorsport Development UK, the body set up by the Minister to co-ordinate this programme, produced its annual report. It makes very sorry reading and is the primary reason for my Question today. The highly publicised £16 million has been reduced by 40 per cent to only £10 million. The report is entirely devoid of any financial details or figures covering salaries, overheads or expenses used in distributing the fund—nor does it explain the value, efficiency or effectiveness to the industry, or the taxpayer, of the objectives. This lack of explanation by a publicly funded body is a scandal.

It appears that MDUK still remains funded by just four of the 12 devolved Administrations and regions, plus the Department for Business, Enterprise and Regulatory Reform, to the tune of only £400,000 each per year from their multi-million-pound budgets. Why is the Department of Culture, Media and Sport now absent from the list of funders? Is it no longer associated with this initiative? Has it kept the £6 million earmarked for this project for some other sport? If not, what has happened to this significant sum and why has this not been made public?

As the report fails to clarify many important points, and there is real concern in the motorsport industry, would the Minister's department be able to provide a clear, detailed financial breakdown of the MDUK performance and expenditure, with regional budgets and spending, and explain what happened to the full £16 million announced by the former Minister to such fanfare? I suggest that this is done in the form of a letter to me, with a copy placed in the Library.

The apparent lack of understanding of current issues in the sport and the industry led me to note that, of the current eight members of the Motorsport Development UK board, just one appears to be fully engaged in the UK motorsport manufacturing industry. I am even more concerned that one member of this UK-focused board is fully employed and living in Bahrain, where he is the director of the Bahrain international circuit, a newly developing competitor to UK circuits. How and by whom were these appointments made?

The chairman of MDUK, when presenting his report, admitted in reply to a question that the body had not,

“achieved much in the area of business development”.

Yet this had been one of the most important objectives for both the Government and the industry. He also said that the industry was in,

“a healthy state, particularly at the high end”.

In contrast to this reassuring view, it has been widely reported that, in fact, the UK industry faces a dramatic downturn at the “high end of motorsport” in the very near future. The sport’s governing body, the FIA, has confirmed that it will shortly require a significant reduction in the spending budgets allowed in Formula 1. As the majority of F1 teams are based in this country, this will commercially affect us far more than any other country in Europe. There will be substantial cutbacks in the employment of engineers in the teams and by their specialist UK suppliers. Sadly, it seems that we will be a victim of our past success.

The Prime Minister’s Strategy Unit discussion paper, issued last month, Future Strategic Challenges for Britain, identified UK motorsport as a prime example of Britain hosting world-class, high-performance innovation and engineering leaders. These skilled employees are precisely those on whom the Prime Minister relies for the future of UK manufacturing; they are all well skilled in advanced, innovative, value-added high-performance engineering. Through no fault of their own, or of their employers, they will find re-employment difficult within this specialised sector during a period of such significant decline.

Will the Minister seek an urgent meeting with the FIA, the MIA, the UK Formula 1 teams and their UK suppliers to see how best these clearly commercial decisions from a sports governing body can be mitigated? When other UK industries faced similar problems, regional and national support was swiftly made available to help re-employment. These skilled individuals are a particular asset to the UK and must be retained here.

The Financial Times, in the same week as the MDUK report, headlined that Britain was losing its global dominance in this sector. British motorsport companies have lost many major global contracts over the past three years. Sadly, this trend continues unabated and unrecognised by either the Government or their MDUK advisers. Most worrying is that this business is not going to the emerging nations of China or India, but rather to our direct competitors in high value-added engineering: the US, Italy, France and Germany. The motorsport industry is regularly highlighted as the perfect metaphor for future British manufacturing by the noble Lord, Lord Jones of Birmingham, as he sells Britain to the world with UK Trade & Investment, as does the FCO.

I am pleased that the redevelopment of Silverstone appears to be making good progress, with planning approval close to being agreed. This will attract many global companies to the UK and create a sound financial base for the British Grand Prix at last. We trust that the Government will do what they can to help resolve any planning matters that are outstanding.

We congratulate the Government on the R&D tax credits. Motorsport SMEs are innovative, creative and competitive, attracting commercial sponsorship for their R&D. They spend over 30 per cent of their annual sales on R&D—nearly three times as much as the pharmaceutical industry. This reaps commercial rewards, delivered on the track, for their sponsors. Outcomes from their substantial investment in innovation strengthen industry partners in defence, aerospace, automotive and maritime areas throughout the UK. In 2002, the industry told the Minister that it required a series of,

“urgent, co-ordinated actions to ensure the leading position of our industry is retained in the face of increasing overseas competition”.

We must actively and intelligently sustain our leadership where it occurs in such high value-added sectors, and not stand by and allow it to decline.

What has happened? After six years, the government response through the MDUK has singularly failed. The fears of those original industry advisers have become reality. I am surprised that no national survey has been undertaken since that delivered by the MIA and the MSA in 2000. Government departments still rely on this clearly outdated survey, citing £5 billion of sales, 38,000 employees and so on. Although the MDUK claims to have spent £10 million, it declined bids by research groups and the industry association to update this vital knowledge. Such research would allow a much clearer understanding of the success, or perhaps failure, of this initiative and the industry that it claims to sustain. Will the Minister’s department work with the MIA and the MSA—the national motorsports governing body—to enable them to update their joint national survey so that they can work with government departments to create a strategy for the future? I am pleased that the leading role of the FIA under the  inspired leadership of Max Mosley in creating innovative environmental technology programmes was highlighted in the recent European Parliament report, CARS 21. The FIA also recognised,

“the role motor sport can play in changing attitudes and customer behaviour towards environmentally friendly technology”.

The urgent need to popularise and increase public demand for energy-efficient vehicles is one of the greatest social challenges that we face while dealing with climate change. In 2003, the world’s first Energy Efficient Motorsports Conference was organised here in the United Kingdom by the MIA to gain the leadership for Britain in this exciting new opportunity. This was actively supported by the Government, but not by the MDUK. Sadly, today, the USA is securing the high ground in energy efficiency in motorsport. Washington recently announced a direct partnership between its Environmental Protection Agency, the American Le Mans Series and the US Department of Energy.

Rhetoric and lack of initiative from the MDUK has allowed global leadership to pass largely to the USA, to Germany through Audi, and to France with Peugeot—another example of the very complacency of which the Minister had warned. In a recent nationwide electronic survey to the industry, over 70 per cent of those who replied said that the MDUK had “not helped their business”. The same number felt that little or no progress had been made in co-ordinating investment into the cluster to widen sports participation or attract world-class events. However, 100 per cent made it clear that these issues, among others, remained critical.

Professor Porter of Harvard University advised the DTI as a world expert in successful business clusters, and explained the importance of industry-respected institutions for collaboration. Such a credible institution was and remains the MIA, which has grown its UK membership by nearly 50 per cent in the same period in which this funding experiment has remained in place, and is fully owned by the industry itself. Its members should be putting their expertise and knowledge into working more closely with government in future to ensure that Britain does not further weaken its position as a global leader.

In the light of that, what are the Government’s plans for Motorsport Development UK once its five-year plan has been completed? Can the industry and the sport return to dealing directly with relevant government departments, all interested regions and devolved Administrations?

14:14:00

Lord Clement-Jones
I start by congratulating the noble Lord, Lord Astor, on an interesting and informative speech and on initiating today’s debate. The motorsport industry and the sport itself are of increasing importance in the UK but they have been little debated in this House and the other place, despite the industrial and sporting success of the industry. Lewis Hamilton has attracted a lot of new viewers to Formula 1 in the past year alone.

I have some links with the sport. Back in the early 1980s my Chinese father-in-law owned a Formula 1 team. In those days you could support a half-decent  team for about £2 million, although that is certainly not the case now. He simultaneously had a Formula 5000 team and a USAC team. I knew many of the drivers well, and I look back with huge pleasure on trips to Silverstone and Brands Hatch, sitting in a trailer at the back of the pits, when our car came well down the field on almost every occasion.

When I was looking at material for today’s debate I was pleased to see that WOMAC, Women on the Move Against Cancer, a charity linked with the motor racing industry, is still going strong and has a Valentine’s Day party annually. I was a great admirer of Jean Denton, Baroness Denton, who in a previous incarnation was a racing driver. I think we all have fond memories of Jean and what she did, both in this House and outside it.

I must admit that when I was sitting in that trailer at Silverstone I had no idea how the industry would develop over the following 20 years. Preparing for this debate and listening to the noble Lord, Lord Astor, have been extremely instructive. It has been a great success. The sport and the industry are inextricably linked, and we have seen something like 500 per cent growth over 10 years. I was pleased that the noble Lord, Lord Astor, mentioned the noble Lord, Lord Jones of Birmingham, because he is a great advocate of the UK motorsport industry. On almost every occasion when he goes to China or India or makes speeches to audiences in the UK, he mentions the great success of Formula 1 and Motorsport Valley. After all, seven out of 11 Formula 1 racing teams have their bases here, and all those engineering companies are clustered in southern and central England.

We have world-class engineering companies serving Formula 1 and other aspects of motorsport as well. As the noble Lord, Lord Astor, said, the sport has an innovation culture, especially now in energy efficiency, with advanced materials technology, design engineering and new product development.

I heard what the noble Lord had to say about the latest statistics, but even a £5 billion contribution to the UK economy is of enormous significance, and it may well be more than that. A £2 billion contribution to exports through 4,000 companies is highly significant, and there should be further research if those figures underestimate the industry’s contribution. Those partnerships with the major car manufacturers involve some 40,000 jobs and some 25,000 skilled engineers. The noble Lord, Lord Jones, and the UKTI have done a good job in promoting the industry and promoting the links with emerging markets such as China and India, as well as Malaysia and Bahrain for good measure. Those links are of huge importance. We all remember the great experience surrounding the Shanghai Gran Prix last year, and the Shanghai international circuit has been forging links with Motorsport Valley. There will also be an increasing transfer of technology to other industries within the UK itself. So we cannot underestimate in any sense the significance of the industry.

The industry has been successful even in mature markets such as Japan. It has been very innovative in terms of selling itself through the annual National  Motorsport Week and Autosport International show, which was held at the Birmingham NEC in January. The industry is no slouch in promoting itself generally. There are also strong links with academic institutions such as Cranfield University, which has an employer recognition scheme for motorsport educators and trainees, and a motorsport engineering and management MSc programme at postgraduate level designed to ensure that there is a pool of high-calibre engineers with management ability. There are some very good aspects regarding the development of the industry.

As well as the role played by the noble Lord, Lord Astor, the industry has many supporters in this House who have expressed concerns about the factors which could lead to the UK motorsports industry losing its dominance. We must take those concerns seriously. The issue discussed by the noble Lord, Lord Astor, that of the function of Motorsport Development UK and the funding provided by the Government and pledged by Patricia Hewitt, is crucial. I would ask the Minister whether it is the case that we have shrunk the funding from £16 million to £10 million. What is the reality of the function of Motorsport Development UK? It is extraordinary that so few people connected with the industry actually serve on its board, and I must say that when I looked at its functions, I was surprised to find that the annual report for 2006 is not on its website; only the 2005 report is posted. That lack of transparency is a great problem.

However, there are some other good aspects. It is great news that the Silverstone plan seems to be on track and that it has the support of the Government and local people. That is crucial because the development of Silverstone is extremely important. I was pleased to see that discussions between the FIA and the BRDC are ongoing, as well as work on the submission of the plan which looks as though it is going to take place shortly. I hope very much that the planning application will have a fair wind.

I turn now to the grassroots funding of motorsport. We know that Lewis Hamilton started his racing career in carting. Making carting available at an accessible price is vital for encouraging budding young drivers to take their place in motorsport, but it appears that carting receives nothing from the National Lottery or from sports distributors. Grassroots funding is needed, so why cannot the motorsport industry receive some lottery funding in this respect?

The noble Lord, Lord Astor, rightly raised several other issues, but I shall content myself with these remarks. It appears that a number of individual members of the Government really do understand the motorsport industry, and I hope that the rest of the Government wake up to the potential and importance not only of the industry but of the sport itself, and respond to the questions being raised today.

14:24:00

Lord Luke
I wish to emphasise some of the remarks made by my noble friend Lord Astor concerning the prospects of the motorsport industry. In so doing I thank him for introducing this interesting Question.

Motorsport Development UK, the body set up by the Government some five years ago to co-ordinate the development programme, produced its annual report in January in which its chairman said, among other things, that,

“the UK motorsport industry was in a healthy state, particularly at the high end, and stable”.

Can the Minister explain the difference between this emphasis and the Motorsport Industry Association’s report that the industry faces a dramatic downturn due to the imminent cuts imposed by the FIA on Formula 1 team budgets? As she knows, the majority of Formula 1 teams are based in the UK and the industry has grown with the success of the teams and assisted by the large amounts of private funds put into the area by the team owners and others. The MIA spokesman said that there are likely to be extensive cutbacks in the employment of engineers both within the teams and their specialist UK suppliers. What will the Government do to help with the re-employment of these extremely valuable human assets to persuade them to stay in this country?

We are also losing increasing amounts of business to our competitors in Europe. Why is this not, apparently, recognised by the Government or, indeed, by their adviser, MDUK? I wanted to call it M-DUCK, but that is not very elegant. What will the Government do about this? Does the Minister agree that there seems to be a shortage of up-to-date information on these subjects? What are the Government doing to find out what the situation is now, not last year or the year before?

I am afraid that I cannot match the experience of the noble Lord, Lord Clement-Jones, as a young driver. My first car in 1953 was an Aston Martin, the Atom, a prototype built in 1939, which is now in the motor museum at Gaydon, near Coventry, so I can say that I have been interested in motorsport and racing cars for well over 50 years. During that time the sport and the industry have flourished.

This leads me to say a few words about Silverstone race track. The British Grand Prix has been held there for more than 50 years and it is famous throughout Britain and the world. It is, indeed, the main reason for the establishment of the motorsport industry business cluster in the area, wherein the UK motorsport industry contributes more than £6 billion to the British economy every year. It employs directly more than 100,000 people. It is under intense threat from new motorsport circuits, for example Bahrain, Istanbul and Shanghai, as has been mentioned, all of which provide brand new, state-of-the-art facilities. It is therefore essential that Silverstone circuit and its facilities are updated to keep the British Grand Prix, and therefore retain the many large and small companies nearby linked to motor racing.

I am sure that the Minister knows of the extensive plans developed by the British Racing Drivers’ Club, the owners of Silverstone, to secure its future as one of the great world venues of motorsport and help to ensure the UK retains its pre-eminence in this sector. The BRDC “vision” for Silverstone includes the redevelopment of the circuit to provide state-of-the-art facilities which should secure the future of the British Grand Prix at Silverstone and a new business park focused on hi-tech production and motorsport uses that will provide flexible and modern accommodation to meet the needs of burgeoning companies in this demanding sector. It includes an advanced technology park for companies with significant research and development needs and an education campus that will take advantage of the hi-tech nature of Silverstone’s motorsport cluster of companies and provide courses across a broad range of specialisms from vocational to higher education. An imaginative dual use of the circuit facilities is envisaged which would help to make the courses very attractive to youngsters. The last thing is to create a centre of automotive excellence with substantial opportunities for economic and employment growth.

I have laid this out in some detail as it deserves wide and continued public knowledge. Plans for implementing this vision are well advanced, as was mentioned by the noble Lord, Lord Clement-Jones, and, as he said, there appears to be broad support for it across key local stakeholders and—this is just as important—relevant planning authorities. Substantial investment is obviously needed, and the bulk of that will undoubtedly come from the private sector. Support and partnership will be sought from many organisations to turn this vision into reality. Can the Minister say what the Government’s view is of this project?

The motor racing enterprise that Silverstone has been for so long deserves government support that will eventually translate into an even more successful operation than it is at present. I hope that the Government will consider it extremely carefully.

I have to conclude by saying how sorry I am that the noble Lord, Lord Drayson, is not in his place. With his current experience of motor racing, he would have been a most useful contributor to this debate.

14:31:00

The Parliamentary Under-Secretary of State, Department for Business, Enterprise and Regulatory Reform (Baroness Vadera)
I must apologise that I cannot quite fill the shoes of my noble friend Lord Drayson in his first-hand knowledge of the sport, but I reassure noble Lords that I am very passionate about the UK industry's competitiveness and what it represents in modern manufacturing, advanced engineering and world-class skills. That is critical in a fiercely competitive global economy. This is about ensuring that we continue to hold pole position as a world leader in this field and seize the benefits that this can bring to manufacturing and the economy more widely.

I acknowledge the enormous contribution of the noble Lord, Lord Astor, to the motorsport industry. However, I may not quite share the depth of pessimism that he expresses about the sector. Motorsport covers a wide range of events and activities; sometimes we focus only on the high profile world of Formula 1, which is at its pinnacle. The motorsport industry in the UK plays a crucial role in showcasing UK engineering excellence globally and in acting as a magnet for inward investment. Our leadership is recognised globally. As the noble Lord, Lord Clement-Jones, said, seven of the world’s 11 top Formula 1 teams are based here.

The reasons for that are clear. We have a sector that specialises in the very best hi-tech manufacturing. UK companies conceive, design, develop and manufacture everything from hi-tech chassis, seats, cockpits, seatbelts and helmets to market-leading engines, transmissions brakes and suspension systems. They produce a seemingly endless range of precision components.

Research data from the Motorsport Academy last year shows that the sector is supported by 2,500 engineering companies with more than 100,000 employees. Most of those are skilled engineers or technicians. Those companies are growing. There was discussion of the value that they contribute to the economy. That research shows that it is about £6 billion, of which 60 per cent is exported. Two-thirds of the companies have sales of more than £500,000; more than 80 per cent expected to grow by 50 per cent in the next two years; and almost half expect to recruit new people.

The noble Lord, Lord Luke, refers to contracts being won by overseas companies. It would be fair to say that many UK companies have also been successful in winning contracts. For example, the majority of the A1 GP contract apparently lost to Italy has been subcontracted to UK companies.

People are key not just to the success of our motorsport industry but to the transfer of technology to other sectors. Many motorsport companies operate in the mainstream automotive industry, with highly skilled engineers bringing expertise and know-how to innovate new products and processes. It is one reason why the UK is a global centre of excellence for automotive powertrain design and production and all aspects of performance engineering. There are many examples of technology transfer. Most recently, Cosworth engineering used its expertise in high quality, short production runs to supply engine parts for Rolls–Royce marine engines.

For government, it is critical to sustain this success, which is why we established the Motorsport Competitiveness Panel in 2002. It identified market failures around the development of the industry at all levels from engineers to drivers. The panel of senior sport and industry experts, including the MIA, also recommended the need for an independent body to,

“fill a gap in the market, lead, coordinate and prioritise activities”.

This resulted in 2003 with the creation of Motorsport Development UK, with a budget of £11.5 million. It undertakes five key programmes to tackle these market failures; that is, skills in the workforce, the motorsport academy, the motorsport learning grid—which is targeted at getting schoolchildren interested in engineering careers—energy efficient motorsport, business development and widening participation more generally by the public.

Of course, I will facilitate a detailed financial breakdown to be made available of MDUK’s performance and expenditure costs. I recognise the noble Lord’s concerns regarding a shortfall from the originally foreseen £16 million of funding. As I understand was made clear in a Parliamentary Question in 2005, it is correct that DCMS has been unable to provide the £3.5 million funding that it envisaged due to limited resources and other priorities. However, I should like to clarify the noble Lord’s point on the remaining £1 million. This has been spent as part of SEEDA’s contribution and was expended directly on a knowledge exchange facility at Oxford Brookes University. If the noble Lord wishes, I would be happy to provide more information.

Through the academy and the learning grid, 2,500 people have been helped to develop their engineering skills. Importantly for the future, more than 100,000 children have taken part in learning grid activities such as Formula Student, Formula 1 in schools and Greenpower, thus enthusing young people—boys and girls alike—to have an interest in engineering. Further support has gone into the volunteers; for example, more than 1,500 new marshals have been recruited and a further 800 have been trained. Without these volunteers many of today’s events could not take place.

The noble Lord expressed surprise that statistical data have not been refreshed since the MIA survey in 2000. That does not, of course, take into account the work that MDUK has done in developing Motorsport 100, which I understand is proving to be a worthwhile barometer of business confidence in the sector, as well as the data that I quoted earlier that the Motorsport Academy research has made available. With my department’s funding devolved to the regional development agencies, I would nevertheless suggest that the MIA discusses the opportunities for making a proposal on this subject with the relevant RDAs. Additional data that are fit for purpose are always valuable.

With environmental impact as one of the key issues facing this and other industries, the noble Lord rightly points out the important contribution that the industry makes to energy efficiency. The energy efficient motorsport programme—EEMS—has directly supported 15 projects to encourage energy efficiency, with some notable successes; for instance, the first biofuel success in a major championship—the car co- driven by my noble friend Lord Drayson—and the first class win for a hybrid vehicle, and, in Formula Woman, the first championship run entirely on biofuel.

The UK industry is pioneering the use of alternative race fuels such as bioethanol, LPG and diesel. For instance, the A1GP series recently enrolled as an EEMS campaign partner. The series has switched to biofuel and has committed to cut waste, to offset unavoidable emissions and to promote environmental awareness at its meetings around the globe.

My department will continue to fund MDUK until 2009, as committed. There is no budget for this activity beyond that date, but the Government’s involvement and interest in the industry, which is wider than any one organisation, will continue. I will be meeting MDUK in June to hear about the progress made and to discuss the future when it has its board meeting. I can respond to the noble Lord’s suggestion by saying that I would also be delighted to meet with the FIA, the MIA, and the UK Formula 1 teams.

Looking ahead, we must ensure the long-term competitiveness of the industry. That means starting with young people, so that we sow the seeds of success in our classrooms. We are keen to ensure that programmes such as the academy and the learning grid can continue to develop an enthusiasm for engineering amongst younger students, and to develop skills once those young people are in the workforce.

As noble Lords mentioned, my noble friend and ministerial colleague Lord Jones is no slouch when it comes to being a tireless champion all over the world. I am pleased to say that UKTI has recently agreed that advanced engineering, including this industry, will be one of its new strategic sectors and is planning support for four UK events.

It is essential that we retain Silverstone Grand Prix as one of the showcase events for UK design engineering services. I assure the noble Lord that we will help in any way that we can if planning or any other issues arise. As the noble Lord, Lord Luke, said, I am aware of the exciting designs that have been developed for the pit and paddock area and my department will continue to be engaged in discussions on its progress.

I am not sure that I would paint as bleak a picture as the noble Lord did about the state of the industry. As ever, we know that in a fiercely competitive global environment, there is absolutely no room for complacency. I welcome this debate and will ensure that we will continue to maintain our interest in this industry.

The Deputy Chairman of Committees
The Committee will adjourn until three o'clock.

[The Sitting was suspended from 2.41 to 3 pm.]

Energy: Renewables

Lord Beaumont of Whitley
asked Her Majesty’s Government what plans they have to develop the production of renewable energy in the United Kingdom so as to reduce the United Kingdom’s vulnerability to global gas and oil price fluctuations.

The noble Lord said: The provision of affordable local and renewable energy is needed by everyone in this country today, and the question is whether this Government are doing enough to that end. The most obvious answer is that they are not doing enough, that there is real fuel poverty in the country and that people are suffering through the inability to access renewable energy supplies on good financial terms. At the moment it is being suggested that if you want renewable energy, you have to have vast wind farms operating on a very large scale. That is not necessary. Local energy is available at a low price for those who take the trouble to seek it out, and here I pay considerable tribute to the London Borough of Merton on its initiative to provide its residents with as much locally available energy as possible. It is no credit to this Government that it has been left to Merton to develop an initiative in this way, and that the borough had to live with considerable insecurity before it realised that it was acting inter vires, which a local authority should not have to do. The good thing is that Merton is now able to carry on with its initiative, helped by a Private Member’s Bill which is going through Parliament at the moment.

Local renewable energy supplies are desperately needed because without them the country will not be able to survive the challenges from abroad. Germany, for instance, has an immense amount of renewable energy, a large quantity of which it relies on, and a very small amount of non-renewable energy. Other countries in Europe and elsewhere also do better than we do. Only two or three very minor countries in Europe do less well than we do in producing renewable energy.

It is therefore with great interest and genuine curiosity that I seek to learn what the Government think that they are doing in this field and how they will be able to meet the needs that are very real and widespread.

15:06:00

Lord Berkeley
I congratulate the noble Lord, Lord Beaumont, on securing this debate on a very interesting subject. Your Lordships have many Questions on renewable energy, some of which the noble Lord, Lord Beaumont, has led or taken part in, and it is good to be able to discuss this subject for a little longer in this debate. I will concentrate most of my remarks on wind energy.

I start by following up a rather interesting answer that I got from my noble friend Lady Taylor on 7 February about the MoD objecting to many wind farm developments. The message that I have been getting from people in the industry is that the MoD tends to object informally to virtually every application that is submitted or every proposal that is discussed with it in advance of putting in a formal planning application. Therefore, it is probably not surprising that my noble friend Lady Taylor said:

“In the past three years we have objected to only 31 applications, and … raised no objection to 352 applications”.—[Official Report, 7/2/08; col. 1165.]
 

But there is the whole question of the costs of achieving planning permission, which I shall come on to later. If one has spent several years trying to get a decision out of the MoD before you put in a formal application, or if it changes its mind halfway through the process, it costs companies an awful lot of money. 

I know that the objections may only be informal, but there seems to be a certain inconsistency about the approach. I am talking primarily about land-based wind farms, but DBERR has produced plans for an enormous increase in wind farms across the North Sea, which seems a most excellent place to put them, and in the Thames Estuary. I find it very difficult to understand what the MoD’s real objections are. Apparently it is to do with the blades turning and causing clutter on radar screens, which means that those operating the radar screens cannot see what is behind the turbines for a fraction of a second if a plane is coming in.

I look at what is on the other side of the North Sea and I see Belgium with rows and rows of wind farms along the coast. I think they have been there for 20 or 30 years. Germany has an enormous number of wind farms. I think that the Netherlands has two and so has Denmark. If the Belgian air force was going to invade us, would it fly over its own windmills, then go along the sea and would the MoD not be able to pick it up for a millisecond? Are we fighting the right war? I suspect that it the MoD could put a little bit of money into upgrading these radar screens—I know that it is very short of money but we could always cancel Trident or a few other things—and try to make it less difficult for these private-sector promoters to get their wind farm proposals through the planning system.

Then you have to look at the North Sea, which has a large number of oil and gas rigs, as we all know. They have motors that go round and round. One would think that they would also show up on radar screens. Surely the difference between a wind turbine and an enemy aircraft is that the wind turbine is fixed in one spot, although it is going round, whereas an enemy aircraft is flying rather fast. One has to question whether there is a significant problem here or whether the MoD does not have the relevant resources. I am told by people who know much more about this than I do that its real problem is technical and procedural and concerns resources. One has to question whether it is using the proper analytical tools to assess wind farms. It is very difficult when it says, “That’s all right. We think this farm will be all right”, but when the project is in its first or second year of development it suddenly says, “Sorry, we’ve changed our mind. It’s not all right and you’d better go somewhere else”. A lot of money will have been spent by then.

I hope that my noble friend’s reply will encourage the MoD to develop a better, more consistent process for dealing not just with formal applications, because it is probably too late by then, but with some of the informal approaches that always have to come first. That will require resources but a policy direction is needed. I was very pleased that my noble friend said in reply to my Oral Question that the MoD was fully in favour of wind farms. Therefore, I hope that this matter can be resolved quickly. If it is not, we shall not meet our targets; that is quite clear. A large number of companies are waiting to invest in these wind farms. The offshore visual intrusion is very small. The costs involved are a bit higher but it seems that we should push ahead with these structures—DBERR wants to proceed with all speed—as they would help to increase our proportion of renewable energy. Therefore, I hope that my noble friend will give me comfort that government will work collectively towards achieving this growth and that the MoD will be helped to come up with a consistent policy.

The British Wind Energy Association very much welcomes draft PPS22, the planning guidelines, which are designed to bring consistency into the process. When you read that 50 per cent of applications in England are approved compared with 94 per cent in Scotland, you realise that that is a very big difference. When I find that Devon and Lancashire have rejected every application whereas Yorkshire has accepted 100 per cent of them, I think there is something wrong. I hope that PPS22, when approved, will move things forward so that we can have a consistent process for constructing these wind farms. The costs would then come down and that would benefit everyone.

I have one last question for my noble friend. Something that worries me about renewable energy is the related price of oil. From her time at the Treasury, she will know that the price of oil in the Treasury forecasts is something like $57, whereas in Germany and France, the government think tanks are talking about $200. They cannot both be right. I realise that forecasting is always wrong, but I worry that the UK appears to be totally out of line with those two countries, our next-door neighbours. I do not know who is right, but it will affect just about everything we do in this country and it would be nice to know why the difference and whether the Treasury is rethinking it.

15:16:00

Viscount Eccles
I am grateful to the noble Lord, Lord Beaumont, for giving us an opportunity to debate this subject. I very much agree with him that there is a dilemma about what is affordable and also renewable. It is a feature of quite a large proportion of the renewable options that they are not easily affordable. I am not going to follow the noble Lord, Lord Berkeley, down the wind avenue. I remind the Committee that quite a lot of people like to find a way to fly below the radar.

I will concentrate on the renewable transport fuel obligation as it relates to biodiesel. It also relates to bioethanol, and they both have the same targets. Those targets are set at 2.5 per cent of the total diesel supply from next month, rising to five per cent in 2010.

Back in November 2006, a Committee of your Lordships' House stated:

“It seems highly unlikely that the biofuels directive in its current form can provide the necessary impetus for the EU to reach the 2010 target of 5.75 per cent market share”,
 

which is what the target was and still is for quite a lot of members, but there is discretion to set it at a different figure. At that time, an equivalence was worked out of about $80 a barrel as being the price at which biodiesel could reasonably compete with fossil fuel oil. Since then, the fuel oil price has risen and so have the prices of the feedstocks for biodiesel. So it is a moving target—that is very much along the lines of the point made by the noble Lord, Lord Berkeley.

Biodiesel has not yet been produced economically; it has always needed subsidy. I go back a long way with biodiesel. I remember, when operating for the Commonwealth Development Corporation, looking at experiments in Malaysia of firing agricultural tractors on 100 per cent palm oil-derived biodiesel. It worked perfectly well. If I remember rightly, at that time the oil price equivalent needed to be $40 a barrel, but in fact was around $15.

The first generation of biodiesel has, to date, depended primarily on palm oil, which is a tropical oil; soya oil derived from soya beans, which is a semi-tropical to hot temperate crop and cannot be grown in the UK; and oilseed rape, which can be and is grown here. It is the only crop which might go some way to meeting the aim of the noble Lord, Lord Beaumont. A further small source in the UK is to be found in tallow and spent cooking oil, and indeed it seems that it is being used pretty efficiently. Some buses in Scotland, no doubt having had their engines modified, are running on 100 per cent biodiesel made from tallow and spent cooking oil. However, production is necessarily limited to very small quantities.

The problem at the moment is price. Since November 2006 when the House of Lords committee reported on this, the prices of the three chosen feedstocks for biodiesel in the first generation have more than doubled. The price of fossil fuel oil has also gone up, of course, but not by nearly as much. Palm oil and soya bean oil prices have been reaching new highs in the past few weeks. In November 2006 palm oil cost around $500 per tonne, while today it is achieving around $1,300. The point is that these prices are being driven up by the demand for food products, not by the demand for biodiesel, although it has been recognised in recent reports from the Department for Transport that it does add a little to the price pressure. So, given the relative price levels and the very high price of the best feedstock for biodiesel in the first generation, which is undoubtedly palm oil because it provides a much higher yield of oil per hectare than either soya or rapeseed, all three sources are uneconomic under the present UK regime because it allows for only a 20p reduction in the 47p duty.

I am not suggesting that we should subsidise biodiesel to any great extent; rather I am pointing out the dilemma here and I do not want to be particularly critical because it is simply a reality. Indeed, the European Union website on the issue of biofuels is remarkably silent at the moment. Not much on it has been produced recently. It could be that someone is saying that unless and until we reach around $150 a barrel for oil, biodiesel is almost hopelessly uncompetitive. There are imports from the United States of America of a blend called B99. However, rather surprisingly, the US subsidises its biodiesel production from soya beans to a much greater extent than we subsidise ours.

Where are we going with this? At the moment, we are looking forward to the second generation. We are being promised results from the jatropha plant, which produces an oil-bearing nut. The nut is inedible and the plant grows in India in hot, barren areas on not particularly fertile land. But it will be five years or even more before any major commercial exploitation of jatropha can be made.

This leads to questions, which follow up on one of the opening remarks of the noble Lord, Lord Beaumont; namely, that the United Kingdom is very far down the league of producers of renewable energy and far down the league of producers of biodiesel, which again is led by the Germans using, in the main, very large quantities of rapeseed.

My first question is: what is the current production of biodiesel in the United Kingdom? Secondly, what percentage of installed capacity is that production? My information is that there are plants working at well under capacity and one plant that perhaps is not working at all. Thirdly, what is the level of imports? Fourthly, what is the best estimate of the percentage of biodiesel use which the UK will achieve in 2008? I think that it will be well below 2.5 per cent. Finally, are we aiming at the right target? If so, what plans do the Government have to meet it?

15:25:00

Lord Redesdale
I, too, thank my noble friend Lord Beaumont of Whitley for initiating this debate on using less oil and gas through replacement with renewables. Climate change has not been mentioned a great deal. Of course, a large number of Peers have used the Committee stage of the Climate Change Bill to make Second Reading speeches. I speak as someone who has sat on the Front Bench and has listened to the many interesting contributions.

It is very clear from the Climate Change Bill that, although we lost the amendment on 60 per cent to 80 per cent, with the Government saying that the 80 per cent would be initiated by the Committee on Climate Change by 2050, there is a massive hill to climb if we are to meet those targets. I have a real issue with that because the target is almost aspirational and will be incredibly difficult to achieve. We are not short on aspirations. In November, the Prime Minister said:

“Globally, the overall value added of the low carbon energy sector could be as high as $3 trillion per year worldwide by 2050. It could employ more than 25 million people in jobs. If Britain maintains its share of this growth there could be over a million people employed here in our environmental industries within the next 2 decades”.
 

I say that the targets are aspirational because, if we are to achieve this, there have to be enormous moves now. The first moves that have to take place are in the regulatory sector, which is where I have a real issue. I am no stranger to trying to prod the Government and I introduced a Private Member’s Bill a number of years ago, which then became Mark Lazarowicz’s Climate Change Bill in another place and the Government added a large number of clauses. I remember going to the DTI and my researcher saying that trying to get the clauses accepted by the DTI was like head-butting a swamp. It was very hard work and very messy. You felt slightly degraded at the end of the process and you did not think that you had got anywhere at all.

I now realise that everything has changed and there is a great deal of movement. During the Private Member’s Climate Change Bill, there was talk about permitted development orders being changed. I thought that we had won this battle. However, perhaps the Minister would write to me on that because it is unfair to spring it on her at this stage. There was a proposal to deliver from DCLG in the Changes to Permitted Development: Consultation Paper 1—Permitted Development Rights for Householder Microgeneration, which stated:

“A revised system would deliver a more permissive regime than exists at present and remove the need for planning applications for many householders”.
 

We thought that that was an excellent application.

However, we are looking now at an amended situation—this comes from the Renewable Energy Association which is particularly concerned about this. I thought that under permitted development orders we could do just about anything as long as long as they meet commitments. But it referred to:

“A height level which is set so low as to prove impossible for approximately 50 per cent of solar thermal panels and installation brackets. A mere increase of 50mm would solve that problem”.
 

I very much hope that this is not the case, because it seems utterly ridiculous that such a small planning application would knock out half the whole solar/thermal industry, which would have a devastating impact.

Another issue is noise levels. With no evidence base to support the Government’s assertion, noise levels have been reduced to, we believe, 40 decibels. This would mean that the noise produced by small microgeneration turbines would have to be almost less than background noise. It seems ridiculous that we should not go back to the World Health Organisation limit of 45 decibels. I speak on this issue particularly as I fought through the planning process to install a small wind turbine. It was a 6.2 kilowatt turbine, which you would not have heard from 5 metres away; yet everyone said that it would be heard from miles away. It is very difficult to get these things through. Microgeneration takes a lot of effort to bring about. If this reduction proves to be the case—I very much hope that the Minister can give some guidance on this—it is yet one more step backwards for the microgeneration industry, which has suffered. It will also mean that the Prime Minister’s assertion that we will get this wonderful expansion in the economy of microgeneration will not be met.

We have that problem not only with microgeneration. At a conference recently, I talked to an investment banker who invests in large-scale renewables. His point was that we have a real issue here. It is very easy to say that we should put turbines not onshore but offshore, and that that will solve the problem. The problem is that we never got into the turbines market, and Denmark leads the field in that. The noble Lord, Lord Berkeley, mentioned the MoD. I have always wondered whether Denmark is totally safe because it is surrounded by turbines, or is indefensible. It does not seem to be too worried about that, but that is a side point. We live in a global market, and there are only a certain number of turbines. We have very large aspirations. The London Array turbine field will be the largest turbine field in the world. It will be rather disappointing if we have this aspiration to build this but we cannot supply the turbines because of the planning difficulties and the hold-up. The people who produce the turbines are quite happy to sell them to other countries, and the market has rocketed up, especially in the United States. Onshore turbines in the US are a very rapidly growing area. It is much easier to produce and deliver those turbines there without the cost associations. We could find ourselves with great aspirations without being able to meet them.

I very much share some of the concerns expressed by the noble Viscount, Lord Eccles, about biofuels. I have severe issues with biodiesel. Indeed, I sat on a Select Committee on Science and Technology some 10 years ago—I cannot remember exactly when. The committee looked at the whole issue and discovered that you would have to plant up all the agricultural land in the country to meet this country’s diesel requirement. There is a real problem with saying that we will try to attach biofuels to all this and skew the economics of the market. I have a real difficulty with the Americans looking at corn ethanol, which does not make sense financially or in emissions terms because it produces far more carbon.

I end with a couple of other points. This debate gives us the opportunity to say that the Energy Bill will come to your Lordships’ House. I followed a number of amendments with great interest in another place, although unfortunately they did not get anywhere. I am happy to see from the Conservative manifesto that we and the Official Opposition have a great deal in common on this, and the Government may receive a reasonably rough ride if they are not a little more accommodating. These are basic issues, and we will have problems meeting our targets on renewables if we do not address them.

Our first approach should be to adopt the EU renewable electricity directive priority access provisions. That involves the whole thorny issues of feed-in tariffs, which is an important point where the electricity companies are going to have to agree to this, so that microgeneration makes some economic sense. The second issue would be to change Ofgem’s primary remit to align it to national policy. In the past, Ofgem has had two main gods in its pantheon, reliability and cost, but a third has to be added now—I know that Ofgem has gone a great deal further in the past few years to meeting it—namely, reducing carbon emissions.

The third approach involves enabling powers to bring in a production tariff for on-site renewables. It is unfortunate that that was rejected, because it is a major difficulty. Merton was mentioned by the noble Lord, Lord Beaumont. This is a hindrance to on-site renewables. The last one, which was in the papers today, is the ability to feed renewable biogas into the natural gas network. This could be a massive source of income for the dairy industry, which could get rid of its slurry and pump it into the national grid. I know that there are certain problems with that, but it would be rather nice if you could heat your milk in the morning, if you wanted hot milk, using the gas coming from the cows that produced the milk.

15:36:00

Lord De Mauley
Whether or not one accepts that the emission of carbon and other gases is the major cause of global warming, to which the noble Lord, Lord Redesdale, referred—the case is pretty compelling, despite the fudged evidence—the sceptics miss two further key points. First, pollution is a major risk to public health; the incidence of asthma, for instance, particularly among children, is extremely high in the world’s most polluted cities. Secondly, we in Britain face a serious energy security risk. So I join other noble Lords in congratulating the noble Lord, Lord Beaumont of Whitley, on obtaining this timely debate, which is helpful in that it specifically links the benefits of renewable energy in reducing emissions to the major risk area of energy security.

One year ago this month, the Government signed up to an EU target of generating 20 per cent of all energy from renewables by 2020, but they are already reported to be wavering. At present, we get just 2 per cent from renewables, so that target is little more than a pipe dream. Another of Labour’s targets was to reduce carbon emissions by 20 per cent below 1990 levels by 2010, but that target will now not be met either. So the true answer to the noble Lord’s Question of what plans the Government have is, at least until the Energy Bill, “None”. They have had targets, but targets are not plans. Targets that are not delivered on are, as the noble Lord, Lord Redesdale, said, worthless. The Climate Change Bill sets more targets, but why should we believe in them?

On the other hand, approximately 30 per cent of our existing generating capacity will be shut over the next 20 years, leaving a significant capacity gap. Until quite recently, we were a net exporter of oil and gas, but have now become a net importer of both. Our gas production peaked in 2000, and from now on the decline is accelerating. The Government have admitted that our reserves have also declined faster than they expected. There was a gas and electricity price shock in the winter of 2005, as a result of the tightness of the margin between supply and demand. Then, in February 2006, there was a fire at the Rough gas storage facility. By March that year, a cold snap across Europe and insufficient gas flow through the interconnector further exacerbated problems. Last summer there were price cuts; then in the new year most of the suppliers increased their prices. So we continue to be exposed to considerable price volatility, highlighting the concerns of the noble Lord, Lord Beaumont.

Clearly, we have a problem. Could this at least in part be solved by renewables? My noble friend Lord Eccles, importantly, also referred to the conundrum of whether this can be done affordably, though in part that will depend on how fossil fuel prices move in the future.

The renewables obligation is the Government's main mechanism to provide financial support to renewable energy technologies. Provision is made in the Energy Bill to alter the renewables obligation to try to stimulate more rapid development. Offshore wind—the noble Lord, Lord Berkeley, spoke about wind—wave and tidal technologies are given especial encouragement by the introduction of banding. Connection of large-scale offshore renewables to the electricity network will be encouraged. Microgenerators are also to be given further support. However, the Bill was published before the new EU renewables targets were demonstrating a regrettable lack of co-ordination.

My noble friend Lord Eccles and the noble Lord, Lord Redesdale, spoke about biofuel, especially biodiesel. We are now just three years away from a 5 per cent biofuels target that will not, as my noble friend said, be met without significant imports, especially of palm oil. To achieve it, the Government will need to do more to stimulate competitive local production of biofuels, while guaranteeing that that does not threaten our food security and that any necessary imports do not lead to further destruction of rainforests—a crucial carbon sink.

No debate on energy security can ignore fuel poverty, and the noble Lord, Lord Beaumont, spoke of that. Britain is embarrassingly high up the list of European culprits for what is known as excess winter mortality. The Energy Minister told the “Today” programme that his hands were tied when it came to increased spending on fuel poverty, but that he was,

“sure the Treasury are listening”.

Is it appropriate for government departments to communicate with each other via national radio on issues as important as this? The Government have set a target to eliminate fuel poverty in vulnerable households, but Ministers have been forced to admit that the total number of vulnerable households in fuel poverty is likely to have risen by about a million households in England between 2003 and 2006. That is a serious problem and we will be grateful for the noble Baroness's explanation as to how the Government plan to deal with it.

Although the marine, Climate Change and Planning Bills are all part of the Government's attempt to secure Britain's long-term energy supply and climate change strategy, much of the strategy on energy is contained in the Energy Bill. Although we welcome much of it, I join the noble Lord, Lord Redesdale, in saying that we think that they could do better. Perhaps I may give some brief examples.

First, underpinning all policies in the Bill should be an effective carbon regime, but it is absent. The EU Emissions Trading Scheme does not currently provide that effective system, so we can unfortunately expect to continue to see wild fluctuations in the carbon price. Secondly, the Government should be committing to develop more gas storage capacity, but I can find nothing in the Bill that will promote that. Thirdly, although the Bill establishes the regulatory framework to explore the potential of carbon capture and storage, CCS is not included in the renewables obligation, the source fuel not actually being renewable. But the process captures carbon, which contributes towards achieving the same objective. That, and delays, have forced BP to pull out of the Peterhead CCS project, undoubtedly setting back the development of CCS by several years.

A number of companies have proposals for more advanced and cleaner pre-combustion CCS projects, which are in jeopardy because of the Government's preference for post-combustion technology. Moreover, it is not clear that the Bill establishes provision for liabilities. The safety of the carbon dioxide stored in a geological reservoir must be monitored for leakage. So there are a number of issues here.

Fourthly, the Bill aims to improve the effectiveness of the renewables obligation by banding the technologies depending on the respective levels of investment, but more than half of renewables electricity sourced under the renewables obligation has been biofuels, while almost a third has been from onshore wind. Wind, of course, has a part to play but, since it generates electricity only when the wind blows, it must be used as an appropriate proportion of total renewables. The renewables obligation would have a much greater impact if it was more broadly spread and if it provided better support for technologies for which there was less public resistance.

Fifthly—the noble Lord, Lord Redesdale, referred to this—the Bill inadequately addresses feed-in tariffs, despite support from the Prime Minister’s own guru, Sir Nicholas Stern. The renewables obligation excludes microgeneration and technologies, about which the noble Lord, Lord Redesdale, spoke, and technologies to harness excess heat and to generate electricity from waste, for example. Feed-in tariffs provide a potent response, and the Government’s position is as yet equivocal.

Sixthly, there is still no clear statement on the disposal of nuclear waste, which is essential. Lastly, the Bill is also missing the key element of energy efficiency. There is no mandate for smart meters, which would not only make people, especially the millions in fuel poverty, more aware of the levels of energy which they are consuming, but would give much better information to suppliers to manage the peaks and troughs.

I look forward to the Minister’s reaction to these points and others made by noble Lords; they will no doubt be brought up again when we debate the Energy Bill.

15:46:00

The Parliamentary Under-Secretary of State, Department for Business, Enterprise and Regulatory Reform (Baroness Vadera)
I am very grateful to the noble Lord, Lord Beaumont of Whitley, for securing the debate.

We face two major energy policy challenges: tackling climate change and ensuring energy security. The noble Lord, Lord De Mauley, asked a number of detailed questions about the Energy Bill, and I will endeavour in the time allowed to answer those and many of the other questions that have been asked. Given the opportunity to debate the Energy Bill, perhaps some of those questions could be answered then. I will write to noble Lords in response to any specific questions that the noble Lord may have.

Renewables have an important contribution to make, but the link with security of supply is not simple. The Government are absolutely committed to renewable energy as a key contributor to meeting climate change goals. If, for example, we raised the level of renewable energy to the 20 per cent of UK electricity generation proposed, we would reduce our total carbon emissions by 10 per cent.

The noble Lord, Lord Beaumont, referred to the relatively low levels of the UK’s deployment of renewables compared with some of our European colleagues. The UK has traditionally relied on secure sources of domestically produced oil and gas, so our sources of renewables, such as wind power, are relatively expensive. Other member states have used other energy sources, such as biomass and hydropower, so they have higher renewable levels than the UK for historic reasons.

The noble Lord also talked about the local generation of renewable sources. The Department for Communities and Local Government recently published PPS1, which requires local authorities to consider climate change and renewables in local planning frameworks. We also provide grants for low-carbon building programmes.

At the end of last year, we launched a strategic environmental assessment on a plan for up to 25 gigawatts of new offshore wind development rights in UK waters. This plan could increase the potential for offshore wind by 2020 from 8 gigawatts to 33 gigawatts, which is enough power for the equivalent of all UK homes. This year we will overtake Denmark as the country with the highest operating offshore wind capacity in the world. We are rated No. 1 as an investment location for offshore wind by KPMG.

We have also launched a feasibility study into a possible tidal power generation scheme on the River Severn—a project with the potential to provide 5 per cent of the UK’s electricity needs. We are introducing measures to strengthen the renewables obligation to allow renewables to compete fairly with lower cost, fossil-fuel-based electricity generation. Members of the Committee have discussed feed-in tariffs extensively, but will be aware that we will look at all options, including feed-in tariffs for microgeneration, as part of the consultation on the new renewables energy strategy.

In April, we will introduce a renewable transport fuel obligation and reforms for the planning regime, which will remove some of the main barriers to renewable deployment. But I undertake to discuss with the DCLG the specific issues that have been raised by the noble Lord about planning and noise levels. Under current measures, we expect that by 2015 we will have tripled the amount of electricity that we can get from renewable sources and by 2010 we will have increased renewable transport fuel fivefold.

The noble Viscount, Lord Eccles, asked about biofuels and biodiesel. The bulk of biodiesel is sourced from eastern Europe and the prices are suppressed, which has led to the mothballing and dramatic cuts in production of UK plants to which he referred. Current biofuel production capacity in the UK is 1,000 kilotonnes per annum. We have concerns about the sustainability of biofuels. Changes in land use and the impact on food prices are a major concern. As a result, it is anticipated that crude oil will provide a significant portion of this.

On 21 February, we announced that the Renewable Fuels Agency will review the emerging evidence of the indirect impacts of biofuel production. The initial analysis will be provided to Ministers as soon as possible with a full report to follow during the summer, which I am sure will be available. It will take into account in particular those indirect impacts, including deforestation and the conversion of permanent pasture, which are a concern.

Security of supply is about reliability and affordability. Renewables could play a key role in reducing or increasing dependence on imported fossil fuels. At times of high demand, they can reduce the use of more expensive fossil fuel plant in the generation mix and result in lower annual average energy prices, as well as lower carbon emissions. But renewable energy is neither cheaper nor more reliable at this point. As we have discussed, the prices of biofuel and biomass are volatile and may not be domestically sourced. Other renewable sources, such as wind and solar, have zero fuel costs, but they are currently expensive to install.

Intermittent renewal sources, such as wind and wave power, display some regenerating capacity, but not on a like-for-like basis. We will need both other forms of low-carbon base-load capacity to be sure that we have sufficient responsive generation to deal with the effects of intermittency. These issues will be particularly relevant at the levels of renewables needed to meet the EU 2020 target and they become particularly pressing.

I assure my noble friend Lord Berkeley that we are in discussions with the Ministry of Defence about their objections related to interference with radar systems in air traffic controls and defence radar. We are working with MoD air defence to identify mitigation solutions and evaluate replacement radar in order to minimise objections to wind farm developments. The MoD will be in a position to confirm or not whether the new air defence radar technology works in mitigating the interference from wind farms by the end of 2008 after the first new such radar has been installed at one of the east coast radar installations.

Renewable energy has a part to play, but does not entirely solve the security of supply issue. Our energy policy therefore focuses on promoting energy efficiency, ensuring security of supply by allowing the most diverse energy mix possible and promoting open and liberalised markets. The starting point of any sensible energy policy is to save energy, which is one of the most cost-effective ways to reduce carbon emissions. So we are introducing measures which are expected to reduce carbon by 2.3 million tonnes a year by 2020. Alongside increasing energy efficiency we are ensuring a diverse energy mix. By 2020 we will be importing at least 60 per cent of our gas. It is clearly in our interest to ensure that we do not become over-dependent on any one region of the world for our supplies.

In addition to a range of geographical sources, we need a range of low-carbon technologies, and to operate in a competitive energy market. With an independent regulator, we can ensure that energy prices continue to remain competitive, although I acknowledge that at times they are higher than consumers would like. That means that there has to be a place for nuclear, for carbon capture and storage and for necessary new investment in fossil fuel plants, as well as renewable sources.  

The noble Lord, Lord Beaumont, referred to fluctuations in oil and gas prices. There are of course legitimate concerns about volatility. In the past five years, wholesale oil prices have ranged from $22 to $98 per barrel—I have not yet seen the $200 per barrel figure—and gas prices have ranged from about 1.5p per therm to £1.80. That is not atypical for traded commodities. Nickel prices have ranged from $8,000 to $50,000 per tonne in the same period. We expect a certain degree of volatility and expect that trend to continue in future. That said, UK retail gas prices are still very low compared with the European average. After the price rises in January and February this year, UK domestic gas prices for medium customers are estimated to be 33 per cent lower than the EU median, 39 per cent lower than Germany and 20 per cent lower than France.

UK wholesale gas prices are driven higher because they are linked to gas prices in the rest of Europe, and wholesale gas prices on the Continent are strongly linked to the price of oil. Along with that linkage, the predominance of rigid long-term gas supply contracts means that European gas markets are less responsive than the UK’s to gas flows and do not always respond to price signals—as we found a couple of winters ago, as the noble Lord, Lord De Mauley, mentioned.

We strongly support the European Commission’s proposed legislation to develop transparent, well regulated EU gas markets, bringing benefits to consumers throughout the EU. We as a Government remain completely committed to the EU's 2020 renewables target. I refute any suggestions that that commitment has been wavering; we are firmly committed to meeting our fair share of that target. Over the summer, we will consult on the most cost-effective way to meet the UK’s share, and we will introduce a new renewables strategy next spring, showing our continued commitment to renewables as a part of a coherent energy policy.

I am conscious of the time and I will come back on any questions that I have not managed to answer in writing or in debate on the Energy Bill.

[The Sitting was suspended from 3.57 to 4 pm.]

Transport: Rail and Air Travel

Lord Teverson
asked Her Majesty’s Government what plans they have to substitute rail travel for air travel within the United Kingdom.

The noble Lord said: I am delighted that we are having this debate, and I thank everyone else who is participating at this time on a Thursday. Although I travel by rail backwards and forwards to Cornwall these days, I have to admit that today, for various reasons, I am going by car, mainly because I have passengers and I am carrying freight. I wish to make clear that one thing I am not—I am sure other noble Lords are not either—is a rail anorak. I do not know a huge amount about rail. I use rail more or less every day, and find it very useful. I have a background in the transport industry but mainly in road and freight, so I do not have a particular bone of contention in this area.

What concerns me most is that, within the UK transport sector and communications, we seem almost by default over the past few decades to have gone down the route of having no real planning—I do not mean central planning, but strategic planning at governmental level—in terms of the way that we move people, particularly over long distances. Going through the facts and figures for this debate, which I originally tabled some 18 months ago, I found that a number of things have changed over that time. Whatever challenges there are between air and rail also exist—in some ways even more so—between air and road transport over long distances.

I shall give the Committee some background. One of the clear issues here is climate change and carbon emissions; that will be one of the key themes of this debate. The Government have published in their Climate Change Bill their target of 60 per cent carbon reductions by 2050. They will refer that to their climate change committee and expect it to rise to 80 per cent. Transport accounts for almost one-quarter of total current emissions; that is, some 23 per cent. The carbon dioxide emissions performance over the past few years has unfortunately stayed remarkably level since about 1997; in fact, since 1999 it has gone up slightly, although it went down very slightly in 2006, according to the figures announced in January. Within that, however, transport emissions are going up, so although industry and domestic emissions are going down significantly, the real challenge in meeting any climate change targets is to decrease the emissions of the transport sector.

If you look at ratios such as emissions per passenger kilometre or per passenger seat, particularly over long distances, although there are great variations in them depending on how they are calculated, it is clear that over a longer distance—within the UK, not necessarily internationally—rail is substantially less polluting in greenhouse gas emissions than other forms of transport. Some people calculate it as being 10 times better, while others make it nearer a 30 per cent or 50 per cent reduction, but whatever it is, it is clearly an improvement. That is despite the fact that within the UK we have electrification of only about 40 per cent of our rail network, where there is much greater potential for reductions in CO2 emissions because of the potential for non-carbon fuel use. We are one of the lowest-ranking countries in Europe in that regard.

Looking at rail policy as I see it, as a user and as someone who takes a more general interest in it, one of the great aspects has been its growth over the past decade. We have an increase of something like 40 per cent in rail traffic over that period, and the last available figures, for 2006, show that growth was something like 6.5 per cent. That says to me that despite all the problems there have been since privatisation—and I am less critical of it than many of my colleagues—given the right circumstances, rail transport can provide what customers need, be attractive and generate growth, which was not the case during most of the post-war period.

In government reports or reports sponsored by the Government—in particular, I read through the Eddington report at some length when it was published early last year—there seems to be a huge lack of ambition on a macroeconomic scale. My background is as a corporate economist in the freight sector. It is one those areas where you can make the right cost-benefit analysis decisions around individual sectors over a particular period, but can get it completely wrong strategically.

The Eddington report, though excellent in many ways, came down to looking at where you get the best return for your investment, pound for pound, over a medium timescale. That is not an unreasonable way to look at things, but within the transport sphere, which is of major importance with regard to the way the economy functions, you always land up putting more investment in short-distance in the south-west, where all the immediate benefits will be felt. That leaves out the long-term competitiveness of the UK economy and the ability to increase and improve transport infrastructures over a much longer distance. That whole policy area gets left out.

The outcome of that over the past few years has been a huge rise in internal air transport. Because of the way the investment decisions work, airport expansion is difficult in terms of planning but you can use far more airport capacity. You can buy individual units called “planes”, which are very flexible pieces of equipment, and you can therefore establish air routes and easily grow a long-distance air structure. For rail, that is almost impossible. In fact, interestingly, since I tabled this Question some 18 months ago, domestic air travel has started to decline for the first time. The interesting thing about that is that no-frills economy airline growth is still at around 10 per cent—so the challenge is still there—and overall, with international flights, it is still going up.

In the 19th century, Britain led the world in rail infrastructure development and transport development generally. Over the period from 1836 to 1848, Parliament gave permission for some 8,000 miles of railway track to be constructed, at an estimated cost then of £200 million, which was equal to something like the gross domestic product at that time. Since the Second World War, we have closed a lot of that down—quite rightly; I am not a sentimentalist in this area. In terms of new rail infrastructure, effectively we have about £9 billion to keep together the west coast main line and the channel rail link, which opened some 15 years too late.

To me, that shows how, as a national economy that needs to be competitive, we have moved backwards. We should not just focus on local travel—although that is very important—but we should raise our horizons to look at long-distance travel. It is part of an internationally competitive economy, and therefore it is an area where we need to be brave and follow where many other European economies have already gone. I rest my case.

16:11:00

Lord Berkeley
I am grateful to the noble Lord, Lord Teverson, for getting this debate on the Order Paper and for his very thoughtful speech; I agreed with every word that he said. He started with the point about emissions and Eddington. To put it another way, the Government’s response to the Eddington report, which came out towards the end of last year, shows quite dramatically the forecast reduction in emissions between the different economies in the sector. The worst performer for the next 15 years is transport. That is saying the same thing, and Eddington is confirming it.

In the debate on my Starred Question on Tuesday on the third runway at Heathrow, we heard my noble friend and a lot of other noble Lords basically saying that we need to continue air expansion in the south-east to maintain our economic position in the world. I do not know where they get any information to support that view, because the UK economy, particularly in the south-east, seems to be doing quite well, even with a pretty third-rate airport, which most of us think Heathrow is at the moment. A lot of us try to avoid Heathrow if we have to fly somewhere, because it is so difficult. I am not sure why the same comments could not apply to good quality rail services. There is nothing particularly special about air; 50 years ago people thought it was sexy with nice air hostesses giving you drinks and everything else. It is not like that now; it is a major hassle, actually.

Air and rail should be looked at in the same way. We have to consider where the country is going to be in the next 20 or 30 years in terms of people’s demands—it is mainly people, although there is a bit of freight, and I declare an interest as chairman of the Rail Freight Group—and where they want to go and how, and the growth. The Government’s forecast for rail passenger traffic increases is for it probably to double in about 15 to 20 years. Certainly, rail freight will do rather more than that. The indications are that by 2030, using existing technology, at least all our rail lines between the major centres will not just be full to capacity, but demand will exceed supply by something like 50 to 100 trains a day. That is quite serious.

I support the suggestion of the noble Lord, Lord Teverson, to divert short-haul flights on to rail and thus increase demand still further. In some ways that will improve the financial case for high-speed lines and more capacity, including more capacity for freight. It would also solve a problem I raised on Tuesday. According to NATS and the CAA, there will not be enough capacity in the air over the south-east of England to take all the flights that will be possible under BAA’s expansion plans for Heathrow, Gatwick, Stansted and so on. In his response, my noble friend said that if we were to accept that analysis, we would not have undertaken the consultation on a third runway. CAA and NATS are government institutions, so if they have got it so wrong, I would be interested to hear from my noble friend what he intends to do about it. I think that one ignores advice from the CAA and NATS at one’s peril.

If it is possible to divert more passengers from air to rail, it would have to be done alongside a more rigorous application of the principle that the polluter pays; indeed, the noble Lord, Lord Teverson, provided us with some information about that. However, let us explore for a moment the routes where it might work, not only with the existing high-speed lines but with ones that could be built in order to make journey times comparable with air, and with lines where capacity could be increased. That is in fact more important because we are talking about routes between London and Manchester, Birmingham, Leeds, Glasgow, Edinburgh, Paris, Brussels, Amsterdam, Cologne and Lyon. Some are four hours away by train, which is better than what is achieved by most air journeys even if they are not delayed.

It usually takes an hour to get to the airport, where you have to wait for around two hours, and then, depending on the delays, you have an hour in the air and another hour travelling to the town centre. Even a four-hour journey by rail is better than the equivalent made by air. That marks a change in the planning of 20 years ago, when three hours marked the tipping point; today it is closer to four hours. When I came back from Cannes by easyJet last summer, it took 10 hours from the hotel to my home. I reckon I could have made that journey using the TGV train in the same time. Cannes is not much further than Lyon, so there is great potential in that.

What is missing from the debate is the fact that it takes a very long time to build new infrastructure, be it an airport, runways or railway lines. The Channel Tunnel rail link has taken around 30 years and Crossrail, if it ever happens, will probably take as long by the time it is finished. I cannot remember how long Terminal 5 has taken, but it is quite some time. The Government need to start planning now for the enormous growth in passenger traffic in what I call the medium distance. In the UK, that is as far as Glasgow and Edinburgh from London, and the West Country the other way. Why fly to St Ives or anywhere else in Cornwall if the train could go a bit faster? However, I will not get on to the issue of First Great Western now.

New infrastructure is also needed to increase capacity and to provide improved interchanges at airports from air to rail. We all know how wonderful it is to travel from Heathrow into Paddington at a cost of £17.50, but what happens when you get to Paddington? You need the Circle line to go anywhere else. How do you get to Gatwick, Luton and so on? Heathrow needs much better connections into the transport networks leading to the west and the north of the country. The south and the south-west will be sorted out when AirTrack is built, which I hope it is. All these projects have to be looked at, but planning new lines through the congested south-east and presumably up through Birmingham and on to Manchester will take a very long time. It will cause major hassle, just as the Channel Tunnel rail link did in Kent, but somehow this has to be done, because there needs to be interchange with Heathrow. However, I suggest that if it were done properly, we could do without the enormous expansion currently planned for Heathrow, Stansted and Gatwick.

People are becoming much more concerned about the quality of the experience. I mentioned all the different things you have to do to get on to a plane these days. This week I looked around Terminal 5 with a parliamentary group. The security there involves fingerprints, eye recognition and a few other things. We did not quite take our clothes off but it was not far from it. So I do not think that that process is going to get much quicker. However, if you sit in a train for four hours, you can get a lot done. You have space and you can work, go to sleep or whatever. It is time that we had a consistent policy on air, rail and road transport in this country, reflecting the carbon that each emits.

It is time that the Government looked again at the air travel White Paper that came out four or five years ago, because many things have changed. It needs to be re-examined, not on the basis of whether air travel is essential for the ongoing economic viability of London—I do not think that it is vis-à-vis short-haul travel, although it is for long-haul travel—but on how we can achieve a much better reduction in our carbon emissions compared with what is shown in the Eddington report. That is a big challenge, but now is the time to do it. I trust that my noble friend agrees with me.

16:21:00

The Earl of Mar and Kellie
My noble friend was right to ask this Question, however long ago it was that he did so, as it is still very relevant. He certainly asked it with great passion, ruing the lack of strategic vision for the railway well into the future. It is a pleasure to follow the noble Lord, Lord Berkeley. I agree with everything that both of them said. However, I shall not sit down just yet.

I have to confess to being an “anorak” with a hefty bias in favour of railways, which leads me to go home tonight by train rather than flying. I also confess to being a bit of a heretic as regards carbon dioxide destroying the world. I prefer the 1,500 year cycle which causes the temperature to go up and down and I note that in both the Roman and Viking eras it was warmer here than it is now. I am reasonably confident that that cycle will continue, as it has done for the past million years.

My noble friend is calling for the Government to make a distinct lurch towards promoting rail travel and to come off the fence, no doubt preferring to plead an even-handed approach and let the public make their own decisions. What about rail for air substitution? Is it desirable and where? Certainly, in terms of the use of resources, emissions and safety, it is desirable. Aircraft make acute noise, especially on takeoff, and create local air pollution and atmospheric pollution. They also create a by-product of road congestion around the relatively few airports.

While rail transport is not blameless in terms of noise, emissions and safety, these are all reduced. One hopes that rail has more pick-up points than any airport so there is less traffic congestion in the vicinity of the very many more railway stations. A new technological development for rail is the arrival of wi-fi on certain routes, giving permanent contact for telephone, internet and laptop users. I am told that firms located on wi-fi equipped routes approve and promote rail travel because it can genuinely be seen as valuable work time.

Going by rail for longer journeys is still a hard sell. My six-and-a-half-hour rail journey to here, and from here back to home tonight, can be done in four and a half hours by air, but in what environment both at the airport and in the air? The way ahead is to promote better advertising about real rail and air journeys, using case studies to back them up. I fully accept that there is a case for domestic flights at the start or finish of an international journey, and indeed from the various island groups in Scotland. The extension of the Channel Tunnel rail services to the north and west of London would also help, enabling people from Leeds, Manchester and Birmingham to go straight through to the Continent.

Long-distance trains run at surprisingly frequent intervals. Manchester and Birmingham trains are run at 20-minute intervals, which is impressive, and do not have to be booked. The Edinburgh to Glasgow journey is now every 15 minutes, and we are about to open a second line—electrified, no less. This is clearly the way ahead, although I acknowledge that few are likely to want to fly from Edinburgh to Glasgow. I have seen aircraft flying from Edinburgh to Glasgow, although they usually fly on to somewhere else afterwards.

Once aboard, the train offers a better environment: with more space, the possibility of moving around, and using mobile phones and laptops throughout the journey. The challenge to this comes from an unlikely source—the executive coach, with wi-fi. I respect this new competitor, but note that it must operate on our congested road network. Eventually the popularity of such coaches may reduce road congestion, but I very much doubt that that will be the case immediately. Inevitably, I join the call for mainline improvements and for our high-speed network. Plenty has been said about that. We are blessed, or otherwise, with a Victorian network, which, if we were starting again, might have run in different ways to different places. The lead-in time is so substantial that I can only press the Minister for early signs of commitment.

On a digression, after reading about the difficulties for any politician bringing forward schemes for community sentencing whereby political parties criticise each other for being soft on crime if they do not support the maximum use of imprisonment, I appreciate that the default position for politicians and the news media has to change. The same is true for the railway. There must be less rail chaos and more specific reporting of which line is affected and why, rather than the usual blanket approach of “rail chaos”. Ideally, the default position will become, “Rail is the best way and should be the first choice for travellers”. Some hope, but that is the way it should be. For that to become true, new trains will be necessary on additional routes, and existing trains will need to be lengthened to provide sufficient seats for the accelerating demand. I fear that the recently ordered carriages will, on arrival, allow only those who are already standing to sit down, without any real increase in accommodation. The increase in demand will mean that people stand in the new coaches.

We await the Minister’s reply. So far, electrified railways are the only form of transport that can claim to be carbon-neutral, at least in operation, although earlier today I read—can I believe this?—about an electric, single-seater aeroplane that could fly for up to 93 miles before needing a recharge. I do not think that that will threaten the railway for a while. The railway has a great future, provided that the Government will let it.

16:30:00

Earl Attlee
I am grateful to the noble Lord, Lord Teverson, for introducing this Question for Short Debate. I have learnt to be careful in my response to these debates, because if I say anything positive about the rail industry, the Minister will throw it back at me at Question Time in the Chamber, but I was flattered that he had my quote right on the top of his brief.

I do not think that I heard anything this evening with which I disagreed. I suspect that the issue underlying the noble Lord’s Question is climate change. Climate change is a wicked problem, because past emissions are causing the present symptoms, which were slow to become apparent, and then it took some time to recognise the cause of the problem. Furthermore, we are committed to more climate change and rising sea levels whatever we do. What we do now will take a considerable time before the benefits become apparent. Finally, obvious popular solutions are not necessarily the right ones to adopt. One has only to look at the US ethanol policy to see the dangers. None of this means that we need do nothing, and taking sensible action should not hold back world economic growth unduly.

I take this opportunity to pay tribute to contribution of the noble Lord, Lord Teverson, to the Climate Change Bill. I know that it is much appreciated by my noble friends who are working on the Bill. The noble Lord has explained to us the transport emissions challenge that we face.

There is little doubt that CO2 emissions associated with aviation contribute to the increase in overall CO2 levels. However, it is only a small proportion of overall emissions. Primary power is much more significant. I am a little anxious about everyone claiming that their use of electricity is carbon neutral, because we know that a large proportion of the electricity that we use in the UK is not carbon neutral—far from it. In later years, aviation could generate a high proportion of UK CO2 emissions, as there is little alternative to liquid fuel propulsion, while other uses of power decrease. What is less perfectly understood is the other greenhouse effects of aviation, and further research is needed here to ensure that policy is backed up by sound science.

Unfortunately for the noble Earl, Lord Mar and Kellie, I understand that the climate change model correlates well with the 1,500-year cycle, as well as with the effects of increasing CO2 concentrations. It is obvious that rail enjoys lower emissions than aviation, but are the figures cited by the noble Lord, and those we read, just the marginal CO2 emissions of a journey in terms of fuel, or do they include the energy required to manufacture the aircraft and its materials and the emissions related to the manufacture or recycling of the rails, the manufacture of the sleepers on the railway system and the overhead line support structure? The point is that, although rail is a very low-carbon means of transport, as we have heard, it is not a zero-carbon means of transport.

Lord Berkeley
Perhaps I can help the noble Earl. In a Written Answer in the House of Commons about the carbon emissions per passenger mile in kilograms, air shorthaul flights are 0.23 and rail is 0.10.

Earl Attlee
Yes, but that does not tell us which carbon content we are looking at. When we build a railway system, we have sleepers. Sleepers have a carbon content. It is complicated. We also need to look at the energy put into making an aircraft, the electricity used to make the aluminium in the aircraft and whether the energy in the aircraft can be recycled—whether we can recycle the aluminium. So it is a much more complicated picture.

We know and agree that aviation emissions are undesirable, but also that aviation is vital to our economy and world development. The noble Lord’s Question refers to internal air and rail travel. There is a fine balance between the utility and economy of the two modes of transport. There is plenty of evidence that improvement in rail services, both in the UK and Europe, leads to a corresponding increase in rail's share of the market.

In the future we could build really fast new railway lines between city centres that would make aviation superfluous for internal travel. The noble Lord, Lord Berkeley, talked about that opportunity, but he also talked about some of the difficulties of finding a route for such systems. Quite apart from all the planning and financial difficulties, the Minister’s carbon economists would have to study any proposal carefully in order to determine the carbon balance benefits. I suspect that for a given amount of investment there are other, much more effective ways of avoiding emissions.

The noble Lord, Lord Teverson, talked about some of the difficulties in determining policy at the strategic level in government. The reality is that internal air travel is efficient and effective and has great benefits, especially for the periphery of the UK. We need good transport connections to encourage investment in the West Country and in Scotland. Sometimes that will be by air and sometimes by rail; it is not one or the other. Given that the air/rail market is balanced in terms of cost and journey time, reliability of rail services becomes critically important. The noble Lord, Lord Berkeley, reminded us that we need to look at the total journey time from door to door. Although the flight time might be only an hour, we know that going through an airport takes a lot of time—and it is not very pleasant nowadays, either.

The need for reliability becomes particularly important when passengers are not paying the fare themselves. That is normally, of course, for business purposes, when time is extremely valued. It is plainly far more carbon efficient to make our current rail system extremely reliable and attractive than to build an entirely new system. We need to move away from an acceptable level of failure in the system towards zero failure. In particular, I do not understand why it is thought to be acceptable to have a signalling failure, even if the system fails at safe. I look forward to hearing the Minister’s response to the noble Lord’s Question.

16:37:00

Lord Bassam of Brighton
I am grateful to the noble Lord, Lord Teverson, for stimulating this debate. It has been useful. I personally regret that we do not have a few more takers in the Moses Room today; they would have greatly benefited from joining in this important debate. Sometimes in our recent discussions on the rail industry, and in looking at aspects of the aviation sector, we have touched on the subject of rail versus air and rail-for-air substitution, and it is interesting to focus in more detail on that aspect of a broader-based debate.

All the speakers have made good contributions. The noble Lord, Lord Teverson, challenged the Government on our lack of vision. I have some comments to make about that. I do not share his view; the Government have gone a long way towards having a broader vision of how the transportation system works, and in particular a vision for the successful and sustainable development of our railway. The noble Lord, Lord Berkeley, made a similar point and challenged us not just to think in the short term but to look at where we wanted to be in 20 years’ time. That is right. We need to do that, and it is an important part of our thinking and our vision of the future of the rail network. The noble Lord said we needed to construct policies for the longer term, and I do not think anyone disputes that.

The noble Earl, Lord Mar and Kellie, charmingly confessed to being an anorak. I suppose that if you are prepared to take a six-an-a-half-hour rail journey twice a week, you spend a lot of time thinking and rather falling in love with the rail network. No doubt, as you go through some beautiful countryside, you have lots of time to reflect on how the network could develop. The noble Earl made the case, as he often does, for a high-speed network with continuous improvements.

The noble Earl, Lord Attlee, said that he did not have much to disagree with in the previous speeches. I shall be studying those speeches to see just how much of the noble Earl’s party policy is now carefully aligned with what has been said, because these things are of broader interest.

Earl Attlee
I did not say that I accept what other noble Lords have said as party policy. I would not be here for very long if I did.

Lord Bassam of Brighton
I would not want to shorten the noble Earl’s tenure in his current post. He made a good contribution, and I did appreciate his observations on the carbon economist’s view of the world. He brought some reality into the debate in terms of arguing that we need a more rounded view of these issues, and I do not dispute that. Indeed, it is probably a view that is more broadly shared than we sometimes think.

The Government are committed to a sustainable transport system which supports economic growth and pays its environmental costs. The Eddington transport study to which almost all noble Lords referred made it clear that a well functioning transport system is essential to supporting continued economic growth in the United Kingdom and maintaining our quality of life, while the Stern review on the economics of climate change confirmed that urgent action is required to tackle emissions of CO2 and other greenhouse gases, and that there is a clear economic case to do so. Indeed, over the past year or so that review has become an important influence in changing the terms of the debate, and we should all be grateful for that.

We do not see this as being a choice between rich and dirty on the one hand and poor and green on the other. Stern properly exposes that as a false dichotomy. The cost of early action is significant at around 1 per cent of global GDP per annum, and perhaps higher for a developed country such as the UK, so the option of being rich and dirty does not really exist. It was for that reason that last October the Government published their White Paper entitled Towards a Sustainable Transport System, which was our response to Eddington and Stern. It sets out a new framework in which transport can support economic growth and contribute to lower carbon emissions. For example, in aviation the UK’s airports play a pivotal role in supporting both the national economy and regional economies by providing around 200,000 jobs directly and making a national contribution of some £11 billion, while by providing international connectivity they help to support the economies of Scotland, Wales, Northern Ireland and the English regions.

However, we argue that all this must be sustainable. A balance must be struck between tackling environmental challenges so that impacts are effectively mitigated while enabling people to fly and UK business to compete internationally. The demand for air travel is continuously growing and our airports, particularly those around the periphery of London, are operating at almost full capacity. We therefore support the provision of additional capacity in the right circumstances. This means making better use of existing airport capacity as a priority ahead of building targeted additional infrastructure. This is the policy outlined in the 2003 air transport White Paper, which makes it clear that the Government do not support predict-and-provide policies and fully recognise the need for development to be sustainable not only in terms of local environmental effects, but also in terms of aviation’s contribution to climate change.

Our support for two new runways in the south-east, first at Stansted and then at Heathrow—subject to strict local environmental conditions set out in the White Paper being met—is entirely consistent with this view. A new runway at Heathrow would provide much-needed capacity, would support the UK economy and help Heathrow to remain competitive. As noble Lords know, our consultation on adding capacity at the airport closed last week, and the responses are currently being reviewed. We expect to make final policy decisions later this year.

We are aware that some groups are calling for a halt to airport expansion and for restrictions on air travel—noble Lords this afternoon did not make that call, but there are echoes in things that are said in your Lordships’ House that reflect that view—while others are requesting that greater consideration be given to alternate transport modes such as high-speed rail. That was reflected in comments made this afternoon. The answer is that both aviation and rail have key roles to play as we continue to support the development of a transport system that both supports economic growth and helps the UK to meet its climate change responsibilities. It is not up to the Government to say who can and cannot fly. The fact is that more people than ever want to fly. However, by using tools such as the aviation emissions cost assessment, we can inform future strategic policy to ensure that aviation pays for its environmental costs.

Lord Teverson
I do not particularly disagree with the Minister. I am not at the end of Liberal Democracy that says that Heathrow Airport should disappear. As the noble Earl, Lord Attlee, rightly said, aviation is incredibly important for a number of areas, and the railway will never be a substitute for it in certain ways. However, given the way in which the economy is structured, airport expansion is driven these days by the private sector rightly being able to say, “There is the demand, and we can get the investment”. There is always pressure—through government, planning or whatever—to meet that capacity, because there are straightforward ways in which it can be done.

However, the expansion of the rail infrastructure cannot work that way, because, unlike in the 19th century, it must be driven by Crossrail or whatever, as we have seen. It must be brought together by government because the private sector is not capable of delivering it. There is an equal demand for capacity and an increase in rail, as we have seen, but there is not the same pressure from government to meet it because of public expenditure and planning for the service. I want to understand how government can create a more level playing field, not so much on the cost side but in the ability to enter the market and create additional infrastructure, because it is clear to me as a traveller and as someone who reads the statistics that the rail industry will hit capacity within the time that it takes to plan these new routes. I apologise; I have intervened for too long.

Lord Bassam of Brighton
The noble Lord is a little like a fast-running train sometimes; he gets carried away with his arguments. I was going to come to that part of the argument, and will say simply this. If we turn from aviation to the Government’s wider strategy for the rail network, the White Paper published in July 2007 is, we can fairly argue, the most positive statement about the growth and development of Britain’s railways in the past 50 years. It commits substantial funding—£15 billion—in public support for the rail network between 2009 and 2014 and is a whole-scale vote of confidence in rail travel. Certainly in my lifetime, it surpasses anything that has been committed previously. Some £10 billion will be spent specifically on enhancing capacity—the very issue touched on by the noble Lord—in those years, and these investments will enable the railway to accommodate a further seven years of what we anticipate will be record growth.

The recent £8.8 billion west coast main line upgrade has had a significant impact on shifting people from air to rail, with two-thirds of passengers now travelling from London to Manchester by train, not plane—up one-third from 2004. The figures have reversed precisely for air and rail travel. By the time the work is completed, many journey times on the route will have reduced by almost a fifth compared with those in September 2004. Pre-project, the Glasgow to London journey time was 5 hours, 6 minutes. From December 2008, the fastest journey will be possible in 4 hours, 10 minutes, so the noble Earl, Lord Mar and Kellie, will have a little less time to spend on thinking about railway systems. The typical reduction in journey time on today will be around 30 minutes. However, rail clearly cannot provide an alterative to aviation in all cases, particularly not for intercontinental passengers who are using hub airports such as Heathrow to make onward connections.

We argue that Heathrow’s status as a hub airport is crucial to the UK maintaining its strong connections with international centres. Over the past decade, regional airports have helped drive the regeneration of cities such as Manchester, Birmingham and Newcastle by connecting the regions to international destinations and markets that would not otherwise be served directly by local airports. As experience with the London-Manchester route demonstrates, rail can provide a highly attractive alternative to air travel, especially over short distances such as end-to-end journeys of two to three hours. That is where the major benefit is. As distance increases, however, air travel becomes increasingly attractive. The fact is that neither air nor rail alone can provide all the required capacity.

There are currently around 50,000 domestic flights a year within the UK from Heathrow and around a further 50,000 to Amsterdam, Paris, Brussels and Rotterdam. Even if half those flights switched to rail, Heathrow would be operating at around 90 per cent of its capacity and would be full by 2020, when a third runway could be in operation. That bears some thinking about. Even if we were able to achieve that level, we would still have a major problem with Heathrow.

Noble Lords have touched on the fact that there has been much debate about possible new railway lines. The Government have not ruled out new lines in future, nor have we ruled out high-speed rail being an important feature of our policy, but Eddington told us that most of the links the country needs are already in place; the priority is to increase the capacity of those links, not to construct new ones. High-speed lines are expensive and do not address immediate needs. A north-south high-speed rail line would cost tens of billions of pounds and absorb the entire rail budget for years, just to serve one particular corridor of travel activity.

We also need to think carefully about the assumption that high-speed trains are necessarily the greenest option. Increasing the maximum speed of a train from 125 miles per hour to 220 miles per hour leads to a 90 per cent increase in energy consumption and, in exchange, cuts station-to-station journey times by less than 25 per cent and door-to-door journey times by still less. The Government’s strategy is therefore to improve the quality of inter-urban rail services and to make the best use of existing networks by lengthening existing trains, increasing service frequencies and tackling key congestion pinch points. We recognise that in the longer term, extra route capacity might be needed on some interurban corridors, and the department will look at that in a multimodal context and announce its conclusions in time for the next High Level Output Specification.

I am conscious that we are getting close to 5 pm. I have a few more points to make and then I will wind up. Increasing rail capacity will improve the passenger experience in getting passengers to the airport, and in some cases will offer an alternative to short-haul flights—an objective we always see as desirable. But demand for both aircraft departures and aircraft arrivals exceeds capacity in the south-east. Not addressing that risks damaging the UK’s economic interests, not only in aviation but more widely across our economy, and it would not provide any environmental benefit. The way to tackle aviation emissions is internationally, through an effective Emissions Trading Scheme. Under current plans, all flights arriving from and departing to the EU would be included by 2012.

We need to recognise, however, that to provide a complete end-to-end service to travellers, we need the capacity and capability to build in reliability throughout the whole journey. That is why, rather than planning along modal lines as has happened in the past, we will be focusing in future on those areas—our cities, our interurban links and our international gateways—where transport can best support economic growth and productivity, while also tackling the climate change challenge. We will identify the problems, look at solutions across all modes and prioritise the best value-for-money solutions.

This is a new way of thinking, and we see it as an important part of our transportation vision. We know that it will take time to deliver, but we are committed to delivering on it because we have to, to ensure that we secure a viable economy, effective transport networks and the most environmentally sustainable outcomes. I am grateful to noble Lords for joining this debate, and I am sure that we will have many more on other occasions.

[The Sitting was suspended from 4.55 to 5 pm.]

Arts and Healthcare

17:00:00

Lord Howarth of Newport
asked Her Majesty’s Government how they intend to develop their policies to link the arts with healthcare.

The noble Lord said: There is much to celebrate in the contribution of the arts to healthcare across the country. Bibliotherapy groups on Merseyside are enabling literature to alleviate pain and mental distress for people with Alzheimer’s, motor neurone disease and mental health problems. Poems in the Waiting Room is the most widely read poetry publication in the United Kingdom. Live Music Now presents concerts and runs workshops to support people in mental health units, care homes and hospices. The Peninsula Medical School has appointed the distinguished violinist, Paul Robertson, as visiting professor of music and medicine. The Royal Northern College of Music and Arts for Health at Manchester Metropolitan University are promoting collaboration between centres of excellence in musical education and medical education. Paintings in Hospitals, led by Stuart Davie, not only lends from its own collection but runs artists-in-residence programmes and has brokered loan exhibitions to hospitals with the V&A.

Gloucestershire Hospitals NHS trusts Leading the Way programme; Stockport’s Arts on Prescription and Bradford’s Dance for Life have been exemplary. In London, Guy’s and St Thomas’s, under the cultural leadership of Karen Sarkissian, with its beautiful Evelina Children’s Hospital designed by Hopkins Architects; Homerton Hospital, with its arts programme led by Shaun Caton; Bart’s, where the Gibbs grade 1 listed west wing has been reinvented by Greenhill Jenner Architects and enhanced with art commissioned by Vital Arts; and Chelsea and Westminster, where the brilliant tradition established by Susan Loppert continues, are all enlisting the arts creatively and effectively in support of healthcare. Over 100 arts managers are running hospital arts groups across Britain. I look forward to hearing in the debate about Bromley-by-Bow and the King’s Fund’s Enhancing the Healing Environment programme. The document jointly produced by the Department of Health and Arts Council England in 2007, A Prospectus for Arts and Health, describes a wealth of activity.

What are the benefits of linking the arts with healthcare? It is important to make clear that practitioners are not making exaggerated claims. No one is suggesting that you should send for an artist instead of a doctor, or that a poem can substitute for a drug. What is claimed is that the arts can supplement and enhance the efficacy of conventional medical treatments. Dr Rosalia Staricoff’s research at the Chelsea and Westminster between 1999 and 2002 demonstrated that the integration of the visual and performing arts in healthcare induces significant differences in clinical outcomes, reduces drug consumption, shortens stays in hospital, improves patient management, increases job satisfaction and staff retention, and enhances service. In a later review of the medical literature on the arts and health, Staricoff found significant evidence of reduced anxiety and depression during chemotherapy, improved blood pressure and heart rate in cardiovascular patients, improved clinical and behavioural states in intensive care, diminished stress before surgery and less need for pain-reducing medication after it.

The testimony of patients themselves is eloquent. Listeners to “Music Matters” on Radio 3 last Saturday heard a person with bipolar affective disorder speaking of the stabilising effect of making music with other patients, and another person described how it “triggered” in her a wish to sing, which then triggered a recovery process to,

“a level of well-being I haven’t had perhaps for 30 years”.

One person said that music therapy stopped her dwelling on her illness until it became her and she it; another described how music “put a brake” on obsession and compulsion, and another told us how music brought order, beauty and meaning into a life devastated by severe depression.

In recent years, NHS Estates and the Commission for Architecture and the Built Environment have brought about a new realisation of the importance of well-designed buildings and neighbourhoods in preventing ill health, supporting therapy and assisting recovery. Local improvement finance trusts have enabled smaller facilities such as GP surgeries to embody good design standards. CABE’s publication, Designed with Care, presents 15 examples of outstanding design in healthcare buildings, including the remarkable Maggie’s Highlands, designed by Page and Park and Charles Jencks. Functionality and aesthetics are part of each other. Polyclinics will be a very important opportunity to support healthcare through design.

Aside from certain beacons, the arts, however, are still not systematically integrated into normal healthcare throughout the country. Why do the arts remain a voluntary add-on, available in healthcare only where they happen to be championed by energetic enthusiasts? Why do the health service and social services fail so extensively to avail themselves of artists and the arts? One reason has been a paucity of hard research that convincingly demonstrates the therapeutic benefits of the arts and their ability to reduce healthcare costs. Dr Staricoff’s research was a somewhat isolated peak. A research team led by Professor Jenny Secker studied participatory arts projects for people with mental health needs. While the study Mental Health, Social Inclusion and Arts reported a “vibrant sector”, many projects struggled to evaluate outcomes. There was difficulty in demonstrating the specific benefits of the arts as distinct from other factors, samples were not large enough for data-hungry analytical methods and there was a lack of longer term studies.

In some areas, both the quality and quantity of research are now being transformed. With non-intrusive brain mapping, pathways and connections in the brain are being explored with increasing precision to enable us to understand the processes linking, for example, music with emotion and music with anaesthesia. A spate of research papers is casting light on the impact of the arts on neurophysiology. A new international journal Arts and Health has recently been launched. How rapidly will professional attitudes and practice respond? As a society, we still suffer from the “two cultures” split. Doctors who love going to concerts fail to see how music could assist them in the treatment of their patients. Latter-day barber surgeons, the practitioners of high-tech medicine, will, I suspect, be slow to acknowledge any claim for resources by latter-day healers. Public opinion may move faster, given the contribution that the arts can evidently make, for example, to the alleviation of age-related diseases.

Funding on a scale that is very modest in NHS terms would enable the arts to contribute much more extensive benefits to healthcare. As it is, the arts are typically supported by tiny charitable organisations tacked on to hospitals. Even at Chelsea and Westminster, the charitable unit consists of only two people. They have to spend so much of their time and energy raising money to stay in being that they are not able to do the work that they really should do. With the NHS running a surplus, surely money can be allocated to pay for core costs of arts activity within the NHS; for arts commissioners in PCTs and arts co-ordinators in hospital trusts. They will then raise awareness and further funds and engage with artists and arts organisations to plug them into the health service.

Some public funding is also needed for research, training, the exchange of ideas and dissemination of good practice. Fifteen million pounds—the amount recently spent by the Department of Health asking Londoners what they think about the NHS—would really make a difference. It is encouraging that the Treasury is already funding a number of projects under its Invest to Save scheme. The Isle of Wight PCT, for example, is being funded to do research, led by Guy Eades, one of the doyens of arts and health, on the contribution of the arts to the rehabilitation of stroke patients, requirements for primary and secondary care by people with mental illness, and reducing obesity in primary school children.

More than money, what is needed is political leadership. It was, up to a point, pleasing to see the foreword to A Prospectus for Arts and Health signed by Andy Burnham and David Lammy on behalf of the Department of Health and the DCMS. The two Ministers said appropriate things, but somehow that failed to be the endorsement needed. The document was signed by two junior Ministers when it could have had the explicit backing of the two Secretaries of State. Its launch was so low-profile as to be invisible. It was not a serious effort to induce culture change in the NHS.

The energy and creativity will always come locally, but we need to know whether the Government intend to take forward the recommendations in the report of the Review of Arts and Health Working Group, produced by Harry Cayton in 2006. The report urged the Government to make a clear statement that the arts should be recognised as integral to health, healthcare provision and healthcare environments; to create an environment in which it is legitimate and considered to be good practice to invest in arts and health; to make clear that there is a substantial evidence base supporting the use of arts in health; to form partnerships and identify sources of funding; to develop a communications strategy; to develop training to support the increased involvement of artists in the work of the NHS; and to make the arts integral to planning, design and construction.

We also need to know whether the DCMS and Arts Council England are still committed to the strategy set out last year in The Arts, Health and Well-being, which was billed as the first formal national strategy for arts and health. ACE declared two overarching aims:

“to integrate the arts into mainstream health strategy”,

and,

“to increase ... resources for arts and health initiatives”.

Has ACE allocated funds for that? Can we look forward to a renewal of that commitment by Andy Burnham in his new incarnation as Secretary of State for Culture?

Most of all, we need a statement from the Department of Health at the highest level giving permission to chief executives of PCTs and hospital trusts to spend money on the arts in healthcare and otherwise legitimising support for the arts as part of mainstream NHS and social services activity. We need best practice guidance from the department but, most importantly, we need a speech by the Secretary of State, Alan Johnson, energetically promulgated throughout the NHS, that decisively raises the status of the arts in healthcare.

17:11:00

Baroness Sharp of Guildford
I congratulate the noble Lord, Lord Howarth, on introducing a very interesting debate. In preparation for it, I confess that I have read various reports from the Arts Council and the Anglia Ruskin University/UCLan report on mental health and social inclusion as well as various government documents, and I have been extremely impressed by the amount of research on this subject that has established a positive link between art and healthcare. I have also been impressed by what has already been done—on a shoestring, as the noble Lord has indicated—with operas in hospitals, dancers and orchestras in residence, acting and singing workshops and poets and puppeteers, let alone original works of art. Substantive sums of money have been devoted to them. I applaud all those initiatives and very much hope that they will continue and multiply. I endorse entirely what the noble Lord said about wishing to see the Government take the issue more seriously than they do at the moment.

I want to take up a slightly different issue with regard to the arts and healthcare; namely, adult education. The arts play a substantial part in adult education for older learners in particular. Participation in the arts through adult education has made an important contribution to the physical and mental health of older people. But it is under threat, which is why I am raising the subject. It is under threat because the budget has already been substantially cut. We have already seen a drop of more than 1 million in the number of adults participating in further education over the past two years. It is particularly under threat for the over-65s.

The government budget for adult education over the next three years, announced in the Comprehensive Spending Review, is £3 billion, but that is split, roughly speaking, between £1.5 billion that goes to further education for training and skills up to level 3 and a further £1.5 billion that will go to employers to encourage them to raise their game and get their employees into further training and skills. Within the further education budget there are two lines that relate to what is called “adult safeguarded learning”, or what is now termed “personal, community and developmental learning”. That is straight-lined at £210 million throughout the three-year period. That relates to adult education courses in further education colleges and, particularly, the old local adult education colleges, which in any case have seen savage cuts over the past few years. No more money is forthcoming in real terms. Money is forthcoming, but in real terms there is a drop in the budget.

Perhaps even more alarming is the fact that a further line in the budget called “developmental learning” in further education colleges, which are courses that adults take to improve their skills but which do not necessarily lead to qualifications, is set to drop in the same period from £385 million to £106 million—a substantial drop. As I say, we have already seen the number of adult learners in further and higher education drop by more than 1 million since 2005, and disproportionately among those over 65. Fewer than half of those over 65 who participated in adult education in 2004-05 participated in 2006-07. In the personal community of developmental learning in particular, numbers are down by more than 30 per cent.

Yet we know that learning matters, particularly for older people, whom it helps to keep healthy and mentally alert. The Centre for Research on the Wider Benefits of Learning has shown irrefutably that people who go on learning lead healthier lives and that learning reduces morbidity, delays the effects of Alzheimer’s and Parkinson’s diseases, encourages mental agility and helps to maintain social contact. We also know from the Basic Skills Agency’s Learning with Grandparents project that grandparents who take adult education classes are confident older learners and have the power to inspire younger learners to improve their own performance.

One in five of those over 65 see themselves as learners. A recent NIACE survey of what older people want to study shows that the most popular subject at the moment is, I regret to say, not the arts but computer skills, although the arts come after computer skills and are a substantial group, if one includes foreign languages and history in the definition of arts. Of those who study, well over 15 per cent study the arts and health. Older learners show a passion for learning and a pleasure in the act of learning. They derive considerable self-confidence from learning, which features highly in their motivation.

Satisfaction and an increased well-being in life emerge as an extremely important aspect of learners’ development, so the arts play an important part in helping to keep people healthy over the course of their lives. It is important that we do not forget that. The Government recently issued a consultation paper, on which I congratulate the new Secretary of State in particular because it is very important that we look at this. There is a great danger, as I said when I talked about the budget cuts, that there will be swingeing cuts in the budget for all adult education courses.

I conclude with two quotations from the NIACE survey on older learners.

“Most older adults want to learn and to meet similar minded people. This is wide ranging positive attitude that impacts indirectly into health and social issues. If people are in classes, less will be in hospital! … Ensuring senior citizens have affordable classes and social contact with others will pay off regarding their well-being. This will probably put less strain on the NHS in many areas affecting the elderly”.
 

My final quote is from a lady who says:

“I have been attending a pressed flower class for a few years and was appalled when told last week that the fees were going up … We were told that the Government want to encourage the 16+ to take exams. As the majority of the class are pensioners I can see the class will fold. I have e-mailed my local MP and asked her if she wants us to sit at home and just wait to die? I thought the Government wanted to encourage pensioners to take part in classes and get out!”
 

This is an important issue. It is a slightly different issue from that raised by the noble Lord, Lord Howarth, but maintaining people in good health is just as important as helping them to get better when they are ill.

17:20:00

Lord Mawson
I congratulate the noble Lord, Lord Howarth of Newport, on securing this debate. It is a subject very close to my heart and an area of work I have actively promoted for many years through my work at the Bromley by Bow Centre in the East End of London. I declare an interest as the founder of a centre that has spent 25 years exploring the relationship between the arts and healthcare in the midst of a challenging group of East End housing estates where traditional approaches to health, which have followed the biomedical model, have been far from satisfactory and very costly.

The key question is: what does it mean to be a healthy and fully rounded human being and what kind of services do we need that will help, rather than hinder, such human development? More precisely, do we want to develop a National Health Service or, as I fear we have at present, a national illness service? Yes, it is a fairly good national illness service, but it is expensive and wasteful to focus on illness rather than health.

The problem with an illness service with an ageing population is that the demands upon it are potentially infinite, particularly given the tendency endlessly to pathologise; for example, on happiness, food or weight. The NHS treats these matters as illnesses rather than giving enough thought to how to promote health. Through working with artists and creative people, social entrepreneurs like myself have learnt how to turn these problems into opportunities for health.

One of the reasons we involved artists from a very early stage in people’s healthcare in Bromley-by-Bow, apart from the fact that you can give an artist a derelict room and they think they are getting the earth, is that they bring a space alive. They bring life, health, energy and transformation and they believe that everyone is creative and has potential. One of the key roles of an artist is to engender change and transformation. What does this mean in practice in our health centre in Bromley-by-Bow?

The Bromley by Bow Health Centre has GPs who work alongside artists and a multi-disciplinary staff team who can offer our patients more than 125 different activities each week, the arts being among them. A few of our medical staff are also practising artists. I could give many examples of how they have used the arts to tackle pressing clinical problems such as diabetes, vaccination take-up and iron deficiency anaemia, but there is time for only one. A while ago a number of our doctors began to notice an increase in asthma among our young patients. The traditional response would, of course, be a three-minute appointment and the calming of parents’ fears with the usual medication for their child. The centre's response was to turn the problem into an opportunity for health promotion.

A 10-week course for children with asthma aged five to 11 years was established, run by a practice nurse who was also an artist. She worked alongside one of the centre artists and local volunteers. The course was run after school in the health centre reception, which doubles up as an art gallery, and was attended by 12 to 15 children at a time with their parents. Seeing your child experiencing breathing difficulties is frightening for all parents, particularly if you have no scientific understanding of what is happening in your child's body. First-year medical students on a special study module placement at the centre were also invited to take part.

The workshops were designed and run in three phases: monitoring asthma, trigger factors and controlling asthma. Each week the art produced from the session was hung in the reception area, thus creating an instant involvement with all the participating children and, of course, with other patients. All the children were given a peak-flow diary and recorded their peak flow for the duration of the workshops. During that period the children produced blow paintings with stencilled airway shapes, made airway mobiles and created models of allergens that cause asthma, showing the role played by cigarettes, house dust mites, spray cans and the like. They sculpted a large bronchial chandelier with inhaler colour coding and produced an asthma space station from empty inhalers.

Each of the workshops had an educational component integrated into the art-making activity, and the facilitators ran quizzes to establish levels of knowledge around each of the asthma areas. The findings and benefits were that there was excellent feedback from the children, with clear improvement in their asthma management. The project was evaluated for its impact on the children and their parents, and all the children showed a marked impact to their peak flow. Surgery staff were involved in the reception and the conversations that the exhibition stimulated among patients, local people and staff were countless. Knowledge about asthma, through the medium of art, increased; fear about a frightening illness decreased. Those are clear positive clinical outcomes with equally clear economic benefits to the health service. However, there remains an important need for research into the costs and benefits of that type of intervention. I am told that it would be straightforward to set up clinical trials to gather evidence as to whether or not they are effective.

A number of important unintended consequences also occurred. Parents began to understand the science of their children’s illness, and were thus less fearful and could respond accordingly. Parents, trainee doctors and members of staff came to know each other on first-name terms and new relationships were built between professionals and local people. Who knows which of those East End children might now be thinking about becoming a doctor or nurse in their later life? Who can tell? Indeed, at least one of the medical students was switched on to the idea of a career as a GP for the first time, rather than focusing on the supposedly more glamorous idea of a hospital-based career.

Was the whole exercise about health, the arts, science, education, social care or relationships? Actually, it was about all of them, but none of them in a box. Does it have implications for the noble Lord, Lord Darzi, and his thinking about polyclinics? I hope so, because the Bromley by Bow Centre is probably the first polyclinic. But who knows? Was it cost effective? Yes, and no prescriptions were given out. The final twist was that, as social entrepreneurs, we realised that we could package the course, turn it into a business opportunity, sell it to every school and health centre in the UK and use the money to fund other health projects at the centre.

A key to our success in Bromley-by-Bow was not to use artists who just came in to do things with patients but to encourage artists to live out their real work as artists at the centre. It really works when artists become part of the health community. They live their lives there and have studios there, and their passion for their subject inspires others.

To maximise the opportunities presented by the reforms of the noble Lord, Lord Darzi, we will need to ensure that we provide a health service rather than just an illness service—a service that is about more than just the biomedical model of health, which is very expensive. Twenty-five per cent of patients who have traditionally been seeing our doctors did not need medical help; they needed something else, but ended up with a medical response by default. If all you have is a team of clinicians, whether they are in big central hospitals or dispersed through smaller centres and GP practices, the health service will change very little. This is all about clinicians giving away power and about a broader view of health. What is radical about our work in east London is that doctors and nurses have shown some humility and have been willing to share power with others. Simple things such as a shared reception save so much money.

The £300 million healthy living centre programme was full of opportunities to expand this thinking when it was boldly launched by Ministers in 1997, but it is in danger of withering on the vine because local clinicians were not actually prepared to give up fiefdoms and engage. Institutionally in all its forms the NHS and the Department of Health singularly failed to engage with this important opportunity. One suggests that all that they saw was yet another demand on their resources, rather than an opportunity such as that described in our asthma project, to reduce the drugs bill and the number of hours that expensive clinicians have to spend with patients.

In my experience, connecting the arts and health is good for patients, builds a healthy and dynamic staff team and is very cost-effective. I hope that the report by the noble Lord, Lord Darzi, will embrace this opportunity, which we have spent over 20 years successfully demonstrating.

17:30:00

Baroness Neuberger
I, too, pay tribute to the noble Lord, Lord Howarth of Newport, for securing this debate. I declare an interest as former chief executive of the King’s Fund and as someone with a passion for the subject of arts and health.

Everyone here knows that the Government asked Harry Cayton, then national director for Patients and the Public, and an old colleague of mine, to chair the working group on arts and health. That group reported, in a useful piece of work, back in February 2006; two years ago. What has really happened in the mean time, and what is going to happen now? The Arts Council has done useful work, and there is masses happening out there, but the Government’s silence in direct response to this review has been deafening. The noble Lord, Lord Howarth, was right in saying that we need to see some political commitment to this now, taking on board the comments made by the noble Lord, Lord Mawson, and the noble Baroness, Lady Sharp, who said that this is broader than simply being about what goes on in hospitals. We need to hear some commitment from the Secretary of State and others, and we need to see whether the Arts Council is doing the funding that it said that it was going to do.

I am going to talk about the area that I know best, which is the Enhancing the Healing Environment programme, which the King’s Fund ran. I am rather hoping that the noble Earl, Lord Howe, who is an expert in these matters, might talk more about music, since I am going to talk more about the visual arts. We have all known for a long time and research has demonstrated all too clearly that the environment has an important role in promoting healing. So important is it that RIBA, whose emphasis is architectural, has been keenly interested in all this. Indeed, at about the same time as the King’s Fund was developing its Enhancing the Healing Environment programme, with which I was closely involved, the RIBA healthcare client forum was running a percentage for the arts campaign for new NHS buildings. Sadly it did not become policy, but the current president of RIBA, Sunand Prasad, is very supportive of such programmes and things might change, particularly if we have a little political leadership around all this.

He recognises, as most of us should, that the environment can be as powerful a part of people’s treatment and care as the medicines, the therapy or the competence and compassion of the professional. Therapeutic environments have a demonstrable effect on health outcomes for patients and promote well-being among staff, and even more importantly, in a cash-strapped NHS where recruitment is expensive, they help to retain staff, who love working in better environments, as we all do.

Enhancing the Healing Environment aims to enable nurse-led teams to work in partnership with service users to improve the environment in which they deliver care; so it is absolutely key to a patient-led NHS. It consists of two elements: a development programme for a clinically-led, multidisciplinary team, including service users, and a grant for them to undertake a project to improve the healthcare environment. We started off with £35,000 grant to each of London’s main hospitals to celebrate the millennium—not a lot of money in these terms—and it simply expanded from there. This is no coincidence, because people all around us can see that it matters. Thus far, 130 teams from 119 NHS trusts, two hospices and five prisons across England have joined the programme. Independent evaluations have shown that the projects humanise the hospital environment and make places and spaces that are truly uplifting. This positive impact can be conclusively demonstrated not only in terms of participants’ perceptions but also in nationally recognised environmental scoring systems.

But there are significant longer-term benefits. First, there is far greater increased ownership of the hospital environment and a greater awareness of its impact on service users—patients, relatives and staff—and the wider public. Secondly, these small-scale projects can act as catalysts for major change and extraordinary transformations take place. I shall tell the Committee about one of them: as a result, I shall probably scrap the rest of the speech. Hillingdon Hospital in west London is in an area not well known for its calm Friday and Saturday evenings in accident and emergency. It was given £35,000, which was used to lever a further huge amount of money from the local community, from bits of the NHS and from charitable funds. It is absolutely right to say that little bits of charitable funding have mostly made the difference. The hospital transformed a horrible accident and emergency reception area, which had bullet-proof glass in front of the reception staff, into a beach. Members of the Committee may not think that this is a likely scenario. There is a huge palm tree in the middle, with small tables and deck chairs. The bullet-proof glass has been removed. The staff sit at low tables and people talk to them directly.

There has been no damage at all to this A&E department. No chairs have been thrown around or cups of coffee thrown at the staff, other patients or relatives. The only damage was to the palm tree. So beloved was it that it was over-watered and had to be replaced with an artificial one. To give true community ownership of this project, trees were put in with clay leaves and any member of the local community who wished to sign one of these leaves was invited to do so. It is a community arts project, which has transformed the atmosphere.

Having seen it with my own eyes; having seen what the noble Lord, Lord Mawson, has achieved in Bromley by Bow; and having seen what has been done at Northwick Park Hospital in the St Mark’s Hospital corridor where originally there was going to be a series of photographs of patients’ bottoms, but the hospital thought better of it—only the history of St Mark’s Hospital is now told in the photographs—I have no doubt of the transformational effect of changing the environment for staff, relatives and patients, some of whom come again and again.

We know that in mental health and dementia care the arts have made a huge difference. The Government are producing a dementia care strategy and I would love to know how the arts and health element is to be incorporated into that. However, we need to ask the Government some questions. The publication of that report was two years ago, and that is a long time. It recommended that we should recognise that arts in health are integral to health, to healthcare provision and to healthcare environments. The arts can also support staff. First, where is a clear political statement to that effect? Secondly, the report stated that arts and health initiatives are delivering real and measurable benefits across a wide range of priority areas for health, and can enable the department and the NHS to contribute to key wider government initiatives. Where can we see further evidence of that from government?

Thirdly, the Department of Health has an important leadership role to play in creating an environment in which arts and health can prosper by promoting, developing and supporting arts and health. But where is the new announcement backing this review? Where is the extra funding and where is the real commitment to making this central to how the NHS thinks? Will the Department of Health support the enhancing the healing environment network so that it can expand with anyone who has been on the programme and beyond and influence the NHS more widely?

Fourthly, where is a clear statement from the Department of Health on the value of arts in health and evidence of the building of partnerships with others involved, or even a prospectus for arts in health in collaboration with other key contributors, beyond what has been done already with the Arts Council? Finally, if the Government think that this is as important as we clearly all do, the principles behind enhancing the healing environment should be integral to all future NHS and Department of Health policy. It should be key for the NHS estate, with providers and commissioners taking it seriously. That, to my mind, means getting the healthcare regulators to set clear standards about the creation and maintenance of therapeutic environments. I very much hope that the Minister can give us some positive news on how some of that might now be taken forward.

17:40:00

Earl Howe
What a fascinating subject this is. It was not until I started researching it during the past couple of weeks that I realised what a wealth of material there is about it. At the same time I came to appreciate the contribution that the Department of Health has made to putting these issues more on to the map. It was noble Lord, Lord Crisp, when he was chief executive of the NHS, who had the vision to ask the excellent Harry Cayton to carry out a review of arts and health and the role that the department should play in promoting these sorts of initiatives. As we have heard, that gave rise soon afterwards to the publication last July of A Prospectus for Arts and Health which in many ways should be seen as our base document for reference and policy purposes.

For many years the problem with anyone making the causal link between works of art and faster recovery times, or music and mental well-being, was that the evidence was in part anecdotal and in part hidden, and there was no properly joined-up approach to the subject across the health service. Yet the knowledge was there. The striking part was that once Harry Cayton had asked the question, he was inundated with replies not just from the NHS, but from representatives of every conceivable discipline in the field. These were detailed submissions of a kind that enabled the working group to conclude unequivocally that the arts are,

“integral to health, healthcare provision and healthcare environments”—

note the word “integral”—and that, as the noble Baroness has just quoted,

“arts and health initiatives are delivering real and measurable benefits across a wide range of priority areas for health”—

again, note the words “real” and “measurable”.

What are those benefits? Many have been referred to by other speakers, few more graphically than by the noble Lord, Lord Mawson, and the noble Baroness. I was certainly aware of the role of the creative arts in mental healthcare in enhancing patients’ self-esteem and reducing their feelings of isolation, both of which are absolutely crucial to recovery. What I had not previously seen were the research findings about music, that listening to music has been shown to have a beneficial effect on anxiety, heart rate, blood pressure, immune response and even the perception of pain. Rheumatoid arthritis sufferers who listened to 20 minutes of music every day were in less pain than their fellow patients who did not. That is pretty dramatic stuff, though when it comes to music we first need to establish with the patient what kind of music might best do the job. To inflict hard rock on someone who specialises in string quartets might well have the opposite effect from that intended. In fact, it might be a rather devilish way to murder someone.

The benefits that the working group identified are not only for the patient. At the Chelsea and Westminster Hospital it was found that patients’ length of stay on trauma and orthopaedic wards was shorter when they were exposed to visual arts and live music, and that their need for pain relief was significantly reduced. The same kind of results were found in quite separate studies by the University of Nottingham and the University of Sheffield. If the arts can actually reduce the cost of treating patients, that surely is the argument that should, par excellence, persuade trust boards to invest in them. The Sheffield study came up with compelling evidence about the feel-good factor created by new hospitals. It compared an old hospital with a new one. In the new mental health unit there was a marked drop in injury and in verbal and physical abuse compared with the levels experienced in the old unit. The King’s Fund, as has been said, has done some remarkable work showing how improvements to the working environment can deliver significant improvements to clinical practice, safety, team working and staff retention.

There is little doubt that good hospital design can reduce the cost of care in that sense, but there is another important dimension to this as well. The therapeutic benefits that mental health patients derive from the creative arts are not just a matter of delivering a feel-good effect; they extend wider than that. Last September, Manchester Metropolitan University published a fascinating study called Towards Transformation: Exploring the Impact of Culture, Creativity and The Arts on Health and Wellbeing. The key point that it makes is that artistic activities, such as painting, singing, gardening or dancing, enhance people’s sense of self-esteem, not only in mental health but across the board. It is that enhancement of self-esteem that affects a person’s sense of purpose about life in general, which in turn creates in them a desire to take control, to change and to make healthier choices. Artistic activity can bring about a more balanced perspective on life, thereby enabling people to move away from dependence on healthcare and much more towards self-reliance. We think immediately of Derek Wanless’s fully engaged scenario, and the arts should be seen as one important catalyst for delivering that scenario.

The evidence is there, and Ministers have made their own contribution by publicly endorsing the prospectus. The challenge is now, as I think every speaker has said, how to deliver. How are we to get these evident benefits embedded as a standard part of the healing process? To a large extent the answer depends on building capacity in the system, and the voluntary sector is surely going to be key to that. I understand that the department has recently issued a consultative document about DH funding of third sector organisations. It would be helpful if the Minister could say whether this particular area of commissioning is being explicitly considered as part of the consultation. PCTs need to see that creating these sorts of partnerships is important, not least when it comes to those communities that are relatively disadvantaged and where there is little infrastructure on the ground. Perhaps we can expect foundation trusts to lead the way on that kind of initiative, but elsewhere in the NHS the department needs to play a role. It would be useful to hear from the Minister how the plans set out in the prospectus are being followed up on the ground.

The other key ingredient of success is surely to get arts and health on to the regional and local arts agenda in a systematic way. I have to say—this is the only faintly sour note I am going to strike—that the recent cuts in the Arts Council budget are likely to make progress in this area very much more difficult. Two hundred and twelve organisations are going to see their regular funding cut or withdrawn, and within that are organisations that support links between the arts and healthcare—such as, to give but one example, the Salamanda Tandem Dance Company, which specialises in training for dance work with autistic children. To make matters worse, we are all aware of how the National Lottery has been raided for various ends, some more worthy than others. The result is that the amounts of lottery funding for the arts were over £100 million less last year than they were 10 years ago.

It is disappointing, to say the least, for Mr Lammy, the DCMS Minister, to have put his name to the prospectus last July directly endorsing all the benefits of the arts and health, and almost simultaneously to be undermining many of those initiatives. I am not just making a political point. The success of any policy is measured in part by its sustainability. In the past, a lot of funding for arts and health has been short-term, assuming you could secure it at all. I hope that we will hear from the Minister not only a commitment to arts and health as a dimension of health policy but also some clear undertakings about how in practice the policy is to be delivered over the medium term, how it will be taken up more widely and embedded in NHS commissioning processes and what role the department will take in helping commissioners and providers to win over hearts and minds and to build capacity in this important but still largely unsung area.

17:50:00

Baroness Thornton
I congratulate my noble friend Lord Howarth on raising this important topic for today’s debate. He has an unrivalled record of work in this area, not only when he was Minister for the arts, but since, when he has been cajoling Ministers and pushing the Government to keep the importance of arts in healthcare on the agenda and ensure that action is taken. It has been fascinating to listen to the debate and, as a new Minister, a rewarding experience to learn about a new subject, although in fact I have been long familiar with some of the work that has been mentioned.

As most noble Lords have said, linking the arts with health is not a new, untested or fringe activity. It has long been recognised that art has the potential to deliver more robust outcomes and improvements for patients, users and staff—in fact, the whole of our health service. Florence Nightingale herself said in her 1859 Notes on Nursing that:

“The effects of beautiful objects, of variety of objects and especially of brilliance of colour is hardly at all appreciated … People say the effect is only on the mind. It is no such thing. The effect is on the body, too. Little as we know about the way in which we are affected by form, by colour, and light, we do know this, that they have an actual physical effect. Variety of form and brilliancy of colour in the objects presented to patients are actual means of recovery”.
 

Bearing these words in mind, we should recognise what has been achieved by the many arts and health organisations and initiatives that have been established in the UK over the decades, many of which have been mentioned by noble Lords in the debate.

Indeed as the noble Earl pointed out, the Department of Health itself has provided leadership and guidance to the NHS and has for many years encouraged the use of the arts as integral to health and well-being. And I agree that of course it is not just about paintings on walls, whether they are of bottoms or of historical events. The concept of art for health encompasses literature and writing, theatre and drama, dance, music and many forms of visual arts. None of this would be possible without working alongside many charitable and voluntary organisations which rightly deserve praise for their enthusiasm in embracing the arts as an integral part of healthcare. Numerous fine examples have been cited, and perhaps I could mention a few.

At St Bartholomew’s Hospital we have seen how the recent development of the Bart’s and The London Breast Care Centre has integrated art into the overall design of the facility from the outset, with the aim of improving the whole patient experience. I personally have been a supporter since 1994 of the Theodora Children’s Trust, which has brought laughter, fun and magic to hospitalised children in the UK. The clown doctors, who are specially trained to work in the hospital environment, are a welcome distraction from the often difficult situations that children and their families face in hospital, and their regular visits can have a positive impact on children’s recovery and rehabilitation.

“Singing for the Brain” is a group activity started and managed by the Alzheimer’s Society West Berkshire branch for all people with memory problems and their carers. It is an opportunity for them to participate in singing sessions together in an informal and friendly setting. The aim is to provide an enjoyable activity that stimulates the mind and body. The happy and sociable atmosphere offers the opportunity to make friends and to help each other. These and the many other examples mentioned by noble Lords demonstrate the range and diversity of projects that are proving highly successful. I believe, as a social entrepreneur, along with the noble Lord, Lord Mawson, that one of the reasons for this diversity is because the voluntary and third sectors are so active in this area.

I turn now to our commitment that the arts should be firmly recognised as integral to health and healthcare. In 2006, as has been mentioned, the department commissioned a review of arts and health that was followed in 2007 by the publication of A Prospectus for Arts and Health produced jointly with Arts Council England. That document sets out the department’s policy and commitment to collaborate across government in promoting, developing and supporting arts and health, as already outlined by my noble friend Lord Howarth and other noble Lords. More recently, the Government, along with Arts Council England, have worked closely together to promote the benefits of dancing for health. Through its obesity strategy programme, the department is continuing to explore what more can be done to maximise the health benefits of dance.

On mental health, the department’s National Social Inclusion Programme is engaged in a range of arts-related initiatives, including working with community arts projects and national arts organisations, and promoting skills in developing the future evidence base on arts participation.

In addition to working on cross-government initiatives, the department has for several years contributed significantly to the King’s Fund’s Enhancing the Healing Environment programme, which has more than 100 participating schemes, so ably described by the noble Baroness, Lady Neuberger. By transforming environments and including art, these schemes have demonstrated therapeutic benefits, reduced staff and patient stress, supported staff development and improved the retention and recruitment of staff, as the noble Lord, Lord Mawson, said. The department has recently funded a scoping study to ascertain the viability of mainstreaming this programme across mental health and learning disability services. In addition, the initiative has recently been extended to the Environments for Care at End of Life programme, to which the department is contributing £1 million of funding.

I now turn to the sometimes contentious issue of spending on the arts for health, which noble Lords have not mentioned today but which has occasionally been a topic for often misinformed discussion among our friends in the media. I want to make it clear that we are unashamed about the need for, and our commitment to, spending on the arts for health. It is a legitimate investment for the NHS, and we welcome the fact that many arts projects are often funded locally through charitable trusts and donations. Much of the work of the sector has grown through the work of many committed individuals and voluntary and charitable organisations. As my noble friend Lord Howarth has said, there are calls for further central funding, and it is clear that additional money would always be welcomed. We believe that tackling issues about awareness, evidence and understanding are an effective way to increase investment, and that it is in keeping with creating a patient-led NHS. Local communities know best how to use the arts in their own work.

On the specific questions asked by noble Lords, my noble friend Lord Howarth and the noble Earl, Lord Howe, talked about the evidence base, and although some pieces of evidence are less rigorous than others, the Government completely agree with noble Lords that there is enough evidence to demonstrate the benefits clearly. On the question of funding and the request for £50 million, I could not possibly comment on any figures, but we recognise that arts co-ordinators are key appointments. However, as noble Lords will know and as the noble Earl said, PCTs are now in control of 82 per cent of the NHS budget, and the direction of travel is that a lot of that funding needs to be found at a local level. Indeed, PCTs know how best to invest in their own work. I hope that many of the organisations that we have mentioned will press them to make that investment.

The noble Baroness, Lady Sharp of Guildford, as ever eloquently raises the issues dear to her heart and about which she is so well informed. I will ensure that the appropriate remarks are passed on to my noble friend Lady Morgan, who may give her more satisfactory answers than I can about the financial details, although of course I agree with her that the arts have a huge role to play in the health and well-being of older people, and I recognise the need and enthusiasm for learning a range of skills right through one’s life.

I feel I should put on record the fact that the noble Lord, Lord Mawson, and I are fellow Bradfordians. We are also fellow supporters of social enterprise. I have visited the Bromley by Bow Centre several times and for many years, and I can say no more than anyone else about how impressive and wonderful that project is. It is always inspiring and deserves replication, perhaps of the sort described by the noble Lord. His description of the work of the centre is completely correct, and I will ensure that his words are drawn to the attention of my noble friend Lord Darzi. If it is not being considered by my noble friend’s review, I will ensure that it and the noble Lord’s remarks about the polyclinics in particular are brought to his attention.

The noble Baroness, Lady Neuberger, described with her usual passion and huge knowledge the important work of the King’s Fund, the RIBA and others. I very much enjoyed her description of Hillingdon Hospital. The department is undertaking a major scoping study to mainstream Enhancing the Healing Environment, as I have mentioned. The Minister, Ivan Lewis, spoke in November last year, at the King’s Fund conference on sharing success, about how to roll this out.

The department will work with the new regulator. It is always striving to raise the profile of the built environment and stressing the vital role that it has to play in healthcare. Clearly, it has to be part of the work of the new regulator. I am sure that the noble Baroness will be raising such issues during the passage of the Bill that is coming our way.

It is important to pay tribute to one or two arts organisations in particular that have worked tirelessly for many years to improve the quality of life for those involved. There is Painting in Hospitals, a charity established in 1959, Arts for Health, established in 1988 and, perhaps most significantly, Music in Hospitals, which is celebrating its 60th anniversary.

I thank all noble Lords who have taken part in the debate. The lack of a recent political statement does not mean that work is not being done. I hope that my remarks have assured noble Lords of the Government’s commitment in this area. However, I will get in touch with my right honourable friend the Secretary of State and suggest that he should mention this in a forthcoming speech. I assure noble Lords that we will continue our work across government departments and with other agencies to ensure that the arts make a major contribution to people’s health and their lives in general.

The Deputy Chairman of Committees (Lord Haskel)
That completes the business before the Grand Committee this afternoon. The Committee stands adjourned.

The Committee adjourned at 6.01 pm.