asked Her Majesty's Government:

My Lords, the Queen's Golden Jubilee Medal will not be distributed to voluntary workers. On this occasion, the issue of medals is being restricted to serving members of the Armed Forces and Royal Fleet Auxiliary and the "999" emergency services.

My Lords, I thank the noble Baroness for that Answer. However, as a former commissioner and commander in St John Ambulance, I am extremely disappointed. Do not members of these organisations line the roads during great events and frequently have to cope with providing first aid during emergencies? Is she not aware that these marvellous people have the generosity of spirit to give of their free time to help others? Could not the noble Baroness herself show enough generosity of spirit to go back to her colleagues and ask them to think once again about this?

Hear, hear!

My Lords, I can see that there is strong feeling in the House on this issue. The Government have been looking at ways of recognising the outstanding voluntary service that people give to their local communities, and an announcement will be made in due course. I hope that that helps the noble Lord, Lord Luke. However, I think that we have to make a distinction between those in the armed services and the emergency services who frequently risk their lives, and those who do extremely valuable voluntary work in the organisations to which the noble Lord referred in support of those services. I am sure the House will agree that there is a distinction here.

My Lords, can the noble Baroness say what happened 25 years ago? Were these services honoured on that occasion?

My Lords, far fewer medals were distributed 25 years ago than will be distributed on this occasion. On this occasion, about 380,000 medals will be distributed as against 33,000 at the time of the Queen's Silver Jubilee. Although a very small number of medals were, I think, given to local services of one kind or another, voluntary services of this sort were not specifically honoured in this way.

My Lords, as a recipient of both the Silver and the Golden Jubilee Medal, may I ask why the police were not included in the Golden Jubilee? It seems to me extremely unfortunate that they were not included.

My Lords, the police are to he included in the distribution of medals for the Golden Jubilee.

My Lords, does the noble Baroness agree that a great deal of clearing up has to take place after these moments of national celebration? If medals are to be handed out, would it not be more appropriate to consider nurses, ambulance workers and the police, who have to bear the brunt of all of this?

My Lords, I think that the noble Viscount's question illustrates the problem—a line has to be drawn somewhere. He is suggesting that we should include nurses, but if we were to include nurses, why not doctors? In the end, the list will become endless. So many people do great work in the public good. However, for this particular form of recognition, I think it right to draw a line and concentrate on the armed services and the emergency services who risk their lives in support of the public.

My Lords, is the noble Baroness aware that the Territorial Army has for more than 100 years played a vital part in the defence of the country, especially in the two Great Wars, and still do? Will the Government therefore consider a suitable number of awards to the Territorial Army?

My Lords, again, I can only reiterate what I have just said. Of course the Government recognise the important role of the Territorial Army. However, I think that it would be wrong for an endless list of people to be included in what I think has to be a rather special medal for those who risk their lives and limbs. There are many other ways in which we can recognise all the other groups whom Members of your Lordships' House would like to see given awards of one sort or another. That happens on a regular basis and should of course continue.

My Lords, has there been wide consultation on the criteria for distribution of the medal? The questions just asked by noble Lords seemed to cover the ambit of those involved in emergency services. As a member of a local authority. I shall extend that by saying that, in the past, such medals were offered also to local authority officials. Was such an award considered? If not, would the noble Baroness be kind enough to say yet again, probably for the fourth time, why they were not considered under the criteria? Most specifically, however, were the criteria consulted upon?

My Lords, consideration was of course given to local government; consideration was given to the Civil Service. However, there are other ways of recognising service given by officials whether locally or centrally. A decision was made, I believe rightly, to confine the Queen's Golden Jubilee Medal to those who work for the armed services and the emergency services. We have, of course, received letters from some people who would like the particular groups of which they are members to be recognised. However, the number of letters we have received has been relatively small outside the request that was made by the police to which the Government listened and made the decision to extend the award to the emergency services.

My Lords, are we not in danger of forgetting that the Queen's Jubilee ought to be the occasion on which we and the nation honour Her Majesty rather than turning it into an occasion when we quibble about whom she ought to honour? Have we not perhaps got some of the argument the wrong way round?

My Lords, I have to agree with what my noble friend said; that is what the Jubilee is all about. Everyone in the House will have some group which they feel should be included, but this occasion is about celebrating the Queen's 50 years on the throne and doing it in a way that people will greatly enjoy.

My Lords, will the Minister confirm that the lifeboat service is also included because its members risk their lives on a voluntary basis in arduous circumstances?

My Lords, I confirm that the lifeboat service will be included as it is defined as an emergency service. Members of the lifeboat service risk their lives by going to sea in terrible conditions to rescue people in difficulty.

Next Question!

My Lords, we have 10 minutes for each Question as there are only three Questions. I sympathise with the noble Baroness and I understand why her noble friends have tried to conceal the position. However, I was astonished by her reply, if I understood it aright, with regard to the Territorial Army. Territorial soldiers are members of the Armed Forces. They are deployed abroad and in battle on our behalf even now. Why are they separated out from the rest of the Armed Forces and not treated the same? That has nothing to do with who is honouring whom, but if some soldiers are awarded the Jubilee Medal, surely all of them should.

My Lords, I am always happy to answer the questions of the noble Lord, Lord Elton, whether seven, eight or nine minutes of Question Time have elapsed. I had better write to the noble Lord about the position of the Territorial Army after consulting my colleagues in the MoD.

My Lords, does the Minister agree that the Queen's Jubilee is a celebration of community and communities in our society? When I was a lad a lady called Alice Whalley was a pillar of the St John Ambulance. When she was honoured there was a celebration in the whole of our community. The Question refers specifically to the Red Cross, the St John Ambulance and the Women's Royal Voluntary Service. The members of those organisations are pillars of our community. This is a wonderful opportunity to honour and celebrate them. Does the Minister agree that in this case the line has been drawn wrongly by the Jubilee jobsworths? The Government should listen to the strong opinions of this House and, as they did with the police, draw the line to the other side of these wonderful voluntary services.

My Lords, I have already said that the Government are looking at ways to recognise those who provide outstanding voluntary service and will make an announcement about that in due course. I can only repeat what I said. I do not accept what the noble Lord, Lord McNally, said; namely, that the line has been drawn wrongly. Of course, these are outstanding services but there are many others too. All I can say is that there will be a never-ending series of requests for additional groups to be included unless the Government draw the line somewhere.

asked Her Majesty's Government:

My Lords, we are always alert to opportunities to promote understanding of Islamic and, indeed, other views on international affairs relevant to the United Kingdom. Recent examples include the Foreign and Commonwealth Office leaflet, Never Again, highlighting reactions from the Islamic world to the September 11th attacks sent to MPs for use with constituents; sponsored visits by Islamic journalists and dignitaries and a new British Council programme bringing together young people of different cultural backgrounds from the UK and mainly Muslim countries. I welcome views from across the House on how this important work can continue.

My Lords, the whole House will recognise the need for a mature and sympathetic understanding of Islamic issues. Would not an Islamic-based television channel transmitting in the English language news bulletins and documentaries competing with the BBC and in particular with CNN be helpful in taking forward that process?

My Lords, I am sure that any such channel could potentially spread enlightenment. Several Muslim channels are available in the United Kingdom which present perspectives of advantage to our community. But these are essentially commercial decisions. I remind the House that there are live channels already broadcasting to the United Kingdom from Islamic backgrounds and providing a useful service. They decide the extent of that service.

My Lords, the Minister says that these are commercial decisions. However, at the moment we see how unwise commercial decisions can be taken with the vanishing of ITV Digital. Will the noble Lord tell us the cost of this proposal? Would it not be better to include the kind of information we are discussing in general programmes that are available without much additional cost being involved?

My Lords, those matters are included in the costs of general programmes. I do not think that anyone doubts the role of the BBC and independent television in terms of news coverage and the fairness and appropriateness of that coverage. If the suggestion is that public money should be devoted to the establishment of a specific television channel, I can only say that that is not contemplated at the present time or in the foreseeable future.

My Lords, as a former chairman of the Royal Institute of International Affairs, may I draw attention to a remarkable programme of seminars, lectures, publications and the like that Chatham House has put out on a regular basis, perhaps most particularly on Islamic opinion since September 11th?

My Lords, I am grateful for that contribution. As the noble Lord rightly says, Chatham House plays an extremely valuable role in that respect. The Foreign Office also organises a range of meetings to extend the understanding of Muslim issues in this country. There are regular meetings between Muslim leaders and government Ministers.

My Lords, I declare an interest as the deputy chair of the Independent Television Commission. Is it not now more than ever important—for the sake of peace at home as well as abroad—for the Government to ensure that there is a diversity of views in broadcasting?

My Lords, there is a responsibility to ensure a diversity of views but we all recognise that a very significant number of television channels is now available. I do not think that our main broadcasters fail to present a diversity of opinion. If it is suggested that particular viewpoints could be expressed more effectively, that is for the commercial market to determine.

My Lords, would the Minister agree that the incomparable contribution of the BBC World Service includes bringing to the attention of Muslims what is happening in the world outside the Middle East and bringing to our attention Muslim opinion? That is of very great value to this country. Does he also agree that it is crucial that the BBC World Service has the resources that it needs to continue its remarkable contribution?

My Lords, I am grateful to the noble Baroness for drawing attention to one of our most valued assets, which helps the British people to understand world affairs. There is no doubt that the World Service is sufficiently funded to play a crucial role with regard to the great public interest in the Muslim world and Arabic countries.

My Lords, does the Minister agree that channel 643 gives perhaps the greatest opportunity to see the most diverse view of developments in the Islamic world? The difficulty is that the majority of people in this country cannot understand what is being said because the channel broadcasts in Arabic. Would it be possible to reach agreement, not necessarily on providing a public service channel but on finding funds to subtitle what is broadcast on channel 643? That would not cost a fortune. Is it not worth pursuing?

My Lords, my noble friend should not underestimate the cost of a subtitling service. I hear what he says about the comprehensibility of a programme presented in a language that is not English. It is surely for the broadcasters to take such a decision. If they are beaming their channel to the United Kingdom and wish to bring their views to the attention of as many people as possible, it is for them to pursue that matter with the best techniques that are available.

My Lords, does the Minister agree that this issue must be handled with enormous sensitivity? There is a wide diversity of geographic and cultural origins in the Islamic community, and a unified view could damage our understanding of that diversity and our standing in the international community.

My Lords, the noble Baroness is right. The matter should be handled with sensitivity. My noble friend who asked this Question and others who supported him are probably referring to a particular channel, which has a considerable reputation for objectivity and which models itself on BBC standards. I am sure that those noble Lords are hoping to see progress in that area.

My Lords, does the Minister agree that schools have a tremendously important part to play in increasing understanding? Is he aware that many schools have initiated excellent programmes whereby children of Islamic faith are able to talk about their special festivals and tell other pupils about their faith? Does he agree that that underlines the importance of keeping our schools multi-faith and not excluding children of different faiths or stopping them mixing together and learning about each other's interests in faith?

My Lords, that is a most constructive comment. The noble Baroness is right about the increasing attention paid to the view that schools should form partnerships and pursue strategies together, when they are differentiated in ethnic terms, in order to spread understanding of each other's cultures. I can think of several towns in Britain in which that programme is proceeding apace.

asked Her Majesty's Government:

My Lords, it was recognised at Weston Park that the issue of those "fugitives" needed to be dealt with. However, as my right honourable friend the Prime Minister has made clear, it is still the object of discussion. No conclusions have been reached.

My Lords, does the noble and learned Lord agree that it would be an affront to the fundamental principles of the British constitution, which have evolved over centuries, for any Prime Minister of this country to suggest that he might be able to influence or interfere with the independent operational responsibility of the police in upholding the law in individual cases? It would be even more outrageous if a Prime Minister were to suggest that he could interfere with the prerogative of Her Majesty's judges to decide whether an individual who is accused and found guilty of a serious crime should receive a custodial sentence. It is not for politicians to interfere in those fundamentals of our liberties.

My Lords, I know of no occasion on which the Prime Minister has made such a suggestion about interfering with the judiciary. As is well known to all noble Lords, there is a sentence release scheme, which was authorised by Parliament and which has been operating for some considerable time in Northern Ireland. Nor do I know of any suggestion by or on behalf of the Prime Minister that involves giving any direction to any police officer.

My Lords, will the noble and learned Lord reassure the House that all the fugitives will have to present themselves to the courts before any question of release under licence or amnesty comes into consideration?

My Lords, I must repeat what I said in my original Answer, which I think was clear—no conclusions have been reached.

My Lords, is it not essential in this matter to distinguish between those terrorist offences that were committed before and those that were committed after the Belfast agreement? If it were thought right to afford some clemency to the latter type of offence, would it not be important to ensure the return of exiles to Northern Ireland and to achieve an end to intimidation?

My Lords, on the first matter raised by the noble Lord, Lord Hylton, I am happy to reassure him that the Weston Park agreement referred to offences that were committed before 10th April 1998. On his second point, which I know has been firmly pressed on a number of occasions by the noble Baroness, Lady Park of Monmouth, I share his views. It is not acceptable for people to be driven out of their homes. I promised, in my reply to the noble Baroness, to take matters forward. I have arranged a meeting—it will be very soon after Easter—with the Minister who has charge of that area.

My Lords, given the fact that there have been detailed reports in The Times and in the Irish Times, which naturally have not been denied by Sinn Fein, can the Minister give the House an absolute assurance that no decision will be taken on any amnesty whatever to known murderers without the issue coming to Parliament for legislation? Surely, it is not an issue that can be dealt with by a quiet, private deal, particularly as, since the Weston Park agreement, we live in a different world. We have been required to put through Parliament a number of further terrorism Acts. In that context, the Americans cannot possibly take us seriously when we ask them to arrange for funding of the IRA to stop if at the same time we do this. I ask the noble and learned Lord to give the House an absolute assurance that there will be no action whatever on this matter that does not first come to Parliament.

My Lords, I have read the reports in The Times, in the Irish Times, and in other newspapers. All of them appear to be inconsistent, one with another. I simply do not know from where they acquired the material. I have to be as straightforward as possible with the House. I repeat that no conclusions have been reached. Therefore, I cannot honourably give an affirmative answer to the question posed by the noble Baroness. However, I recognise the strength of the proposition that she puts forward, and I further recognize—I am happy to repeat that I recognise it—that what she has said would chime readily with a large number of noble Lords.

My Lords, as someone who was present at Weston Park, from where the confusion about amnesties and other matters appears to have arisen, perhaps I may indicate that there was no agreement to which we, in the Ulster Unionist Party—major contributors to that extended weekend—were party. Does the Minister recognise that an unacceptable anomaly would arise if those who have escaped justice for many years were to be treated as though murder was not murder, as though crime was not crime and as though terrorism was not terrorism? No constitutional party that was present at Weston Park gave assent in any way—I emphasise, in any way—to anything that would lead to confusion or to misunderstanding or to an anomaly in respect of this matter.

My Lords, the noble Lord. Lord Maginnis, is quite right in what he says. At Weston Park, in July last year, the Government of the United Kingdom and the Government of the Republic of Ireland put forward certain proposals. This issue is dealt with in one of those proposals—paragraph 20. On 1st August the party leaders were sent a document signed by Dr Reid and the Foreign Minister of the Republic of Ireland. So when the noble Lord, Lord Maginnis, says that those present did not sign up to the agreement, historically he is quite accurate.

As to his other observations, I realise that they are sentiments that are held by a large number of people. Equally, other people take a different view and want to see some finality in relation to these matters. In regard to publishing the proposals when conclusions have been arrived at, I am bound to recognise that it is asking an enormous amount of people who have been grievously wounded one way or another over the past years in Northern Ireland.

My Lords, should we not look forward? Has the Leader of the House seen a report in The Times today that the retiring chief constable of the RUC, to whom Parliament owes so much, has predicted that,

"it is only a matter of time before the Provisional IRA completes the process of destroying all its weapons and disbands"?

Can he confirm that all the Government's policy decisions are directed towards that end?

My Lords, I can confirm that. I read the report shortly before coming into the Chamber. I hope that Sir Ronnie Flanagan is right. He says—I believe this is a fair paraphrase—that he hopes and is optimistic that the Provisional IRA will see that being an army is not consistent with political activity. He is in a better position to judge what the future holds than I am. That is certainly a more optimistic note than one has heard recently from others in Northern Ireland.

My Lords, can the Minister confirm—

My Lords, I am perfectly happy to answer the noble Baroness, but the noble Lord, Lord Glentoran, has a question.

My Lords, the noble and learned Lord knows only too well my strength of feeling on this matter. I am delighted that he has told us that no conclusions have yet been reached. I ask him to inform his right honourable friend the Prime Minister of the strength of feeling in this House on the subject, and in particular that it is not beholden to a British Prime Minister to conduct deals of this kind, which bear no relationship whatever to the Good Friday agreement, with common terrorists.

My Lords, in answer to the noble Baroness I said quite unambiguously—I repeat as plainly as I can—that I fully recognise the strength of feeling in the House. I also recognise the strength of feeling that is behind the remarks of the noble Lord, Lord Windlesham. I further recognise that whatever the conclusion is, there will be significant distress among large sections of the population. That will not be overlooked. I am not sure that it can be entirely accommodated.

My Lords, I beg to introduce a Bill to amend the Public Trustee Act 1906 in respect of the liability and fees of the Public Trustee. I beg to move that this Bill be now read a first time.

Moved, That the Bill be now read a first time.—(The Lord Chancellor.)

rose to move, That the draft order laid before the House on 13th February be approved [20th Report from the Joint Committee].

The noble Lord said: My Lords, the order puts in place the main plank of the Government's renewable energy policy, a 25-year obligation on licensed electricity suppliers to secure a rising proportion of their sales from eligible renewable sources. It will make an important contribution to the UK climate change programme, to our Kyoto target and to our domestic aim of a 20 per cent reduction in carbon dioxide emissions by 2010. It marks a step change in our support for renewable energy and our proposals are the result of extensive consultation with industry, green groups, consumers and the public.

The obligation will apply to all licensed suppliers supplying customers in England and Wales and requires them to obtain a percentage of their sales from renewable energy sources. That percentage will rise from 3 per cent in the year beginning 1st April this year, to 10.4 per cent in the year beginning 1st April 2010 and remain at that level until 31st March 2027.

Promotion of renewables in Scotland is a devolved matter but I am pleased to say that the Scottish Executive is introducing a similar obligation in Scotland from 1st April. I understand that that order has now been passed by the Scottish Parliament. Certificates issued under the Scottish order will be eligible under this order and vice versa. There will be a seamless join between the two obligations.

The provisions of the Electricity Act do not extend to Northern Ireland, but electricity generated in Northern Ireland will be eligible provided that it is supplied to customers in Great Britain in accordance with the requirements of the primary legislation.

The scope for this is likely to be limited in the early years, but I am pleased to say that the Northern Ireland Executive is considering legislation to introduce a similar certificate-based obligation there. We would warmly welcome development of a UK-wide certificate-trading scheme. As I would say to the noble Lord, Lord Glentoran, were he still here today, we shall work with the Executive to that end.

The additional cost to consumers will be around £800 million a year by 2010. That will result in an average increase in electricity prices of around 4.5 per cent by 2010. Compared with 1999 levels, that is the equivalent of an increase of less than one-tenth of a percent on RPI over the decade.

We believe that this represents a worthwhile investment in our future. As a result, we expect to see the market for renewable electricity reach somewhere between £1.5 billion to £2 billion a year in 2010.

Some, including noble Lords, have suggested that the Government's target of securing 10 per cent of electricity sales from eligible renewables sources by 2010 is unrealistic or that the initial level of obligation is too high. I prefer to say that the target is tough. It must be tough if we are to respond effectively to the challenge of climate change. But we believe that it is achievable. That view is confirmed by the recently published overview of regional resource studies. We aim to make rapid progress towards meeting our earlier interim target of securing 5 per cent of our electricity from all renewable sources, although we accept that delays—particularly planning delays—in implementing projects supported under the earlier non-fossil fuel obligation scheme are likely to delay achievement of that target beyond 2003.

Planning, above all else, is seen as the main constraint to further, faster development of renewable energy projects, especially onshore windfarms. We will need more renewables energy projects in future and they must go somewhere. It is not good enough just to pay lip service to the environment and then oppose sensible action that can actually help to tackle the problem.

While the countryside will not be covered with wind turbines or any other type of renewable project—far from it—there is no point in pretending that there will be no impact either on the countryside. It is, of course, a question of balance.

The key is, in my opinion, to get public opinion on our side. Developers have a major job to do in making sure that they bring forward sensible and sensitive proposals and involve and inform local communities. In principle, the public at large is hugely supportive of renewable energy and that support has to be harnessed in practice.

Pricing under the renewables obligation should also allow projects to be sensitively sited while still being commercially attractive. For example, it should allow wind turbines to be sited off the highest hilltops, reducing their visual impact to some extent. It may also pave the way for smaller developments than we have seen in the past.

We are not providing separate bands within the obligation for different resources or technologies. Fragmenting the market in that way would undermine the competitive market for renewable energy that we are trying to create.

We are, however, providing additional grant support to help less well-developed technologies enter the market and reach the point at which they can compete on their own merits. Over the next three years the Government have set aside a package of support for renewables worth over £260 million, including an enhanced research and development programme, £74 million to encourage the early deployment of offshore wind projects and over £60 million towards the capital costs of early bio-energy projects.

We looked carefully at exempting all combined heat and power generation from the obligation but reluctantly concluded that that is outside our powers under the Electricity Act. The obligation does not, however, apply to licence-exempt supply, such as the on-site use of electricity generated by combined heat and power. This will give a small but important boost to the market value of such licence-exempt supplies.

We also considered whether the obligation could be used to promote the capture and use of coal mine methane—a powerful greenhouse gas that seeps from disused coal mines—but again concluded that that lies outside the powers available. Under current legislation, coal mine methane cannot be promoted as "renewable" and therefore is ineligible for the renewables obligation. But we are exploring other mechanisms to provide assistance that is both timely and cost-effective.

If otherwise eligible, the output from stations built under both current and expired non-fossil fuel obligation and Scottish renewable obligation contracts will be eligible for the obligation.

The proceeds from the sale of contracted non-fossil fuel obligation output will, however, be used to offset the cost to consumers of those original contracts through the fossil fuel levy.

We have also amended the arrangements governing non-fossil fuel obligation contracts in order to allow those not yet commissioned to relocate, subject of course to normal planning requirements. The industry estimates that over the next few years that could bring forward up to 100 stalled projects. That would help to ensure that a significant volume of certificates is available in the market and it would provide liquidity in the early years of the obligation.

I am confident that, coupled with the other measures we are taking, the obligation will deliver the 10 per cent target we have set for 2010; contribute an additional 2.5 million tonnes a year of carbon reductions to our Kyoto target; and stimulate the development of a new and thriving industry in the United Kingdom.

I confirm that, in my view, the provisions of the draft order are compatible with the Convention rights as defined in Section 1 of the Human Rights Act 1998.

I commend the order to the House. I beg to move.

Moved, That the draft order laid before the House on 13th February be approved [20th Report from the Joint Committee].—(Lord McIntosh of Haringey.)

My Lords, the manufacturers will be extremely grateful to the Government that at last this renewed non-fossil fuel obligation is to he legislated on. There has been a hiatus in plans for new green electricity projects. I suppose that that is inevitable when one moves from one scheme to another.

I understood from the phraseology used by the noble Lord, Lord McIntosh, that he had almost certainly read the report on this subject which emanated from Sub-Committee B of your Lordships' EU Committee. One finding of that report was that planning has been the biggest bugbear.

However, we have recently discovered another problem. Can the noble Lord when winding up say something about the proposed windfarm in the far western Hebrides which apparently is on the site of a European Union declared area for wildlife? It looks, on the face of it, as though the kibosh is being put on the whole plan. It would be the biggest semi-offshore windfarm anywhere in Europe.

My Lords, I add my voice in welcoming these regulations. Those long-standing Members of your Lordships' House may remember that I had responsibility for renewables as a Minister in the Department of Energy. In some ways I was also responsible for the introduction of the non-fossil fuel obligation during the process of the electricity privatisation.

I was interested in what the noble Lord, Lard McIntosh, said about coal mine methane. I should like to know whether that covers all methane from any source? For example, I am aware that waste disposal sites also create methane. In some countries that byproduct of the process is put to good use.

As the regulations before us are to comply with our international obligations under the Kyoto agreement, I am interested to know whether the Government have consulted with other countries as to what measures they are introducing. The ultimate aim of these regulations of course is to improve the global atmosphere. It is therefore very important that not only we in this country but those in other countries fulfil our obligations.

My Lords, I should like to support my noble friend's point about planning. I am glad that the Minister included in his speech a paragraph about planning, because it is crucial that we get the balance right. At present, the balance is incorrect because it is weighted far too heavily on the side of renewables. In October 1996, I initiated a debate in another place calling attention to tLe proliferation of windfarms and telecommunications masts, which were sited on the top of almost every hill in Scotland—and, no doubt, in many places in England and Wales as well.

What detailed consultations is the department undertaking about planning? At the end of the day, the department and the Minister will answer to appeals. In almost every case in which I have taken an interest, the appeal has gone in favour of the developer and against those trying to preserve the beauty of the countryside. Often, inquiries overlook the issue of transmission lines that must run from the windfarms to where the electricity is required. They often add greatly to the concern of those interested in the countryside.

It is important that at least a word is said today to show that many of us are concerned about the development of windfarms, which are just as unsightly off-shore as on-shore. Are any practical steps being taken concerning tidal power using barrages, such as operate in northern France, where of course the stand of the tide is much higher than in the United Kingdom? They, too, can be unsightly.

The Government must have a fair balance between what is required under our renewable energy policies and the saving of our beautiful countryside.

My Lords, 30 or so years ago, when I was teaching marketing, I used to instruct salesmen to close the sale by what is called the assumptive technique. That is, having made his sales pitch, the salesman would then without further ado simply start filling in the order form on the assumption that the customer was going to buy.

In his helpful letter to me giving the details of the orders that we are considering today, the Explanatory Notes and the reports of the debates in the other place, the Assistant Private Secretary to the Government Chief Whip said:

"All the orders are welcome and all are uncontroversial".

That is an example of the assumptive close, but one that may be entirely justified. Although it is for me, not the Minister, to say whether the order is welcome and uncontroversial, I entirely agree—as three of my noble friends have already done so, it is just as well—and we shall not oppose the order, nor any of the orders with which I am dealing today.

I thank the Minister for his explanation of the Renewables Obligation Order 2002. Despite it being uncontroversial and welcome, it took the Minister for Industry and Energy 22 minutes and seven columns of the Official Report before the Third Standing Committee on Delegated Legislation to explain it. It certainly did not take the noble Lord as long. It took my honourable friend the Member for Salisbury another 26 minutes and another six and a half columns to explore the ramifications of the order. Your Lordships will be relieved to know that, following that detailed discussion in the other place, which I read with interest, and the Minister's helpful but nowhere near as long an explanation today, I shall need only a fraction of that time.

Only one aspect of the order concerns me. That is that apart from their own efforts, electricity suppliers will be able to meet their obligation by one of two other methods. First, they can purchase what are called renewable obligations certificates from another supplier, generator or third party instead of doing what is necessary themselves. Secondly, they can pay what the Explanatory Notes call a buyout price to the regulator, Ofgem, which will distribute what amounts to a penalty or fine to electricity suppliers that have themselves supplied excess renewable energy obligations certificates to other defaulting generators.

I agree that that will be an incentive to generators to produce as much renewable energy as they can in the hope of selling it to another defaulting supplier, as long as there is a market for it, but can we be sure that the buyout price will be set sufficiently high to make it worth while for generators to create their own renewable sources rather than taking the easy way out and relying on someone else? What incentives will there be for generators to create as much energy as possible from renewable sources, not merely the bare minimum to meet their obligations or to put on the markets to sell to others—those whom I have called the defaulting generators or suppliers?

The Minister in another place sought credit for the fact that the Government have exempted renewables from the iniquitous climate change levy—so they should. By their nature, renewable energy sources are the antithesis of the cause of climate change, so why should a levy have to be paid for them in any case? The Minister claimed that the new obligation will help to create a total market for renewable electricity of approaching £2 billion a year. Perhaps it would have been more accurate to have pointed out that the market for electricity will exist in any case and that the objective is to divert its manufacturing renewable sources.

The three-year package of other support measures for current research and development to which the Minister in another place referred, totalling £260 million, is welcome. Whether it will be enough to "kick-start", as the Minister put it, a research and development programme that will take more than three years, we do not know. As the Minister mentioned, that is another question. I do not expect the Government to commit themselves now, but an indication that further future funding is not out of the question would be useful and encouraging.

I turn to the question of costs. The energy review states that the existing renewables obligation will cause a price increase to domestic consumers which could be as large as 4.5 per cent in 2010. The proportionate increase on industrial bills could of course be double. The Minister's response to the committee in another place on the question of the added cost to industry was to suggest that, contrary to what the energy review predicted, the cost would be only an extra 4.4 per cent by 2010, spread over the next years, and that the cost will therefore not add more than 0.1 per cent to the retail prices index. If he can, I should like the Minister to tell us what steps are being taken by other EU countries to encourage the development of renewable energy sources, and whether the cost to their domestic industries will be no less than that being inflicted on British industry.

The Minister will recall that one of the world's greatest producers of so-called greenhouse gases, the United States of America, has not only resiled from the Kyoto treaty but is seeking to buy out the quotas of greenhouse gases from underdeveloped countries, rather than reduce its own production. Perhaps the Minister can remind us what steps the Government are taking to persuade our friends in the United States, who invariably rely on the United Kingdom when they need help, to help those of us who are worried about millions of tonnes of ice breaking away from the Antarctic ice shelf.

Finally—I mentioned this point to the Minister—I have just received a brief from, or perhaps it would be more accurate to say that I have been lobbied by, a commercial firm that has apparently been trading environmental instruments abroad, notably in Australia and New Zealand. While I accept that it clearly has its own business interests at heart, it raises two questions that I should like to pose to the Minister. First, the draft order gives Ofgem five days to decide whether a trade is valid. The company points out that that could be done more quickly using electronic means. The Minister may well say that five days is not an unreasonable time limit, and that there is nothing to prevent Ofgem from operating more quickly if circumstances permit. I should be interested to hear the Minister's comment on that point.

A point of more substance arises from the possibility of two trades taking place at more or less the same time. I suppose that that depends on Ofgem's intended procedure in creating its register, on which it has promised consultation with interested parties. Can the Minister assure us that he is pushing Ofgem to deal with that aspect, including the consultation exercise, with all speed?

Although I said to the Minister that I would raise two points, I did not tell him what they were. I was notified of them only late last night and until rereading what I had written about them at the time I was not sure myself. I appreciate that I have sprung them on the Minister at the last minute, just as they were sprung on me. I would therefore be satisfied if the Minister chose to write to me on those points. As I said, we are happy with the order.

Noon

My Lords, we on these Benches also support the order. We regard it as an important step towards reducing carbon emissions and meeting our Kyoto obligations.

As the Minister said, one of the big issues is whether there will be enough renewables to meet the obligation. One reason why there might not be is the restricted definition of eligible renewable sources. The Minister referred to methane from coal mines. I find it extraordinary that methane from landfill sites should be regarded as renewable, but methane from coal mines should not. We have raised the issue several times. I suppose we regard rubbish as something that will go on for ever, but the country's coal resources will virtually go on for ever, or at least for several centuries. The Minister referred to other measures being introduced to cover methane from coal mines, but this would have been an opportunity for what I consider a sensible and desirable step, and I cannot imagine that anyone would have challenged it.

Combined heat and power is another issue that arises from the definition of eligible sources. The Minister also referred to it and said that the Government had considered it carefully and would like to have included CHP in the renewables obligation but felt that existing legislation prevented their doing so. Like many noble Lords, I took part in the debates on the Utilities Bill. At every stage, I pressed for the inclusion of CHP in the eligible sources of energy. I find it surprising that the Government, who resisted that amendment, now say that, unfortunately, the legislation does not allow them to act. I do not see how they can have it both ways.

There is also the question of the support that the Government will give to other new energy technologies that can contribute to the reduction of carbon emissions. For example, the extraction and sequestration of CO₂ from coal—my old industry—could make a substantial contribution to the reduction of carbon emissions if provision were made for it in the renewables obligation. There is also the question of substantially encouraging distributed generation—small-scale generation, as opposed to large-scale generation—which is far more efficient because the waste heat can he used and transmission losses avoided. That is another area where a big contribution could be made to the achievement of our Kyoto objectives.

It is also surprising that, although the Government are substantially encouraging renewables—even on the restricted basis to which I referred—there are measures in train that operate the other way. The Minister will not be surprised to learn that I refer to the balancing mechanism of the new electricity trading arrangement, which still operates against small-scale, intermittent generators. The matter has been under discussion since long before NETA came into operation, but no solution seems to be in sight. I cannot see the justification for, on the one hand, stimulating renewables and, on the other, putting obstacles in the way. That seems a disjointed approach.

Subject to those comments, we support the order.

My Lords, I declare an interest as the unpaid chairman of the energy forum of the Yorkshire Regional Development Agency. I welcome the measures in the order. I shall not repeat the many wise words uttered by the noble Lord, Lord Ezra. I simply endorse them and look forward to the Minister's reply.

I shall touch on one or two other matters, including CHP and methane. I understood from my noble friend the Minister that, in both cases, it was not a matter of principle that they had not been accepted but that, at the moment, the legislation is not framed appropriately. Given that we are looking forward to 2010—even 2020—for the next set of objectives, it might be possible to amend or change the statute so that they would become eligible in due course. If methane and combined heat and power were to he included, would that not make a significant or important contribution to meeting the targets? If so, would it not be worth considering, at the appropriate time, changing the legislative framework so that they could be qualifying sources of energy?

Many noble Lords say that wind generation is now, essentially a matter of planning. It seems to me, as a layman, that, with biomass, the planning problems will be relatively modest. It is really a matter of economics and of how to get it to the point that wind generation has reached after all these years. It is a matter of cost, not planning. The economics of wind power are becoming feasible, but there is a major planning problem. How will the Government take those planning measures forward? I appreciate that my noble friend the Minister is not responsible for planning; he is responsible for enough things in this House, without taking that on. However, can he tell us, today or in writing, about the role that the regional development agencies are expected to play in driving forward the question of wind power planning permission? When it comes down to it, there is an enormous gulf between the national level and the local level where such things must be accepted. There is a lot of pressure on regional development agencies to deliver many of the renewables targets.

As I understand it, the regulations rule out imported green energy—for example, wind generated electricity from Holland. Can the Minister confirm that that is the case? If it is, is it a matter of long-term policy for Her Majesty's Government? If it were to be feasible to import, for example, wind energy from Holland, that could drive out the economic viability of biomass. Biomass will not become economically viable without being heavily protected. It will not be economically viable against wind generation for many years. There is an important issue of commercial confidence. There will be a medium-term guaranteed market to enable biomass technologies to develop to the point of being more economically viable.

With those provisos and questions, I warmly welcome the order. I agree with my noble friend that it is better to be bold and aim high than to be timid, not least because the commercial interests that are to drive things forward need to feel that there is a vision that will be sustained and produce results.

My Lords, I am grateful to all noble Lord who have taken part in this brief but exceptionally well informed debate. I am also grateful for the general support that has been given to the order. I shall try to answer as many of the points as possible, but if I miss anything perhaps I may take the liberty of writing to noble Lords.

The noble Lord, Lord Skelmersdale, raised the point of the windfarm on Lewis. That is an ambitious project and we are aware of the concerns about wildlife in the area. It falls, in part, within a Nature 2000 area with rare blanket bog. Any wind farm on Lewis must obtain consent from the Scottish Executive and it will have to consult Scottish National Heritage and others. I understand that the developers are working closely with Scottish National Heritage to minimise the effect on local wildlife, but clearly they are some way from a conclusion.

The noble Baroness, Lady Hooper, referred to methane from waste disposal sites. That is included in the renewables obligation. It is a quirk which must be resolved that coal-mine methane is not, for what seems to me to he a bureaucratic reason, in theory renewable. However, in every other sense the production of energy from coal-mine methane is highly desirable because coal-mine methane itself is so undesirable. If it escapes into the atmosphere, it is 21 times more damaging than many other forms of emissions. Methane from landfill sites is a major contributor to renewables and it will be supported under the obligation.

The noble Lord, Lord Monro, was the first of a number of noble Lords to talk about the planning issues and I recognise how serious they are. I want to make it clear that the Government's role in such planning matters is restricted to a quasi-judicial role under Section 36 of the Electricity Act. There will of course be a planning inquiry on any occasion when the local planning authority objects to a proposal for a development for renewable purposes and that inquiry will be independent. The Government have no influence on the way in which the planning inquiry works.

The noble Lord, Lord Woolmer of Leeds, asked about the role of regional development authorities. That is probably a developing issue which has not been resolved. As the noble Lord, Lord Faulkner, made clear, there are many proposals about the relocation of responsibility for planning matter, but at present they are in the hands of local planning authorities.

We are aware of the concerns not only of environmental groups but of ordinary residents about the potential visual intrusion of renewable energy projects. However, project developers are also concerned about difficulties in obtaining planning consent. There are lessons to be learnt from some of the more difficult projects during recent years, which, including Cefn-coed, have been debated in your Lordships' House.

The noble Baroness, Lady Miller, took me back a long way by reminding me of what she called an "assumptive sales pitch". When I was a trainee sales service representative for Hoover Ltd, we used to call it "dual positive suggestion". One did not ask whether the lady wanted to buy; one asked whether she wanted to pay using cash or hire purchase. That is a trick which Ministers would do well to learn, if they have not done so already.

My Lords, I am sorry to interrupt the Minister in full flow, but surely Ministers, by definition because of the electorate, are not so much assumptive but certainly temporary.

My Lords, they should not make jokes—or attempt to make jokes.

I can confirm that the figures given by the noble Baroness, Lady Miller, relating to costs are correct. They are the same as those which I was given. She asked me in particular about comparisons with Europe and other parts of the world. The Kyoto obligations are world-wide and the renewable obligations within that are also world-wide. They will be different for different countries and it does not mean much in Norway, for example, where hydroelectric power can exceed the renewable obligation without difficulty. However, without going into detail, we are aware and supportive of many attempts in different parts of the world to encourage energy from renewable sources.

The noble Baroness also asked me about further funding for particularly difficult technologies. We believe that the £260 million to which I referred is enough to bring forward the earlier development of key renewable technologies. It would be premature to speculate on the need for future funding when we have not spent the money that has already been allocated or evaluated in order to ascertain whether it produces value for money. But we will be doing so. If the noble Baroness asked me whether I would rule out further money, my answer would be that I certainly would not if it produced value.

The noble Baroness asked about the details of Ofgem operations. As she suggested, I would like to write to her about that. I would also like to write to her about the points she raised on the trading arrangements in particular cases where there are defaulting suppliers and on whether the buy-out price is high enough to deal with the problems which may arise.

The noble Lords, Lord Ezra and Lord Woolmer, criticised us for a narrow definition of "renewables". The definition must relate to the common use of the English language. I agree that it is paradoxical as regards coal-mine methane which, although it is not renewable, has a considerable future life. However, combined heat and power is not of itself renewable. It is energy-saving and that is an important part of meeting our Kyoto obligations, but it cannot be called "renewable" unless in turn it comes from renewable sources. We have international obligations.

My Lords, I find the obsession with renewables as the only way in which we can reduce carbon emissions to be diverting us from our main task. Had we defined what has come to be the renewables obligation more widely under the Utilities Act, we could have put more effort into reducing carbon emissions, which after all is our main objective.

My Lords, I do not deny that, but this is a renewables order. I am not saying that there are no other ways of greater energy efficiency and no other contributions which can be made to meeting the Kyoto targets. It is merely that this programme is based on international definitions and common-sense language definitions.

Nothing that I say should be taken in any way to indicate that we are antagonistic towards or unsupportive of other technologies. The noble Lord, Lord Ezra, made a particular point about NETA and the balancing mechanism. We took account of NETA while designing the renewables obligation and we have protected the existing NFFO projects, with their fixed-term price contracts. The noble Lord will remember, as I do, the debates we held on this subject while considering the Utilities Bill. In fact, NETA is working well and delivering lower wholesale prices in England and Wales. The cost of balancing the system has gone down dramatically. However, lower energy costs sometimes means the greater use of energy and thus conflicts with Kyoto targets. That is in the nature of economics and it is difficult to overcome the problem.

My noble friend Lord Woolmer asked me about imported renewable energy sources. I shall go as far as I can in my response by saying that the order does not extend the obligation to imported renewable energy. There are benefits in extending the obligation in due course, but we have to pursue these issues with other member states in bilateral agreements. However, the first obligation is to ensure that investors have the confidence to invest in renewable projects—including biomass, which my noble friend mentioned—in the United Kingdom.

hope that in the time available I have dealt with as many as possible of the points that have been raised.

On Question, Motion agreed to.

rose to move, That the draft regulations laid before the House on 7th March be approved [22nd Report from the Joint Committee].

The noble Lord said: My Lords, with the leave of the House, I should like to speak also to the following four regulations set out on the Order Paper, although they will be formally moved separately.

The five sets of regulations before the House set out the detailed provisions behind a change to the law which was supported by both sides of the House when we debated Section 45 of the Criminal Justice and Police Act 2001, which received Royal Assent last year. The proposed regulations will apply to England, Wales and Scotland. They will not apply to Northern Ireland, which has its own companies legislation and registry.

At present, the usual residential address of all directors must be filed at Companies House and he made available for public inspection. Section 45 of the Criminal Justice and Police Act amends the Companies Act 1985by inserting new Sections 723B to F. The amendment allows directors who consider that they are at serious risk of violence or intimidation to apply to the Secretary of State for a confidentiality order. The granting of the order by the Secretary of State will enable directors to file a service address instead of their home address, for the public record.

The home address will still have to be provided to Companies House, but will be kept on a separate, secure register to which only competent authorities—that is, bodies such as the police and other public sector regulators that are listed in the orders—will have a right of access. The protection given to directors in Section 45 also extends to company secretaries and to permanent representatives of overseas companies who have to supply their home address for the public record. Section 45 comes into force on 2nd April 2002, the same date as is proposed for the five sets of regulations.

Having company directors' home addresses on the public record is important for reasons of accountability and transparency. It has been a requirement under company law since 1917, but it has been clear for some time that certain activists have tracked down the home addresses of directors of particular companies, such as Huntingdon Life Sciences, and subjected the directors to abuse. Such actions are clearly unacceptable and it was against this background that Parliament agreed to Section 45 of the Criminal Justice and Police Act.

Following the Act receiving Royal Assent, the Government issued a consultative document last October. This sought views on draft regulations implementing the detailed provisions of the new regime. The Government have taken into account the views expressed by consultees in framing the revised regulations before the House today. Companies House has also needed to implement very substantial changes to its systems since it currently operates an entirely open register where all information filed is available to the general public. The setting up of a separate, secure register has therefore involved a major departure from this policy. In addition, it has been necessary to discuss and agree with the police their contribution, which will be vital, since in many cases only the police will be able to provide an assessment of the risk of violence or intimidation faced by directors.

I should like to turn to the five sets of regulations before the House. The principal regulations are the Companies (Particulars of Usual Residential Address) (Confidentiality Orders) Regulations. Part I of the regulations describes how an application for a confidentiality order may be made. Companies House has drawn up a form to assist applicants to provide information in sufficient detail to enable the Secretary of State for Trade and Industry to make a decision on whether to grant a confidentiality order. An application has to be accompanied by a fee of £100. The fee is calculated to recover the costs of Companies House in setting up and administering the system. In addition, as I have mentioned, in many cases the police will be asked to provide a risk assessment and the fee therefore includes a contribution to them in respect of the assistance they will be providing.

The regulations provide that ultimately it will be for the Secretary of State to determine whether a confidentiality order should be granted. However, unsuccessful applicants may appeal to the court against a decision on the grounds that it was unlawful, irrational or unreasonable, or has been made on the basis of a procedural impropriety or otherwise contravenes the rules of natural justice.

Part II of the regulations deals with service addresses and describes when the service address has to be notified to the company and the criteria for a service address to be valid. Part III covers the duration, renewal and revocation of a confidentiality order. An order will normally last for five years and may be renewed by application prior to its expiry. It may be revoked where false, misleading or inaccurate information has been provided in support of an application.

Part IV deals with access to the confidential record containing the beneficiary of a confidentiality order's home address together with disclosure provisions. Disclosure is generally prohibited except to a competent authority. Part V describes the form and delivery of notices, amendment of enactments, offences and penalties for unauthorised disclosure, and the making of a false statement.

Schedule 1 lists the competent authorities, which consist mainly of bodies such as the police and certain other public sector regulators, while Schedule 2 contains the necessary amendments to the Companies Act 1985 in order to effect the measures described in the regulations.

More briefly, I turn to the other four sets of regulations. The Limited Liability Partnerships Act 2000 allows the Secretary of State to apply, by regulations, any law relating to companies to limited liability partnerships. The Limited Liability Partnerships (No. 2) Regulations apply Sections 723B to F of the Companies Act 1985 to limited liability partnerships with appropriate modifications. The Limited Liability Partnerships (Particulars of Usual Residential Address) (Confidentiality Orders) Regulations closely follow the principal regulations, thereby allowing members of limited liability partnerships, who also have to make available their home addresses to Companies House for public inspection, to apply for confidentiality orders in the same manner as directors of companies.

The other two sets of regulations are the Companies (Competent Authority) (Fees) Regulations and the Limited Liability Partnerships (Competent Authority) (Fees) Regulations. These regulations provide that Companies House may charge competent authorities a fee for accessing the home addresses of company directors and LLP members respectively. The regulations provide for a one-off registration and validation fee of £50 and an individual search fee of £4. Companies House will, of course, incur costs in providing the home addresses and, as a trading fund, it is required to recover those costs.

There is one final issue that I have to bring to the attention of the House. These measures do not extend to removing or expunging existing records at Companies House and cannot do so since there is no power in the primary legislation. In any case, information on companies, including the usual residential address, is kept in a variety of formats such as paper, microfiche, as an electronic image and in data format, and is kept not only by Companies House but also by many business information companies—such as one that I used to run—which buy them from Companies House for resale. It would be impracticable to expunge past records. The regulations provide that documents filed at Companies House for the public record after an individual has been granted a confidentiality order shall include a service address rather than the home address.

All five sets of regulations have been approved by the Joint Committee on Statutory Instruments and comply with the requirements of the European Convention on Human Rights. I commend the regulations to the House. I beg to move.

Moved, That the draft regulations laid before the House on 7th March be approved [22nd Report from the Joint Committee].—(Lord McIntosh of Haringey.)

My Lords, I shall speak briefly to the two regulations relating to the confidentiality of the private addresses of shareholders in limited companies and limited liability partnerships.

As the Minister explained, the need for this protection for shareholders and limited liability partners arises from the threats, intimidation and acts of terrorism—which is not too strong a word for such acts—committed by mindless and sometimes cowardly bullies against shareholders and the bankers of legitimate companies carrying out entirely lawful activities.

We saw only last week the example of an elderly lady who had inherited from her late husband shares in Huntingdon Life Sciences—a company which is particularly at the centre of the activities of these self-appointed people. They have daubed her house with graffiti and she has been subjected to threats of violence, which the police seem powerless to prevent.

Let us suppose that it was not anti-vivisectionists who were conducting this form of gangsterism but the anti-hunt lobby, some of whose supporters are not adverse to bouts of violence. Let us suppose it was the supporters of those who oppose Sunday trading—although I hasten to say that I accept that their campaign was entirely peaceful and proper. Let us suppose it was anti-abortionists trying to intimidate doctors and clinics, as has occurred in the United States of America, resulting in the murders of several doctors. It is a sad sign of the times that to protect companies carrying on a legitimate and lawful business it is necessary to protect the identity of their shareholders by negating the open register of company shareholders that has existed for the past 85 years. But that is a fact of life.

We support both regulations. We also support the two consequential regulations relating to the fees for accessing the registers by what the next two regulations call the "competent authorities".

Finally, we also approve of the Limited Liability Partnerships (No. 2) Regulations which, as the Minister explained, bring the recently introduced limited liability partnerships into line with ordinary limited companies.

My Lords, we on these Benches feel that, although there are some issues in the regulations which could be questioned, overall they make a useful and necessary contribution, particularly for the reasons adduced by the noble Baroness, Lady Miller. We therefore support the passage of these regulations.

My Lords, I am grateful to both noble Lords for their support for the regulations. I can reassure the noble Baroness, Lady Miller, about shareholders. Unless it was a slip of the tongue and she meant to refer to directors, the present position is that shareholders are not required by company law to file their home addresses at Companies House. In the same way that these regulations provide for directors, shareholders can give a service address, an accommodation address or the name and address of a nominee—for example, their solicitor or accountant. They can give the address of the company, if the company agrees. The only requirement is that they have to be able to receive shareholder communications. These regulations concern only directors who do not have that protection and who arecovered by companies and limited liability partnerships legislation.

On Question, Motion agreed to.

My Lords, I beg to move.

Moved, That the draft regulations laid before t17.e House on 7th March be approved [22nd Report from the Joint Committee].—(Lord McIntosh of Haringey.)

My Lords, I beg to move.

Moved, That the draft regulations laid before the House on 7th March be approved [22nd Report from the Joint Committee].—(Lord McIntosh of Haringey.)

My Lords, I beg to move.

Moved, That the regulations laid before the House on 7th March be approved [22nd Report from the Joint Committee].—(Lord McIntosh of Haringey.)

My Lords, I beg to move.

Moved, That the draft regulations laid before the House on 7th March be approved [22nd Report from the Joint Committee].—(Lord McIntosh of Haringey.)

rose to move, That the draft order laid before the House on 7th February be approved [20th Report from the Joint Committee].

The noble Lord said: My Lords, the contracting-out order is made under provisions in the Deregulation and Contracting Out Act 1994. I am pleased to have the opportunity to debate the order.

The main purpose of the order is to allow local education authorities greater flexibility in the delivery of services. LEAs need this flexibility for two main reasons. First, LEAs are tasked with securing high quality services to the schools, parents and pupils in their areas. They are key to delivering many of the improvements that we want to make. But local education authorities may not be able to deliver these improvements on their own. They will, in most cases, need to work in partnership with others.

We cannot expect all LEAs to house within one organisation all the skills and expertise necessary for their wide-ranging responsibilities. We need to build the capacity of LEAs through effective partnership working. Many LEAs are already using partners to deliver back-office functions but there are also significant capacity issues for LEAs trying to deliver high quality front-line services such as those covered by this order.

Secondly, our policy of best value obliges local authorities to review their services and to consider whether the service needs to be provided and, if so, who is best placed to provide that service. Local education authorities are currently limited in the range of services they can deliver in partnership with others. Whether or not they are the organisation best placed to provide a service, they are obliged by statute to undertake many education functions in-house.

Tasks such as drawing up a school organisation plan, making arrangements for statementing SEN pupils and enforcing school attendance orders currently have to be undertaken by an officer of the LEA. The order will allow LEAs, if they wish, to contract with private or voluntary bodies to deliver services such as these which require the exercise of discretion in individual cases. So the order will give LEAs greater flexibility in securing the most effective delivery of their services.

LEAs will remain ultimately responsible and accountable for all contracted out functions. LEAs will continue to set the direction and the strategy. They will ensure that the implementation of that direction and strategy is reflected in their contracts. While a contractor may carry out functions on behalf of the authority, the authority will retain overall control and ultimate accountability.

To reflect this, we have excluded from the order a number of key strategic decisions that we believe an authority should not contract out. For example, the approval of key plans, such as the authority's education development plans and early years and childcare development plans; setting local policies, such as school admission policies, and reviewing arrangements for children with SEN or behavioural difficulties; putting forward proposals for new schools or to close schools; determining the education budget and the budget share schools receive. These decisions remain for the LEA to determine—decisions for which the authority should be directly democratically accountable.

The order has been the subject of consultation with the local authority associations, local education authorities, trades unions and other interested bodies. We have taken their views into account in drafting the order. LEAs that responded to the consultation have broadly welcomed the flexibilities offered by the order.

I should also stress that this is not a privatisation agenda. The contractor need not be a for-profit commercial company. It could be a voluntary or not-for-profit company, or a company formed as a partnership, or a joint venture between a local authority and a commercial undertaking or voluntary body. LEAs will also be able to take advantage of the new freedoms on trading activity proposed in the recent local government White Paper in order to provide services for other LEAs where they wish. What matters is that the services are provided by the organisation that is best placed to provide the highest quality service, be it in the public, private or voluntary sector.

The order is an enabling measure. It will allow local education authorities to secure better value services for their schools and for the local community. It will remove legislative barriers to partnerships between the public, private and voluntary sectors, trying out new and better ways of delivering services. Whether to contract out is entirely for LEAs to decide, in line with their obligations under "best value". The order has been welcomed by the LEA sector. I commend it to the House. I beg to move.

Moved, That the draft order laid before the House on 7th February be approved [20th Report from the Joint Committee].—(Lord Davies of Oldham.)

My Lords, I am grateful to the noble Lord for setting out and explaining the order. Like him—even on Maundy Thursday—I am pleased to have the opportunity to debate the matter.

The Government are committed to modernising local authority services. As with so many well-intentioned ideas of the Government, implementation invariably means greater complexity, some confusion, certainly more bureaucracy, and greater cost.

I support greater flexibility for schools and local education authorities, and I support more innovation and enterprise in the provision of services. In principle, all of that is a good thing. However, the way in which local authorities are required to go through the "best value" process is cumbersome; and it is costly. Looking at the three schedules to the order, I am bound to ask: will not the best value testing process be so time-consuming and costly that the ultimate operational and financial benefit will be diminished, if not eliminated?

I noted that in presenting the order the Minister referred to a number of areas that would be outside its provisions: education development plans; early years planning; admissions arrangements; special educational needs and educationally behavioural disordered young people; new schools; merger schools; and budget. He said that the reason was that local authorities should retain the accountability for those services. My understanding of the order is that local authorities will retain accountability for all the services, including those set out in the three schedules. I shall come to that point later.

I want to press the Minister on the issue of local authorities retaining accountability for services that are contracted out. I understand that, if the volume of contracted-out services is to increase significantly, it follows that cost and bureaucracy will increase too, and the areas of activity will be more complex—that is, not simply contracting for teaching or provision of direct services but to involve third parties in, for example, the area referred to in paragraph (y) of Schedule 1:

"section 406 (prohibition on political indoctrination in maintained schools)".

What is it envisaged that a contractor would do in this area? How would the contract be costed; and by what would one measure the effectiveness?

On the issue of the schedules, perhaps I may refer at random to a few examples. Perhaps the noble Lord will be able to offer some clarification as to how, in practice, these provisions will work. For example, paragraph (hh)(ii) of Schedule 1 relates to Section 441 functions under the Education Act 1996:

"choice of school; child with statement of special educational needs".

Again, what 'would a contractor do? Surely it is the local authority which mostly understands about young people with special educational needs. As I understand it, the local authority retains accountability for the service; but what third party contractor would deal with a child with special educational needs?

In Schedule 2, dealing with,

"Functions conferred by or under the School Standards and Framework Act 1988",

paragraph (f) refers to:

"section 26(1),(2), (3) & (4) (duty to prepare a draft Schools Organisation Plan and consult on it)".

Again, a schools organisational plan is an organic activity for the local authority. If the local authority is going to invite, by contract, a third party to devise the educational plan, it can do so only by itself briefing the third party in such a way that the energy and time consumed would be duplicated by the third party.

Paragraph (g) refers to:

"section 28(5) and paragraph 5, Schedule 6 (consultation on proposals to establish or alter a community or foundation school and implementation of approved proposals".

What third party is better, and more knowledgeable, in regard to the need for restructuring in this way than the local authority? Again, a local authority would spend as much time imparting its own information from within the authority to a third party. It is for these reasons that I query the effectiveness of contracting out to a voluntary body, or to a company with profit, or to a company without profit.

Paragraph (h) of Schedule 2 refers to:

"responsibility to fixing dates of terms and holidays and times of sessions".

Schools do not have to farm out such an activity as a distinct, paid-for contract. Fixing school dates, terms and holidays is a relatively minor matter for local authorities. Nevertheless, local authorities will have to go through the best value procedure, even if they believe that the notion of putting such matters out to contract is a nonsense.

Paragraph (s) relates to:

"section 70 and schedule 20 (requirements relating to collective worship".

What on earth is there is in that particular service to contract out, other than perhaps inviting the local vicar to do it? All such activities can be dealt with under the present arrangements. Lay preachers, people from the community, and people from various faith groups come into schools now on a voluntary basis. No change in the law is necessary to allow that to happen. Paragraph (v) of Schedule 2 relates to "parental preferences". We are talking about farming out parental preferences for contract. I wonder what that actually means.

My final example is paragraph (bb) of Schedule 2:

"section 105 (duty to provide information in relation to grammar school ballots)".

I do not see an issue here for contracting out.

These areas will now have to come under the best value arrangements. In each of these areas, local authorities will have to carry out a distinct best value exercise, in regard to lists of activities covering pages, in deciding whether or not to contract out. As the Minister said, this is a voluntary activity; nevertheless, a great deal of time and energy will be expended—and time is money.

I have to ask the noble Lord the following question. Would each LEA be required to review each and every aspect of service listed in the three schedules to test for best value? If LEAs are to be exempt from going through that test, why are they not exempt from going through it on any other matter that precedes the order? How time-consuming would all that be, and how costly? There must be a more efficient way of achieving cost-effective and, more significantly, operationally efficient contracted-out services.

Local education authorities are now inspected. That is a good thing. Inspections will cover the degree to which an authority is well managed, and the quality and cost-effectiveness of its services. That is also a good thing. Many of the functions set out in the schedules encroach more and more on the strategic and core functions of local education authorities. The Minister must tell the House how, in contractual terms, an LEA will retain distinct boundaries between service provision and strategic and core function accountability. Will it require yet more guidance—as if schools do not have enough already?

It would also be helpful if the Minister could explain the interaction between the present contracting-out arrangements and relationships between schools and LEAS and commercial or voluntary enterprise, and the proposals for setting up companies as set out in the current Education Bill by the Secretary of State—and by the LEAs and the schools themselves.

A point raised by my honourable friend Graham Brady in another place was the degree to which schools which exercise powers of exemption under Clause 2 of the Education Bill could potentially disregard those provisions if they had applied successfully to innovate in order to raise standards by converting the cost of what would be incurred by conforming to the orders and implementing the provisions to areas of classroom expenditure which could, indeed, provide a better educational return. Does the Minister agree with a comment made by my honourable friend in another place that, under this order, LEAs would be reduced to advising, consulting and implementing the strategy being farmed out, leaving the LEAs as mere contract managers? I ask that question for clarification, as much as anything, about where the Government expect to see local education authorities over the next few years.

The Minister in another place appeared to dismiss the consultation exercise on these measures. A number of points raised by respondents have not been adequately addressed. Like us, the respondents to the consultation exercise broadly welcome the principle of improving the delivery of services by contracting out with the commercial, private and voluntary sectors. However, they were concerned, as, indeed, we are, about the split functions, the quality and the quantity of providers, and, again, the interaction of the proposals in the current Education Bill giving the Secretary of State power to form a company.

An additional, very real issue is the cost of implementing the order. It is disingenuous—almost misleading—to suggest, as the Government have done, that it is cost-neutral. The additional work at local education authority and school levels will cost. Once again, that cost will have to be met by raiding money that should be spent on children in the classroom. For example, a great deal more coordination will be required. That is time-consuming, and, as I said earlier, time costs money.

I noted that the Minister in another place, in answer to a question by my honourable friend Graham Brady, concerning the contracting-out of services for identifying children with special educational needs and assessing appropriate provision for them under Section 321 of the 1996 Act, said that it would not present any problems. However, I must ask the Minister a question concerning the case of an aggrieved parent who was critical of a judgment made by a contractor. According to the Minister, the parent would simply appeal to the LEA where the accountability lay. But can the Minister explain what the situation would be if, in such an event, the LEA was taken to a tribunal for the failure on the part of the contractor not because the contractor was incompetent or inefficient but because the parent disagreed with the judgment made by the contractor? The situation is hardly straightforward and it would cause a great deal of confusion.

Many examples given by my honourable friend and by Members on the Liberal Democrat Benches in another place threw up complex and often confusing aspects of this order, especially the area of responsibility for strategic functions and the diffuse delivery of the service. Given the fact that this is Maundy Thursday and that this is the last item of business, I shall not—this may come as a relief—pursue some of those details further. However, I want to raise one point.

The Government claim that the aim of the order is to increase flexibility, to widen choice in the provision of LEA services and to provide better value for money. We support those aims. However, the Government will know that there is considerable disquiet about the practical implementation of these measures and their impact on LEA schools and, more especially, on children. We shall take the Government on trust by not opposing the order. But I hope that the Government will be vigilant in monitoring its effects and will seek to remedy any shortcomings in order to pre-empt any possible adverse, even if unintended, consequences.

My Lords, from these Benches we also offer our broad support for the aims of the order, as outlined by the Minister. However, that support is given very much on the basis that this process should be driven by the local education authorities themselves in the best interests of the people whom they serve and not in pursuit of ticking boxes on government forms or adhering to a raft of best-value performance indicators. I declare an interest as a member of a local education authority. I have been a county councillor in Suffolk for a decade.

I am sure that there will be many occasions when this order can be used usefully in order to respond to temporary circumstances as well to deliver the type of partnership and new arrangements for service delivery which the Minister has outlined. However, we also remain profoundly concerned about the accountability aspects of contracting out. Although we broadly welcome the assurances given by the Minister in terms of the strategic functions being retained by the LEAs, we nevertheless remain concerned that many of the issues which are contracted out should also be democratically accountable. At present, people who seek to challenge the system are faced with a minefield. If there is now to be an added layer for them to fight through, it will be very difficult for people to challenge decisions or simply to make their voice heard when they are not happy. With those caveats, we support the order.

My Lords, I am grateful for the contributions to the debate from both Front Benches. It has been a particularly lively debate, even though it has taken place somewhat late in this part of the parliamentary Session. I appreciate the fact that support has been expressed on all sides for the concept of achieving best value. I accept straightforwardly that the noble Baroness, Lady Blatch, is right when she says that initial costs are bound to be involved in the drawing up of a contract and that a local authority would have to take account of those costs in working out whether it would obtain best value from the contract.

However, those initial costs might relate to a contract which would obtain over several years. Therefore, the assessment of the viability of the contract and the advisability of going forward with it would obviously have to take into account such costs. However, they might be reflected in the achievement of best value by the quality of the service that could he guaranteed from the contract. I want to emphasise—I believe that it was the subject of significant debate in the other place and has been reflected, in particular, in the contribution of the noble Baroness, Lady Blatch, today—that the question of best value must mean that built into the contract is a guarantee of the efficiency of the service.

As the noble Baroness indicated, it is possible that special provisions will need to be made in certain areas. In anticipating this debate, I did not doubt that the noble Baroness would refer to the case of a child with special educational needs. I know of the very keen interest that she has always taken in this area and of her expertise in the field. Of course, the contract which would be developed in such a situation would involve the LEA being liable if the contractor took a decision which the parent of a child disputed. Therefore, the structure of the contract would contain the necessary appeal procedure in order to guarantee that, where the parent justifiably felt aggrieved, the decision would have to be taken at the local education authority level. That would be consistent with the Bill which I recall debating with the noble Baroness a short while ago. During our discussions, we expressed concern about the issues of appeal procedures and the rights of parents who, inevitably in this area of educational provision for children, take the most keen interest and who need to be satisfied that the best possible service is being offered to their children.

With regard to one or two other areas, I shall write —

My Lords, I am grateful to the noble Lord for giving way. I want to raise a point before he leaves the subject of special educational needs. My concern relates to the example that I gave where it is not incompetence or inefficiency that is being appealed against but the judgment made by a third-party contractor. If the tribunal considers only the process—in other words, if the process is immaculate and is not at fault in any way—then the local authority is exonerated from any responsibility. That leaves an aggrieved parent with no one to turn to. There is no process set down for the contractor to he accountable to the parent. As I understand the order, the LEA is accountable to the parent, but an unaccountable third party makes the decision. That leaves the parent of a child with special educational needs in a difficult position.

My Lords, I understand tie noble Baroness's anxiety, which needs to be relieved. As we have indicated, local authorities have a particular and obvious responsibility for policy relating to special educational needs. Any such contract would make it clear that the local authority took responsibility for the parent's appeal against the decision and the work carried out by the contractor. It would be a different kind of contract from that used for less significant and sensitive areas of education provision.

I recognise and accept that considerable care would need to be taken in the drawing up of contracts in that area and that there would be some initial cost. If local authorities did not feel that there was a contractor capable of providing better-value service, the service would remain with them.

The noble Baroness questioned whether a third party should provide a service, which she recognised as essential and proper for the local authority, and whether the third party would have a role to play. With regard to parental choice and—perhaps I may tread on this sensitive area—grammar school ballots, a third party could not necessarily be ruled out. Of course local authorities take responsibility for the ultimate decision on the provision of places and the admissions strategy in their area. However, I recall the noble Baroness's government ensuring in legislation that third parties were involved in ascertaining the democratic voice.

The industrial relations legislation indicated that ballots should be held under proper terms. In many cases they are carried out by a third party. The Electoral Reform Society has established a significant reputation for carrying out sensitive ballots. It may not be that particular body, but comparable bodies have the expertise to carry out the appropriate processes of ascertaining—under the direction of the local authority on what needs to be ascertained—the views of the people concerned. We could surely see a third party undertake that process without any direct implications for the value judgments eventually involved in the local authority's decision.

The process of electoral testing has not been the subject of great controversy in any of the sensitive areas of national life where third parties have played their part. However, I accept that this is a strategic issue for which the local authority is ultimately responsible.

My Lords, I agree with the Minister that the Electoral Reform Society is greatly involved in that process. But what else relating to grammar school ballots could additionally be contracted out?

My Lords, the order lists all the areas currently undertaken by local authorities where they may choose to employ a third party. There is no question about the decision being taken by the local authority. Following widespread consultation, we have sought with this order to create the greatest freedom for local authorities to make the choice. If in an area as sensitive as grammar school ballots—into which I seem, somewhat ill-advisedly, to have clambered—the intrusion of a third party might in some way be a derogation of the local authority's responsibility, local authorities are wise enough not to put themselves in jeopardy with regard to process. I believe I can reassure the noble Baroness on that matter.

The noble Baroness raised parental choice in general. Local authorities will set agreed admissions policies. The process by which parents express their choices could be provided by another competent body with the expertise to carry out a survey of parental choices. As we have made clear with regard to the legislation, local authorities are responsible for their admissions policies. The process of ascertaining a choice and defining the issue could be contracted out to those capable of ascertaining opinion.

The legislation draws a clear line between the strategic issues of principle, on which the noble Baroness and I are in agreement, which are the responsibility of democratically-elected local authorities, and the process through which the basis on which decisions are taken can be improved. In that sense, this is enabling legislation. Local authorities are under an obligation to achieve best value. Bearing in mind the reservations expressed by both noble Baronesses, if an authority is engaged in an exercise in which the process of drawing up the contract defeats the objective of getting better value for money, it will not act in that area. However, it is surely right that the order should maximise the opportunities and lead to democratically elected local authorities taking the decisions.

The noble Baroness, Lady Blatch, drew a number of other detailed points to my attention. If I have omitted to cover them in sufficient detail, I shall write to her. I am grateful for the fact that both noble Baronesses have recognised the value behind the principles of the legislation. The noble Baroness, Lady Blatch, said that she would take the Government on trust. I shall not ask her for the timescale of that commitment—it is probably until our next debate. Under best value procedures we expect to be able to establish that the legislation works to the benefit of the people whom we serve and provides them with the best services that can be secured. If there are difficulties in that respect, the issues will have to be revisited, but in the meantime, I commend the order to the House.

My Lords, before the noble Lord sits down, there is one more question to which it is important that we receive an answer before we close the debate. I asked specifically whether a local authority will have to go through the exercise of best value on every one of the considerable number of items listed in the three schedules.

My Lords, the categorisation of best value for local authorities has considerable breadth. These are areas in which, if they so choose, they may establish best value for the services provided under a contracting out principle to their own satisfaction. If they choose to do it that way and are able to establish to their satisfaction that they can achieve best value, they will pursue that course.

There is no question of every detail being a checklist against which a local authority will be evaluated. We have produced an extensive list of discrete functions because the legislation covers that range of functions. Following consultation with local authorities, we want to maximise their opportunities to achieve best value targets. However, we also accept that there are certain discrete areas that ought to be reserved to the local authorities. That is the basis of the order.

On Question, Motion agreed to.

House adjourned for the Easter Recess at eleven minutes past one o'clock until Monday, 8th April