Lords Chamber

 House of Lords

Thursday, 20 November 2008.

The House met at eleven o'clock: the LORD SPEAKER on the Woolsack.

Prayers—Read by the Lord Bishop of Southwell and Nottingham.

International Development: Agriculture

Lord Judd
asked Her Majesty’s Government:

What support and encouragement they are giving farmers in poor countries in view of the pressures on world food demand.

Lord Tunnicliffe
My Lords, the UK Government remain strongly committed to helping farmers in poor countries to increase their productivity, thereby helping to increase the availability of food to the most vulnerable. As well as continuing to provide substantial support for agriculture through our bilateral aid programme, we have taken the lead in pressing for a comprehensive and co-ordinated international response, with the aim of doubling agricultural productivity in Africa and doubling the rate of agricultural growth in Asia.

Lord Judd
My Lords, I take the opportunity to congratulate the Government once again on their commitment to overseas aid. Does my noble friend agree that in our response to the global economic and financial crisis we must keep the plight of the world’s poorest people constantly in focus? With 75 per cent of the world’s poor still living in rural areas, and with most of them utterly dependent for their livelihood on agriculture, do the Government agree that for appropriate agricultural technology to be sustainable the farmers themselves have to be genuinely involved and that this means ensuring that extension programmes reach the poorest and the most excluded, including pastoral people, women and those living on subsistence farming? Can my noble friend reassure us on that point?

Lord Tunnicliffe
My Lords, I think, more or less universally, yes; I acknowledge that 75 per cent of the very poor people are in agriculture. We aim to move people away from humanitarian assistance into long-term protection schemes. Those are about involving farmers and causing them to improve their own capability. We have schemes in Ethiopia, Bangladesh and 18 other countries to achieve that aim.

Baroness Northover
My Lords, did the Minister see the report in yesterday’s Financial Times which states that companies in some of the richer countries are now buying up large tracts of land in poorer countries with the intention of growing food there to bring back home? Does he regard this as a worrying development or is it an opportunity for the poor farmers in those poorest countries?

Lord Tunnicliffe
My Lords, the honest answer to the first question is no, I did not. As a generality, processes that increase trade bring people out of poverty. If the schemes to which the noble Baroness refers increase international trade and involve local communities in that international trade, they are to be welcomed.

Lord Pearson of Rannoch
My Lords, remembering the 25,000 deaths every day in the developing world caused by malnutrition and associated causes, have the Government made any progress with the analysis that we discussed during our Lisbon debates of the contribution made to those deaths by the common agricultural and fisheries policies and by US grain policies?

Lord Tunnicliffe
My Lords, the Government are firmly committed to the Doha round and to doing our best to revive it, which will tackle the sorts of issues the noble Lord is talking about. Certainly, import duties into the European Union do stifle trade, and we as a Government are keen to do all that we can to reduce those tariffs.

Lord Tomlinson
My Lords, I take this welcome opportunity, for what I believe is the first time in 10 years of discussion in this House, to agree entirely with the noble Lord, Lord Pearson of Rannoch. Does my noble friend agree that if we are meaningful in what we say about completing the Doha round, then both Europe and the United States have to give further in relation to their commitment on protectionism of European and American agriculture, and that it is only in that way that we will make a meaningful contribution to the eradication of poverty?

Lord Tunnicliffe
My Lords, without committing the Government to a particular negotiating position, I agree with the generality of that statement.

Lord Soulsby of Swaffham Prior
My Lords, I am grateful to the noble Lord, Lord Judd, for bringing up this issue. He identifies the bottom billion people in developing countries who rely entirely on agriculture at a very primitive level. Part of that reliance depends on the use of draught animals such as oxen, buffalo and others. What are the Government doing, via DfID, to help the rural farmer to keep those animals healthy, productive and profitable in terms of producing food at that basic level?

Lord Tunnicliffe
My Lords, I know of no specific DfID-wide programmes on that issue. We have committed £400 million over five years to agricultural research and I am sure that some of those programmes will touch on those issues.

The Countess of Mar
My Lords, is the Minister aware of the push/pull system in Kenya where crops are grown that, for example, protect maize from the stem borer, the crop that is grown can be fed to livestock and the maize grows productively? What are Her Majesty’s Government doing to promote such small schemes?

Lord Tunnicliffe
My Lords, I am sorry but I cannot respond at that level of detail. Our aid generally goes through country programmes, and if that is in the country programme we will be supporting it.

Baroness Rawlings
My Lords, the international conference on wheat stem rust Ug99 declared that countries should take strong preventive action against the spread of the new and virulent strain of Ug99, which is puccinia graminis. Does the Minister agree with the estimate that 80 per cent of wheat varieties in Africa and Asia are susceptible to the disease? What action are the Government taking to help to offset this potential food crisis?

Lord Tunnicliffe
My Lords, I am constantly amazed at just how wide this brief is and my total lack of the appropriate detail. The only thing I can say is that we have this important agricultural research programme to which we have committed £400 million, £25 million of which is going into UK biotechnical and biological science research. I am sure that this issue is being considered in those programmes.

Baroness Tonge
My Lords, does the Minister agree with the report from the All-Party Group on Population, Development and Reproductive Health that world food security will never be achieved unless world population growth is reduced? Will the Government therefore increase their support for family planning and safe abortion in developing countries and, even more importantly, persuade the United States Government to do so?

Lord Tunnicliffe
My Lords, DfID’s position is a great deal less prescriptive than the noble Baroness is inviting it to be. We are in the business of reducing poverty and working with Governments of poor nations to develop and help them in the programmes. Yes, there is frequently a dimension to do with helping women’s reproductive health and education, but we are not in the business of telling countries what to do; we are in the business of helping countries to solve their poverty problems.

Health: Diabetes

11:15:00

Lord Harrison
asked Her Majesty’s Government:

What plans they have to reduce the incidence of diabetes amongst children

The Parliamentary Under-Secretary of State, Department of Health (Lord Darzi of Denham)
My Lords, we know that the number of children developing diabetes is increasing. There are an estimated 20,000 children with type 1 diabetes in England, and some experts suggest that there may also be up to 1,000 children with type 2 diabetes. The close link between diabetes and obesity means that it is vital that we reduce the number of children becoming overweight and obese. Our strategy Healthy Weight, Healthy Lives focuses on children and aims to reduce the proportion of overweight and obese children in the population.

Lord Harrison
My Lords, I thank my noble friend for that Answer. My noble friend Lady Thornton and I met this week in Westminster brave and inspiring children who suffer discrimination at school because of prejudice and misunderstanding. This treatment may be due to having to test blood in front of other children in the classroom, being locked in a store cupboard to take their insulin injection or being banned from school because the school nurse is not there. Will my noble friend work with Diabetes UK, the EarlyBird Diabetes Trust and the Secretary of State for Children, Schools and Families to eliminate the causes for a mother ever again having to hear from her child, “Mummy, please take away my diabetes. I want to be like everyone else”?

Lord Darzi of Denham
My Lords, I am grateful for my noble friend’s leadership in championing the cause of diabetes in children. I am also grateful to Diabetes UK, which produced this fantastic evidence-based document on the state of diabetic care for children in England. All schools have a legal duty under Part 4 of the Disability Discrimination Act 1995 to make responsible adjustments to help ensure that disabled children and young people are not in any way disadvantaged compared with their peers. That includes patients and children with type 1 diabetes and covers all extra-curricular activities such as school trips. As for working with DCSF, a cross-government publication entitled Managing Medicines in Schools and Early Years Settings, published in 2005, highlights the importance of schools working in partnership with parents and PCTs to ensure that all the resources are available in schools to manage children with type 1 diabetes.

Baroness Masham of Ilton
My Lords, will the Minister strengthen the guidelines in schools? Some parents have to give up their jobs so that they can help their children in school, and some schools are so much more helpful than others.

Lord Darzi of Denham
My Lords, in April 2007 a group published Making Every Young Person with Diabetes Matter. Those recommendations are now being taken forward and implemented by our national clinical director for children and by other stakeholders and professional bodies, including Diabetes UK. I have no doubt that, as these recommendations are implemented, we will see significant improvement in the support that children get in schools.

Earl Howe
My Lords, we read and hear a great deal about the diet of school-age children, but does the Minister share my concern that we read and hear very little about the diet of young babies and toddlers and the impact that diet in the early months of life may have on health in later years? What research is being done into this particular aspect of the issue?

Lord Darzi of Denham
My Lords, I think that I would go even further than that: diet during pregnancy is as important as diet in the early months, or even years, of life. I do not have the full details of the research in this field but would be more than happy to get the references on what has been done.

Baroness Tonge
My Lords, perhaps I may further press the point made by the noble Lord, Lord Harrison. Surely the Minister must realise that only 16 per cent of schools that have children with type 1 diabetes have a proper medications policy. Combined with the demise of community clinics up and down the country, with mothers no longer able to access advice so easily from health visitors and district and specialist nurses, there has been a great fall in the resources available to mothers of young children. How will the Minister address that problem?

Lord Darzi of Denham
My Lords, we have clear guidance, Making Every Young Person with Diabetes Matter, to which I referred earlier. School boards, through local authorities and PCTs, should ensure that all the resources are available in all schools so that young patients are cared for. A significant number of schools across the country provide high-quality support and we need to learn from their example. There has to be partnership not just with the schools but with local authorities, the PCTs and the parents themselves in finding the right pathways and resources for kids in school.

Baroness Finlay of Llandaff
My Lords, what are the Government doing to ensure that the NICE guidance, which recommends that all children under the age of 12 with type 1 diabetes have access to insulin pumps and specialist paediatric diabetic nurses, is adhered to?

Lord Darzi of Denham
My Lords, the NICE guidance, which was recently looked at again, recognises the importance of insulin-pump therapy and its advantages in glycaemic control. Since the updating of the guidance the pump therapy is, as the noble Baroness suggested, now recommended for children under 12 where MDI is impractical or inappropriate. For children over 12, it is recommended if the MDI result is disabling hypoglycaemia. As with any of the other NICE guidelines, we need to encourage PCTs to implement them. One important study currently being carried out in Cambridge, the adolescent diabetes intervention trial, includes hundreds of kids, not just from the UK but also from Australia and Canada. I have no doubt that it will show even more promising results in this field.

Baroness Symons of Vernham Dean
My Lords, the incidence of diabetes is incredibly high in the Middle East, but they have enormous resources which they are ploughing into research in this subject. Can my noble friend tell us anything about international co-operation on research?

Lord Darzi of Denham
My Lords, I am grateful to my noble friend. As I am sure many of us are fully aware, World Diabetes Day was observed in the past week. It is extremely important occasion to remind everyone of the impact of this condition. I am particularly pleased that the emphasis this year was on children and young people. My noble friend is right that the incidence of diabetes worldwide is increasing. There are 250 million diabetics worldwide. I have no doubt that this global campaign will increase not only awareness but, more important, collaboration between different countries so that some of the innovation on which we lead in this country can be translated to some of the countries in need.

Visas: Watoto Children’s Choir

11:23:00

Lord Roberts of Llandudno
asked Her Majesty’s Government:

What steps they are taking to enable the Watoto Children’s Choir from Uganda to visit the United Kingdom.

The Parliamentary Under-Secretary of State, Home Office (Lord West of Spithead)
My Lords, it is difficult to discuss individual cases, especially those where no formal application has been submitted. That said, the UK Border Agency works closely with charitable organisations to make sure that they fully understand what is required of them and that those who meet the Immigration Rules can prove it.

Lord Roberts of Llandudno
My Lords, I expected a fuller Answer from the Minister, because the British high commission in Kampala announced at 7.45 this morning that these visas had been granted to the children.

A noble Lord
All because of your Question.

Lord Roberts of Llandudno
My Lords, these Benches really do contribute tremendously to the House. Will the Minister get in touch with the high commission in Kampala to verify that? Will he also meet other organisations involved with young people about meeting the new Criminal Records Bureau and visa criteria for these visits?

Lord West of Spithead
My Lords, the Answer crafted by the Box was, I thought, a marvellous piece of not saying anything. I am, of course, absolutely aware of this situation, as I have been working on it for the past few days and we have discussed where we have got to on it. It is now clear that the group involved—a marvellous choir, which helps the orphans of those with AIDS and has visited before—has provided the right data. We have to be absolutely sure that young people are protected in this country. There was confusion because the choir had not provided those data, so we could not process the visas. The data have now been provided and the visas will be being processed now. I was aware of that. My speaking note said “cannot”, but I changed that to “it is difficult to” discuss individual cases. That is where it stands. Of course, it is incumbent on the Government always to protect youngsters. We know that from awful cases in this country. We have to put things in place and nothing had been provided to show that this was being looked after. It is now, so we can move forward.

Lord Mawhinney
My Lords, I am sure that the whole House is grateful for the work that the Minister has been doing on this, but I wonder whether he would take time to see what lessons might be learnt from this incident. I am one of the Members of this House who have heard the choir. To the best of my failing memory, it has made at least two prior visits to this country, because it has sung in the churches in which I worship on both occasions. The choir is an embodiment of the effectiveness of the work of NGOs and Christian missions. It embodies hope, which is a virtue in short supply these days. It would be helpful if, in future, these ambiguities did not have to arise, thus raising questions about future visits.

Lord West of Spithead
My Lords, the noble Lord is absolutely right. I did not answer fully the Question asked by the noble Lord, Lord Roberts, on this point. I am very happy to say that officials will meet these groups, because things need to be made clearer. I think that there was confusion that an extended CRB check was required in these cases, but that is not the case; a full CRB check is not required. What we need is evidence to show that someone has looked into the safety of the young people while they are here. We have no desire to stop them coming over on the ground that some might be left here. It is not like the Moscow Philharmonic, which used to come here during the Cold War and go back as a string quartet. We do not think that that is going to happen. We think that they will go back to their own country.

Baroness Howe of Idlicote
My Lords, it is obviously important that visits such as this are facilitated and, indeed, welcomed. Can the Minister reassure me that charges are not made for visas on this kind of visit, which would prohibit a considerable number of people from coming to this country?

Lord West of Spithead
My Lords, I am afraid that I cannot say that. They are charged the normal rate of £65 a visa, but I am sure that that is all taken account of in terms of the total visit and the money that goes to the charity. We firmly support these things. The choir does marvellous work. As the noble Lord mentioned, it is inspiring. What it is doing is wonderful and makes a considerable amount of money for this worthwhile charity.

Baroness Miller of Chilthorne Domer
My Lords, I wonder whether the Minister saw the inspiring programme about the work that the Venezuelan youth orchestra has been doing in difficult areas in Venezuela. Scotland is now taking a leaf out of that orchestra’s book and learning from its methods. The orchestra is visiting in April. May I ask the Minister not only about the CRB check issue but whether he will ensure that a positive line is taken on visas? At the moment the line seems to be rather negative. Will he ensure that guidelines look positively on these cultural exchanges?

Lord West of Spithead
My Lords, I do not know the specifics that the noble Baroness is talking about, but I can say that we look positively on these things. It is appropriate that we make sure that all the correct checks are done, particularly when looking after the safety of youngsters. It is also appropriate to make the right checks to protect our borders. We have done some revolutionary things to achieve that and had a number of debates in this House on it, so those things are important. We very much approve of these sorts of cultural event and assist them whenever we are able to.

Lord Howarth of Newport
My Lords, could not the choir have a collective visa at £65 for them all?

Lord West of Spithead
My Lords, I cannot say on the Floor of the House that that would be achievable. It is an attractive thought that for charitable things there might be some scope for such provision, but I certainly would not commit the Government to that because I do not think that that would be appropriate.

Taxation: Small Businesses

11:29:00

Lord Forsyth of Drumlean
asked Her Majesty’s Government:

Whether their proposals to help small businesses maintain employment will include retaining after 1 April 2009 the staff hire concession, which prevents value-added tax being charged on the wages of agency workers.

Lord Davies of Oldham
My Lords, this year’s Budget announced the withdrawal of that administrative VAT concession from 1 April 2009. It was introduced as a temporary measure in April 1997 to correct a distortion of competition that no longer exists, and there is no basis in law for its retention. From April, normal VAT rules will apply to temporary staff suppliers. Most businesses will be unaffected as they can recover in full any VAT they are charged when hiring staff.

Lord Forsyth of Drumlean
My Lords, I thank the Minister for that very disappointing response. What does the Government’s rhetoric about helping small businesses and businesses to maintain employment in a recession mean if they plan to impose from 1 April next year a tax of 17.5 per cent on the wages of temporary workers? The Minister says that it will not affect many businesses but does he not realise that part-exempt businesses, which include financial services, charities, social care, education and social housing, will not be able to recover the VAT? I understand that even the Government think it will result in an extra £125 million being imposed on the costs of employing people. Should not the Government put their rhetoric into action and continue this concession, given the recession that we are about to face, which they have played such a part in creating?

Lord Davies of Oldham
My Lords, the Government will be translating rhetoric into action in the Pre-Budget Report on Monday. I hope at that stage that the Opposition’s rhetoric extends beyond the interests that involve about 30,000 equivalent full-time workers when the country is facing difficulties for a very large number of the employed population. The noble Lord must recognise the magnitude of the issue we face; the Opposition—he is a significant figure in them—appear to be concentrating on an administrative concession that was granted by that Administration in 1997 on a temporary basis and which was declared in 2005 to be outside the law. Over the past three years, we have consulted and indicated that we intend to comply with the law. I hope the Opposition applaud that position.

Lord Razzall
My Lords, we cannot expect the noble Lord to anticipate the detail of the Statement on Monday but is he prepared to give two undertakings to your Lordships? First, will he undertake that, in making that announcement, the Treasury will take no notice of the siren voices of the Tory Opposition, who would lead us even further on to the economic rocks? Secondly, will he confirm that the plan on Monday will produce real tax cuts for hard-working families in this country?

Lord Davies of Oldham
My Lords, that broadens the Question, which was about a small concession on VAT that affects a very small section of the population. The noble Lord will expect me to indicate that I am well able to resist the siren voices of the Opposition; I have not always been able to detect such a phenomenon. However, I want to emphasise that the Pre-Budget Statement on Monday will address the issues facing the economy of this country at a most serious time. I am glad that the noble Lord, Lord Razzall, generalised on to broader issues—I find it somewhat surprising that the Opposition, at the last representation before the Pre-Budget Report, are concentrating on such a minor matter.

Baroness Noakes
My Lords, I am going to stick with the Question and not get distracted by Liberal Democrat party propaganda. The last Red Book estimated, as my noble friend Lord Forsyth pointed out, that the impact of this could be £125 million from 2010. The industry estimates that this would have an impact of £400 million. One of the sectors most affected is the voluntary sector. What estimate have the Government calculated for the impact of this on the voluntary sector and, for example, on healthcare provision? Are they absolutely sure they want to go ahead with it in these straitened times?

Lord Davies of Oldham
My Lords, I emphasise to the noble Baroness that we have no option but to go ahead with it because we have no legal basis for the concession that was advanced in 1997. A test case indicated that it is beyond the powers of Her Majesty’s Revenue & Customs to operate the concession, so we are seeking to come within the framework of the law.

I agree with the noble Lord, Lord Forsyth, and the noble Baroness that it is essential that we have measures—they will be announced next Monday—that address the problems facing employment levels in the country; we all know that there are great difficulties ahead. However, the noble Baroness is surely not asking the Government to persist in operating outside the law.

Lord Skelmersdale
My Lords, the Minister has given the House the impression this morning that this concession would have been maintained but for the law. Why did the Government continue with it for six years?

Lord Davies of Oldham
My Lords, because there were market imperfections at the time. I am not critical of the previous Administration for having introduced the concession to deal with those imperfections, which have now largely been eroded. We continued with the measure because it produced some beneficial effects at the time.

Once it became clear that a judgment of the House of Lords in its judicial capacity found against Inland Revenue’s powers to operate this concession, we had to do something about it. Why has it taken so long? We sought to consult with the industry, and wanted a decent lead-in time before the concession was withdrawn. Three years have therefore elapsed. We announced in the 2008 Budget that we would withdraw the concession, and that that would be implemented in next year’s Budget. The Government could not have acted more fairly than that.

Business

11:36:00

Lord Bassam of Brighton
My Lords, my noble friend Lady Morgan of Drefelin will repeat the Statement on safeguarding children after the debate in the name of my noble friend Lord Adonis.

Railways

11:37:00

The Minister of State, Department for Transport (Lord Adonis)
rose to move, That this House takes note of the prospects for the future of the United Kingdom’s railways.

The noble Lord said: My Lords, in rising to move that this House takes note of the prospects for the United Kingdom’s railways, I want first to pay tribute to all who work on and for the railways, including the British Transport Police. They do a great job of service for the British public, often at unsocial hours; we owe them a debt of gratitude and they are rightly proud of their work and their industry.

The history of the railways was, until the turn of this century, one of extraordinary innovation and dynamism by the Victorians, followed by a century of gradual and then precipitate decline and stagnation. Like all simplifications, this is an oversimplification. The Victorians made their mistakes, not least their failure to build effective north-south and east-west links across London, which has bedevilled commuters and the national economy ever since and is only now being put right by Crossrail and the Thameslink upgrade. There were also notable successes in the 20th century, such as the electrification of southern England’s commuter network. Certainly, however, the 50 years between the Government of the grandfather of the noble Earl, Lord Attlee, in the 1940s and that of John Major in the 1990s was a period of decline and underinvestment which many thought would never be reversed in the face of the seemingly relentless rise of the car and the truck. This year marks the 50th anniversary of the opening both of Britain’s first motorway and of Gatwick airport. Road traffic has increased 15-fold since 1950. For all British Rail’s commendable marketing efforts in the 1970s, it is fair to say that the last half century was the age of the car and the plane, not the age of the train. The botched rail privatisation of the mid-1990s, followed by the Hatfield rail crash and the collapse of the privatised Railtrack, was in many ways the nadir for the industry.

The 20th century decline of rail was of course an international phenomenon, but the relative decline was greater in Britain than in much of western Europe—although less than in the United States—because of slower rates of innovation and investment.

While most of western Europe went straight from steam to electric traction for intercity and commuter services in the 1950s and 1960s, Britain only partially electrified; and while France, followed by most of its neighbours, built high-speed lines from the 1980s, we sat on the sidelines. We did build the Channel Tunnel after a century of dithering, an historic achievement of the Government of the noble Baroness, Lady Thatcher. However, as President Mitterrand noted at its opening in 1994, the Eurostar trains would speed through France at 186 miles an hour but then slow to half that to enable passengers to enjoy the beauty of the Kent countryside, not to mention the glory of the south London suburbs.

Since the late 1990s, a renaissance of the railways has taken place. Passenger numbers and freight volumes have grown at a remarkable rate. Passenger numbers are more than 50 per cent higher. There were 1.2 billion passenger journeys last year, higher than at any time since 1946. Freight traffic is up by 40 per cent in the past decade. The number of services, and service quality, have also improved steadily. Almost exactly a year ago, St Pancras re-opened as the terminus for High Speed 1, the quintessential marriage of Victorian railway grandeur and 21st century high-speed technology. It is a moment that will surely come to be seen as the start of a new era in Britain’s railways.

There is plenty in all this for the railway romantic, but it is important to appreciate the hard-headed economic, environmental and technological factors which are driving this upsurge in rail, and which I am confident will take it a long way further in the decades ahead. In an age of growing traffic congestion, environmental concern and rising carbon emissions on the one hand, and steadily faster, more efficient, and more environmentally friendly trains on the other, the terms of trade in transport are changing fundamentally. The railways are coming back, not only because we like them but because we need them. Nothing exemplifies this better than one of the lesser reported ballot results in the United States on the day of Barack Obama’s election a fortnight ago. The people of California voted yes to a referendum proposal, backed by Governor Schwarzenegger, for a $10 billion bond to start building America’s first high-speed rail line between Los Angeles and San Francisco, with the aim of reducing the 350 mile rail journey time to a mere two hours and 40 minutes on trains travelling up to 220 miles an hour.

The go-ahead for the Californian scheme followed a robust campaign which focused on the strong transport and environmental benefits of high-speed rail. Proponents argued that it would alleviate the need to spend an estimated $100 billion on new freeway and airport capacity over the next 20 years. So after decades when rail was virtually derided as a mode of passenger transport in the United States, California looks set to follow most of western Europe, China and Japan in pioneering high-speed intercity rail.

Beyond High Speed 1, we have not so far opted to join this international movement. However, I highlight the terms of reference of the Network Strategy Group I chair, set up by my right honourable friend the Transport Secretary last month, which include examining the need for new lines over the next 20 to 30 years, alongside the case for a rolling programme of further network electrification. Next week I go to Japan to see at first hand its high-speed network and its ambitions for a generation of still higher-speed Maglev trains. We hope to be in a position to indicate conclusions and a way forward on electrification and new lines by next summer.

I also point to the other modernisation programmes in train, including the £16 billion Crossrail project, which will take 24 trains an hour through central London on a line which connects Heathrow and the west of the capital, through the business and commercial heart of the City, into Docklands and to Essex beyond. In addition, the Thameslink project will take up to 24 trains an hour from Bedfordshire, Hertfordshire and the north of London through central London to Brighton and other destinations in the south. These are both transformational projects which will improve radically the network at its most congested and economically vital heart. We are also pioneering the next generation of express trains, which will take over from the ageing diesel 125 fleet and provide greater express capacity on the electrified network too.

The intercity express programme will provide a new generation of express trains capable of running by both diesel and electric traction, and switching between the two as needed, at speeds of up to 125 mph. This will offer greater capacity, flexibility, speed and reliability to existing intercity services. The introduction of the next generation of in-cab signalling towards the end of the next decade is also likely to have a significant positive effect on capacity and reliability.

Nor are we neglecting the interests of rail freight, a vital area of current and future growth. The planned £200 million investment in the strategic rail freight network will be capable of handling more and longer trains, carrying greater loads, and offering better connections with the UK’s international gateways and main transport hubs.

As Minister for Transport, it is my job to be relentlessly on the side of the passenger. I am well aware that despite these welcome prospects for the medium-term and long-term future, passengers have real concerns about the railway here and now, and I fully accept our duty to bring about improvements month by month.

Today’s commuters and other travellers care about the number of services available, performance and reliability, safety, capacity and overcrowding, and ticketing and fares. The £15 billion programme of investment in the network over the next five years, set out in last year’s rail White Paper, is focused on concrete improvements in each of these respects. Let me take each in turn.

In respect of the number of services, significant improvements will be evident from 14 December this year, when the new timetable is introduced. This will be particularly evident on the West Coast Main Line, where the £8.8 billion modernisation programme is drawing to a close. The standard London to Birmingham journey time will, from 14 December, be reduced to 82 minutes. The fastest services to Manchester will be just over two hours, and four hours 10 minutes to Glasgow. There will be a shuttle-style service every 20 minutes to Birmingham and Manchester, a further step-change improvement. In the early 1990s, there was not even a proper hourly service between London and Manchester.

Across the network as a whole, the number of train services will increase on 14 December by more than 5 per cent to 104,500 a week—the highest on the network since Beeching. This includes a 9.8 per cent increase in Sunday services, and a 6.5 per cent increase on Saturdays, as we seek to offer a reliable seven-day-a-week railway in place of the patchy weekend timetables of the past. From December 2009, the new domestic services on High Speed 1 will offer significant improvements for passengers from the Kent coast and Ashford into the Thames Gateway, east London and central London.

On reliability and punctuality, the latest figures show that in the past year more than 90 per cent of trains arrived punctually under the public performance measure—that is, within 10 minutes of booked time for intercity services and Five minutes for suburban services. That compares with 75 per cent seven years ago. In the last four-week period for which figures are available, 14 September to 11 October, 91.7 per cent of passenger trains arrived punctually. But we need to see these figures continue to improve. We have set a higher benchmark for the future and, where performance is unsatisfactory, we are ready to take immediate action to improve services for passengers. That is why, for example, we insisted upon a remedial plan to improve reliability on First Great Western, where there was a serious breakdown of performance earlier this year. We also secured a package of passenger benefits worth £29 million, including discounted tickets and extra rolling stock on the crowded Cardiff to Portsmouth route.

To increase capacity further, we are working with the train operating companies and rolling stock companies to procure an extra 1,300 rail carriages by 2014; 423 of these are already on order, to be delivered between 2009 and 2011—92 for southern services, 217 for London Midland, eight for Chiltern, and 106 extra Pendolino carriages. I feel as though, during the past six weeks, I have answered Questions for Written Answer from the noble Lord, Lord Bradshaw, in respect of every single one of the remaining 877 carriages, and I continue to assure him and the House that new orders will be placed soon and we believe that we are absolutely on course to meet our commitments. These 1,300 extra carriages will enable more trains, longer trains and more modern trains to be available in areas where there is greatest demand over the next five years. In addition, in order to increase capacity, Reading and Birmingham New Street, the two busiest stations outside London, will be redeveloped, along with the refurbishment of 150 mid-sized stations.

In respect of passenger safety, the Secure Stations Scheme is improving station security. Launched in 1998, the scheme accredits individual stations which work with the British Transport Police and partners to improve station security. Funding for the British Transport Police has more than doubled in the past six years to £271 million a year. There are now 2,800 BTP officers and 262 community support officers in the force, and the number of offences reported by the BTP fell by 12 per cent between 2006-07 and 2007-08. More than half of all stations, and more than 3,000 trains, are now equipped with CCTV surveillance systems, and more than 500 stations now have cameras that are centrally monitored. This means that not only will passengers be safe but they will feel safer, which is vital to building passenger confidence and tackling social exclusion.

In terms of ticketing and fares, we believe that the RPI plus 1 formula in respect of annual increases in controlled fares provides a fair balance between, on the one hand, the interests of the passenger and, on the other, those of the taxpayer, who provides the £4 billion in annual subsidy to the industry. Thanks to recent reforms, operators have introduced common names and standard terms for fares, and we are asking the industry to back the new structure with a “price promise” that will give passengers confidence that they have been sold the right ticket at the best price.

However, we need to do more to simplify the ticketing system and to enable passengers to buy tickets quickly and simply. I am sure I am not the only person who has missed a train at Victoria queuing for a ticket in a gated station and who has found it difficult to navigate the internet ticketing obstacle course. I am working on these issues with Passenger Focus, the passenger watchdog, which does an excellent job on behalf of passengers. I expect to have more to say about this in the new year.

It is also important that we make it easier for passengers to switch between different forms of transport. Better facilities for cyclists is one issue, and the recently published specification for the new South Central franchise sets out significant improvements for cyclists at South Central stations. Better interchange arrangements between rail, cars, buses and coaches are also necessary. Several of our train operating companies are also bus and coach operators and are seeking to integrate rail, coach and bus travel in novel ways. The new East Midlands Parkway station, opening next year, will be a significant step forward in this respect. There is great potential for the marketing of tickets and journeys which are part bus or coach and part train to meet the needs of passengers better. An expansion of park-and-ride facilities will also benefit car owners who wish to switch to rail for part of their journey.

As I used to say when at the Department for Education and Skills, “No Complacency” is my middle name, and I am certainly not complacent about the state of the railways. A lot more needs to be done, month by month, to improve the service for passengers and freight operators, and to improve the system’s efficiency and value for money for both passengers and the taxpayer. It is particularly important that Network Rail continues to improve the condition in which it keeps the track, the way in which it conducts maintenance and renewal work so as to cause minimum disruption to passengers, and the efficiency of its operation.

The Office of Rail Regulation has highlighted the scope for considerable efficiency savings in Network Rail’s operations in the next five years as the company seeks to achieve best international standards in track maintenance and renewal, which the ORR believes it is still some way short of. The memory of the West Coast Main Line breakdown last Christmas and new year has certainly not been forgotten by passengers or by the Government. Network Rail, for all the improvements of recent years, still has a big job on its hands, which I know it fully accepts. That is all the more important as we enter a period of greater economic uncertainty, when value for money is ever more crucial for hard-pressed passengers and taxpayers.

I end, as I began, by emphasising the strongly positive climate which now exists for rail in Britain. Decline is a thing of the past. A spirit of optimism is abroad and there is a lot to be optimistic about. The great Victorian railway pioneer, Isambard Kingdom Brunel, vowed to create a railway on which, in his words,

“we shall be able to take our coffee and write whilst going noiselessly and smoothly at 45 miles per hour”.

I know that all too many passengers wish that they could sit down to enjoy their coffee and write, but I am sure that even Brunel would be impressed by the railway technology of the 21st century and all it has to offer this generation and the next at speeds rather greater than 45 miles per hour. I beg to move.

Moved, That this House takes note of the prospects for the future of the United Kingdom’s railways. —(Lord Adonis.)

11:55:00

Lord Lyell
My Lords, after that wonderful speech by the Minister, delivered at considerably more than 45 miles per hour, I adjusted the focal length of my glasses and looked around to discover that I am one of the only amateurs taking part in the debate. Together with the noble Lord, Lord Berkeley, my career goes back to 1952, when we both studied at that wonderful college beside the Thames, Eton. His professionalism in his new career in your Lordships’ House and outside bears testimony to all the work that he has done.

I declare an interest as a noble Lord who probably does more mileage on the railways of the United Kingdom than any other. I hesitate to say “United Kingdom”, but I refer back to my career in Northern Ireland, which the United Kingdom covers. Today, I shall desist from worrying about what went on between Belfast and Londonderry, let alone the integrated system to Dublin, and I shall concentrate on Great Britain, especially Scotland. I travel 450 miles twice a week between Dundee and London on the east coast main line. I would like to thank all the personnel who have worked on that line over the many years that I have travelled from Scotland to London. The Minister mentioned the British Transport Police, who on several occasions this year have been able to assist me in various aspects of my travels to and from your Lordships’ House.

Perhaps I might split my remarks between passenger and freight. On the passenger side, your Lordships may be aware that north of Edinburgh the east coast main line, which continues to Aberdeen, is not electrified. I am a veteran of the high-speed train known as the 125. I am particularly gratified to hear the Minister say that those trains are being looked at, as some of the accoutrements and furnishings go back, to my mind, to the early 1980s. I have to take medicaments because of the draughts when the doors jam open. From everything that the noble Lord has said, however, it seems that progress is being made on that line.

Those of us who use the east coast main line are impressed with the electric service and I suspect that the noble Lord, Lord Rosser, is as well. The noble Lord, Lord Berkeley, and I may remember our elementary mathematics: 125 miles per hour is, I believe, 225 kilometres per hour. To achieve those speeds, to which the Minister referred, one needs a certain amount of infrastructure. One hears about, across the Channel, the TGV system in France and, to a great extent, the neue Bahn in Germany.

I have one point about the east coast main line. The Minister mentioned Isambard Kingdom Brunel. Perhaps he would let me know in writing, or someone may enlighten me during the debate, who is responsible for repairing the old Great Northern Railway line that goes from King’s Cross to York, which I believe is 188 miles. The layout on that line, apart from some tunnels and one or two viaducts crossing the Chilterns, is perfect. It is a testimony to what can be done on the east coast main line with the 225s, which would not require the enormous infrastructure changes and earthworks that are required in France, Germany, Italy or elsewhere for high-speed trains.

I have some experience of travelling in Europe. Germany is rather like France, Italy and some parts of Spain. I have some personal knowledge of travelling in the Alps, particularly in Switzerland. Switzerland has an excellent integrated system for passenger trains. It has elapsed-time, fixed-interval trains so that you know that you will be able to make your connection. It is beautifully adjusted. Switzerland, Austria, France and Italy cover the Alps. Perhaps the Minister might be able to confirm that I have some of this right. I have a friend in Switzerland, former Federal Councillor Ogi. He was responsible for driving through the new alpine transport system. He had serious difficulties—political, personal and others—with many people in Switzerland when preparing two enormous transalpine, or subalpine, tunnels. The one that goes into the Rhone valley is complete. The second, the Gotthard tunnel, will be open, I think, within the next four years. Perhaps the Minister can confirm that I have that partly right. Those tunnels will significantly reduce the road transport, pollution and other problems associated with moving freight across Europe.

The Minister mentioned both sides of this aspect in Great Britain. Can he confirm that large parts of the track infrastructure and, for all I know, the laid track of the old Great Central line that used to go from Marylebone to Manchester would be suitable for extensive freight transport? The noble Lord, Lord Berkeley, knows a lot about this and may be able to fill me in later. My noble friend Lord Henley reminded me that north of Leeds there is the old Midland line from Settle to Carlisle. I call it Ais Gill because it goes over it. I understand that that line still has excellent double-line infrastructure and track for freight. The passenger traffic is not great, but it can be. I hope that the Minister will be able to confirm that where we have existing track and infrastructure it will still be available.

Will the Minister write to me to confirm that the loading gauge for tunnels and track—the width and all that—will be suitable for all the improvements in transport that he and all of us wish to see? Across the Channel, the loading gauge—the height, the width and, for all I know, the weight—even on the older lines, certainly in the Alps, is greater than we have in Great Britain.

From a humble position, I thank the Minister for his great exposition of the current position. I look forward to hearing what he has to say in future and to hearing the other speakers in this debate who are the real professionals on this.

12:04:00

Lord Bradshaw
My Lords, I, too, start by thanking the Minister for his optimistic view of the future. I hope that he will be able to carry it into effect. He certainly has my best wishes and, I imagine, those of most Members of the House. I will dedicate what I have to say to the memory of my friend in another place, Robert Adley, who first brought me into the political arena as the adviser to the Transport Select Committee of the House of Commons in 1993. I speak from a professional, not a romantic, point of view and not from a particularly political point of view. The Government inherited a terrible mess and the Conservatives would do well to reflect on the advice given by the noble Lord, Lord Forsyth, who is not in his place, about how the Government should efficiently run business, and on what they did to the railway. They wasted vast sums of money, created an awful bureaucracy and almost ruined our railways after Hatfield.

However, the charge that I make against the Government is that there are fundamental flaws in the current system. Leaving aside the collapse of Railtrack, which obviously occupied a good deal of their early time, and John Prescott, who forced through the upgrading of the links to the Continent, we still await the delivery of Thameslink 2000—that was its title—and Crossrail. Those will happen in future, but I remind the Minister that the Government have been in office for 11 years. He spoke about the renaissance of the railways, but the reasons why we have a much busier railway are that the economy has grown substantially, there has been an enormous increase in road congestion, people are living further away from where they work, so there are more commuters, and there is genuine concern about the price of oil and the environment. The increase is certainly not because we have adequate rolling stock, it is not because we have opened a lot of new lines, it is not because we have opened many new stations—British Rail had a much better record—and it is not because we have had electrification, because we have had no electrification. The only bit from St Pancras to the Channel Tunnel was probably built by the French.

Engineering costs have gone through the roof, whether the cost of track, signalling or rolling stock. Rolling stock provision has been stultified. Will the Minister confirm on the record his Written Answer of 29 October that 1,300 new vehicles will be delivered during control period 4? There is a lot of suspicion in the industry that some double-counting is going on and that not all the vehicles will be new; some will be vehicles transferred from place to place. Enterprise has been almost killed off, except in the case of freight, where the noble Lord, Lord Berkeley, and the people with whom he works have made enormous efforts to put the freight business, which was shamefully neglected by BR, back on its feet.

The bureaucracy that surrounds our railway has multiplied tremendously. As an example, I have here the Office of Rail Regulation’s determination of Network Rail's output for the next control period. It has about 465 pages and is a heavy document, as it is printed on good paper. It encapsulates the work of armies of consultants. They are people who were never employed on the railway before and I guess that many of them do not know much about how railways work.

I imagine that the specification for the replacement high-speed train, to which the Minister referred, is a very big document. Of course, it was possible simply to go to the rolling stock industry to say, “We want a high-speed train”, and see what the industry had to deliver, rather than convening committees to design one, which has all the properties of committees designing a horse and arriving at a camel. The question of whether we need a diesel high-speed train needs re-examining. I believe that if we are to have an electrified railway, we want an electric high-speed train. If a train needs to be moved across the periphery of the railway, a locomotive can be simply attached to the front to take it to its destination.

Perhaps the Minister would also look at the size of some of the invitations to tender, which can amount to cartloads of paper. Again, we never had that before privatisation. The Government give the impression of action, but in answer to many things they pass the blame to Network Rail, the train operators and the ORR. The Minister could perhaps initiate the practice of having a notice on his desk that says, “The buck stops here. You will get answers here. We will not shove them off to other people”. This morning, on the “Today” programme, a critical item about the Criminal Injuries Compensation Authority said that people did not get compensation quickly because the papers are just passed from one official to the next. No one was doing anything wrong; people ticked boxes but they did not ensure that action was taken.

In October, the National Audit Office published a report on letting rail franchises. It was a self-satisfied report, which said that everyone had ticked the right boxes and had done what they should. On 26 October, I wrote to the chief executive and asked him eight questions. Do franchise terms reflect the long life of assets and ensure that these are obtained on the best possible terms to the taxpayer? What is the cost of letting franchises? What about end-of-franchise behaviour? How is past performance rewarded in a franchise? Has the department been sufficiently imaginative in designing reward systems? Is the department really planning the 1,300 new vehicles to which I have referred? Does the report recommend that the department must increase or improve the calibre of its staff, particularly engineers? Put simply, where are these people to come from? There is no surfeit of qualified engineers. I agree with the report that PTEs should be more involved. I also agree that bidders should be much more imaginative in making bids, not simply trying to adhere strictly to the absolute word specified in the franchise.

I have mentioned the defensiveness of the Civil Service versus the train operators, which are almost afraid to make robust representation to the department. I have personal experience of this. When I first came to this place, I was on the Strategic Rail Authority. Three times, Sir Alastair Morton, who was then the chairman of the Strategic Rail Authority, had telephone calls from the Under-Secretary protesting that I had asked questions about transport in this House. The Civil Service is very defensive and tries to crush anyone who raises pertinent questions.

Network Rail’s advertisement for a new chairman bears looking at. It states, for example, that it is looking for someone for two or three days a month and that no particular knowledge of the railway is necessary. Yet this is the most important job in railways. It is not a job for a retired general or bank manager when he can find time to spare from the golf course. It is a serious job.

I believe that only two courses of action are open to us: either we take the whole railway back into public ownership under a reconstituted railways board or we radically reform the whole of the franchising process and, in doing so, encourage challenge on the part of the Government and empowerment on the part of the operators. Those who win new franchises or gain extensions to their existing arrangements will do so on the basis that quality of service continues to rise, that they are willing to invest real money in the system, that fares are kept level with the RPI and that there is an enormous increase in the provision of car and cycle parking. The Minister referred to this when talking about East Midlands Parkway, but more needs to be done because so many car parks are full after eight o’clock in the morning. We need long, rolling franchises; that is, if the operator does well, the franchise does not come to an end. We need to stimulate the rolling stock market, if necessary by the Government taking finance leases on rolling stock if the roscos will not do so. We also need some vertical integration, although I realise that doing that, as well as giving any directions to Network Rail, requires primary legislation.

I turn to the question of the high-speed line to the north. I have done some work with former railway colleagues on an alternative: what could be achieved by upgrading the existing east coast main line rather than building an entirely new one. A great deal of value could be realised for much less money if that were done. I invite the Minister to meet me and my colleagues soon so that we can explain to him what could be done with the east coast main line to make it a very much better railway. Upgrading could offer, for example, a journey time of three hours 15 minutes to Edinburgh, the provision of a separate line for freight almost all the way and an all-round better service.

I do not agree with the Conservative policy so far expounded to build a high-speed line by taking money away from the rest of the railway. We will end up in the same situation as the French: a third-class railway operating underneath the TGVs. We do not need that; we need a good railway system that serves everybody. We should be starting on electrification, about which my noble friend Lord Wallace will say more. However, I draw the Minister’s attention to the perilous situation of the Bombardier works at Derby. It is the only works in this country that is building diesel trains. If the works close, which Bombardier is threatening if it does not get orders, they will not reopen and we will then have to pay a king’s ransom to buy trains abroad. The Minister mentioned Birmingham. The only thing I want to say is that a lot of the money is being spent on a new station at the top of the city and very little is being done about capacity. There are good schemes, but they need some impetus.

Lastly, I want to recount a couple of things about the situation in Wales. First, last Saturday when the train to Holyhead left Cardiff Central near the Millennium Stadium on a rugby international day, fisticuffs broke out because people could not get on the train and lots of people were left on the platform. When passengers ask, “Can’t you put some more rolling stock on?”, the simple answer is that there is no more rolling stock and you cannot rob one part of Wales for another. The second point that I want to draw the Minister’s attention to is the desperate need to redouble the line between Swindon and Kemble. That sounds a little esoteric, but in fact the only link between south Wales and London is via the Severn Tunnel. If that tunnel were to fail—it is old and full of water—there would be no credible way of connecting south Wales with London. A bit of a push from the department would have persuaded the ORR. The ORR had more representations on this than on anything else, yet it is not included in the schemes to be funded in CP4. It could be included either by extending the franchise or by finding some method of incentivising the train operating company.

In conclusion, we want a busier, larger and more efficient railway with a lot fewer hangers-on and buck-passers.

12:20:00

Lord Faulkner of Worcester
My Lords, I am delighted to join others in congratulating the Minister not only on the brilliance of his historical analysis of the railway but on encouraging us to have this debate at all. It is, I think, the first time in my nine years in this House that the Government have initiated a debate on the future of the railway, and it is a measure of his self-confidence and that of the Government in the railway compared with a few years ago.

I should say at the outset that I am particularly pleased that the Minister paid tribute to the British Transport Police. I have spoken up for that body on a number of occasions in this House and I have long wanted its role to be expanded. I shall probably talk to him on another occasion about the role that it could play in policing Britain’s airports; that debate is for another day.

I declare a number of non-commercial interests in the railway. I am proud to be the president of the Cotswold Line Promotion Group, which is campaigning for the reinstatement of the double track on the line from Oxford to Worcester and was rewarded with success in the recent ORR determination. I am treasurer of the All-Party Group on Rail, and I chair the Railway Heritage Committee. I am an advisory board member of Greengauge 21, which is campaigning for the new high-speed line from London to Scotland, I am a trustee of the National Museum of Science and Industry, and I sit on the advisory boards of the National Railway Museum and its outpost, Locomotion, in county Durham.

This is a great time to be associated with the railway, as all three speakers so far in this debate have made clear. As the Minister told us, the number of passengers carried is at its highest level since 1946, the punctuality and performance figures for most train operators are steadily getting better—even the worst performing have improved—and research into customer satisfaction shows that that, too, is higher.

I should like the Minister to consider one measure that could significantly increase off-peak business on the railway, prove extremely popular with those who would benefit, and build on the success of the free bus travel that was introduced earlier this year for the over-60s. The Government should encourage local authorities to say that the travel card, which the over-60s receive for bus travel, can double as a senior citizens’ railcard, not with a view to making rail travel free for seniors but to save them the £24 annual cost of the railcard. The railway would then benefit from some of the travelling that seniors are undertaking now. Although the card is growing in popularity, only about 10 per cent of us who are over 60 have one. There is therefore scope for increasing rail travel among seniors.

I have commented before in your Lordships’ House on how great the contrast is between the time when I worked at the British Railways Board from the late 1970s to the early 1990s, when cost-cutting and retrenchment were the main imperatives, and today. I still remember with a shudder how a senior civil servant from the Department for Transport arrived at the BRB as a board member and announced to his stunned colleagues that he had been appointed “to preside over the orderly rundown of the railway”. Despite that mood, it was possible throughout the 1970s and 1980s to resist repeated suggestions to reduce the size of the network. Thank goodness that we did so. If we had not done that, we would have lost routes such as the route from Settle to Carlisle, to which the noble Lord, Lord Lyell, referred—an attempt was made for many years to close that line—and scores of others that now are essential passenger and freight lines, and we would not have had a network capable of handling the increased traffic on the railway today.

As the debate is about the future, I will not spend too long down memory lane, but I cannot resist making the point that if the Treasury had allowed the publicly owned railway the same amount of financial support as today’s railway receives, we would have created many years ago the finest railway in Europe. The levels of support that the old British Railways Board received were tiny compared with what the railway receives today.

There are many challenges for my noble friend and he has his chance to secure his place in railway history. He starts with the latest ORR determination, to which the noble Lord, Lord Bradshaw, referred. It is a reasonable way forward. As noble Lords can imagine, on the Cotswold line we are delighted with the decision on redoubling and we hope that my noble friend, as a former committee member of the CLPG, will come and celebrate with us on a suitable occasion very soon. However, as the noble Lord, Lord Bradshaw, said, he will have to cope with those who have lost out in the determination, such as the good people of Kemble, the reinstatement of whose track to Swindon was not included in the document. Their local government representative in Gloucestershire, when I met him on Monday, asked me to pass on his unhappiness to my noble friend today, and I do so.

The other point to bear in mind about the ORR determination is that the forecasts on which it is based are about half the level of growth that is currently being experienced. So the problems of overcrowding in the future will be considerably greater if this growth continues and if capacity is not increased. One way to increase capacity is to reopen stretches of line which should never have been closed, such as that from Uckfield to Lewes in Sussex, to give an alternative route to Brighton from London, and at least the Oxford to Milton Keynes section of the east-west line which used to go on to Cambridge. That would become an even better proposition if Chiltern Railways’ very imaginative plans for a new Oxford to London via Bicester service come to fruition.

I hope we shall hear some good news from my noble friend next year about electrification. There needs to be a combination of filling in the gaps, such as from Preston to Manchester, from Leeds to York, up the midland main line north of Bedford and, indeed, from Aberdeen to Edinburgh, as the noble Lord, Lord Lyell, said. There needs to be an imaginative approach to the big projects, such as the Great Western main lines out of Paddington to South Wales, Bristol and the west of England, and the north to west lines from Leeds to Sheffield and down to Birmingham and Bristol.

I sense that the mood has changed in the Department for Transport. There were some encouraging comments earlier in the year from the former Secretary of State, Ruth Kelly, but I stress that if we are going to commit ourselves to electrification it will be for control period 5—that is, after 2014—and the work must start soon.

The case for electrifying an expanding railway is absolutely unanswerable. It makes so much more sense to use a fuel which can be derived from a variety of sources rather than rely on a single type of fossil fuel. Electric trains are lighter and use less energy than diesel trains and, with regenerative braking, which has recently been introduced on the west coast main line, there can be energy savings as well. In the case of the west coast main line new trains, there are energy savings of up to 18 per cent.

Unlike the noble Lord, Lord Bradshaw, I am strongly in favour of high speed 2, the new railway line which starts in London, goes to Heathrow Airport, up to Birmingham and on to Scotland with branches to Manchester and Leeds. That would produce journey times of 40 minutes from London to Birmingham, one hour 25 minutes to Manchester, one hour 20 minutes to Leeds and two and three-quarter hours to Edinburgh and Glasgow.

I sense that there is a growing political consensus in favour of this, which must be linked to a decision to abandon airport expansion in the south-east of England, particularly the third runway at Heathrow. My noble friend will recall that at Oral Questions on 10 November I welcomed the Conservative Party’s conversion to this way of thinking. In reply to me he said that the number of internal flights that could be saved was,

“fewer than 3 per cent”.—[Official Report, 10/11/08; col. 431.]

He said that because the Conservatives’ plan appeared to be only for a high-speed line to Manchester and Leeds.

That is a fair point, but I want to see a new line to Scotland that reduces journey times to less than there hours. With that in place, it would not just be the Manchester and Leeds/Bradford journeys that would be made by train rather than plane, but those to Glasgow and Edinburgh as well. If you add to those the trips to destinations in continental Europe that could be reached easily by high-speed train—Frankfurt, Amsterdam and Cologne, for example, as well as Paris and Brussels—you could have a future where most short-haul journeys of up to, say, 500 miles were undertaken by train.

Well over one-third of the flights currently using Heathrow, around 200,000, are to short-haul destinations in the UK and Europe. Paris remains Heathrow’s top destination, with more than 50 flights on a typical day. It is those flights that are clogging up the airport’s runways, and most of those journeys could be made more easily and in a more environmentally friendly way by high-speed railway. The Conservatives are right to abandon the third runway, and I shall say so next week if the government announcement is made on the subject. I hope it is possible that we can achieve some sort of cross-party consensus on the need for the high-speed line as well, provided that they will look at the requirement for it to go on beyond Leeds and Manchester.

The ability of high-speed rail to capture these markets from air is not in doubt. Eurostar now has more than 70 per cent of the market between London and Paris and more than 60 per cent of the market between London and Brussels. The air service between Paris and Brussels has ceased since the train journey was reduced to about an hour. Rail used to hold only 22 per cent of the combined Paris-Marseilles air/rail traffic before TGV Mediterranean went into service in 2001, but in five years the market share for rail has risen to 69 per cent and easyJet has abandoned its Paris-Marseilles flights altogether. In the UK the improvement on the west coast route, without a new line, has led to rail taking 20 per cent of passengers from the airlines and increasing its share of the market to 60 per cent.

The tipping point, traditionally, has been a journey of three hours, but that threshold has recently been increased to around four and a half hours for business travel. The French railway SNCF has found that on journeys shorter than that, where its trains compete with airlines, its share of the market rises rapidly to more than 50 per cent. That is backed up by other European rail companies, which are capturing more than 60 per cent of the business market from airlines on four-hour journeys. Comparative figures about the time a journey takes, however, paint only a partial picture. What is more important than the journey time, particularly to business travellers, is how productively the time can be used, and it is here that rail can have a big advantage. I suspect that is why I see many more of your Lordships and Members of another place on the trains from Edinburgh and Glasgow—and even Dundee—to London than I used to.

Finally, I shall refer to some other railways that have not yet featured in this debate—the heritage sector. It is responsible for 13 million passenger journeys a year, has a turnover of £60 million a year and contributes £150 million directly and indirectly to the nation’s economy. I have three points to make. First, I thank officials at the Department for Transport for the support they give to my colleagues and me on the Railway Heritage Committee. We take seriously the responsibilities that have been given to us by Parliament to,

“secure the preservation of evidence which is significant to the nation’s railway history”.

The department has recently concluded a major programme of consultation on how the RHC’s scope can be updated and expanded to take account of recent changes in the structure of the industry. An order is now likely to come before the House early in the new year. There is no need for me to say more about this now, other than to say thank you.

Secondly, I thank my noble friend for the interest he has taken in the threat facing one of the oldest and most special industrial light railways in the south of England, the Sittingbourne and Kemsley. I would not want at this stage unnecessarily to antagonise the Finnish owners of the land on which the railway sits as negotiations are continuing but I hope that, from the avalanche of representations that it has received, the company called M-real now appreciates that we in Britain are deeply attached to our railways and we will not sit by and let their rails be ripped up just to satisfy the profit hunger of property companies.

The third matter will be the subject of a further letter that my noble friend will receive from me next week. It concerns the Birmingham Railway Museum Trust, which is based at the old GWR depot at Tyseley. It is an educational charity that provides a main-line vintage train experience and an equipped workshop serving the heritage railway movement. It has particular problems with its landlord and with rent. The work that the trust does in teaching young people engineering skills is very valuable.

I endorse what other speakers have said, including my noble friend. These are great times for the railway. There are some huge challenges ahead and some great opportunities, particularly for him as the most enthusiastic Transport Minister we have ever had in this House who clearly wants to leave his mark on the railway. Public opinion will be very much on his side if he can use his time in office to grow the railway and enhance its popularity. I wish him well in that, particularly in his role as chair of the network strategy group, because that could produce a new railway for the new century.

12:36:00

The Earl of Glasgow
My Lords, it is a great pleasure to be following the noble Lord, Lord Faulkner of Worcester, for once; normally in these railway debates he follows me. I agree with a lot of what he says, although I am not quite so optimistic as he is on the state of the railways. In fact, when considering the present and future state of the railways in Britain, some of us feel close to despair.

Successive Governments have allowed our network to get into an undeveloped state, mainly through lack of investment. This is particularly shaming when the network is compared with the standard of most other European countries. Why have successive Ministers of Transport not given us hope that things really are going to get better in the future? After his introduction to this debate I am hoping that the Minister today will be the one to do so, but we must still await results.

Surely it is evident to everyone by now that the railways are the only possible solution to our transport problems. Trains are the only relatively carbon-free means of transport, unless you count the bicycle. They are not subject to congestion, except sometimes when trying to enter one of London’s termini during the rush hour. They are the safest method of travel, for short distances anyway. They are the fastest way of getting from A to B for any journey of 200 miles or so, and if we had high-speed trains they would be the fastest over 500 miles. More important to those of us who value quality of life, however, they are, or should be, the most civilised and stress-free form of travel. Congestion on the roads and at airports have forced more people to travel by rail—not, I suspect, because like me they are seeking a better quality of life, but because the frustration and aggravation of finding places to park their car have proved too much for them.

We are told that in the past 10 years train travel has increased by 50 per cent. To most passengers, and I believe the majority of these are daily commuters, the journey is still an ordeal. Although some improvements have been made by the train operators in the past few years, rail journeys are still unreliable and usually uncomfortable. Overcrowding on some train services is still a disgrace. Worst of all, they are getting more  and more expensive. The fares here are considerably higher than those for comparable journeys on the Continent. Those adverts telling you that you can get a return fare from London to Scotland for something like £45 are particularly irritating and misleading. What must you do for such a cheap fare? Take a particularly slow train at a time when no one else wants to travel and book a year in advance? Travel by train should be a convenience, not a complicated item of advance planning.

The Government assure us that they are in the process of improving the existing network, and to a limited extent I believe that they are. Better signalling is being installed to allow more trains to travel on any one line. Longer carriages and longer platforms should help ease overcrowding, although I am still rather shocked by how long it will be before we get these new carriages. There will be a mile or so of extra track here and there to relieve bottlenecks, and improvements to stations such as Reading and Birmingham New Street. God, Birmingham New Street is a dreary station. Can we not get Richard Rogers or Norman Foster or someone like that to look into it?

All this is good news in itself, but it is nothing like enough. Even in the immediate short term, there is a lot more to do. We need a more regular and frequent service in many rural areas, whose people must otherwise rely on usually unreliable privatised bus services. We need safer rural stations, which the Minister has alluded to, where, for instance, women returning from the city on dark nights can feel assured that they will not get mugged. We need safer car parks at these stations and enough parking spaces. But even if they were to be acted upon, these short-term improvements, although welcome, are mere window dressing in comparison with the fast-approaching future threat to the railways. Something must be done urgently; the problem is that we are running out of capacity.

With passenger numbers increasing, we are told, by more than 8 per cent a year—it could be more—we need more railways, and that means more railway lines. Various bodies, as well as Network Rail, have identified the most pressing routes for new lines but as I understand it, as yet there are no plans for any new lines, let alone a high-speed rail line from London to Scotland, the one that the noble Lord, Lord Faulkner, and I are so keen on. The Government are not even going to consider that idea until 2014, although the Minister suggested that there may be a decision before then. I do hope so.

A high-speed train going at 185 mph or more would not only help to solve the capacity problems on the existing lines but make polluting internal plane travel unnecessary. The fastest train I can get from Glasgow to London takes four and three-quarter hours. If there were a train that took three hours, I would no longer need to take the aeroplane which, including checking in and out of airports, takes about three hours.

Nearly every other European country has high-speed trains. Spain, for instance, has a train from Madrid to Malaga and from Madrid to Barcelona that takes two and a half hours, and both are longer distances than from London to Glasgow. All we have in this country is the 80 miles from St Pancras to the tunnel, and if it were not for the French and the tunnel, we would probably not even have that. For goodness’ sake, we were the country that invented the railways.

Even if we did get the go-ahead in 2014, the earliest we could expect to see high-speed rail from London to Glasgow in operation would be 2025, and I think that that date is optimistic. By then, God knows what the state of our existing railway network will be. Anarchy may have broken out on the roads and Ryanair might be flying passengers from Stansted to Bristol.

Time is running out. Let us hope it is not already too late. The Government must show some vision. A larger as well as an improved network is essential for the future. It is not an option. And the money for it has to be found somewhere.

12:43:00

Lord Rosser
My Lords, I, too, thank my noble friend for providing the opportunity to discuss the current and future prospects of the railway industry. I declare some interests: an involvement in Rail Freight Group visits, as set out in the register, and as a member of the All-Party Group on Rail.

We have had, as has been said, more than a decade of unprecedented growth in passenger and freight traffic. Passenger kilometres, as the Minister reminded us, are greater than at any time since 1946, on a network that is nearly half the size that it was then. Ninety per cent of passenger trains reach their destination on time. Rail is the safest mode of travel in Britain measured in terms of passenger kilometres. Over the past five years, Network Rail has improved the efficiency of operating, maintaining and renewing the network by nearly 30 per cent.

According to the Office of Rail Regulation in its latest report, when Network Rail took ownership of the rail infrastructure from Railtrack in 2002, it faced a network where costs had spiralled and delays were far above the levels of a few years before, when the railways were publicly owned—hardly an advert for the benefits it was claimed that privatisation would bring to the railway industry. Since 2002, Network Rail has achieved a great deal in rectifying the problems it inherited. However, the Office of Rail Regulation will be expecting Network Rail to achieve a further 21 per cent improvement in operating, maintenance and renewals efficiency by 2013-14. Even that 21 per cent is only two-thirds of what the Office of Rail Regulation considers to be a reasonable view of the current efficiency gap between Network Rail and other infrastructure managers, including those in other countries with highly developed railway networks.

As we know, passenger and freight traffic is expected to continue to increase significantly, with Network Rail needing to deliver projects across the network to handle passenger demand growth of some 22 per cent and a 30 per cent growth in freight over the next few years.

Considerable investment has, of course, already been made in the industry, not least by the Government, and further major projects have been given the go-ahead, such as Crossrail, Thameslink and major improvements at Reading and Birmingham New Street. There will also be many smaller scale schemes, including 500 longer platforms to accommodate longer trains. The scale of the enhancement programme in the five-year control period commencing 1 April next year will be more than twice the level in the current control period. But since it takes some time to develop and give the go-ahead for major projects, I hope that active consideration is being given to further major investment, not least to the electrification of existing routes and the construction of more new high-speed lines following the full opening of the new line to the Channel Tunnel. High-speed lines should not just be for people trying to flee the country or get into the country.

With the present economic downturn, it is quite likely that the recent growth in passenger and freight traffic will slow down or even go into reverse. I want to raise a few points about that later. However, such a development is likely to be relatively short-lived and ought not to colour judgments over future long-term investment in the rail industry, since all the indications are that current growth trends will continue and the capacity problems which we already have on some routes and in some locations will intensify and become more widespread if major investment does not continue. The population of our nation is, after all, expected to continue to grow, and with it the demand for travel for leisure and non-leisure purposes. That demand will have to be met in part by rail travel in view of the justified hostility to building more and more roads; the costs, particularly to business, of road traffic congestion; the enhanced contribution that rail can make compared with road and air travel in reducing emissions; and the contribution that rail, particularly electrified lines, makes in reducing our dependency on fuel from countries of, shall we say, uncertain friendliness.

The relatively recent reduction in journey times and associated increase in train frequencies on the west coast main line, which is not a high-speed line as such, has resulted in a significant increase in passenger traffic, once again illustrating the point that reducing journey times increases rail patronage. The Minister has said that service frequencies on the principal routes on the west coast main line are shortly to be further enhanced.

The approach that we have taken up to now has been to increase the speed of conventional trains on the InterCity routes to 125 mph using conventional signalling. This has produced significant improvements and has no doubt been influenced by considerations of costs and a feeling that since most of our major centres of population are within 200 miles of each other, 125 mph trains provide good enough journey times.

While high-speed electric lines use more electricity than lower-speed lines, the cost of building a new high-speed line is not that much more than building a conventional line. The reality is that continuing growth in demand for rail will need new lines to relieve the most congested routes or expensive and potentially disruptive programmes to increase capacity on existing congested routes or, most likely, a mixture of both. However, if we want to maximise the number of people who switch from travel by car, we need high-speed lines with significantly reduced journey times for our principal trunk routes. Such lines, provided there is a sensible fares policy, would also increase the amount of leisure travel by those who would not have travelled at all.

With passenger demand for weekend travel continuing to grow there is an increasing need for the railways to be open for business longer, with a consequential need to find more efficient ways of managing the infrastructure to avoid lengthy and extended line closures or delays which add considerably to journey times, to the detriment of both passenger and freight traffic.

Other transport modes are continuing to reduce their emissions through the use of new technology, and rail also will need to address the issue of improving its environmental performance if it is to maintain its environmental advantage. Is the Minister satisfied that there is sufficient investment in research and development by and for the railway industry, both now and projected for the future? In 2006, the then chief executive of the Association of Train Operating Companies said:

“Technology, which has come to the aid of productivity in many industries, has done little for the railway”.
 

Does the Minister agree with that point of view? If the industry wants to take full advantage of the opportunities that it now has, a comprehensive research and development programme will be vital to address rather more than just the two issues that I have just mentioned related to better management of the infrastructure to avoid closures and delays and the need to maintain the environmental advantage of rail.

Does the Minister believe that the current arrangements for the provision of rolling stock through the rolling stock leasing companies are sufficiently flexible in terms of availability of rolling stock and charging to enable quick responses to increased passenger traffic on particular routes, or specific services on particular routes, by the provision of additional coaches and better-quality rolling stock to meet that demand? As has already been said, we seem to have issues with overcrowded trains on some routes or some specific services which seem to continue for a long time and to be incapable of quick or early resolution even when the constraining factor is not platform lengths that preclude an additional carriage on a train.

Many of my comments have been related to Network Rail. However, it is obvious that the train operators, too, have a key role to play in securing increased patronage at a time when customer expectations for reliability, safety, comfort, standards of service and value for money are also increasing. According to the most recent survey by the railway watchdog, Passenger Focus, the percentage of passengers nationally satisfied with their journey overall was 80 per cent, which reflects on the performance of both Network Rail and the train operators. However, the specific satisfaction rates which scored least well were those over which the train operators would appear to have had the most control. These related to toilet facilities, availability of staff on trains, how well the train company dealt with delays, and the value for money of your ticket. The national satisfaction rates for those four items were 35 per cent, 38 per cent, 34 per cent and 40 per cent respectively. There would seem to be some scope for the train operators to raise their game in certain areas, which will be essential if the industry is to maximise the opportunities that it now has.

I should like to raise one or two points about the current position of the railway industry and the impact of an economic downturn. If there is a significant economic downturn, as seems to be widely predicted, it will be the first occasion since the railway industry has been in the private sector, and to that extent we could be entering unknown territory. One of the Government’s objectives is to achieve a further reduction in the level of taxpayer subsidy after the substantial increase in taxpayer support that followed the decision to move the industry into the private sector. The Office of Rail Regulation has made it clear to Network Rail that it must achieve more with the financial resources at its disposal. Likewise, the terms on which train operators have decided to bid for and have secured franchises have been based on financial projections based on assumptions that they will either sustain or increase passenger numbers. In some cases the company running the franchise will have agreed to pay money to the Department for Transport over a period of years in return for the right to run services over what will be deemed the more lucrative routes. In others, the amount that the company said that it required from the department to run services will have reflected a projection in its bid about future passenger levels and thus income.

What will be the position if the train operating companies say that they cannot achieve the anticipated level of passengers because of a downturn in the economy and as a result either cannot pay the Department for Transport the amounts required under the franchise or, for the same reason, need a higher level of subsidy? If he was satisfied that it was all attributable to the effects of a downturn in the economy, would the Minister accept either a reduction in payment from the train operator concerned or pay a higher subsidy to the train operator as appropriate? Or would he say that that was a risk for the train operator to bear and that if the train operator subsequently went bankrupt or withdrew from the franchise, the Government would take over the operation of the services until another operator could be found? Or do the franchise agreements already stipulate that the department will have to accept a reduced payment from the operator or increase the level of subsidy where it is deemed that the reasons why the projected increases in passenger growth and income could not be achieved were outside the operator’s control? Alternatively, will a train operator be told that any financial shortfall will have to be made up by further fare increases and reductions in services, with the burden thus falling on rail users? I hope that my noble friend will give some indication of the department’s likely approach, since it is inconceivable that contingency plans for dealing with such problems are not already in place.

I conclude by again welcoming the Government’s continuing active support which has resulted in a growing and thriving railway industry. The approach by this Government is in marked contrast to the negative, defeatist attitude of the previous Administration, who had no time for the railways.

12:57:00

Lord Berkeley
My Lords, it gives me great pleasure to participate in a very knowledgeable debate. I declare interests as chairman of the Rail Freight Group and a board member of the European Rail Freight Association. I am also secretary of the All-Party Parliamentary Rail Group.

Many noble Lords have spoken about the success and growth of passenger and freight traffic. My figure for the growth of freight is 60 per cent in 10 years. That is because service quality has improved and performance in passenger and freight services is probably the best in Europe, after Switzerland. The noble Lord, Lord Lyell, was very kind about me. It is clear that he knows a lot about Switzerland. They do run a very good train service there.

His and other noble Lords’ comments focused on the problems of capacity. There is a shortage of capacity at the moment, and there will be a much greater shortage in the future. Forecasts that we did with the Freight Transport Association in the summer indicate that, in 20 years, there will be a shortfall of paths on the west coast main line, the east coast main line, the great eastern and many others of somewhere between 100 and 200 freight trains a day, assuming that there is no increase in passenger trains—which is not a very sensible assumption, except for the fact that nobody can say how many extra passenger trains there will be. You can go on making trains longer; you can extend platforms; you can build extra tracks; and you can build new freight lines—as the noble Lord, Lord Lyell suggested. All of those things can help and some of them can be done quite quickly—for example, having four tracks instead of two, although high-speed lines would take longer—but we need to start thinking about it now. I know that the Minister is doing so, and it is very welcome, but we need decisions quite soon because the problem will begin to hurt in the next few years. On the midland main line, for example, I understand that the new service to Corby, which is in all the timetables to start in December, does not have approval for an access right to a path. If it gets approval from a regulator, freight will have to wait and go some other way. The problems have started now.

Freight terminals are equally important. If there are no terminals, there is no freight. I am very pleased by the work that the Minister and my noble friend Lady Andrews have done to include rail freight as well as big railways in the scope of the Planning Bill.

I have just one last reflection on the difference between the UK and our nearest neighbour. Many noble Lords have talked with affection about high speed lines. They are great fun and get you around very fast. They are different here—they would be, because we are a much smaller country and the capacity problem is much greater. But the significance difference that I see between here and somewhere like France is that at the moment our whole network is in a pretty good state, whereas the French railway network, apart from the TGV line, is in a pretty appalling state. I have travelled outside the Paris region by bus because the track was unable to take a train. So we must be careful when we start making comparisons with other countries and hold on to what have been some very good investments by Network Rail in the past few years.

I welcomed my noble friend’s robust statement about how the Government cannot interfere in Network Rail. I declare an interest as one of the 100-odd members of the board who are trying to review corporate governance to see whether we can improve it, if it needs improving. I also welcome the work that the Rail Regulator has done in his latest review, to which others have referred. He said that track access charges would come down 35 per cent. That is fantastic, but it would not have happened if the costs had not come down, because there is a direct relationship between the two. I agree with what my noble friend Lord Rosser said—that there are further savings to be made—and I hope that the regulator continues with this.

It is interesting that in Scotland, the new line that Transport Scotland proposes between Edinburgh and the Borders is intended to be operated by an infrastructure manager that is not Network Rail, so that the performance and cost can be benchmarked between them. That is going to be very interesting. It might assist our Rail Regulator in seeing whether efficiencies can come from that. I personally have no appetite for major changes to structure, but small tweaking is necessary, so let us build on the success to date and concentrate on investment and more efficiency.

I have three issues to raise in this debate: on passengers, on rolling stock and on the dear old Channel Tunnel rail link. On passengers, I have an interest in Cornwall, where I am a harbour commissioner in the port of Fowey and have a house. I travel by train as much as I can around there. I add my comments to those of other noble Lords who have referred to the lack of capacity in the rolling stock on some of those services. Devon and Cornwall are seriously important tourist destinations for the UK and a lot of tourists, as well as local people, want to go by rail. However, being squashed into a pacer is a bit like cattle being squashed into a truck on the way to the slaughterhouse, which is not the way to encourage tourists to leave their car wherever they are staying. I urge my noble friend to look at the south-west as well as other parts of the country to see whether, certainly in the summertime, more rolling stock could not be found for local services and for some of the services that come cross-country and from the First Great Western line to that area. I know that the Minister’s department has said that some of the cross-country trains can be increased by turning them into 125s, but some of the other trains have been taken away, so it is only a marginal increase. I hope that he will be able to look at that and do something for the tourist industry in that area.

I turn to something a bit more complicated, called homologation. It is to do with introducing new rolling stock on the railways and is part of the single market in railways—open access and interoperability, which I support vigorously. The problem of getting there, however, is quite serious. It is challenging the private sector industry to spend money on innovation when the costs are really getting quite high. To give your Lordships an example, new wagons have been ordered by Network Rail for its own equipment and have been produced for lower-height and container wagons to get under bridges without gauge enhancement. The cost of compliance with the new standards is looking to be from £50,000 to £100,000, which to a private sector company is quite a lot. We find that they are required to fit spark guards to the wheels, in case the sparks from the brakes set fire to the train above it. Sparks can be caused by cast-iron brakes, as noble Lords will know, but it is very difficult to create sparks from composite brakes. I do not think that anybody has ever achieved that, actually—but they still have to fit spark guards. Furthermore, the wheel profiles are different in the UK and the brake blocks have to be different. If you put the new brake blocks on a wagon of a train that otherwise has UK blocks on them, the new brake blocks will stop the whole train, because they have higher friction. That means that they will wear out so quickly that you have to replace them every other week. It is fine if the whole train is like that, but it does not actually help developing new equipment.

The noise has to be tested on all new wagons and coaches, passenger and freight. For some reason, we do not have anywhere to test them in this country, so they have to go by road to the Czech Republic. That probably costs £10,000 in road charges. I mean, don’t we look stupid? I said to Network Rail, “Why don’t you put a microphone beside the track?” Somebody in a government department said to me, “Actually, you can’t do that in this country because the track is so bad that it wouldn’t come up with the right answer”. I am not sure that I believe that—but the fact remains that having these trains going to the Czech Republic on a road vehicle is stupid, and I hope we can get round that.

This is a big transition issue for the industry, which has to compete on the freight side with road. It is a disincentive to modal shift. I give credit to my noble friend’s officials for their commitment to not only this kind of homologation but another thing that is coming in called TAF TSI. That is a requirement that all train operators, passengers and freight, must introduce IT interface systems between train and infrastructure manager and train and other train in the next five years, or they will not be allowed to run on the network. The good old incumbents on the Continent have come up with the lovely idea that they will introduce all this, develop it and give it to themselves for free and everybody else will get charged an unregulated fee for doing it. Most of the companies in this country, passengers and freight, have not joined this.

Again, my noble friend’s officials are doing very well with the regulator in addressing these issues, but could he do even more with his officials? Not only do these things have to be taken extremely seriously, but our success in this country with the new structure, with the competition and the better service quality and everything, is something that our colleagues on the Continent really want to know about, but they are a little bit uncertain about it, and they need our experiences first-hand from my noble friend and his colleagues rather than from other people who want to tell another story.

My last issue is on the dear old Channel Tunnel rail link, which is now called High Speed 1. We had a big debate here on 13 May, on the Third Reading of the Channel Tunnel Rail Link (Supplementary Provisions) Bill. My comments relate to costs and charges for freight to use the link, for which the consultation is out at the moment. The issue with costs started long before my noble friend was in his post—it probably started before 1997, in fact. The owners of HS1—effectively the Government—have given the contract to Network Rail to operate HS1 for 80 years on a cost-plus basis. I am not a great fan of cost-plus contracts, because people sit back and watch the money roll in. Where is the incentive to reduce the costs when the contract is for 80 years? I do not think it is a very good idea. On the basis that charges relate to costs, I want to see the costs come down so that the charges come down.

In the debate on 13 May, my noble friend said that he was keen for the Government,

“to place incentives on the infrastructure owner continuously to improve the efficiency of operation and we want [to see this] reflected in the relevant subcontracts”.

I think that means he wants to break the contract with Network Rail—I hope he does—and come back with a better one. He continued:

“The Government do not see themselves as the first and best regulatory option”.—[Official Report, 13/05/08; col. 932.].
 

That certainly was not the case at the start. I would say that they were probably the worst regulatory option. I hope my noble friend can now turn that around. I hope that he can inform me of some progress on this, either now or in a letter, because lower costs equal lower charges.

The regulations are quite clear on the principle of charging for freight. Directive 2001/14, Article 8, states:

“The level of charges must not … exclude the use of infrastructure by market segments which can pay at least the cost that is directly incurred as a result of operating the railway service”.
 

To me, that means marginal cost plus a mark-up on what the market can bear, if it can. I do not think that the CTRL people are saying that they should have fixed costs added to this. They published a network statement on Monday—about three years late—which said that the infrastructure managers,

“will calculate freight charges on the basis of the long run incremental cost”.

In other words, “We are doing that, and to hell with whether it is legal”. That needs to be challenged.

Secondly, the document has no basis for calculating the costs. The managers say that the cost is £9.25 per train-kilometre. There is no justification for that: that is what it is, like it or lump it. The cost is £14.80 per train-mile, compared to Network Rail’s £2.50 a mile, as required by the regulator—it is six times the figure. When road freight is the market leader, you cannot just multiply the access charge by six and say “That’s it”. There would be no traffic at all. I hope my noble friend will look at that and see whether we can get some common sense. I believe that the charges are illegal under Directive 2001/14. I do not think, as my noble friend Lord Bassam said, at col. 929 of Hansard, that this is encouraging greater use of the line. To me it certainly is not. I do not think that it puts the Government in a very good position as a regulator because no freight will use the line as it is. There were plans for freight for the Olympics to come up that line. I believe that it is a barrier to trade.

The Government are about to receive a letter—perhaps my noble friend can confirm whether they have already done so—to say that the European Commission is starting infraction proceedings for non-compliance on this network statement. I hope I do not have to do this, but unless my noble friend can give me some answers—I do not expect them today as it is a bit complicated—I shall encourage the Commission in that.

My noble friend spoke warmly of the £200 million strategic freight network for freight, which is really good news and which I welcome. He said that it makes a good connection to hubs and international gateways. The Channel Tunnel is the only international gateway connected by rail, and I do not think that he will see any trains on his strategic freight network going through the tunnel, unless that gets changed.

Enough of that gripe. I apologise to my noble friend for the length of it. What we are all saying in the debate—certainly what I am saying—is that we have had a lot of change but, for me, change never goes fast enough. However, let us look at the significant improvements to passengers and freight and the quality of the network achieved. Service quality and performance have been dramatically improved. Forecasts of growth—I do not know whether they slow down—are a nice challenge. I am sure that my noble friend and his team will meet that challenge and that we will move forward to see the growth and the investment necessary to achieve it.

13:44:00

Lord Wallace of Saltaire
My Lords, the noble Lord, Lord Lyell, said that he thought that he was the only amateur in this debate. I declare myself also an amateur among all these rail professionals. I am very grateful to my noble friend Lord Bradshaw for providing me with some very helpful briefing. However, I live in the north of England and I very much want to make a number of points in a debate about investment, which tends to be dominated by the demands of the south and south-east England.

We all recognise how much we have damaged public transport infrastructure over the past 30 years and the structural reasons for that. I was talking to the Minister informally the other day about the structural bias of transport economics against rail, which I have experienced as an academic on a number of occasions. I hope we are now at least beginning to move away from the structural bias of the Conservatives, particularly under the prime ministership of Margaret Thatcher, against public transport and in favour of private transport. The whole Anglo-Saxon approach to private and public initiatives, which one sees now in the United States as they become aware of their rail and road infrastructure, is desperately in need of change. I have to say to the Minister that it is wonderful to hear that California is beginning to revive its rail network. In 10 days’ time I shall be taking the train from New York to Boston through several states. I have allowed for it to be half an hour late. The last time I went from New York to Washington by train it was nearly an hour late. When the United States actually starts to deal with its east coast main line, we will know that it has begun to catch up with the shift in assumptions about public and private.

I welcome the Minister’s opening speech. I am only sorry that it has taken the Labour Government 11 years to reach the point that we hope we are at. I note the thinness of the Conservative contributions to the debate, and I fear that that also represents the thinness of Conservative policy on public transport. We have seen a whole series of missed Opportunities over the past 20 or 30 years. New road-only bridges have been built over the Humber and the Severn when on the Continent they have been building combined bridges for road and rail. Airports at Manchester and Heathrow have been built without through rail connections in sharp contrast to Schiphol, Charles de Gaulle and Frankfurt. These things are all going to be costly to revise. Privatisation was very badly mishandled with large sums paid to consultants and unnecessarily expensive arrangements for the leasing of rolling stock and for PFI. There was the abandonment of the electrification programme and the odd situation in which we have privatised our railways by allowing state-owned companies of others to buy into them. When I wanted to talk about the Leeds to Skipton railway line I had an interesting conversation with an executive of Netherlands rail the other week—NedRail is a part owner of Northern Rail. The same applies to the state railways of Germany and France.

The revival of rail travel over the past 10 years has been as strong in the north as it has been in the south. There has been a 40 per cent increase in Yorkshire in the past 10 years, and Network Rail is talking about an anticipated rail increase of up to 50 per cent in Yorkshire and across the north of England over the next 10 years. As regards CrossCountry trains, I cannot remember a time, whenever I get on a train from Leeds to Newcastle, York, Sheffield or Birmingham, when people were not standing in the train. As regards the Skipton to Leeds line, which is my local railway line, it is impossible to get on at Saltaire between 8.30 and 9 o’clock in the morning. The Harrogate to Leeds railway line, a marked commuter rail line, still uses Pacers that were cascaded—that lovely term in which stock moves from the south of England to the outer regions of the country. It means that if you try to go from Leeds to Morecambe or Shrewsbury to Aberystwyth, or even Leeds to Harrogate, you still use these funny things, which were disbarred from the south-east many years ago.

Lord Berkeley
My Lords, I remind the noble Lord that we have never had Pacers in the south-east.

Lord Wallace of Saltaire
My Lords, I thank the noble Lord. In that case, no one in the south-east would ever have put up with them.

The revival of freight on the railways is also immensely encouraging, but we are already up against capacity limits. My London-Leeds train the other Friday was held up for some time because there were two freight trains on a double-line section of the east coast main line in front of us. I assure the noble Lord, Lord Lyell, that the Settle-Carlisle line is now heavily used, including at weekends. Now that I have a shared allotment in Saltaire, just alongside the Settle-Carlisle railway line, I see the number of trains that go past us.

The absurdity of privatisation as a basis for higher public investment has been well remarked upon by others in the debate. The case for public investment in rail is now strong. There are four rationales: first, to meet this rising public demand; secondly, to reduce carbon emissions as part of the climate change debate; thirdly, now, to revive the UK economy through long-term public investment, in which public infrastructure investment is clearly important; and fourthly, as an aspect of spatial strategy and regional policy, to assist economic development outside the south-east.

Last Friday, we had a debate on a report from the Economic Affairs Committee on immigration, and a number of noble Lords were talking about the threat of a rising population concreting over the south-east. Well, we are doing pretty well at that, with a four-lane M1 and five-lane parts of the M25. If we do not want to concrete over the south-east, we must also think about how to improve communications between the north and the south, and across the north.

I have a number of questions for the Minister. First, have the Government now committed themselves to resuming the rolling electrification scheme? That was not entirely clear from the Minister’s opening speech. Secondly, will the Government also commit to what I suppose one must call a rolling programme of rolling stock and investment in increasing the capacity of carriages on the whole railway network? Thirdly, will the Government ensure that investment in rail improvement benefits the entire United Kingdom, not just the south-east of England?

As the Minister will know, the intensity of rail transport across the north of England—Liverpool to Manchester, to Leeds, to Sheffield, to Newcastle—is an important part of how the north holds itself together. Train times are longer for comparable distances there than in the south-east. The problem of improving city regions around Manchester, Leeds and Liverpool is tied up with improving the quality of regional commuter rail in the Manchester and Leeds regions. It is also an issue for rural rail. The future of Airedale and Wharfedale certainly depends upon what are becoming commuter lines. The Minister will also know of the proposal that Wensleydale be again linked into the national railway system, which depends on the enthusiasm of a number of local rail enthusiasts to keep the line open and investment to link the line up at Northallerton.

The quality of rolling stock is limited and we need more coaches. There are many gaps in electrification across the north that could be filled relatively easily in the early stages of a rolling programme, increasing both freight and passenger capacity. I am told by Network Rail that a number of electrified lines have inadequate loading capacity, so that when National Express wishes to increase the number of direct trains running between London and Skipton, and when Northern Rail wants to increase line frequency, the electricity substations will not bear the load. There are a large number of issues on heavier investment.

I remind the Minister of light rail issues. Manchester and Sheffield both benefit from their existing and developing light rail scheme, but the Treasury blocked Liverpool and Leeds from using light rail schemes to integrate city regions. At the end of September, Network Rail produced a blueprint for investment to improve rail across northern England. It is putting this to the Government and now needs government funding.

We want investment across the whole of Britain, not just across the south-east. Investment in rail is a matter of regional policy and national spatial strategy. Investment in improving and upgrading the east coast main line is not an alternative to a new high-speed line, which will take many years to plan. It could be undertaken now. Some of the schemes are already approved, but not yet funded, as a means of helping to revive our public economy. I hope that, in winding up, the Minister will be able to reassure us that this is indeed what the Department of Transport is planning, and what the Treasury will begin to respond to.

Lord Adonis
My Lords, I took the noble Lord, Lord Bradshaw, to be saying that his proposals for significantly upgrading the east coast main line were an alternative to creating a new line. Did I mishear the noble Lord?

Lord Bradshaw
My Lords, no. I said that a new high-speed line will inevitably take a long time to come to fruition because of planning troubles and the work. However, we could immediately set about upgrading the east coast main line and have an attractive service. That might undermine the benefits of a high-speed line but one must go for the immediate benefits, which are attainable in the very short term.

Lord Wallace of Saltaire
My Lords, I entirely agree with my noble friend. We support the principle of a high-speed line, but the planning system in this country, even after the Planning Bill has been enacted, means that it will take some time to get under way. The plans are all there, but we need investment in upgrading the east coast main line, which could be well under way within two or three years.

13:27:00

Earl Attlee
My Lords, I thank the Minister for introducing the debate today. For myself, I am interested in the long-term future. I do not intend to debate history. The Minister gave us a fair analysis of the history of our rail system. He also paints a picture of success, and he is right. When one looks at the graphs, they mysteriously start going in the right direction shortly after privatisation. Despite the comments of the noble Lord, Lord Bradshaw, something seems to have gone right at that point.

The Minister mentioned the InterCity express project that will be dual powered. Is he not concerned about the extra dead weight that will have to be hauled around the country? Would it not be better to fill in the gaps in electrification, as proposed by the noble Lord, Lord Bradshaw, and others?

The Minister mentioned ticketing problems. I, too, have been caught in exactly the same way at exactly the same station. What can be done in the long term to obviate the antediluvian need to buy a ticket? Does the Minister see a future for greater coverage of the Oyster card system, or perhaps something even better?

The noble Lord, Lord Bradshaw, and many others raised the issue of the 1,300 carriages. Does the Minister accept that he urgently needs to place orders to industry? If he does not, the manufacturers’ subcontractors may not exist.

The noble Lord, Lord Rosser, made some extremely important points regarding revenue risks for the TOCs. If our worst fears were realised, something would have to be done. The TOCs are already competing on how much revenue risk they will take. If the Minister does not manage the downturn correctly, he will significantly increase the costs associated with revenue risk. I deeply regret the final comment of the noble Lord, Lord Rosser, which I did not find particularly helpful.

The nub of the problem is clear: our railway system does not have the capacity to carry even the number of passengers wishing to travel now, let alone the numbers expected in the future. The Government have accepted that demand for rail is set to grow, but seem to fail to appreciate that this trend is not only unavoidable but is welcome and is to be encouraged. When they issued the rail White Paper, the Government believed that it set out the strategic direction of the network. It was claimed:

“The White Paper looks at the potential future challenges for the railway over a 30-year horizon. It identifies three long-term agendas for Government and the rail industry working in partnership: increasing the capacity of the railway, delivering a quality service for passengers, and fulfilling rail’s environmental potential”.
 

At the time, many commentators complained about the paper’s paucity of ideas and its aim, in effect, simply to manage growth and restrict demand and capacity, mainly through increased fares for passengers.

I note the comments of the noble Lord, Lord Adonis, regarding the future and I wish him all the best for his work on his national network strategy group. Where we think that initiatives will make a real and positive difference, we will not hesitate to support them. We still see operational problems with Network Rail and we pray that the new year and Easter engineering fiascos are not repeated with this season’s maintenance programme. The Minister will have to pay close attention to that, and I think that he will do so.

Many in my party believe that we need a fundamental review of the structure and governance of Network Rail to ensure that it is responsive to industry, customers and passengers. We need to encourage train operators and the private sector more generally to make long-term investments. To do that they need certainty, and to deliver it a Conservative Government would review the length of franchises. Common sense suggests that franchises deliver certainty and facilitate greater levels of investment as the costs can be recouped. It is not just a matter of the capital cost of setting up the franchise but of staff training costs and, in particular, bid costs, which are very high indeed. The new southern franchise is just five-and-a-half years. Does this really make sense? We will look at franchise length, and if a longer rail franchise makes sense in terms of what the operator needs to be able to deliver, we shall have no qualms in offering it. These types of arrangements would give operators the certainty they need to deliver the investment, capacity and performance for which passengers are crying out. However, with these longer franchises, with review periods built in, would come more effective remedies to deal with an operator that fails its customers. The Minister touched on some of the actions he has had to take with regard to a below standard TOC.

The Conservative Party has a transport team down the Corridor led by Theresa Villiers, which has been considering all these matters very carefully. It has a vision. It does not think that it is good enough for our people to have to stand on intercity journeys, nor that it is right to use short-haul aviation when we could provide a far better rail alternative given that short-haul aviation incurs high embarkation and disembarkation costs and constitutes poor use of business users’ time. Air travel does not take travellers to the heart of the city, where they generally want to be, and worst of all, short-haul is relatively more polluting than long-haul aviation, and far more so than train by orders of magnitude.

We understand the problems of the noble Lord, Lord Berkeley, and the rail freight industry. It is very hard to find extra train paths because our rail system is already running at over capacity. We do not think that it is enough to undertake some big projects, such as redeveloping Reading and Birmingham New Street stations, welcome though they are—the Minister touched on those projects in his opening comments—as we know that we will still run out of capacity if we succeed in increasing the GDP per capita in the long term. We want to bring millions of citizens in Birmingham, Manchester and Leeds closer to the centre of the UK and closer to Europe, a point made by the noble Lord, Lord Faulkner.

Lord Wallace of Saltaire
My Lords, I apologise for intervening, but is the noble Earl implying that London is the centre of the UK when he says that he wants to bring Birmingham closer to the centre of the UK?

Earl Attlee
My Lords, many noble Lords referred to the concentration of the economy in the south-east. That is what we want to avoid.

These citizens need to be connected, not just electronically but physically, if they are to reach their full potential. My honourable friends do not want them to be isolated or limited in their economic activity. Their vision is high-speed rail and I hope that, over the coming months, I can encourage the Minister to share that. I am grateful for the comments of the noble Lord, Lord Faulkner of Worcester. We disagree on some of the detail but I strongly accept the vast majority of his arguments. We on these Benches have been committed to high-speed rail for some time. The planning and tendering process will take five years, and construction a further 10; it will not be quick. However, HSR will be the age of the train yet again.

Lord Faulkner of Worcester
My Lords, I am grateful to the noble Earl for that comment. Can he confirm that his party is willing to take on board the point that I made; namely, that if the plans for high-speed rail are confined just to a line from London to Leeds and Bradford, but that the benefit would flow from having a line to Scotland, the transfer of traffic from air to rail will not be achievable?

Earl Attlee
My Lords, I fear that the noble Lord is asking me to comment in a little bit too much detail about HSR beyond Manchester.

As noble Lords would expect, I do not agree with the objections to our thinking expressed by the noble Lord, Lord Bradshaw. It is not “either/or”, our national rail system and HSR need to be enhanced. The Government have repeatedly failed to take steps to preserve disused lines, despite many warnings from the noble Lord, Lord Faulkner, the Transport Committee and Network Rail. The Government are “keeping an open mind” on whether they should safeguard this capital stock. Perhaps the Minister could explain why the Government will not immediately adopt the Conservative proposal to impose a two-year moratorium on the sale of disused lines in order to prevent the elimination of future developments.

The Government’s continued hesitancy to consider a high-speed rail link is a continuation of a transport policy that not only fails to deliver current targets but would be completely unable to meet the needs of the future. Our railways have a proud heritage and could have a bright future, helping us to meet our climate change and economic development objectives. The next few years will be vital. We need to be imaginative about the changes that may be required to deliver this bright future. We need to harness the ambition and creative thinking that exist within the industry so that it can deliver for us all. This debate has gone one way: high-speed rail.

13:38:00

Lord Adonis
My Lords, I have always made it a principle of action in my time in politics not to exaggerate differences or to pretend that there are differences where they do not exist. I pay tribute to the noble Earl, Lord Attlee, and his party for their marked change of tone on rail over recent months. They have become a great deal more positive about the industry and I strongly welcome that. I hope that over the months ahead it will be possible to build a consensus on a programme of improvement in the rail industry over the next 15, 20 and 25 years with the party opposite and with colleagues in the Liberal Democrats. I sense that we are converging.

My noble friend Lord Faulkner was absolutely right to say that this is a great time to be associated with the railways. He was also right to point out that we had some pretty close shaves in the 1980s with policies that would have significantly harmed the rail network to an even greater extent than happened with the changes that did take place. I remember the Alfred Sherman report, which, as my noble friend will recall, proposed concreting over the entire rail network and running buses and coaches over it. This proposal was taken seriously by so-called free-marketeers in the 1980s, even though it seemed to be from the wild west. 

However, a perfectly sensible report was published, commissioned, I think, by the Department of Transport and possibly British Rail. This was the Serpell report, although it, too, proposed options that could have led to significant network cutbacks in the 1980s. I told the noble Lord, Lord Wallace, in our informal conversation before the debate, that I remember Sir David Steel—now the noble Lord, Lord Steel—making a brilliant speech after the publication of the Serpell report regarding the options that it proposed. The inquiry had put passenger usage numbers through a computer and had worked out that the West Highland line could stop at Crianlarich. As the noble Duke, the Duke of Montrose, is clearly aware, Crianlarich is not a great centre of population but a junction. The computer had worked out that if you stopped the line there, you might get the benefits of the traffic flows from both lines going onwards, without the expense of maintaining them. That was the kind of ludicrous planning that took place in the 1980s in some areas, which could have led to significant further cutbacks in the rail network.

As the noble Lord, Lord Wallace, said, we have a more sensible approach to transport planning. I can assure the House that not only is there a commitment in England to no network closures over the five-year period ahead—a commitment given in the rail White Paper last year—but the Scots have no intention whatever of closing the line north of Crianlarich.

Lord Bradshaw
My Lords, perhaps I may interrupt the Minister while he is doing his little historical thing about Serpell, Sherman and others. A report on electrification was also produced in 1983, which was agreed with the Department of Transport, but it was decided that its proposals would be discontinued—or rather we were ordered to discontinue them. If they had gone through, we would now have an electrified railway system for almost the whole country. Professor Alan Walters was the person who persuaded Mrs Thatcher that the report should be binned.

Lord Adonis
My Lords, that, as they say, was before my time. I welcome the fact that we appear to be forging a new consensus on rail that not only puts behind us the language of decline and past proposals for cutbacks but looks for sustained growth in the years ahead. I accept the various invitations for me to visit and to meet. I will be very glad indeed to meet the noble Lord, Lord Bradshaw, to discuss his ideas for improving the east coast main line. I always seek to give speakers a free rein and rarely intervene. I intervened on the noble Lord, Lord Wallace, because I thought that I had detected the noble Lord, Lord Bradshaw, indicating in his opening remarks that the improvement to the line could be in place of the development of a high-speed line. I was keen to understand the policy of his party, but I look forward to discussing that further when we meet.

My noble friend Lord Faulkner never hesitates to invite me to visit the many extremely worthwhile projects with which he is engaged. I look forward to joining him and his colleagues in the Cotswold Line Promotion Group to celebrate the decision to redouble that line, which will significantly enhance its capacity. I will also be happy to meet him and leaders of the railway heritage sector. I join him in paying tribute to the great work that the sector does, not least for the tourism industry. One of our unique contributions to international tourism has been the restoration of closed and disused railway lines. The work of the railway heritage sector is very important indeed.

I sense that the noble Earl, Lord Attlee, and I will need to go together to Victoria to see how long it takes us to buy a ticket. As I said in my opening remarks, I am keen to see what more we can do to ensure that passengers, particularly in gated stations, are able to buy tickets rapidly. I am keen to look at what further steps can be taken in that regard.

Earl Attlee
My Lords, what about the Oyster card system?

Lord Adonis
My Lords, the Oyster card system will be extended at the end of next year to cover commuter services from south London. Therefore, there will be a single Oyster card system covering all metro lines, including Underground and overground lines south of the Thames. The Mayor of London and I are working closely on this. Discussions are taking place with the relevant train operating companies to ensure that the introduction is smooth and that their commercial interests are adequately catered for. This will reduce the number of tickets that need to be bought at stations and will contribute to a better service for passengers at stations.

Earl Attlee
My Lords, I am extremely grateful for that good news. However, the noble Lord introduced the subject of ticketing and I am interested to know his thinking for the future. Will there be some point when we do not need to buy tickets at all and there will be some sort of Oyster card or automatic charging system, whereby there will be no frustrating delays for passengers when they need to buy a ticket for national journeys?

Lord Adonis
My Lords, I think that it will be quite some time before we get to that position, but we can make changes, including better ticketing machines at stations to reduce the need to queue for tickets. However, I am anxious to ensure that, when passengers need to queue, they are not inconvenienced to an unacceptable degree. I intend to look at that further in the period ahead.

Perhaps I may go to the heart of the issues that we face. I want to make two broad points. First, the current condition of the rail industry is reasonable. The noble Lord, Lord Bradshaw, is generally speaking a fair-minded person and he does not seek to paint a bleaker picture where it is not justified. However, he did so in one significant regard. He said that the big increase in rail usership in recent years had nothing whatever to do with improvements in capacity and was all to do with improvements in the economy. That is simply not the case. Because the noble Lord is far too fair-minded not even to mention the evidence against him, he did, in passing, in an intriguing part of his speech, mention the National Audit Office’s recent report on the letting of rail franchises, which was extremely positive about the way in which government policy has changed. He dismissed the report as being far too optimistic. This was the most extensive independent inquiry into the rail franchising system that there has been in recent years. It was extremely positive about the system and the improvements that had been made to the benefit of passengers. I simply suggest that the report was correct in its findings and that it was right to highlight the improvements that there have been.

There have been significant increases in the number of carriages; there are 11,150 carriages compared with 10,400 in 1995, which is a significant improvement in capacity. The noble Lord seemed to have forgotten that entirely when he said that there had been no improvements. The £8.8 billion of investment on the west coast main line, which has all taken place since 1997, is leading to the significant improvements in capacity that I set out in my speech, including the introduction of the new three-times-an-hour service between London and Birmingham and between London and Manchester. In historic terms, that is truly transformational. I see the noble Baroness, Lady Morris of Bolton, paying close attention to me. I know that she is a regular user of that line, as I have been to Bolton with her. Many people are not aware of how significant the improvement will be when the new timetable is fully implemented and at long last we move past the period of investment in the network, which, I well understand, has led to significant inconvenience to passengers in recent years.

Perhaps I may quote the final conclusion of the National Audit Office’s report into the letting of rail franchises between 2005 and 2007. It concludes:

“The Department’s approach to rail franchising produces generally well thought through service specifications and generates keen bidding competition. This approach has resulted in better value for money for the taxpayer on the eight franchises let since the Department took over from the”,
 

Strategic Rail Authority.

“The Department has been able to gain a commitment to some improvements in quality, reliability, accessibility, security and capacity at the same time as negotiating a sharp fall in subsidy. The combined contracted subsidy of £811 million in 2006-07 should turn into a payment to the Department of £326 million by 2011-12”.
 

That is a very positive picture of improved services that are of direct benefit to passengers.

We saw it again recently in the specification that my department issued for the new South Central franchise. This new franchise specification includes provision for: an extra 118 vehicle arrivals into central London, which is an 11 per cent increase; an additional eight arrivals into Brighton, which is a 24 per cent increase in the morning peak period; the lengthening of many suburban trains from eight to 10 carriages and some trains being lengthened to 12 carriages; increased services in the evenings and at weekends, with some later services on Friday and Saturday nights up to half-past midnight; new Sunday services, such as from Southampton to Brighton; regulated fare increases to continue to be capped at RPI plus 1; improved safety with new gating at around 30 stations and secure station accreditation to cover 95 per cent of footfall; around 1,000 additional car parking spaces and 1,500 additional cycle parking spaces; 30 additional ticket machines and help points to be installed at 20 additional stations, and station travel plans to be developed at 30 additional stations; and all trains—I repeat, all trains—to be fitted with CCTV. That is not for the medium and long-term future; it is the precise specification for the new South Central franchise and will lead to very early additional benefits for passengers over and above those that I have already described.

Taking a fair view of the debate, in my opening remarks I fully accepted that there is a great deal more to be done. My noble friend Lord Berkeley rightly picked up on the remarks that I made about Network Rail and the fact that there is a need to see significant sustained improvements in its efficiency—not simply to save money for the taxpayer but also to ensure a much better deal for those who use the rail network, not least the freight operators, to which my noble friend referred and on whose behalf he does an excellent job in your Lordships’ House. Taking the position as it stands, I think that it is clear that things are improving.

A number of specific points were raised. The noble Lord, Lord Wallace, asked me three questions. He asked, first, whether we are committing now to a rolling programme of electrification. The whole purpose of setting up the National Networks Strategy Group is to work through what our commitments will be, and we will be in a position to make commitments next year. We would not have set up the group if we had intended to make commitments in advance of its work. However, my right honourable friend the Secretary of State made it clear that a rolling programme of electrification is one of the key issues that we will be addressing in the strategy group. I think that the noble Lord, Lord Wallace, will clearly detect from the tone that I have adopted throughout this debate that we are very positively minded about the case for further electrification.

However, it is unlikely that any rolling programme of electrification will avoid the need for intercity diesel trains in the next generation. Therefore, the case for the Intercity Express project, which is intended to ensure that we have both diesel and electric traction capacity for the next generation, and the capacity to move between the two with minimum inconvenience to passengers, remains strong, and we will continue with that programme.

Lord Berkeley
My Lords, I am grateful to my noble friend for giving way. Has he considered, as an alternative to humping great big bits of diesel engine around under the wires, fixing a diesel locomotive on the train when it gets to the end of the wires? Very few lines in this country need the power and acceleration provided by electrification, and the trains can go fast when they get to the end of the wires. These are usually slower lines and it is probable that diesel locomotives could do the job very well.

Lord Adonis
My Lords, I understand that the alternative was fully considered when the Government took the decision to proceed with the IEP programme. For reasons of resilience and given the inconvenience that would be caused to service operators and potentially to passengers, it was decided that the bi-mode option was preferable to simply putting new diesel locomotives on to trains that had been pulled by electric traction in the earlier parts of their journeys.

Secondly, the noble Lord, Lord Wallace, asked whether there will be a rolling programme of stock replacement. I have made it clear that there will be such a programme, with a commitment to 1,300 additional carriages over the next five years. He also asked whether we would favour the north as well as the south with our investments. We are indeed doing so. The upgrade of the west coast main line favours the north as much as the south and, as I set out in my opening remarks, is leading to significant improvements in the services that will be available from 14 December to Birmingham, Manchester and further north. The commitment to the 1,300 additional carriages will see significant improvements in the rolling stock available to, for example, Northern Rail, which, in the latest rolling stock update, is indicated to receive 182 additional vehicles, benefiting Manchester, Leeds, Sheffield, Liverpool and Newcastle local services. Therefore, there are significant benefits for the north and I am sure that there will be others from the £15 billion programme of improvements over the next five years.

Finally, I turn to the wider issue of the Government’s position on the management of the rail industry over the period ahead. I took the noble Lord, Lord Bradshaw, to say that he favoured significant change to the structure of the industry over the coming years. Indeed, he mentioned the need for further legislation in this area significantly to change the institutional infrastructure of the industry. I think that it is only fair for me to indicate to the House that that is not the position that the Government wish to adopt. Our view is that there has been too much institutional upheaval in the industry over the past 10 years and that in recent years we have seen significant improvement as we have brought greater stability to its institutional infrastructure. It is not our intention to promote significant structural change in the industry over the period ahead, although, as I have indicated elsewhere, I am open-minded about the case for longer franchises to give franchise operators a greater stake in the management of, and investment in, the network. We now need to see not further upheaval in the rail industry’s institutional infrastructure but nuts-and-bolts improvements to the network, steady improvements to the quality of the service provided to passengers and an in-depth consideration of the medium and long-term infrastructure requirements of the industry. I believe that that would be hampered if its leadership and governance went through another period of upheaval in the period ahead.

Lord Bradshaw
My Lords, perhaps I may make it clear that I am concerned about the governance of Network Rail. The Government are not able, for example, to require Network Rail to do experiments in vertical integration; that is entirely at Network Rail’s discretion. Nor can the Government control the bonuses that Network Rail pays. I am concerned not with large-scale upheaval but with Network Rail becoming conscious of the fact that it is a public servant and that it should be doing the Government’s bidding.

Lord Adonis
My Lords, I note the points made by the noble Lord, but I reiterate my own point: it is not our intention to bring forward legislation that would engage in another process of musical chairs in the management of the industry.

I do not have time to respond to all the points that were raised. My noble friend Lord Rosser spoke about what happens if franchises fail. If they fail, well established procedures are in place. Of course, in recent years one failed and the department needed to step in as operator of last resort. I believe that we can meet his points in that regard. I shall be happy to correspond with my noble friend Lord Berkeley on rail freight and access charges to the CTRL, although my understanding is that that is still a matter for ongoing negotiation. I know that he has a strong interest in seeing a successful outcome to those negotiations.

In conclusion, I simply reiterate my thanks to all who have spoken and note the general support in the House for the future of the rail industry, beginning with the speech of the noble Lord, Lord Lyell, who painted a very optimistic picture. I see that he is rising to intervene. I will respond to his points. We are making big investments in improving the capacity of the rail freight sector to handle larger containers than has been the case in the past. That was one of his concerns.

Lord Lyell
My Lords, perhaps the Minister will take on board the fact that much of the debate has concentrated on England. The noble Lord, Lord Wallace of Saltaire, pointed to the Keighley and Settle line. The mention of Crianlarich caused great excitement on the Liberal Democrat Benches. It is a very important rail junction, as from Crianlarich the line goes west to Oban and north to Fort William and Mallaig. In times of trouble, God forbid, when one needs serious movements of freight in remote areas, Crianlarich and the line west and north are of particular importance. That is one of my points. No doubt the Minister can write to me.

Lord Adonis
My Lords, I entirely agree with the noble Lord on the importance of Crianlarich. His remarks will have been noted by the appropriate authorities. This has been a very positive debate. It heralds a bright future for the rail industry and I am grateful to all noble Lords who have taken part.

The Earl of Glasgow
My Lords, before the Minister sits down, perhaps I can ask when the Government are likely to make a decision on any new railway line, let alone an actual high-speed rail.

Lord Adonis
My Lords, over the next nine months, the National Networks Strategy Group, which I chair, will actively consider network options, including electrification and the case for new lines. I expect the Government to be in a position to say more next summer.

On Question, Motion agreed to.

Safeguarding Children

14:03:00

The Parliamentary Under-Secretary of State, Department for Children, Schools and Families (Baroness Morgan of Drefelin)
My Lords, with the leave of the House, I shall now repeat a Statement made in another place. The Statement is as follows:

“Mr Speaker, with your permission, I would like to make a Statement on the actions I have taken over the past week since I received the serious case review last Wednesday morning into the tragic death of Baby P. As I said to the House on Monday, the whole nation has been deeply shocked, appalled and angered by the terrible suffering this little boy endured.

“Since the jury reached its decision on 11 November, we have all read of the abuse he suffered at the hands of adults he lived with, something I know we all struggle to comprehend. This case has also raised serious questions of public concern about how this could have happened again despite numerous contacts with social workers, police and health professionals, and in Haringey, too, the same borough where Victoria Climbié died eight years ago; about what actions are urgently needed in Haringey to ensure the safety of other vulnerable children in that borough and proper accountability for what went wrong; and about what further steps are needed to ensure that all children are safe across the country.

“It is our collective duty to do what we can to prevent such a tragedy happening again. I am grateful to the honourable gentleman and to Members opposite for the support they have given me over the past eight days for the action we have taken so far.

“Let me start by setting out the background. Following the death of Baby P on 3 August 2007, and consistent with the statutory requirements set out in Working Together to Safeguard Children, a serious case review started immediately to discover what happened and why. Serious case reviews are carried out whenever a child dies and abuse or neglect is known or suspected to have been a factor. They are instigated by the local safeguarding children board, independent of government. The report should be independently authored. Local agencies should implement any interim lessons immediately while the serious case review is still in progress and working drafts of serious case reviews may be shared with government officials.

“Since April last year, Ofsted has evaluated each serious case review to help strengthen the system. However, in all cases, Ministers are not involved in any part of the process of undertaking and completing the serious case review process and do not see draft reports. In this case, the executive summary of the serious case review was published on the afternoon of 11 November and the children’s Minister and I received the full confidential report on the morning of 12 November. Having studied it, we concluded that there was clear evidence that agencies had failed, singly and collectively, to adhere to the statutory procedures for the proper management of child protection cases. This raised serious concerns about the wider systems and management of services for safeguarding children in the borough.

“Our immediate priority was to ensure the safety of children in Haringey. So, that afternoon, we arranged for the director of children’s services in Hampshire, John Coughlan, to be immediately seconded to Haringey to help ensure that proper procedures for safeguarding children were in place and being applied. He began his work the following morning. At the same time, I decided that Ofsted, the Commission for Healthcare Audit and Inspection and the Chief Inspector of Constabulary should carry out an urgent inspection in Haringey under Section 20(1)(b) of the Children Act 2004. In particular, I asked the inspectors to look closely at the quality of practice and management of all services that contribute to the effective safeguarding of children in Haringey. The work of the national inspectors is under way and I will receive a first report by 1 December. As soon as I have studied their findings I will publish their report and the actions we will take.

“This tragic case also raises wider issues about child safety. It is now just over five years since we published Every Child Matters in response to the Victoria Climbié inquiry chaired by Lord Laming. Both the joint chief inspectors earlier this year and Lord Laming himself have said that these reforms have significantly strengthened the framework for safeguarding children and that, in local areas across the country, much good work is being done that is keeping children safe. But as the joint chief inspectors also said in their July report, there is still much work to do to ensure these reforms are being implemented systematically by all local agencies so that children in every part of the country receive the protection they need, a view that was repeated and reinforced yesterday in Ofsted’s annual report.

“That was why we began a stock-take of local safeguarding children boards last month, including the governance and accountability arrangements, the independence of local safeguarding children board chairs and whether the statutory guidance needs to be revised. At the same time we also started work to establish what more can be done to improve the quality, consistency and impact of serious case reviews.

“As I explained to the House on Monday and immediately following the legal verdict on 11 November, the children’s Minister and I asked Lord Laming to provide us with an urgent report of progress made across the country in implementing effective arrangements for safeguarding children. In parallel, we have also set out legislative proposals to improve children’s trusts that will provide stronger area-wide accountability for the well-being and safety of children across all children’s services.

“I met Lord Laming on Monday to agree the scope of his report, which will be ready early in the new year. He will report on the key features of good safeguarding practice and whether they are being universally applied across the country, including the development of the professional workforce, interagency working and effective systems of public accountability. He will also report on the key barriers, including in the legal process, that may be impeding children’s professionals in their work and stopping good practice becoming common practice, including whether the right balance is being struck between the correct application of processes when taking a child into care and the child’s needs, and what specific actions should be taken by national government and local agencies to overcome these barriers and accelerate systematic improvement across the country. I have also decided to bring the stock-take of local safeguarding children boards and the work on serious case reviews which we announced last month under the remit of Lord Laming’s work.

“I am pleased that Lord Laming has now begun his work. He has today written to experts and interested parties setting out how they can inform his findings. I have also placed a copy of this letter in the Library of the House.

“Professionals working with children in this country do a tough job, often in difficult circumstances. They have a great responsibility and they make difficult judgements every day. But where serious mistakes are made, there must be accountability. We must never forget that our first duty is to make sure that all children are safe and protected from harm, and we will not rest until we have the best possible child protection arrangements to safeguard our most vulnerable children.

“The case of Baby P is tragic and appalling. We have a responsibility to take whatever action is needed to ensure that such a tragedy cannot happen again and that all children are able to grow up safe in Haringey and across the country. I commend this Statement to the House”.

My Lords, that concludes the Statement.

14:12:00

Baroness Morris of Bolton
My Lords, I am most grateful to the Minister for repeating this Statement on safeguarding children made necessary by the distressing details of child protection in Haringey. The horrific images on our television screens and the tragic story of Baby P’s short and brutal life have shocked the whole country. The understandable sense of outrage that this trusting little boy could have been seen so many times by one professional after another and still be failed by a system designed to protect him has left us all asking how this could happen in modern Britain. So we welcome the fact that the Government have ordered an inquiry into the practices in Haringey, and we will expect them to act on the findings.

It is all too easy to point the finger of blame at the social workers, who are at the sharp end of some of the most difficult and complex cases imaginable and who are submerged by mounds of paperwork. No amount of child protection legislation is a substitute for properly trained and resourced professionals. The number of cases they are looking after, and the mix of those cases, also is crucial if they are to do their job properly. However, you have to question the particular pressures that social workers are under in Haringey given that almost a quarter of the posts are vacant. You also have to ask who is going to want to work there. Can the Minister say what the Government are doing to address the problem of a critical shortage of children's social workers, particularly in some of the most deprived areas of London?

A more urgent question is: why are we still in the dark over who had ultimate responsibility for this case, and where does the buck stop? After the tragic death of Victoria Climbié, the Laming report called for clear lines of accountability; and yet here we are again, eight years later in Haringey, and none the wiser. Can the Minister say who is accountable? And what about the legal services? They told police and social workers that there was not sufficient evidence to apply for a care order, but were they aware that three separate doctors had reached the conclusion that Baby P was probably suffering from non-accidental injuries?

I am sure the Minister will probably tell me that all this will be subject to the findings of the independent inquiry, but perhaps she could help me on the question of the inspection of social services. In between the death of Baby P and the subsequent court case, Haringey Council and its children’s services were awarded three stars—the highest award available from Ofsted. Does the Minister agree that when serious cases are pending, that should raise a note of caution? If the basis of testing the quality of the system is flawed we will never be able to judge its true efficiency.

We have the greatest admiration for the noble Lord, Lord Laming, and welcome his review into the key features of good safeguarding, the key barriers that may be impeding children’s professionals in their work, and the action that needs to be taken. However, the implications of what happened in Haringey and the problems facing children’s professionals across the country go much wider than this and the Government will find it difficult to solve the problems unless they look at family breakdown. My right honourable friend Iain Duncan Smith is so right to focus on the chaotic life that is, sadly, the normal picture for so many children. One of the chilling statistics that he highlighted from recent research carried out in the USA is that children living with non-biological parents are 50 times more likely to die from inflicted injuries than if they live with their biological parents. We must do all we can to bring much needed stability to the lives of these vulnerable children.

It is impossible for us to imagine how grown-ups can inflict such damage on an innocent, trusting child. Sadly, some people are simply wicked. But others have serious mental health problems. There is still too large a gap between child and adult services. I hope that this is an area where the noble Lord, Lord Laming, might apply his considerable expertise. The Government have our full support in ensuring that we have the best possible child protection arrangements to safeguard our most vulnerable children. For our part, my honourable friend Tim Loughton, shadow Minister for children, following an urgent consultation with Conservative councillors in the immediate wake of the Baby P tragedy, has written to all Conservative lead councillors asking them to make changes to the structure of local safeguarding children boards so that in future they will be chaired independently.

Writing this weekend about Baby P, my great friend Nadine Dorries MP said:

“Chocolate may have been smeared on his face, but his eyes were surrounded by red and swollen tissue ... If there is one Baby P who has died how many babies are out there waiting for someone to notice before sad red rimmed eyes become a broken bone or worse?”.
 

That is why the findings of these inquiries and the subsequent actions cannot come a day too soon.

14:19:00

Baroness Sharp of Guildford
My Lords, I, too, thank the Minister for repeating the Statement. As the noble Baroness, Lady Morris, said, all of us were deeply shocked by the horrific images of Baby P. However, it is important to echo the part of the Statement which says that professionals in this country looking after children do a tough job, often in very difficult circumstances. That echoes the thoughts expressed by the noble Baroness, Lady Morris.

It is also important to remember that since the 1970s, when we had the Maria Colwell case, we have been gradually tightening up child safeguarding procedures. The number of children killed in this country has fallen by about 50 per cent, compared to the United States, where it is up by 17 per cent. Indeed, today the UK has one of the best records in the Western world on childcare. Professor Colin Pritchard from the School of Social Care in Bournemouth has said that our child protection services have never been better. His work has revealed that most child murders are committed by mentally ill mothers, followed by mentally ill fathers, followed by mothers whose children are on the at-risk register. Baby P was of course one of those; he was on the at-risk register.

A number of issues in this case raise concern, above all about the organisation of the services in Haringey, which was the centre of the storm around Victoria Climbié. When the same issues arise within a matter of a relatively few years, that raises concerns about the organisation and management of services in that area. There have been many changes since the Victoria Climbié case, most effected as a result of the Children Act 2004, with which many of us in this House were involved as it passed, not least the attempt to get joint working across health, education and social services, the setting up of children's trusts and the establishment of local safeguarding boards.

However, I think that the case raises real questions about local safeguarding boards. The NSPCC has stated:

“It is legitimate to question whether the ‘safeguarding’ agenda might be giving professionals a mandate to give parents the benefit of doubt … and not to focus on the needs and vulnerability”
 

of children. Earlier this year, Ofsted questioned the variability of standards, remarking that,

“thresholds are sometimes raised by”—

local authorities—

“in response to workload pressures, staffing shortages and financial pressures”.

Yesterday's annual report from Ofsted revealed that since April 2007, it had evaluated 92 serious case reports and found 38 of them to be inadequate.

Why was this serious case review not chaired by an independent individual, as distinct from the director of the service being scrutinised? Why was the report delayed by more than a year, instead of being completed, as required, within the four-month target? Why, now it has been published, can we not see the full report; why have we seen only the executive summary? Is it surprising, given that it was chaired by the director of the service being scrutinised, that the executive summary seems so bland and worthless?

To what extent are the higher court charges to be paid by local authorities in child protection cases deterring local authorities from acting in such cases and, in particular, from taking children into care? Is it true that applications across England to take children into care have fallen by 20 per cent since the dramatic rise in court fees to be paid by local authorities? Is it true that since the Baby P case came to light, applications to take children into care in Haringey have more than doubled?

Finally, if, as the Secretary of State said earlier this week, he was so deeply disturbed by the failings of practice and management in the Baby P case, why has he resisted calls for the publication of the full serious case review? Why has he not set up a full public inquiry? Does the Minister think that the urgent joint area review that the Secretary of State has set up, which is to report within two weeks, will be adequate? Can she confirm what my honourable friend in the other place, the Member for Hornsey and Wood Green, Lynne Featherstone, has been told: that local managers in Haringey are selecting the staff to be interviewed by the investigators in that quick joint area review?

Why, if there have been such failings in management, is the director of children's services still in her post, when she is directly accountable under the Children Act 2004 for what has occurred? It is not obvious why the serious case review is still secret; nor clear that the quick, two-week review that has been set up will get to the bottom of what has gone wrong in Haringey. Like the noble Baroness, Lady Morris of Bolton, we have great faith in the noble Lord, Lord Laming, and look forward to hearing what his deeper inquiry will reveal, but that still leaves many questions about this case which both Haringey and the Secretary of State have to answer.

14:25:00

Baroness Morgan of Drefelin
My Lords, I start by thanking both noble Baronesses for their support in dealing with this extremely tragic case and the constructive all-party tone, which I heard in another place as well. It is very much in the interests of children and young people that we can discuss the issues frankly and openly and bring them under close scrutiny in this House and the other place. I very much welcome the tone and support from the noble Baronesses.

I hope to be able to deal with a number of questions in the time that I have. The noble Baroness, Lady Morris of Bolton, rightly asked about social workers. She asked what the Government are doing to promote the uptake of social work positions, given the worrying numbers of vacancies. The Government are investing £73 million in social care workforce development, and our children's workforce review, which was announced in the Children's Plan and which we are currently working on, will address the important issues, such as recruitment, retention, the training of social workers and the support that they need, especially when they are new in the profession. Since 1997, there has been a 29 per cent increase in the number of social workers in children's services. I absolutely agree with the noble Baroness that this is a key area of concern for us all.

We have a new, rigorous process of inspection through the joint area reviews, which now take place every three years, and the annual area performance assessment, to which the noble Baroness referred, which took place in Haringey in 2007. That was carried out when a serious case review for Baby P was just beginning, so it was not possible for it to take that into account, but when serious case reviews are undertaken, it is expected that learning from them is fed into the system immediately. Although there are sometimes delays in serious case reviews because of pending court action, we do not see it as acceptable to wait, because that knowledge is important and must be applied. In fact, it is the role of safeguarding advisers in government offices to work with local authorities and ensure that they put the early findings of serious case reviews into practice.

Joint area reviews take account of serious case reviews as a matter of standard practice. The review taking place in Haringey will take account of this serious case review and will look at whether it is adequate. That will be addressed when they report to the Secretary of State on 1 December.

The noble Baroness, Lady Morris, made an important point about the remarks of her right honourable friend Iain Duncan Smith who has talked about the importance of stability and, I think, about the importance of early intervention, which we all agree are key aspects of the Every Child Matters agenda and safeguarding children globally. I very much welcome her drawing attention to those comments.

The noble Baroness, Lady Sharp, talked about the review being undertaken by the noble Lord, Lord Laming, which is looking at the implementation of the Every Child Matters agenda. We absolutely want his report to tell us whether we doing well enough, whether we are going far enough and what changes need to be made now in the light of this tragic case. Publication of the comprehensive serious case review report is not a matter of rule. The Information Commissioner ruled on that recently and my right honourable friend the Secretary of State has looked at that. In order to ensure that Opposition spokespeople in another place have the information that they need to think about and to scrutinise the way in which the joint area review is being undertaken, he has offered to allow them to see that report at the earliest possible stage. I hope noble Lords opposite will understand that we are doing everything we can to make sure that the information is available for people to make their judgments.

The selection of staff for the joint inspectorate to speak to is absolutely unacceptable. My right honourable friend in the other place has made it clear that he would not expect this to be the case. We have been clear that we need action now. The tragic case of Baby P has led to convictions. The serious case review was reviewed by Ministers in the department. As soon as we received it, we sent in the joint inspectors. We will have their report and my right honourable friend the Secretary of State will take action, along with the children’s Minister, urgently and promptly.

14:32:00

Baroness Pitkeathley
My Lords, I declare an interest as a former social worker as well as chair of CAFCASS. Wearing my professional hat, I am grateful for what the Minister and the noble Baronesses have said about the profession of social work and in recognising the tremendous burdens that such social workers carry. Does the Minister agree that this case is bound to have a serious effect on the morale of that already beleaguered profession? As well as the very welcome initiatives already being taken by the Government, will she consider that they might undertake the kind of promotional programme that they have undertaken so successfully with teachers to address the needs and resources required for social work?

Baroness Morgan of Drefelin
My Lords, I thank the noble Baroness for her question. Last year, under the Children’s Plan, we announced a commitment to develop a children’s workforce strategy, to look at all the professions working with children and to create a more holistic approach to workforce development. Central to that will be the focus that we place on intensive development for the social work profession. As my noble friend suggests, that will mean looking at the needs of the profession as regards child and adolescent social workers. Their needs will be looked at from their qualifications and professional development, right through to recruitment and retention, and the support that they need at various points in their careers. It is absolutely right that my noble friend should raise this issue, which we treat very carefully.

Lord Northbourne
My Lords, most of the Government’s comments so far seem to be related to procedures, reports, strategies and all sorts of things of that kind. My concern simply is about money. Will the brief of the noble Lord, Lord Laming, enable him to report on whether the borough of Haringey had in hand enough money or was it influenced by shortage of money in making the decision that it made?

Baroness Morgan of Drefelin
My Lords, the report being prepared by the noble Lord, Lord Laming, will be wide ranging. His letter containing the terms of reference is in the Library. Specifically, he will look at the effective implementation of safeguarding systems and procedures, which is about inter-agency working, and the development of a professional workforce, including capacity. I have no doubt that the noble Lord will feel able to report on matters that he sees as important, including, I am sure, resources.

The Earl of Listowel
My Lords, does the Minister agree that, while accountability is crucial, no additional bureaucracy will be placed on social workers and others than is absolutely necessary? Does she agree that if it were, social work and other social care work might be made increasingly unattractive? Does she recognise that some bureaucracy needs to be there, but that it should be as small as possible? I make no apologies for re-emphasising the point made by the noble Baroness, Lady Pitkeathley, that the Government have been very successful in raising the status of teachers over the past 10 years. It is an immensely encouraging achievement. They have taken many steps to promote the status of social workers. Can they repeat what they have done for teaching? In particular, will the Minister look at the model of the teacher development agency, which has been so helpful in promoting good quality teacher training, ensuring that the highest calibre of applicant is accepted on courses and has been a powerful voice for getting the best for teachers? Will the Minister look at the agency to see how that model can be applied to social work?

Baroness Morgan of Drefelin
My Lords, we have been working hard to address the bureaucracy load of social workers through initiatives such as the integrated children’s system, which is very much about streamlining the administration and record-keeping with which social workers are engaged, and the development of the contact point online directory. As the noble Earl makes clear, it is important that professionals keep accurate and timely records, and that there are processes to facilitate them in doing so. On the children’s workforce strategy, of course we are looking at the experience of teaching and at what lessons can be learnt. Now, more than ever, we need to recognise the extremely challenging and important role that social workers play in supporting safeguarding children and young people. We need to look forensically at what specific initiatives we can develop to ensure that the profession develops comprehensively from the start, through professional development and so on.

Baroness Howarth of Breckland
My Lords, I declare an interest as a former social worker, a previous director of social services and the deputy chair of CAFCASS, an organisation that employs around 2,000 social workers. I should like to ask several questions that are inter-related to what previous speakers have asked. First, how will we gather through the new review being undertaken by the noble Lord, Lord Laming, a different understanding of the matrix in which social workers function? They have to be responsive to local communities and to expectations of communities, which often press for children to remain at home, and they are continually criticised for removing children inappropriately—as against the pressure when something goes wrong and the media immediately hound social workers for not removing children. How is the social worker doing her job to marry that matrix of expectation with the complex demands of bureaucracy—there has to be some bureaucracy; records must be kept and information gathered so that we know how many children are of concern and where they are in order to make a comprehensive assessment? This is a workforce that for some time has been bowed by poor pay, the undermining of its professional standing in terms of decision-making, and the sheer horror of worrying about what happens to clients. That is because the person who will suffer emotionally and has to face the press as a result of this case is the social worker responsible for the child.

Faced with an extraordinarily complicated problem, how is my noble friend Lord Laming going to put aside the issues surrounding structures and get to the questions I have been asking recently? These include how to improve practice, the standing of the worker within the family so that advice is acted upon, and ensuring that the nation can be confident about the band of workers in whose hands the welfare of these vulnerable children is placed.

Baroness Morgan of Drefelin
My Lords, I am sure the noble Baroness will understand that I do not want to prejudge what the noble Lord, Lord Laming, will say in his report. In response to her eloquent explanation of the difficulties of striking such a delicate balance between the challenges faced by social workers every day of their working lives, I should say that it is very much about culture. We need people who are trained, confident and able to articulate their professional judgment in what are often difficult circumstances. Procedures and processes are all about providing a framework to support that, as well as good management and encouraging the right culture within the organisation. Those are the exact issues we have asked the inspectors undertaking the joint area review in Haringey to look at and report on as a matter of urgency. The noble Lord, Lord Laming, will consider whether the entire Every Child Matters agenda has been taken forward and implemented as fully as had been expected at the time.

Lord Mawson
My Lords, one of the reasons why I am in this House is to try to make connections between some of these difficult policy matters and the practical realities of what happens on the ground. As many noble Lords know, I spent 25 years working with a group of dysfunctional housing estates. I went on to develop the Bromley by Bow Centre, which arose out of the difficult circumstances of a woman called Jean Vialls, who died at the age of 35 of cancer, leaving two children aged two and 16. She fell through all the cracks of our social and healthcare provision.

One would hope that we had learnt the lessons and moved on, but in many ways we are in the same place. Two years ago I was asked by Christine Gilbert, now the head of Ofsted but at the time the chief executive of Tower Hamlets, to look at St Paul’s Way. Millions of pounds were being invested in a new school, in a new health centre and surgery and in housing, but the key professionals in each of those public sector bodies were not communicating with one another.

Perhaps I may share two thoughts with noble Lords that it would be good also to discuss with the Minister outside the Chamber. The first is the issue of culture shift and mindset. In my experience of working with partnerships on the ground, some people in the public sector do not see why they need to work in a more integrated way and still do not understand why they should have to work collaboratively with others outside their particular area.

Baroness Thornton
My Lords, I hate to interrupt the noble Lord because of his experience of these issues, but noble Lords are supposed to make a brief contribution and ask questions of the Minister.

Lord Mawson
My Lords, my question is to ask the Minister whether we could have a meeting to talk about the issues of culture shift and mindset, as well as the question of the skills and capabilities of staff. How do we enable these workers to relate to staff in other sectors in real and reasonable ways? I ask this because I fear that there are some real difficulties in this area that have nothing to do with bad people, but are to do with skills and capabilities.

Baroness Morgan of Drefelin
My Lords, the noble Lord has highlighted a key issue of concern for us. There is a lot of talk about integrated working and we have to be clear about what we mean by it. What skills and capabilities do we expect the children’s and the wider social care workforce to adopt in order to create a high-achieving workforce? I would be more than happy to discuss with the noble Lord and others if that is appropriate how we should bring about such a culture shift.

Baroness Northover
My Lords, I speak as a Haringey parent and without the expertise shown by others in our debate. From what I have been hearing, in Haringey there is a tremendous amount of concern about what people want to feed into an inquiry in this area, which obviously this more limited inquiry cannot embrace. Indeed, we have heard about the restrictions on it. My noble friend Lady Sharp asked the Minister about a full public inquiry, but I do not think that the Minister answered the point. Could she elaborate on it, because it seems that there are questions not only about this specific case—one in which a number of issues that people are talking about locally need to be explored—but also about several other instances that were brought to the attention of the leader of the council but on which no action was taken? For those reasons if for no others, I think that there is a tremendous loss of confidence in Haringey in this area of social services provision, which would definitely benefit from a full public inquiry.

Baroness Morgan of Drefelin
My Lords, I thank the noble Baroness for her contribution. I want to be clear that we in the department are committed to taking action at this stage. Our concern about the approach being espoused by the noble Baroness is that an inquiry of that nature takes a long time to complete. Immediately on receipt of the report of the Baby P incident, my right honourable friend Ed Balls, the Secretary of State, sent in independent inspectors so that we could be clear on the appropriate action to take. That was done because urgent action is required. We are expecting a comprehensive review.

We sought advice from Ofsted about the most reasonable timeframe within which to achieve a report and an intensive two-week period, to 1 December, was agreed. It is the shortest timeframe within which to produce a comprehensive report for the department. The Secretary of State is uniquely focused on taking the right action and is not prejudging what needs to be done. We shall have a fully independent and comprehensive report on which to base our consideration for taking action.

I appreciate what the noble Baroness has said, but we have asked John Coughlan from Hampshire to work alongside the department for children’s services in Haringey to ensure that, as of today, we can be sure that the correct safeguarding procedures are now being followed for children and young people in that borough, since obviously these are matters of great concern to parents. That is our approach and we are not prejudging what steps might be taken later.

Baroness Howells of St Davids
My Lords, I know that everyone feels emotional about Baby P. Unfortunately, I am not so graced that I can keep my emotions to myself. I must ask seriously who was parenting Baby P. We know from the report that three brutes were responsible for the welfare of that innocent child, so my question is: what were the professionals, who are paid to look after the welfare of children in that borough, thinking when they failed to take action after receiving various reports? The case review said that there was strong evidence that agencies failed, singly and collectively, to adhere to the statutory procedures for the proper management of child protection cases. Can the Minister tell the House why those involved in the case are still being paid by the state? Report after report is produced whenever a child is treated in this way, so what does the country think when we produce yet another and say that we will get better? I wonder whether these things are not simply get-outs from the horror that some of our children suffer.

Baroness Morgan of Drefelin
My Lords, my noble friend speaks with the anguish that many in this country feel and asks questions that we all ask. The Secretary of State is set on taking the right course of action. I know that there is a sense that there are reports after reports, but we must ensure that we learn from this tragic loss of life. There are many ways of learning, but we need to ensure most of all that anything that is learnt from this tragedy is put into action. That is where we must be right now.

Energy: Renewables (EUC Report)

14:52:00

Lord Freeman
rose to move, That this House takes note of the report of the European Union Committee on The EU’s Target for Renewable Energy: 20% by 2020 (27th Report, HL Paper 175).

The noble Lord said: My Lords, on behalf of the Select Committee, in particular my colleagues on Sub-Committee B, which deals with the internal market, perhaps I may say how pleased we are that there has been such an early opportunity for debate, particularly as the report was published only on 24 October. There are special reasons for welcoming this early debate, which I will touch on a little later.

The report was designed not only for your Lordships’ House but for the European Commission, and we very much hope that the Commission and the responsible directorate-general will respond in due course to our comments. Thanks to the encouragement of the chairman of the Select Committee, the noble Lord, Lord Grenfell—I shall touch very briefly on his impending retirement in a moment—we have taken the liberty of having the report’s conclusions and recommendations translated as a courtesy to the European Parliament and to the European Commission.

On behalf of the Select Committee, I thank our excellent clerk, James Whittle. I am constantly heartened by the great quality of the clerks who service Select Committees in this House, and I echo the views of all your Lordships in commending the quality not only of our clerks but of the clerk to Sub-Committee B. I also thank Dr Robert Gross, our special adviser from Imperial College, for his expert advice. Our report was a voyage of discovery. We certainly have not completed our understanding of the complicated issues involved in energy conservation, and indeed in meeting such targets as greenhouse gas emissions and in improving the output of renewable energy, but at least we have learnt a great deal from our deliberations.

I now pay tribute to the noble Lord, Lord Grenfell, who is at the European Parliament in Strasbourg today and cannot be with us. I also welcome the noble Lord, Lord Roper, to taking on the important role—I am not sure whether it has been publicly announced yet—of leading our deliberations in the future. The encouragement that the noble Lord, Lord Grenfell, has given to all the sub-committees, his wisdom and his calm advice are much appreciated, and we will miss him. Members on all sides of the House appreciate what a difficult job it is to be the Principal Deputy Chairman of Committees and to be responsible in particular for the European Union Select Committee. It is, in many ways, a thankless task and a full-time task.

The House is very grateful to the noble Lord, Lord Davies of Oldham, the Treasury Minister, for standing in for the noble Lord, Lord Hunt of Kings Heath—who I know has to be in Brazil today as Minister of State for Energy—and for responding to this brief debate.

I welcome the opportunity to have this debate, first, because next month the Council of Ministers in Brussels will be invited to agree the renewable energy targets for the European Union and individual targets for each country. Ministers in this country have assumed a target of 15 per cent of total energy consumption from renewable sources by 2020. That is the issue which our report seeks to address. It is a very narrow issue. It does not deal with greenhouse gas emissions or energy savings; it deals simply with the consequences of this specific target, which our Ministers will consider and, presumably, agree.

The Department of Energy and Climate Change has now finished its consultation on renewable energies, and I understand that it will publish its conclusions some time in the spring, so it is apposite to put the views of your Lordships on to the record. I also understand that it is likely that the Economic Affairs Committee will publish early next week its conclusions on some of the financial implications of an increase in sourcing energy from renewables. I hope that our report and its report will not duplicate each other too much.

Our report has not dealt with the very important issue of nuclear energy. Nor has it dealt with the 2020 target to reduce greenhouse gas emissions by 20 per cent and by significantly higher percentages in later years; so its scope was limited. One can be a strong proponent of nuclear energy. I speak as someone from the county of Suffolk, which already has Sizewell B and perhaps Sizewell C. Who knows, it may have Sizewell D in due course. I am a strong supporter of nuclear power, but I should point out to your Lordships, as we received evidence on this subject, that even if we were to complete the planning and construction of new nuclear power stations by the end of the next decade, we will largely be replacing what is already there because it will run out of operating capacity. The nuclear issue is extremely important but is not part of our inquiry.

It is proposed that 15 per cent of total energy consumption in the UK should come from wind, sun and water, whether hydro or barrage. That is lower than the average for the European Union as a whole because some countries, for reasons of geography or political decision, have made greater strides in this field. So we asked ourselves a simple question: if the target is 15 per cent by 2020—12 years from now—what are the consequences in policy terms that will face the Government and, indeed, face the nation? By total energy consumption we are talking about that from electricity, combined heat and power and transport. On combined heat and power—an extremely important part of our total energy consumption—I pay tribute to the Combined Heat and Power Association for the very sensible and practical representations it has made. It has been very level headed and our committee certainly paid great attention to what it had to say.

I remind your Lordships that only 2 per cent of our total energy consumption comes from renewables at the present time and we are facing a target of 15 per cent. That is a massive challenge facing not only the Government but ourselves as consumers. The committee concentrated on where the bulk of that contribution will come from in the next 12 years, and that is from electricity—specifically from wind power through both onshore and offshore wind turbines.

However, I shall make one or two qualifications and comments about that concentration. We welcome the Government’s agreement in the recent Energy Bill debates to include a feed-in tariff, particularly for microgeneration of energy. We think it is very sensible and can sit comfortably with the renewable obligation certificate regime which encourages the major distributors of electricity to purchase from renewable sources. We did not look in detail at biomass from agricultural crops but we welcome the announcement from Drax, the owner of the largest coal-fired power station in western Europe, which is reported as being willing to invest £2 billion in that new process. We think the target of sourcing 10 per cent of transport energy consumption from biofuel is a real challenge and must be the subject of a further inquiry.

As to water power, we have just about run out of hydro capacity in this country. We are excited by the prospect of a barrage on the Severn but we do not believe that it will be complete by 2020, either the larger barrage of 22 kilometres in length, or the slightly shorter barrage closer to the second Severn crossing. It will be a subject of great consultation, discussion and, I am sure, argument, but because it did not fall, in our judgment, within the time period we were looking at, we do not comment in detail on it.

The final qualification to our concentration on electricity and wind power is that we believe very strongly that the Government should encourage research into other technologies. We do not want wind power to crowd out other sources of renewable energy, and there are many. I mention only one—geothermal—which I am sure in the years and decades to come will be playing an important role.

Before coming on to the contribution that wind power can make, our report states that it is obvious that if we reduce our total energy consumption through energy efficiency measures, the mountain we have to climb is reduced. Therefore we hope that the Government, in the spring of next year at the latest, will come forward with recommendations about improving the rate of energy efficiency and, therefore, a reduction in the total amount of energy we consume. If the Government’s decision is that it is to be 20 per cent, that clearly reduces the target of 15 per cent for renewables by perhaps up to a fifth. We should like a policy statement from the Government as soon as possible on that front.

We accept that pursuing a target of 15 per cent for renewables will involve increased cost to the consumer. The Government have to be frank about this and the power generators have to explain the consequences. The charges for those who are emitting carbon under the carbon permit scheme—I understand that in the first round it raised about £50 million—are paid by the power generators and therefore paid by the consumers. The renewables obligation certificate, which is a scheme for encouraging the use of renewable sources of energy, is also paid for by the consumer. We have got to understand that, estimate what it is likely to cost and ensure that we protect the most vulnerable energy users in our society.

I turn now to the issue of wind power. The noble Lord, Lord Broers, spoke a few days ago in your Lordships’ House and I understand his point in questioning the wisdom of pursuing offshore and onshore wind because of the problems of intermittency—that is, that when the wind does not blow you do not get any energy—and the energy producers having to plan for a certain base load coming from conventional coal and gas-fired power stations and nuclear. I shall deal with the intermittency point in a few moments.

The noble Lord, Lord Oxburgh, and my noble friend Lord Dixon-Smith gave evidence. I pay tribute to my noble friend’s experience and wisdom on this subject and look forward to his comments in due course. The noble Lord, Lord Oxburgh, while being cautious about how much reliance should be placed on wind power because of the problems of intermittency, nevertheless welcomed further development of the technology.

We are all aware of the objections from householders, conservationists and many other bodies about the construction onshore of wind turbines that disfigure the countryside, particularly in large, open rural spaces. My noble friend Lord Vinson has written to me reminding me of the problems of construction in Northumberland, and I am well aware of it in my own county of Suffolk. Our report states, however, that one of the consequences for the Government is that if onshore wind turbines are going to make a contribution, then one may have to go back to the Planning Bill, after it becomes an Act, and reduce the threshold size for the responsibility passing to the Infrastructure Planning Commission to perhaps 20 megawatt output. Otherwise, even with onshore wind farms, it will take longer and longer to obtain planning permission, for reasons we all understand.

The committee believes that the real challenge and opportunity lie offshore. As regards planning, I commend what the Crown Estate has done in the third round, which is underway at the moment, of inviting bids for planning permission, essentially, offshore. It has gone about that in a positive way and I am looking forward to the outcome. It will certainly be much bigger than the second round.

The committee is attracted to the technology of laying under the sea a grid cable, essentially—perhaps around the whole of the United Kingdom—so that wind farms can be constructed not only in the North Sea but in the western approaches off the Northern Isles. If all the power generated could be transmitted using direct current and then converted to alternating current in due course—I understand that there is Swedish technology to create that—that would deal with the intermittency problem because the wind has to be blowing somewhere around the British Isles at any one time.

As to the grid, we welcome what Ofgem is doing in looking carefully at how it can encourage the grid to invest ahead of connection from not only renewable sources but conventional sources, and also making sure that the queuing system is a proper queue of those who have finance and planning rather than simply on the basis of those who have applied in the past. We think Ofgem is moving in the right direction.

Finally, I am sure that my noble friend Lord James of Blackheath, whose experience dates back to the oil and gas industry 20 or 30 years ago, will have comments to make on the supply chain—the creation of the supply mechanism for new turbines, barges and drilling systems. However, I make the point that the Swedes, the Germans, the French and the Danes have already responded to the opportunities offshore in the United Kingdom and we should welcome their manufacturing companies into this country.

Can offshore wind be a significant contributor by 2020? I believe so, and our committee believes there is a chance that there could be such a contribution so long as planning consents come on time, one hopes, by 2013; that turbines are ordered—there is certainly capacity around the world; and that we have the lifting barges to lift the turbines and place them into the seabed. Some industrialists are forecasting 25 gigawatts of capacity coming out of round 3 by 2020, and if you add what happened in round 2—6 gigawatts are likely to be in production by 2020—that is a large contribution to our target.

I end by referring to the challenge. It is not only an organisational challenge for the Government but a challenge for us as consumers. In the Second World War Lord Beaverbrook was charged by the then Prime Minister, Winston Churchill, with increasing aircraft production, and he took substantial executive powers to get the programme delivered. We believe that something like that has to happen; there are too many government agencies involved, and some form of renewables commission should be in place in order to deliver the objectives that the Government may accept. Those, like my noble friend Lord James and myself, who were involved in the development of the oil and gas industry in the North Sea in the 1970s remember that industry responded quickly. Incentives were given, there was clear planning guidance and great success was achieved in a relatively short period of time.

I look forward to the contributions of those who know a great deal more about this subject than I do. I beg to move.

Moved, That that this House takes note of the report of the European Union Committee on The EU’s Target for Renewable Energy: 20% by 2020 (27th Report, HL Paper 175).—(Lord Freeman.)

15:11:00

Lord Bradshaw
My Lords, I do not know whether I qualify as someone who knows more about the subject than the noble Lord, Lord Freeman, but I reiterate the great urgency of the situation if we are to meet our renewable targets. At the same time, I sound a note of caution for any Government of whatever colour about what will happen if there are power failures and the lights go out. We need to get a move on in the energy field.

With regard to wind power, it is something of a puzzle to me that when I went to Wellington in New Zealand last year, the first place I was taken was up a hill to see a wind turbine that was a tourist attraction and to which large numbers of people came because they thought it was well worth looking at. If ever the old adage “beauty is in the eye of the beholder” held any truth, it was certainly not contradicted there. We react with shock horror to wind farms, but they are actually not permanent blots on the landscape, if that is how people wish to refer to them; they could be taken down and improved. Much of the resistance should be taken care of in the most sensitive areas, but I am sure we are going to have to agree to wind farms in many areas.

It was rather appropriate that we should have had a Planning Bill and an Energy Bill at the same time as the committee was deliberating. I am disappointed that we are still talking about 50 megawatts being the lower limit, as it were, for the Infrastructure Planning Commission. That may have to be revisited—a lower limit should be appropriate.

Regarding the domestic feed-in tariff, it was evident to the committee on our visit to Brussels that in both Germany and Spain a good deal more energy is generated at home by photovoltaic cells. While one might say that the Spanish have a lot of sunshine so this method might be appropriate, I am not aware that it is any sunnier in Germany than it is here. However, it has the advantage of a feed-in tariff that gives generous levels, which would encourage more people to fit photovoltaic cells. If we are going to have two-way meters, and if we are not going to pay large grants to people, there has to be some financial incentive to people to go ahead and put these in. A big industry could be set up quite quickly to install them. The things on people’s roofs have very little impact on the environment because many of them can be easily hidden away.

One thing that we discussed which concerned me was the question of certificates of origin, which would be traded and which give people confidence that what they are buying results in good being done. I am thinking of garden furniture, where a certificate of origin is often a label tied around the chair that you buy saying, “The teak from which this was made was harvested in sustainable forests in Indonesia”. I just do not believe it. We need to have a system of certificates of origin where we can have confidence that the people trading them have genuinely saved the carbon and have done so for a long time, not just last week or something. It must be a continued saving, going into the future. I also look forward to the efficiency targets, which I know are coming in the spring.

The last thing I want to say concerns the management of the grid. Far be it from me to cast aspersions on witnesses who came before us, but Ofgem was not very convincing. In my view it was extremely cautious, it referred to the objectives that were set for it by the Government and it had to have the needs of present-day consumers in the forefront of its mind. To some extent, if you take the needs of present consumers too much into account, it could be at the expense of consumers in years to come. There may well be a price to pay immediately in order to get the whole process going. I hope that Ofgem will address this issue, as it must also address the issues of the management of the grid.

The grid, as we know, was designed with the idea of central power stations radiating outwards. It is likely that a lot of this renewable energy will be generated on the periphery of the United Kingdom, and we will have to be able to bring it towards the centre. Again, this seems to be an urgent problem that goes beyond the immediate economics of the next two or three years.

15:18:00

Lord James of Blackheath
My Lords, I should declare my interests in this matter. I have obviously been a member of European Union Sub-Committee B and therefore a participant in the construction of this report. In an earlier life, I was chairman of North Sea Assets plc and of British Underwater Engineering which played a very large part in the supply chain for the development of the North Sea.

I should correct one impression given by my noble friend Lord Freeman: I am deeply pessimistic about the levels of investment in this round similar to those which were made to support the North Sea. The North Sea development was a disaster for the investors, for the principal reason that we did the job too quickly. As a result, the dockyards of Leith and Aberdeen are today full of ships that have not sailed for 25 years, the cost of which has never been fully paid back to the investors. I think that there will be a completely different structure when it comes to getting the finance for this: people will not invest in the individual ships, which are very short for what we need now. Some form of corporate entity will have to be created to give some form of equity participation in the eventual proceeds of the energy created. Without that, I do not think that anyone will have any chance of a fair payback. That is a very important point which is not in the report as such.

My primary concern today is about the supply chain, which is in a dire state. Before doing so, let me say that 10 days ago I attended the 8th meeting of the European renewable energy conference in Budapest, which came up with one or two surprising outcomes. My noble friend Lord Freeman referred to the fact that geothermal energy is a big issue for the future, and it may be. It was brilliantly presented in Budapest by a very attractive 28 year-old Hungarian physicist, who has just got the Nobel Prize. And she has got four children already—one wonders what she does in her spare time.

Geothermal is capable of heating the entire world twice over with the resources taken out for one year. In so doing, the earth would replenish the entire removal of geothermal within six months; it is therefore eternally renewable. However, I understand that there is a big problem with sulphur generation and that it will not be usable—cleanly usable—until the sulphur problem has been eradicated, but I am assured that in time it will be. We need to bear this in mind for the future.

A minority view among committee members was that we might be getting pushed by the 15 per cent target by 2020 into an enormous expenditure of uncertain outcome to buy something which may not represent value for money by 2020 in comparison with what else is available at that time. However, we must take it as a given that 15 per cent by 2020 is the target that must be achieved, and everything I say from now on is therefore in that context. We have to recognise that we may have to try to turn what we have got by 2020 into an even bigger opportunity and become the powerhouse for the whole of Europe by adding our wave capacity on to our wind capacity, in which case an enormous income could be generated to this country’s benefit in years to come.

The other factor which came late to the Budapest proceedings I undertook to relay to the Government, and I have not had a chance to do so until now. I was approached outside the conference by one of the commissioners from Brussels, who asked me what my reaction would be to the creation of a North Sea association. I asked him to explain this. He said that such an association might be sponsored by Brussels to require every country which bordered on to the North Sea to give up the sovereignty of its shoreline in order to gather together the entire wind resources. We take the intermittent point, but it is not intermittent for the North Sea as a whole. Overall, the wind is blowing somewhere in the North Sea every day at the necessary level for generation. If there was one central control over the whole North Sea, the theory goes, there would be enough to provide fuel for the whole of Europe. That is what is in the mind of those in Brussels.

There would also be a plan to build an artificial island somewhere in the region of the Dogger Bank to act as a massive substation for the gathering and transmission of all the created fuel into whichever country paid. Each country’s generation would cease to be its property and would have to go into a central pot. We would then have to buy back from the central pot what we needed for our own purposes. This sounds like a thoroughly bad idea to me. When he asked for my reaction, I said that it was not for me to comment, but I reminded him that when Shakespeare wrote that ours was a fortress built by nature bound in by the triumphant seas, I did not think that he had it in mind to give away 800 miles of our battlements to him. The Government should monitor closely what Brussels has in mind, because I suspect that there is a subplot to this: it does not like the plans that have come in from everybody; it is disappointed by the outcome; it has seen that the North Sea in isolation, if centrally controlled, can do the job for the whole of Europe; and there may be some attempt to strong-arm a grab on the all the resources that it needs.

The supply chain, which is the critical factor, is seriously limited by the fact that it first of all requires a variety of types of vessel of which hardly any exist in this country. Your Lordships should understand what is involved in a turbine. They cost about £2.5 million each and weigh 570 tonnes. They variously stand between 70 and 100 feet above the sea level, with 500 tonnes of the construction out of sight below the surface of the water. The other 65 or 70 tonnes sticking up on the top are the bit that you see.

I am not as optimistic as the noble Lord, Lord Freeman, about there being plenty of turbines available in the world. I think that there are only three manufacturers of turbines at present: REpower, Suzlon and Siemens. Without doubt, Siemens’ turbines are the state of the art. It is encouraging to hear that Siemens has in construction in this country a factory into which it intends to bring the manufacture of a certain number of the turbine gearboxes, which are critical. The Government should look towards developing the warmest and closest possible relationship with Siemens, with a view to trying to secure from it as much of this forward product as they can. They will need at least 3,000 turbines for the scheme to work, and they should see to it that they are being delivered. There is a two-year waiting list to get a single turbine at the moment, so they do not have long to get it up and running.

Another development that the Government should watch very closely is the floating turbine. A prototype is being tested in the Gulf of Locarno, called, somewhat promisingly, the multi-brit-ariba. It could be the answer to a quick fix. If it is made feasible, it will be ideally placed for manufacture on land before being shipped out and placed in position. All that will be needed is for it to be connected. However, the prototype has a nasty habit of severing the transmission lines for whatever it generates, therefore rather undoing its own good work.

The creation of a turbine as an operational unit requires first of all that a foundation is sunk into the sea bed. The foundation comprises something resembling a huge Lego brick of reinforced steel, a number of which have to be piled, one on top of the other interlocking, to a height of at least 10 metres and sometimes 30 metres. It then has to be hammered into the sea bed to a minimum depth of 10 metres by an explosive piledriver. There is only one ship available in this country that can do this and it is called the “Jumping Jack”, which has been used to construct pretty well every one of the wind farms that we have in this country.

I am told that three more are in construction, but that that is it, and that they are all booked out until 2020. We must therefore find some more. I asked Anni Podimata, who chaired the conference in Budapest, whether the renewable energy arm of the European Union would assist by compiling a register of every piece of equipment available, and whether we could have a list of all the ships, what was available and which components were resourced. I received a discouraging reply. She said: “No, we couldn’t possibly do that; it would be outside our brief; and, in any event, you haven’t got a problem with ships, because now that the billionaires are hit by the recession and can’t afford to buy any more yachts, you can go to the yacht builders and get them to build your ships for you”. I asked her whether she was a direct descendant of Marie Antoinette, because it sounded rather like the cake and the bread story to me—I do not expect to be invited back next year anyway. Driving the stack of foundation Lego bricks into the ground requires a hammer to hit it at the force of 44,000 pounds impact. The first impact will probably drive the pile about 1 metre into the ground. By the time you get to your 30th or 40th impact, you are lucky to get 2 centimetres out of it—so it is a long, slow process. Putting every turbine up takes an average of six weeks in each case and the total cost, including material, is £2.5 million.

Turbines can be manufactured, laid out flat and taken out on a flat barge but, when they get to sea and to the place of construction, they have to be lifted to their full height, which means that you have to have a marine boom crane with a minimum carrying capacity of 65 tonnes, which is the actual weight of the final component that you have to put on top of the foundation. There are no such cranes available in this country. You might be able to make some if you follow the Venetian solution used in building the tidal barrier in Venice, by making large floating pontoons, covering them with a steel plate and then driving a crane onto them and securing it by bolting it down. But you would have a very dodgy centre of gravity and you would not want to be too near one of those when it is picking up 65 tonnes.

The short answer to those problems is that you cannot use the stuff that is surplus from the North Sea, because that is a deep diving problem. You go down to a huge depth there. You put your divers down there for six weeks at a time in teams in three, with two days to put them down and two days to bring them back. You do not have a problem there in needing specialist diving vessels, because you will be diving down for only 20 metres maximum. That is easy—half-hour stints will cover all the work that is necessary. The difficulty with the other ships is that you do not have the piledriver, beyond “Jumping Jack”, and you do not have the marine crane lifts. You will have to get them and you cannot really manufacture them in time to get through.

The timetable that I have worked out for the whole exercise, to make 3,000 turbines effective down the east coast of Britain, would work on the basis that planning consents must all be achieved by 2013. If you do that, I have a fairly reliable estimate from professionals in the business that the whole 3,000 turbines needed to achieve the target could be erected in six years, with one year left up your sleeve before reaching the deadline. To do that, you have to get a turn-key operation done on it by some form of contractor, who you will have to cut in on some form of equity participation. I cannot see any other way around that problem.

There are people who can do it. You have to go to somebody who either has the boats or can bring them back from other projects on which they are using similar boats around the world. You need four different types of boat. You need a basic diving support vessel, which does not have to have a moon pool; you can dive over the side at that depth—you do not have to have a hole in the middle of the boat. You need two cranes per installation and one piledriver on every installation. You might be able to make economies by doing three farms alongside each other at one time so you can rotate the ships between them and get maximum use of the ships. But you will also need remote control submarines, of which there is a plentiful supply in this country. There are places in Aberdeen and Yarmouth which are well stocked—you will not have a problem with those. At that point, you will be in a position to have the full kit, but you will not get the kit unless you have the turbines ordered well in advance and you have to have the planning consents.

I have calculated that there are 13 agencies whose planning consents you will need. Rather than delay your Lordships this afternoon with them, I shall drop a note to the Minister with a list of the 13 agencies from which you need consent. They are all difficult ones; some of them have already objected to installations which they do not like, so they are used to arguing it out. If you get those consents, you have a reasonable chance to get through this. There is no alternative way of doing it. You have to make it work. You must get the planning consents by 2013, which means that the survey work on their location must be done in the next eight to 10 months or so. That is the first thing. The components have to be ordered now, as without them the whole thing is a failure. You will end up—

Baroness Thornton
My Lords, I am sorry to interrupt the noble Lord, but the guidance in the Companion to the Standing Orders suggests:

“Other speakers are expected to keep within 15 minutes”.
 

I would like to point that out.

Lord James of Blackheath
My Lords, the time was not on the speaking list today.

Therefore, you will have a very effective series of wind farms which will meet your target by the time involved, but only if you start immediately.

15:35:00

Lord Rowe-Beddoe
My Lords, first, let me apologise to your Lordships, to the noble Lord, Lord Freeman, and to the Minister for my discourtesy in not being present at the beginning of the debate. I was unavoidably detained elsewhere, to which place I have to return. I crave your Lordships’ indulgence to address the House now. Secondly, I have the pleasure to declare my normal interest for Wales—the geographical place rather than the mammals.

The noble Lord, Lord James, might make one think that our committee is always conducted in a jocular way, but it was refreshing to hear him recount some of his serious experiences at his recent meeting in Budapest.

In a recent newspaper article, Wulf Bernotat, chief executive of the world’s largest quoted energy company, E.ON, asked of the United Kingdom:

“You have old nuclear power plants, old coal, expensive gas, a need to invest in renewables to reach unrealistic targets, and a slow [planning] process. Doesn’t that sound like a problem to you?”.
 

As we are all aware, the European Commission’s target “20 20 by 2020” requires the UK to achieve 15 per cent of its energy from renewable sources by 2020. As we also know, this figure comprises energy used for heating, cooling, electricity generation and transport. The European Union sub-committee of your Lordships’ House published a report on this target on 24 October. Our report concluded that the UK’s 15 per cent target should be regarded as a stepping stone, not as an end in itself. In fact, it is probable that it will not be achieved. In these uncertain financial times, can we view this as phase one of a process towards building a low-carbon economy in the UK?

To do so, we shall need the will of our political leaders to look beyond 2020 to ensure that those people and organisations that commit investment and resources for sustainable and cleaner energy projects are not only encouraged to begin that process immediately but also assured of a stable and predictable planning environment in which to carry it out in the short, medium and long terms. Without such certainty, large national and regional projects, such as the Severn barrage and other methodologies to harness tidal power around our long coastline, will not even be worth consideration by those organisations capable of investing in and developing them. Focus and leadership will be needed to take us into a diverse energy programme not only to meet the United Kingdom’s renewables targets but, perhaps even more important, to increase substantially the security of our national supply. We must change our ways of doing business. We must change our ways of living.

A mega-project can of course also help to regenerate regional economies. To take south Wales and the south-west of England as an example, recent university research indicates that both areas are at an economic tipping point. Investment to develop the massive tidal resources of the Severn estuary can be raised. This, in turn, would provide us with the basis for a low-carbon economy and a better quality of life for a substantial part of the UK. In addition to the national importance of a proposed barrage, by far the UK’s largest single source of renewable energy thus far identified, may we be assured that the Government are taking full account of the national employment opportunity that will accrue from the scale of the construction and machinery production required, as well as the enormous continuing and diverse scope for employment generation to follow?

We have started the renewable energy process with wind power. We must accelerate diversification. We need to work rapidly to bring other options into the policy and planning process for the long term, both large-scale and small-scale, through new build and by improving the efficiency of what we already have. To return to the barrage for a moment, the project, which extends from the Welsh coast to Hinkley Point, not only could substantially simplify the task of providing cooling water for the next generation of nuclear stations proposed for that location, but would focus the task in establishing connections to the national electrical transmission system and protect both Somerset and south-east Wales from inundation due to a rising mean sea level.

We have no time to waste. I return without apology to the Severn barrage as an illustration of the indecision that is regrettably so often a feature of our processes to address such substantial investments of this kind. The idea for such an investment was first mooted early in the last century, as I have mentioned on previous occasions in your Lordships’ House. Of course, we have to consider carefully the impacts of such a huge project, both positive and negative, on the physical environment. The feasibility study currently in progress is scheduled to have its interim findings published in the first half of 2010, but we cannot afford to continue our habit of assessing large projects at such a relaxed pace any longer. The world of our grandchildren and great-grandchildren is taking shape here today.

We all have something to contribute—the corporate giant, research laboratories, planning offices, schools, Ofgem and the consumer. The Government’s job is not only to raise awareness of the arguments but to lead and facilitate the way forward; they must show us that we can all contribute and simplify the methods by which we do so.

15:43:00

Lord Teverson
My Lords, from these Benches I thank the noble Lord, Lord Freeman, for an excellent and comprehensive report on an area of increasing importance. It will be, as the report says, very challenging for the UK, and even for Europe as a whole, to meet the targets, which are quite something. Over the past year we have heard rumours of rebellious civil servants and officials in government departments saying that these targets just cannot be met. Many of us, even though we wish them well, might almost say that that is the case. I shall come to one of those areas in a minute.

At the moment the European Union derives something like 8.5 per cent of its energy production from renewable energy and is aiming for 20 per cent by 2020. In trying to think how far ahead 2020 is, I go back in time to 1996 and the last full year of office of the previous Conservative Government, which seems a long time ago. However, there is little time for investment over the relevant period, and certainly very little time for invention or innovation. The relevant renewables figure for the United Kingdom is about 2 per cent, with only Malta and Luxembourg having a lower figure. Therefore, we shall have to achieve about an eightfold increase over the next 12 years for us to meet the target we are discussing. Although that may seem possible in terms of electricity generation, when we consider that it also includes heat and transport fuel, the task looks staggering.

I thank my noble friend Lord Bradshaw for mentioning the visual aspects of wind farms. I like to look at wind farms. I do not often drive up the M4, but I have noticed that there is a huge wind generator by that motorway at Reading, which I consider a good thing. Wind farms are a very controversial subject in Cornwall. However, if some of them were taken down, I believe that I would not be the only person to protest that some of our greatest landmarks were disappearing. When I was a Member of the European Parliament, some farmers wanted to show me how the landscape in a certain location would be despoiled by wind generators. Indeed, I accept that you should not put them in certain locations. The farmers invited me to visit a stunning vista in north Cornwall and asked me to consider what it would look like if wind generators were installed there. However, all I could see was the criss-cross of electricity pylons stretching for miles, which made me think that you do not notice what has been there for years, and that perhaps people feel threatened by change. However, this is a controversial area of which communities are naturally very wary.

One of the most telling pieces of evidence occurs at page 38 of the report. It states:

“Cambridge Econometrics has estimated that on current policies the UK would achieve less than 5% of final energy from renewable sources by 2020”.
 

I note with interest that the report continues:

“This is a view accepted by BERR”.
 

That is a stunning statement; namely, that on current policies we will increase our energy generation from renewables from a figure of just under 2 per cent to 5 per cent. However, the challenge is to produce another 10 per cent beyond that.

I consider that the renewables energy policy concerns principally three things. It involves reducing carbon dioxide emissions, and the European Union’s 20 per cent—possibly 30 per cent—reduction target by 2020. Importantly, not just for us but for Europe also, it concerns energy security. The report on Russia of the EU committee chaired by my noble friend Lord Roper shows that Europe is dependent on Russia for 40 per cent of its gas supplies. I think that seven of the 27 EU states are completely dependent on Russia for their gas supplies. Therefore, renewables are important in that regard, but also because renewable energy is sustainable and so we do not eat up the planet as our economies motor forward.

One sad thing about the United Kingdom, as was shown in the report, is that we are near the bottom of the league table; as the classic head teacher’s report says, we have to do not just better but hugely better. That means that we have missed out in a number of areas which will make it very difficult for us to catch up in terms of capacity, producing the technology ourselves, expertise, and our experience in applying the technologies—in all of which many of our EU partners are well ahead.

I was interested in what has been said on technology. It is clear that we cannot and should not depend, as we are, largely on wind power. It is important for reaching the 20 per cent target and the intermittency problems are not huge, but we need diversification beyond that. I was delighted that geothermal power was mentioned. In fact, the granite batholiths in the south-west are a larger potential resource than the Severn barrage. I am not aware at all of a problem with sulphur. In fact, much geothermal power is generated mainly in volcanic areas, where there may be some sulphur output naturally; but even in the UK and other parts of Europe there is potential. An experimental station in Soultz, Alsace, started operating earlier this year, but, unfortunately, the technology is unlikely to be on-stream until about 2020, along with a number of other technologies that we have talked around.

The Government’s commendable move to including heat in the Energy Bill and lay down a framework for the equivalent of renewable obligations or freedom tariffs for heat One area that makes me more positive about the targets, is. Heat accounts for some 47 per cent of carbon emissions and a large proportion of our energy consumption in the UK and Europe. It is an area that we need to tackle; and there is a lot more scope for renewables—certainly in biogas, whose industry has a great potential to increase, and in biomass in terms of timber and timber-related heating. I cannot understand, given that we realise the urgency of this issue, why in any new house or building we do not insist on heat pump technology or something equivalent being installed, as to retro-fit any of these types of technology is incredibly expensive.

I would be interested to hear the Government’s latest view on biofuels. The 10 per cent target has already been mentioned, but this is an important part of meeting Europe’s target for 20 per cent of renewables. Biofuels have gone from being a saviour to something that is seen as a threat to our ecology and the environment. Where do the Government now stand and what is their understanding of where Europe stands? There has been a fair degree of disagreement within the Commission about whether the targets should remain and how we ensure that energy resources are sustainable.

I was not aware of the issue of guarantees of origin before I read the report. I understand my noble friend’s scepticism in terms of previous forestry badges. The EU ETS has certainly shown that certification in terms of emissions and generation can be strong. However, in the United Kingdom, renewables obligation certificates are effectively a guarantee of origin already, and I would like to understand whether the two systems conflict in terms of registering renewable output, or whether they come together quite well.

However, because I still do not understand this and I do not believe that the Energy Bill, which is about to become law, really deals with it, my basic question to the Minister is: exactly how is Cambridge Econometrics wrong and how will policies in the future ensure that we bridge the gap between the predicted 5 per cent and the 15 per cent that I am sure everyone in this House wishes to achieve?

15:55:00

Lord Dixon-Smith
My Lords, this has been a very interesting afternoon for me. I was delighted to hear the opening remarks of my noble friend Lord Freeman, who rightly pointed out that the 15 per cent renewables target that we are looking at is the target after we achieve a 20 per cent reduction in our carbon emissions by 2020—that is, 20 per cent of our energy requirements not today but in 2020. The difference is fundamental, and my noble friend was absolutely right to draw attention to it.

In this country, ultimately we are looking at an 80 per cent reduction in our carbon emissions. That is not yet written into law but it is a recommendation that will, as I understand it, be made to the Government by the Committee on Climate Change following its consideration of evidence that has accrued since the Government decided on the 60 per cent target three or four years ago when they were planning the Climate Change Bill. That is, of itself, fundamental because it probably means that by 2020 we will require a renewables target higher than 15 per cent if we are to get our emissions down to 20 per cent below where they were in 1992—or, in the case of Europe, probably today. However, getting our emissions down to that level will be very difficult.

I also sympathise with my noble friend Lord Freeman, as anyone who writes a report looking at the future is immediately in difficulties because what you expect to happen in the future never does happen. I merely draw the House’s attention to page 37 of the report, which refers to the cost to the domestic consumer of generating 37 per cent of electricity from renewable sources. The report sets out assumptions based on oil prices at $70 a barrel and $150 a barrel, which they nearly were earlier this year, although today they are at $55 a barrel. That suggests that under the present regime the price for the consumer will be much higher than anything generated in this report.

That leads me on to a different aspect of this issue. It seems to me that in the end it all comes down to economics and the climate in which everyone has to undertake these actions. I draw attention to something that appears on page 75 of today’s Times. It may not be too significant but it is, none the less, indicative. It is a report that the world’s biggest wind farm, which, curiously, was to be in Texas, has just been put on hold because the economic conditions have worsened so much in the past two or three months. Years ago, I was responsible for the whole built estate run by Essex County Council—that is, maintenance, energy use and everything else. Even in those days, we worked very hard on energy economy. Economic viability drove the programme, and projects went in and out of viability depending on the fluctuating interest rate. I say that to make the point that, ultimately, we really need to get this moving. I agree with the noble Lord, Lord Teverson, about the headmaster’s report, but the comment that I consider to be appropriate for the Government at the moment is, “Could do better if they tried”. I am not wholly convinced that the Government are really trying to tackle this; at least they give no appearance of having an absolute conviction to get to grips with the problem.

I use another illustration of the difficulties that we face. A friend of mine has a wind turbine which supplies most, if not all, his electricity and he supplies some to the grid. Until the electricity prices rose, he was on a 60-year payback period. That would not encourage people to go into this business.

Finally, we need to consider another problem. I refer to the second report of the Science and Technology Committee, 2005-06, to this House on energy efficiency. At page 27 of the report we find a graph which illustrates yet another aspect of this problem of which little has so far been said today. That report illustrates the performance of our country's economy over the past 30 years. Interestingly, it shows that GDP grew by about 110 per cent over that time. For our own sakes and for the sake of everyone in our communities, we expect to keep our economy growing. It also shows the units of energy required to produce a unit of GDP falling from 100 to 50, so effectively it halved. Energy efficiency has been ongoing for a long time. It would have accelerated had the price of oil stayed where it was, but now I am not sure what will happen.

We need to bear that in mind because the real problem revealed by that graph, and which we need to consider very seriously, is that over the same 30 years the effect of those two movements was to keep our energy use virtually flat—it grew about 5 per cent. If we are to rely on increasing energy efficiency to try to get our emissions down, in my view, it will not happen. If we become more efficient in our use of energy, it will be held up as the economy grows. We have a deep problem and the nature of change required in our energy supplies is greater than most of us are at present contemplating.

As my noble friend Lord James was saying, this question of economy applies across the board: not only do we have these problems in the United Kingdom, but every other country across Europe has a similar, parallel problem and will want to invest in this area. The noble Lord, Lord Rowe-Beddoe, who I see has temporarily had to leave the Chamber, talked about the need for stability in the economic climate in order to encourage investors in the construction and installation of all the specialist equipment to deal with the installations and then the installations themselves. Given that this is now a trans-European problem, investors ought to be able to have considerable confidence, but the brutal truth is that, looking at the economy today, there is no confidence at all. No one in manufacturing industry, and no one in the construction industry, dares to plan more than about a week ahead. Until we get that foundation laid, we shall find it extremely difficult to achieve anything. There is an urgent need to give this field and the wider economy that stability.

The Minister will undoubtedly argue that the Government are already doing what they can and that we shall hear more next week with the Pre-Budget Report and so on. I do not expect him to answer this this afternoon, but we all need to recognise that we will get nowhere without certainty in giving the people who are going to have to put their money into the construction that is necessary to bring this change about the confidence to begin doing so.

I should refer to the Planning Bill. It has been much mentioned, and I played some part in it in this House in the past few weeks. It will help, but it is not a solution. For a start, it deals with national-scale infrastructure projects only. It will take care of power stations, but a lot of other things are required. That is the first thing, but let us also consider the timescales. The Bill will be passed by the end of this Session. The planning commission will probably be in place by next April. It will, perhaps, have settled its procedures by autumn 2009. At that point, applicants will know what they have to do in order to make a valid application. It will take them a year to produce a valid application; certainly, it will take a year for an application for a power station. That takes us to the end of 2010. It will then take another year for the commission to consider it. Therefore, we should not think that we have produced a tremendous acceleration. Of course, after that, matters will be much easier and there will begin to be some benefit, but we have a two or three-year hiatus before the Act will be operating. We have to face the fact that that is so. It will help with planning problems at national level on large-scale projects, but in due course, we may have to turn our attention—dare I say it?—to the rest of the planning system, which for many people in the construction industry is still a confusing obstacle to pass.

This has been an interesting afternoon. It is a step forward. Whether one agrees or disagrees with everything that was said is neither here nor there. The more discussion we have on this issue, and the more the recognition is forced home that urgent action is required, the better. In that sense, I completely support everything that has been said this afternoon.

16:08:00

Lord Davies of Oldham
My Lords, I agree with the final remark made by the noble Lord, Lord Dixon-Smith: we can advance the cause only by discussing these issues intensively. I am therefore grateful to the noble Lord, Lord Freeman, for his report and for the work of the committee. I offer two apologies, neither of which should occasion too much consternation in the House. First, I, too, would have preferred that my noble friend Lord Hunt was replying to this debate, for the obvious reason, but also because, as the Minister responsible for this area, he has detailed knowledge of this matter and the report is geared towards longer-term strategy. However, when he returns from Brazil—I hasten to add that I offered to exchange roles with him this weekend so that he could have the pleasure of this debate and I would have the arduous task of looking at biofuels strategy in Brazil, but the House will recognise that he was committed to inevitable priorities—we shall get the benefit of his keen interest in this area, which is reflected in the fact that the Government will produce a further perspective on their overall priorities just before Christmas.

Next year, we will produce our full strategy, which will take into account the various matters aired today, especially the legislation that we will by then have in place. I hasten to add to all those who voiced anxiety about the effectiveness of the legislation that it is enabling legislation to improve the prospects of our hitting the targets. The legislation itself does nothing to hit the targets, especially given that—as the noble Lord, Lord Dixon-Smith, was, from his vast experience, able to point out—it will be a little time before the arrangements under the Planning Bill bear fruit. However, without them we would have been severely constrained, so I am delighted that in the week that this important report is being debated we are celebrating the fact that two of the most significant Bills in this area—the Energy Bill and the Planning Bill—have been before the House and extensively discussed. Some of the arguments that we have had today have been fairly well rehearsed in those frameworks.

I also offer the brief apology that I would have preferred that the government response to the report had been published a little earlier than today. I am grateful that noble Lords have been able to absorb it and take it into consideration when making their contributions. I wish that we had been able to provide time for substantial consideration prior to the debate, but the Government get caught between Scylla and Charybdis. The Scylla was that, if we delayed the debate, we would have missed the benefits of important contributions in this area; we had space for it, so we produced it earlier than we would ordinarily expect. The Charybdis was that we were not quite ready for the debate. I hope that noble Lords will appreciate that, in producing our response today, we offer no discourtesy to the committee but a desperate attempt to catch up with rapidly developing events and the great benefit of having this debate today.

The debate is timely, given our desire to conclude European negotiations on the renewables directive in the next few weeks and to work to finalise policy, following public consultation on the UK renewables energy strategy last June. The negotiations on the directive are ongoing, with the UK supporting the presidency’s aim to reach political agreement on the 2020 climate and energy package, of which the directive is a part. We want to reach agreement by the end of this year. We are now assessing the many responses received to the consultation on the renewables directive with the intention of publishing our final energy strategy in the spring of next year. This debate feeds into that consultation.

A number of important decisions for future renewables policy will need to be finalised over the next few months. We are pleased that the report highlights the scale of the challenge faced by the UK in meeting the proposed target. If there were doubts about aspects of the technologies to be deployed, this debate has added to them. I know that the anxieties of the noble Lord, Lord James, are shared by others. He well articulated the practicalities of getting various installations in place. I am grateful to him, but he will forgive me for not following him down those intricacies; if I did, I would finish up at the bottom of a deep ocean and not make a great deal of sense.

Let me reassure the noble Lord, however. First, the Government are all too mindful of the constraints. Secondly, the noble Lord will recognise that renewables development will be very significant in Europe and across the world. It would therefore be more than surprising if acute businessmen did not recognise the opportunities that will be vouchsafed to them with the demand of so many powerful Governments and rich economies.

I know that we are in a period of difficulty. The noble Lord, Lord Dixon-Smith, did not exactly call me out on this issue, although he expressed his anxieties about the next few months, which I understand. However, he will also know that this debate has a more-than-a-decade dimension to it. The report is about a decade of investment and delivery. The noble Lord, Lord James, and the noble Lord, Lord Freeman, in a rather milder form, also expressed anxieties on this point. We anticipate that the investment decisions will be seized by business in an area of considerable growth. I want to assure the House that the Government are well aware that they will need to have a keen eye to these practicalities if they want to see the issues being realised.

The noble Lord, Lord Teverson, put me somewhat on the spot by referring to the Cambridge Econometrics report and its doubts about the position. In 2007, our energy White Paper was clear that we could not just carry on with comfortable strategies. The requirements of the target for Europe of 20 per cent and for us of 15 per cent need a step change. I understand entirely the anxieties that are bound to be expressed when some current policy predictions are that we will deliver only 5 per cent in 2020 when we have to hit 20 per cent. In every aspect of their policy on this issue, the Government are concerned about the step change. I hope that noble Lords will appreciate that we cannot prove that we have made that step change yet, but the Government are fully aware of the necessity in certain clear areas—not least the legislative one but also in relation to the structures that we are already putting in place—to reach those targets.

Why are we concentrating on renewables? Obviously, we have to ensure the security of our energy supply; that is an absolute prerequisite. Noble Lords are all too aware that our indigenous resources of energy are decreasing. It is important for the nation that we find alternative indigenous supplies. We all know that we will have dependence on externalities, but excessive dependence would be dangerous, which is why the Government’s long-term energy policy takes into account the fact that we want to increase the amount of indigenous resource if we can. Renewables play an important part in that and help to reduce our reliance on imported oil and gas. We realise that we are dependent on such sources in the foreseeable future, but overdependence would be dangerous.

We estimate that a 15 per cent renewables target could lead to achieving carbon savings of some 20 million tonnes by 2020 and a reduction of between 12 per cent and 16 per cent of gas imports. That is a significant contribution. Moreover, it is estimated that by 2050 the overall value of the low-carbon energy sector globally could be as high as $3 trillion per year and could employ more than 25 million people. That is the nature of the world’s necessary response to different forms of energy production and the reduction of carbon. It also establishes the opportunities that are necessary. Our environment sector is flourishing, with more than 400,000 people employed, 17,000 companies and an annual turnover of £25 billion. We are already leaders in offshore wind, integrated pollution control, energy control systems, carbon trading, water and waste management and environmental instruments and monitoring.

We want to build on these developments to ensure not only that the gaps to which the noble Lord, Lord James, drew attention in terms of supply are filled, but also that opportunities are in place for British business to create jobs for British people. All this can contribute to the expansion of our economy in what is going to be an enormous increase in economic activity in this area.

The starting point of our energy policy is, of course, to save energy. In introducing the debate the noble Lord, Lord Freeman, said that it is also the starting point of the committee’s report. I am glad that we have coincided on starting points, and indeed much of the report points in exactly the same direction as the Government want to go. We accept the chidings set out in the report and the anxieties expressed in certain areas, but in broad terms the committee substantially reinforces and helps to guide the Government down paths which I hope to establish we are already engaged in travelling. Moreover, later this year we will carry out a further consultation on measures to encourage energy efficiency.

The noble Lord, Lord Freeman, and other members of the committee no doubt share in recognising that the 15 per cent target is ambitious for this country. It would involve a tenfold increase from the current level in the share of renewable provision as a percentage of total energy production. The noble Lord, Lord Teverson, not just in this debate but on other occasions has emphasised just what a challenge that represents, and he is right to do so. We believe that we can meet the challenge if the policy is appropriate and the market responds effectively, and as I said earlier, I acknowledge the immediate impacts on industrial economic investment through the credit crunch and the depression resulting from a loss of confidence in the economy in the short term. However, that is in the short term against the background of the committee’s report, the policy we are discussing, and what the Government hope to achieve.

I am not going to be drawn too far into those areas that look towards energy solutions beyond 2020—sufficient unto the year is the challenge thereof. If noble Lords will forgive me, I will not stray too far into the details of geothermal energy, which is some way off. I recognise its advantages and I do not see why the noble Lord, Lord James, and others should not take this opportunity to make these points, but nevertheless the report of the committee overwhelmingly addresses strategy up to the year 2020. Neither geothermal nor, realistically, the Severn Barrage, can be readily encompassed in that perspective. We are not certain about the economics of a tidal barrage because it is an enormously complex area. I heard what the noble Lord, Lord Rowe-Beddoe, said in his contribution, and I am sorry that he is not able to be with us, but in his absence I should say that we remain to be persuaded about the economics of the proposal. In any case, it cannot deliver for 2020 and is therefore rather outwith our considerations. However, the discussion reflected the fact that the UK has access to extensive and diverse renewable energy resources. We have one of the best offshore wind profiles in Europe and many opportunities to harness both wave and tidal energy.

Since its introduction in 2002, the renewables obligation as a primary means of providing long-term certainty to the market about the returns available to renewable electricity generation has increased UK renewable electricity generation from 1.5 per cent of total output in 2001 to three times as much in 2007.

We have to go as fast as we can, if not faster. We have, however, made some impressive progress, and the challenge is now to build on that progress. Wind power is now the UK’s fastest growing renewable energy technology. There has been a 33 per cent year-on-year growth rate in the investment in wind power. The UK is only one of seven countries with more than 3 gigawatts of wind power operating offshore and onshore, and we have recently gone past Denmark as the No. 1 country in the world for installed offshore wind capacity. We supply the equivalent of more than 400,000 homes with clean, green electricity, so we should not minimise the achievements made so far.

The wind farms that are currently under construction, together with those that have planning consent but await construction, will produce electricity for a further 5.5 million UK homes. A decision on a further 25 gigawatts of offshore wind development will be announced in spring 2009, following a strategic environmental assessment, in addition to the 8 gigawatts from offshore wind farms that have already been built or planned. The market has responded to energy opportunities of this kind in the past, and I have no doubt that it will develop strategies to bridge the gap which several noble Lords have identified in their contributions to this debate.

We have taken action to ensure that the work of government-funded research organisations is properly co-ordinated. Expenditure by the research councils on energy-related basic research has more than trebled since 2003-04 to more than £90 million, and we have spent an additional £200 million between 2005 and 2008 on the work of the Energy Technologies Institute. The new Environmental Transformation Fund is a significant simplification of funding for demonstration projects.

We recognise that we need to act now if we are to achieve these 2020 targets, and we have made great progress with the two Bills to which I have already referred and which provide the legislative structure for expansion. It was said that some parts of the Energy Bill have a certain rigidity, but that is not so. Its terms may look rigid when it becomes an Act, but it provides a framework under secondary legislation for expansion in exactly the areas about which anxiety has been expressed. I therefore assure the House that, aided by its careful consideration of both Bills, we have a framework for building for the future by making the energy changes that we need to make.

The results of the renewables obligation to encourage smaller-scale projects are indeed somewhat patchy, but that is why we have tabled an amendment—I do not underestimate the degree of pressure that came from other parts of the House about this—to introduce a feed-in tariff for low-carbon generation of up to 5 megawatts to allow homeowners, schools and communities to benefit from a guaranteed price for generation. This shows the flexibility that is built into the Bill, and I hope noble Lords will appreciate that the Government have accepted arguments that have been advanced in this House and have made appropriate arrangements to ensure that the Bill meets the approval of both Houses.

We fully support the committee’s recommendation to introduce financial support for renewable heat, which the noble Lord, Lord Freeman, emphasised when he introduced the debate, and we have tabled a further amendment to the Bill to create a power for the introduction of a renewable heat incentive to ensure that homes and businesses are heated from low-carbon sources.

I emphasise again the appropriateness of the legislative measures that we are taking. This is also true of the planning process. As I have indicated, I recognise the noble Lord’s keen interest in this area, his long acquaintance with it and the fact that he survived the rigours of the Planning Bill and the extensive discussions on it over the past year. Those of us who were not directly involved in consideration of the Planning Bill were all too well aware of the intensiveness of the discussion and the lengths of the debates, but we have, as a result of that, a framework for the future.

We have also announced measures to address the issues key to the successful deployment of the renewable technologies. To shorten the timescales to connect to the grid, for example, the department, Ofgem and the electricity suppliers are working together to speed up connections of projects that are ready to go. There is no doubt that connection with the grid is absolutely crucial to electricity generation and the opportunities for all those who may provide it through various sources. We are developing a new regulatory regime for the offshore grid to enable connection of the significantly increased amounts of offshore wind-generating capacity. I am grateful to the noble Lord, Lord Bradshaw, who drew attention to this issue. It is fundamental.

I do not know whether the noble Lord, Lord Bradshaw, produced an analogy between the grid and a main railway structure, but in trying to get past my obtuseness in grasping some of these matters my officials have used as a comparison the nature of the feed-in to the national railway system, from a whole range of branch lines, and connection to the national grid. We were doing a reverse Beeching, if you like. I am not sure whether I have enlightened the House with that analogy but, I confess, it was of help to me.

As part of the manufacturing strategy we have announced an intention to create a new Office for Renewable Energy Deployment, ORED, to help address issues such as the time taken to reach planning decisions and encouragement to business to identify and seize the opportunities in the supply chain for renewables technology. I recognise that we need to do more. I merely seek to establish that, thanks to this report, we now have the signposts on where we need to go. I hope that I have indicated that we are already quite a long way down these paths with the strategies we are pursuing. But a great deal more needs to be done, and all noble Lords who have taken part in this and related debates will be watching the evolution of government policy closely over the next six months as crucial aspects of the building blocks in relationship to the European requirements are put in place.

I emphasise again that although this debate is about the UK’s targets and the UK’s contribution, we should recognise that this report is that of a sub-committee of the European Union Committee. That is because this is a European issue, and the strategies we pursue are those which we hope will give a lead to others who are more slowly off the mark, or to others such as the Danes. Denmark is a unique country both in relationship to Europe and in wind energy, but the House will have noted that I took some pride in the fact that we went past the Danes this year in the amount of energy generated from wind farms. So I am sure the Government are on the right tack.

16:33:00

Lord Freeman
My Lords, this has been a very interesting debate. I thank the Minister and the Department for Energy for achieving what is almost a parliamentary record: responding within four weeks to a Select Committee report. On behalf of the committee I am most grateful for that speedy and comprehensive response, in so far as it is possible to give one before publication of a detailed policy in the spring. I suggest to your Lordships that that is when we should return to this subject either in Select Committee or in your Lordships’ House or in both.

I also thank the noble Lords on the two Front Benches, who are rarely thanked in these debates: the noble Lord, Lord Teverson, and, in particular, my noble friend Lord Dixon-Smith, with his vast experience. I also thank my noble friend Lord James of Blackheath, the noble Lord, Lord Bradshaw, and the noble Lord, Lord Rowe-Beddoe, who sends his apologies because he has been involved in, as I understand it, a semi-judicial hearing today. It was particularly kind of him to come and contribute to the debate. I thank your Lordships. The state of parliamentary knowledge has been advanced.

On Question, Motion agreed to.

Counter-Terrorism Bill

The Bill was returned from the Commons on Wednesday 19 November with amendments and reasons. The Commons amendments and reasons were printed in accordance with Standing Order 51(2).

House adjourned at 4.34 pm.