moved Her Majesty's Government:

My Lords, British passports are issued in the United Kingdom under Royal prerogative by the UK Passport Office. Citizenship is a matter of law, primarily under the British Nationality Act 1981, that is usually determined by the facts of a person's date and place of birth and those of their parents. Active service in Her Majesty's Armed Forces is not a factor usually taken into account when determining eligibility for a British passport.

My Lords, I thank the noble Baroness for that Answer. She will be aware that the noble and gallant Lord, Lord Craig of Radley, raised two examples of this problem in the debate on defence on Monday. On that occasion, the Minister did not have time to respond to them. I do not want to refer to individual cases other to say that the one which has caused most outrage recently has, I understand, now been satisfactorily settled. However, I note that the Government were reluctant even to answer questions from the person's Member of Parliament, until directed to do so by the Speaker. My point is that the rules need to be changed, so that active service in Her Majesty's Armed Forces is indeed a very good qualification for earning British citizenship.

Perhaps I may ask the Minister a more important question. Is she aware that there is increasing concern and frustration at the way in which the Home Office, instead of reassuring and serving the British public as it is meant to, seems again and again to irritate and provoke them by making apparently foolish decisions? Is there some way in which Ministers can get a grip on the Home Office?

My Lords, first, I reassure the noble Lord that Ministers have a grip on this issue. I disagree with the noble Lord in his assessment of the way in which applications are dealt with. Secondly, I reassure the House that the law will apply equally to all, irrespective of whether they are within or without Her Majesty's armed service. I inform noble Lords too that settlement is possible under favourable terms for those who are members of the Armed Forces. If they serve this country for four years, they can apply to be settled and thereafter obtain citizenship on favourable terms.

My Lords, I am delighted that the Minister has spelt out the legal requirement for passports. Does the Secretary of State have any discretion in waiving the qualifying residential period when deciding the issue of British citizenship, which then leads to a British passport?

No, my Lords. The rules apply equally, but the noble Lord should know that in the exercising of discretion about what will count, there can be variations. So, for example, we changed the rules so that those who serve in our Armed Forces, but who do not spend the whole of the period here in the United Kingdom, are given very advantageous terms, so that long periods spent outside this country would not count against them if they were serving this country's ends. For example, the five-year criterion would now be met if the person so serving spent one year in the United Kingdom. Those are very favourable terms.

My Lords, as a Member of this House who is not a British passport holder, I presume that the first criterion for gaining a British passport is to be a British citizen. Is that correct?

My Lords, the first thing is that you have to be settled here. You could then use the fact that you have been settled to obtain British citizenship, as the noble Baroness rightly said. Once you have got British citizenship, of course, you can then apply for a British passport.

My Lords, I have listened carefully to what the Minister has to say, but does she not agree that there is a real problem with the way in which the Home Office deals with these sensitive issues?

My Lords, I do not agree with the noble Baroness. These issues are very sensitive and they have to be dealt with very carefully, but the noble Baroness must understand that they have to be dealt with equally. It is very difficult when various people are saying "We should do this, we should do that, we should change our rules". We have to be consistent. Of course we have to be flexible. I hope noble Lords have found that, in relation to these measures, we have amended the rules so that they are proportionate and very well applied.

My Lords, can my noble friend assure me that if a national of a country who would have some difficulty in returning to that country serves in the Armed Forces and applies for British citizenship, that person's application would be given particularly favourable treatment? I am thinking in particular of someone, for example, from Zimbabwe, who clearly would find it very difficult in present circumstances to return to Zimbabwe if he did not have a British passport.

My Lords, I have to reiterate that we treat each application equally. It would be quite improper to favour one group above another. I can reassure the noble Lord that the circumstances of each individual case are of course taken into account in exercising any discretion that there may be in relation to any particular group.

moved Her Majesty's Government:

My Lords, the recent Pensions Act includes many changes which are designed to ensure good governance in pension schemes and which recognise the crucial role of lay trustees in managing those schemes. We have also been discussing with those organisations which currently run trustees' groups—NAPF, PMI, TUC—whether and how a standing trustees' forum could work actively further to promote and support lay trusteeship. We are considering how best to take this forward. My noble friend's Question is very apt.

My Lords, I thank my noble friend for that response. Does she not agree that it is very important that suitable people should be encouraged to come forward and take on this important function for their fellow employees? If there were a task force or something similar available for them, it would provide them with the necessary support in many instances—and possibly access to training—and give them the confidence to take on this important function.

My Lords, I agree entirely with my noble friend. Whether one calls it a task force or a forum, it is the case that trustees in this country are managing something like £750 billion-worth of assets. Some trustees, particularly those in the smaller schemes, have had no training at all, even though they are hungry for it. We certainly want to encourage more training. We shall be issuing through the regulator codes of guidance to ensure that the appropriate knowledge and understanding that trustees need will be exercised. If the forum is the right way to do it, I am sure we will have widespread support.

My Lords, should not the training of trustees be mandatory rather than merely encouraged by the Government? The whole issue of trusteeship of pension schemes at this stage is so convoluted and difficult, even for people with financial acumen, that longer term—particularly in view of the amount of money that has been mentioned—there really ought to be some statutory obligation for proper training.

My Lords, there are two reasons why we have not gone down that route so far. First, you cannot predict what background people come with—some may need no training at all; others may start from a very low knowledge base. Secondly, 90 per cent of companies with more than 1,000 members already offer training. Our problem is that of those schemes with fewer than 100 members, only 30 do so. In many cases the reason, of course, is that so far they have not had member-nominated trustees. The regulator will be issuing up to a dozen codes of guidance. There will be statutory codes of guidance—on which there will be consultation and which will be laid before Parliament—which will require trustees to exhibit appropriate knowledge and understanding. I believe that is the way forward.

My Lords, as there is clearly a serious shortage of competent trustees, can the Minister confirm that, contrary to reports in the press, the Government do not propose to impose a limit of nine-year terms on existing trustees—or, indeed, on future trustees—as this would certainly deprive the schemes of those with experience and expertise?

My Lords, I am not aware that there is a shortage of trustees willing to come forward. They have concerns about their knowledge and understanding, and sometimes they have concerns about their liability, but, from my experience—certainly with member-nominated trustees—I know that many very able people wish to come forward. Their problem sometimes is to get the training that they want at times that are convenient to them and so on.

I am not familiar with the noble Lord's second point about a nine-year rule. I certainly have no knowledge or evidence that the Government are thinking in those terms. If I am incorrect, I shall write to the noble Lord.

My Lords, beyond that, will the noble Baroness assure us that this would not be a good idea? She may know that the private sector's box-ticking approach, whereby non-executive directors are regarded as non-independent and somehow polluted after nine years, is now being abandoned. Surely she can state clearly that that would be the wrong approach for pension fund trustees.

My Lords, my understanding at the moment, unless the regulator issues a code of practice to the contrary, is that it is for the individual rules of the schemes to determine the terms on which trustees are elected and chosen. I have seen nothing to suggest that that will change.

moved the Chairman of Committees:

My Lords, the Administration and Works Committee decided to rename the building as the name "Fielden House" had no particular connection to the House of Lords. The origin of the name is not certain, but the building was probably named after the developer who backed the project in the 1930s. The name "Abingdon House" is politically neutral and will assist visitors and others to find the building, located, as it is, just off Abingdon Green.

My Lords, I am grateful to the noble Lord for that Answer, and I congratulate whoever was responsible for the research that went into producing it. Might I suggest that it would be more appropriate in future were such changes to be the subject of a more open process and perhaps a degree of consultation? I also suggest that it might be appropriate to choose to name houses within the parliamentary domain after distinguished past parliamentarians. In that context, we might have suggested that that hugely distinguished parliamentarian, the radical 19th-century reformer who made an immense contribution to British national life, Mr John Fielden, would have been an appropriate choice.

My Lords, on the noble Lord's first point about having an open process, this decision was made unanimously—there was no argument, as I recall—within the Administration and Works Committee, which your Lordships have tasked with dealing with this kind of thing.

With regard to parliamentary connections, my research, which the noble Lord was most kind about, has led me to research the Member of Parliament for Oldham—to whom the noble Lord referred—Mr John Fielden. He was a great campaigner for factory reform and wages. However, the Dictionary of National Biography notes that apart from a certain tenacious loyalty, Fielden,

"was not otherwise an impressive or effective MP",

whose thoughts,

"seldom ranged beyond the uninspiring realm of industrial statistics".

My Lords, I suggest to the noble Lord that there is another connection between this House and Fielden House in as much as the property was owned by the Church of England and was sold to the government at a good price. It was the place where the Archbishop's appointments secretary worked, so I guess that all the names of those who appear on these Benches have, in times past, been discussed within Fielden House. Given that we have the Bishops' Bar where, as I understand it, bishops used to dress and undress before it was turned into the Bishops' Bar, I wonder whether a more ecclesiastical title might have been appropriate.

My Lords, the right reverend Prelate refers only to the last occupants of Fielden House. When it was first built in 1937, it was occupied by the London Midland and Scottish Railway, so perhaps it should be named after a prominent railway person. It then became the Scottish Office, as it then was, between approximately 1940 and 1955, so no doubt various Secretaries of State for Scotland—if that is what they were called in those days—might have liked it to be named after them. Since then, until we bought it in 2001, as the right reverend Prelate said, it was leased to the Church Commissioners.

My Lords, does the noble Lord agree that it seemed to those of us on the committee entirely appropriate that the house should be renamed, when it came into House of Lords occupancy, after the Earl of Abingdon. He had a house approximately there and the green is named after him. Abingdon House is a very welcome addition to the accommodation available to your Lordships and their staff, and we appreciate it very much indeed. We are very grateful to the Church of England for being willing to sell it at an appropriate price.

My Lords, the noble Lord the Opposition Chief Whip is absolutely right. Abingdon was a distinguished person; both the green and the street were named after him in 1750, after the road was widened and improved. The Earl of Abingdon's residence stood on the site around 1700.

I believe that the building has been a great addition to the properties owned by the House. It provides accommodation for 66 Peers and eight staff, and there are three new meeting rooms. I understand from those who have moved in, which happened only at the beginning of last week, that everybody there is very happy with the building and thinks that it is a great addition.

My Lords, could not the noble Lord be a little more generous to Sir John Fielden? He hailed from Todmorden, just down the Calder Valley from me. It seems to me that someone who introduced the Ten Hours Act 1850 demands a little more attention and consideration than that which the noble Lord has given. I have to say that I would have stuck with the name—I understood what it meant.

My Lords, when I spoke about John Fielden MP I made it clear that I was quoting from the Dictionary of National Biography. I was not inventing the phrases that I used; they are from that book—and who better to describe a person than that?

My Lords, in the context of the explanation given by noble Lord the Chairman of Committees of what underlay the connection with Abingdon Green, is he aware that the winner of the architectural competition to redesign this palace after the Great Fire of 1834—Mr Charles Barry—was born in Bridge Street, across the road from the Houses of Parliament? Therefore, the principle of propinquity has a good pedigree on the parliamentary estate.

My Lords, I am sure that the noble Lord is right. As a matter of interest, as noble Lords have mentioned the practice of changing names of buildings during their history, the Scottish Office was housed in Fielden House—or Abingdon House as it now is—between 1940 and 1955. It then changed to Dover House, which was the third name that that building had had, having originally been called Melbourne House, then York House and then Dover House since 1831.

My Lords, I am sure that the Chairman of Committees would want my appreciation. We have gone from the situation when I was introduced in 1998 and for two years had no office and no desk to that which applies now, which is so different. Will he agree with me that we should put on record our appreciation to all the staff, who made the move so smooth, shifted all our numerous papers, connected our computers and provided tremendous artworks on the wall to boot?

My Lords, I am most grateful to the noble Baroness, and I am sure that the many members of staff involved in the move and in the process of refurbishment of Abingdon House will be much appreciative of what she has said. The noble Baroness mentioned the artworks, which have been very well received. The Works of Art Committee purchased 22 original travel posters, which noble Lords may have seen exhibited in the Royal Gallery before Christmas. I have further good news in that Shell has kindly donated a further 20 reproductions of its 1930s posters, for which we shall also find a place.

My Lords, while welcoming the addition to the accommodation as a user of it and having no objection to the change of name, I must ask the noble Lord the Chairman of Committees whether he will get up on his stepladder and change the name above the door, which still says Fielden House.

Yes, my Lords, that will happen—but sorry, no, I will not get up on a stepladder and change the name; somebody else will. The point is that we have had to make an application to Westminster City Council so that the emergency services are aware of the change of name. Once the formal registration is completed, which should not be too long now, the name on the building itself can be changed.

moved Her Majesty's Government:

My Lords, since the tsunami struck, British officials and police teams have worked tirelessly in support of UK victims and relatives. The Government are immensely grateful to all those who have devoted themselves to the biggest consular operation that we have ever mounted. In the light of this tragedy, there are a number of issues relating to our emergency response which we shall need to look at again—and we shall do so.

My Lords, I thank the noble Baroness for that response, and congratulate all the people who have worked so tirelessly in helping those who have lost family and friends in this terrible disaster. However, I am sure that the Government are aware that very many of the survivors and families feel very let down by the performance of the Diplomatic Service both in Thailand and the UK. It is clear that communications, particularly initially, were totally inadequate. Even today, we have only one pathologist and one dental expert in Thailand. Will the Government institute an inquiry, report back on the performance of the Diplomatic Service and make a public response as soon as possible?

My Lords, of course we shall look into such criticisms very carefully. People suffering in these terrible circumstances deserve the very best help that should be given to them. I am confident that in the majority of cases, the very best help was given and is indeed being given as we speak. The Foreign Office and police are working hard to get British victims who have already been informally identified home as soon as possible. They are also fully involved in the international efforts led by the Thai and other governments to identify all remaining victims.

Of course, the noble Lord, Lord Laidlaw, is absolutely right: there are lessons to be learned. We are looking in detail at all aspects of the handling of this tragedy.

My Lords, does my noble friend appreciate the uncertainty surrounding relatives of the deceased persons, victims of the earthquake as well as the tsunami? As I understand it, they face years of uncertainty. Would she hold out to them, so as to avoid the complexity and delay involved in making applications to the probate court, that the Government will move swiftly with regard to this matter?

My Lords, the Government do appreciate the uncertainty to which my noble friend referred. In making progress on the legal status of those missing in the tsunami, we see that as a priority for the families and the Government. We are working very hard to resolve the issue. As a matter of urgency, the Foreign Office, the Home Office, the Department for Constitutional Affairs and the police are working to clarify the legal status. I hope that we shall be able to make an announcement on that in the next few days.

My Lords, the first reply that the noble Baroness gave to my noble friend Lord Laidlaw is a little worrying in the sense that there has been very widespread criticism and unfavourable comparisons with the apparently more efficient operations of the German, French, Swedish and Japanese foreign offices, and others. Clearly there are some very important lessons to learn here, in case, God help us, we ever face such a tragedy again. Will she assure us that there will be a very stringent look at what went wrong and how it can be put right?

Could the noble Baroness just confirm, following what she has just said, that the rules following the freezing of assets of victims, when their bodies are not found, which would normally last for seven years, are going to be revised to bring some comfort and reassurance to the victims' relatives?

My Lords, as I said, this matter is very much under investigation and an announcement will be made shortly.

On the matter of the lessons, I reassure noble Lords that in an incident of this size it is inevitably important that lessons are there for all of us, and it is crucial that we learn from them. But our staff were immediately deployed, as soon as this dreadful disaster happened. The Government's response, as soon as the earthquake happened, was that there was an immediate deployment of staff from our High Commission in Sri Lanka and our embassy in Thailand to the worst affected areas.

On 26 December, we immediately—that is, within two hours—set up an FCO emergency response centre in London. We had such a large number of calls that, when numbers were at their very height, there were 40,000 calls a day coming in to the police centre that took them. They had 350 staff working on those calls. In an ordinary day in this country there are 25,000 999 calls—in this case there were 40,000 a day. People were working flat out.

Police and forensic teams are now in those areas. They went out on 30 December, and there are now 97 police officers looking at identification, which is one of the most important problems in the whole issue.

My Lords, having experienced the events in Thailand, I beg to disagree with some of the points made by the Minister. On the ground it did not feel as if there were an immediate response.

Moving to the broader issue, when repeating the Prime Minister's Statement of 10 January the Minister assured us that elements of the review would include the length of time taken to deploy logistically. The Minister has just told us that it took five days in Thailand—until 30 December. Five days, arguably, is a little bit too long. Can the Minister confirm whether in talking about lessons learnt and reviews that a cross-departmental review will include not only, naturally, the lead departments—the FCO and DfID—but also the Casualty Bureau Appeal Centre in Hendon and the Centre for International Forensic Assistance? Will she also assure us that the results of this review will be made public? Finally, will she look into the request I made in that earlier debate of putting in place local and regional contingency planning so that the Foreign and Commonwealth Office and DfID can react somewhat faster?

My Lords, in answer to that final question, local teams already exist. But I shall write to the noble Baroness if I need to develop that. As far as deployment is concerned, the ambassador and his staff in the areas were deployed immediately; there was no wait of the number of days that the noble Baroness referred to. Of course, I respect her view because she was there at the time. I am giving the House the overall point of view and the statistics that we have.

The sheer scale of the tragedy was unprecedented. It required constant reinforcement of staff and flexibility. The noble Baroness referred to the casualty figures and their compilation at the centre in Hendon. I hope that the House will be interested to know that those figures are falling. They are available in the Library. I will not take up time now, but, thankfully, the figures are falling in most categories each day.

My Lords, in the spirit of learning lessons from what must have been an overwhelming experience for everybody involved, would the Minister be willing to look at the Foreign Office helpline to which she has referred? A neighbour of mine had a son in Thailand and spent two days trying to get through and never succeeded. I appreciate that this was an unprecedented emergency, but will she look at the Foreign Office helpline?

My Lords, we will certainly look at that as part of the lessons learnt. I would remind noble Lords that some members of the public were using the emergency number not to report friends and relatives in the area but to ask for information about travel advice and where to send donations. That clogged up the telephone helpline.

rose to call attention to the state of mathematics teaching in schools; and to move for Papers.

The noble Lord said: My Lords, today's debate is motivated by the report, Making Mathematics Count, which was written by Professor Adrian Smith. His report was on post-14 mathematical education. I intend to view today's debate more broadly to include all school mathematical education. I also add a sort of declaration of interest; namely, that Professor Smith is Principal of Queen Mary, University of London, where I spent a very large part of my academic career.

When I say that I want to look at this more broadly, I want immediately to mention mathematics in primary schools, and to assert that much of the problem of mathematics and mathematical ignorance arises from lack of teaching or poor teaching when young people first come into contact with elementary calculation. But having said that, I should also add that most people—and not least employers—are confused because they believe that mathematics is just calculation. What is much more important is serious mathematics, which, as an intellectual discipline, is one in which rigorous proof is of the essence and calculation is hardly more than incidental.

Certainly we want everyone to be numerate in a calculation sense. I do not doubt that it is important for performance in the workplace that people are numerate in that way. But the reason for doing maths in schools is wider and deeper than that. It is to give young people direct experience of deductive, rational argument in its purest form. That is important for everyone and not merely for those who go on to become professional mathematicians, pure scientists or engineers.

The obvious analogy in my judgment is with English poetry. I imagine only a minority—probably a tiny minority of adults—read the poetry of Keats and Shelley, let alone Milton, and they probably think that Bob Dylan is a serious poet, but I am certain that all young people should at least be acquainted with the very best that English literature has to offer. I would say the same is true of mathematics. It is a subject for everybody.

Having said that, I recognise a point that will probably have been made by one of the many distinguished scientists who adorn our Benches—if any of them had bothered to turn up for today's debate—namely; that no serious study of natural science or engineering, or indeed nowadays of my own subject of economics, is possible without a proper grounding in mathematics. If that does not happen in school, it is not in the least surprising that the number of prospective students of science is lower than it might otherwise have been and that one ends up eventually with university science departments closing.

The general point, however, is that all students at school—and not merely those going on to do A-level—should be taught by people who have a proper understanding themselves of mathematics and who have been trained to teach the subject. I note with a degree of alarm in Adrian Smith's report his discovery that there are apparently very significant numbers of teachers in schools qualified to teach mathematics but who do not teach it; they do other things.

In that connection I must draw your Lordships' attention to the fact that training places for teachers of maths in teacher training colleges, or whatever they are called now, are regularly unfilled despite the valiant efforts of government to offer financial incentives to people to take up the places. The reason is that what little research we have shows that the average rate of return to an investment in maths degrees is higher than in other subjects, but that is because these mathematicians are not employed in schools or education more generally.

Again, as Adrian Smith points out, if income is what matters in people's job choice, then the finance industry is enormously more attractive than education. I must add that, compared certainly to when I and probably most of us were at school, the typical schoolteacher—and this is more general than just mathematicians nowadays—is subject to criticism from all sides and therefore the notion that they can compensate for lack of income with job satisfaction becomes more and more far-fetched.

I might add that the current policy, which seems to be supported very widely, of placing more of the cost of higher education on students must lead them to place more emphasis on lifetime income in deciding what to do after graduation. In the case in point, mathematicians will have an incentive to look elsewhere than schools for employment. While they may have a desire to enter public service, it becomes less and less affordable for them to do so. All of that must be placed in the context of the most recent research that I have looked at, which appears to indicate that not merely are the returns in teaching lower than can be earned in other work—I shall be interested to hear what my noble friend the Minister has to say about this matter and about the subject in general—but the gap has grown in the past 10 years.

I have already indicated that while basic numeracy is important it is far from what mathematics is really about. I make a similar point about data handling, which again shows how out-of-date I am. When I went to school I would not have had the faintest idea what the words "data handling" meant. I gather that it is now a very important part of the syllabus. It appears that data handling is quite different from what one might understand by statistics, let alone probability. The report says that the data handling component of GCSE ought to be re-examined and the time spent on it reduced. I am bound to say that I very much agree with that. In particular young people need to be taught rather more about matters such as spurious accuracy in data. My own test for innumeracy is the solemn reading out of figures—frequently by Ministers, I say to my noble friend—to several decimal places when the underlying data are hardly accurate to five percentage points.

I revert to pure mathematics as an intellectual discipline. As an amateur who loves pure mathematics, I regard it and mathematical logic as part of the greatest expression of the human intellect and the human imagination. It stands alongside serious music—that is, classical music—and literature as the true flowering of our civilisation. It is deeply to be regretted that so few young people in school have any acquaintance at all with pure mathematics in its strict sense. To take an obvious example, it has been known for 2,000 years that root two is not a rational number. But I wonder even how many A-level students would understand what I have just said, let alone be able to reproduce the proof that was known to Pythagoras and others.

I looked at current A-level papers in preparing for this debate. They, too, seem to be much more about calculating, albeit at a more advanced level, than any requirement to prove anything fundamental and in a rigorous form. My other worry about A-levels, at least as regards the papers that I have looked at, is that I discovered that I could do all the questions on the papers. I am bound to say that tells me absolutely that standards must have fallen. Therefore, I certainly support Professor Smith's recommendation that we need to strengthen the curriculum in a way which makes it more stringent and a much better test not only of the intellectual ability but also of the intellectual input, if you like, of the students doing these courses and these exams.

I conclude as I began. Professor Smith's report is of great importance and he is to be congratulated on it. However, it does not lie in his hands, or even in your Lordships' hands, to do anything about it. That is the task of government and it should be at the top of the department's priority list. I beg to move for Papers.

My Lords, it is a great honour to follow the noble Lord, Lord Peston, who I have admired for many years, albeit from a distance. I am very glad that he has chosen to raise this subject in debate.

I am good enough at mathematics to know that I am not a mathematician, that I have my limitations and that I fall short of being able to enjoy the sort of beauty that exists in pure mathematics. However, I am close enough to see it and I am close enough to understand it in others. So I have to trudge along in the field of computation. Indeed, I have spent most of my life in the field of computation. I suspect that most of us do. Very few people really get the chance to exercise pure mathematics. It is a wonderful thing to be able to do. I would like to be able to do the Times crossword better than I do. One gets a lot of pleasure out of these intellectual exercises. However, it is not really the substance of life for most people, and certainly not for most students.

My recent exposure to the subject has comprised helping my children through their GCSE mathematics. They are both competent practitioners and I have not had to struggle too hard but I was struck by the grim syllabus we have evolved for mathematics. As the noble Lord, Lord Peston, says, it has none of the joys of pure

mathematics. As someone for whom mathematics is a beautiful thing, you cannot get any joy out of it. Nor can you get any practical use out of it as someone for whom mathematics is a tool. If you look at some of the things that people are asked to learn to do, and the sort of questions that they are asked in examinations, you just think, "Why?". What earthly joy or what earthly purpose has all this?

I have been an accountant and a merchant banker and studied physics at university, but I have never used most of the stuff that is in a modern GCSE syllabus. Even in my life it has not been necessary. As I say, calculating the volume of a cone is not something which brings much joy, albeit that I cannot think of a purpose for it at the moment. It seems ridiculous to me that we should have allowed ourselves to get into this pass because mathematics, and a better understanding of mathematics, would be useful to us if we taught the right kind of mathematics.

If, as the noble Lord, Lord Peston, said, we ended up with a better understanding of statistics, it would double the quality of Ministers overnight. We endlessly see articles written on the basis of scientific papers and then spouted on ministerial Benches—my party when in government was as bad in that respect as this Government—but when you get down to the research paper itself, there is some statistical technique being used to amplify data so that the result you are getting in words bears no relation to the result that is there in figures. My favourite example is the Tennessee Star Project on class sizes, which constituted the great proof that you need small class sizes to provide good education. When you got down to the paper itself, you found that if you halved the average class size, you got a 1 per cent improvement in results. Yes, it was statistically significant because they had carried out the research with lots of pupils and it was absolutely certain that this was a reliable result. However, it was not a useful result because you could find better ways of spending money and improving education than doubling the cost and getting a 1 per cent improvement.

I refer to the aversion we have in our society to risk and our failure to understand what risk is. We are happy to go out and buy a lottery ticket but shrink from the ordinary risks of everyday life to the point at which we deny ourselves many pleasures and greatly increase the cost of others because we do not have a rational understanding of risk. That is all based on mathematics and there is absolutely no reason why the mathematics we teach in schools should not have some relationship to the mathematics that we use in life. That would give children some pleasure in being able to use this subject in a way which would reinforce their willingness to learn it and their appreciation of its usefulness.

There is very little relationship in mathematics to the common applications of science that people see. The mathematics behind computer games is fascinating stuff. A book entitled, In Code, was published recently about number theory and the basis for encryption. It is a totally readable book. It demonstrates the fascination that people have with the application of mathematics in real life. But there is none of that in the syllabus. There is no connection between the properties of numbers and the fact that they might have a use.

I know that at the end of the day we want mathematicians who wander off into their abstruse spheres and think high thoughts, but most of us, if we are going to learn mathematics, will benefit enormously from having it connected. There is no reason why mathematics cannot by linked sensibly with other subjects. Surveying or architecture would be fascinating subjects to study at GCSE level. You would get your element of mathematics and an element of appreciation plus history. Crossing the subject boundaries like that and involving mathematics suddenly gives you an understanding of why geometry might be a useful subject rather than the dreadful, dry, purposeless questions which sit in mathematics papers.

As the noble Lord, Lord Peston, implied, you are never going to get great mathematicians to teach mathematics. Anyone who is zip at the subject is in the City or somewhere else earning a great deal of money, not least because they are capable of doing original work there. They are capable of tackling something which is new and producing a new result. Even if they are not capable of inventing a new mathematics, most mathematicians want to be involved in doing something new, which is where you are given the opportunity rather sitting down in front of a class of 14 year-olds and doing what you did 10 years ago.

If we want people to teach mathematics with relish, we ought to allow it a human side that connects it with real life and which allows it to be taught well and with an enthusiasm that is transmitted by people who, as the noble Lord, Lord Peston, said, have the expertise to teach mathematics, but whose main interest may well lie elsewhere—in a subject such as economics involving people, albeit quite remotely if you are doing classical economics. None the less, economics, politics, history, languages and other great subjects, all relate to people and the pleasures of real life.

You can see that, too, in the way the sciences are dealt with. The most popular science is biology, then chemistry and physics because you are getting more and more remote from real life. The physics syllabus is the one I followed when I studied physics. I liked it, but that is me. I can really understand why people do not want to know about the motions of vibrating springs or calculate what is happening to them. It is not something which has resonance, as you might say.

We ought not despair of mathematics or pupils, but we ought to look at what it is we are asking them to learn. We should start from the base and say, "Let's find ways in which we can give them some insight into the joys of the subject and the extraordinary beauty of the patterns and the way in which mathematics can move you from one place to another without seemingly having to understand what lies in between". It is an extraordinary thing to be shown. If we take them on a journey which involves something of real life rather than artificially constructed problems about steam engines, or whatever else might amuse the problem setters, we will really start to capture people and give them the feeling that it is something in which they wish to be involved.

If we go down that road we will find that people whose main subject is not going to be mathematics have picked up enough of it to enhance what they intend to do and the decisions they will take in their daily lives. We will have built a stronger foundation for the general teaching of mathematics. If that occurs, I shall be absolutely delighted. But the core to it is reforming the Qualifications and Curriculum Authority because that is where all these difficulties and drudgeries arise. We need much more innovation there. If I were to suggest one thing to the Government I would say, "Abolish it" and let us have examinations set and invented by people who really care about these things. Let us have some innovation and forward thinking. Let us have some diversity because all we have at the moment is stasis and decay.

My Lords, the noble Lord, Lord Lucas, has prompted me to consider for myself what use one is making of one's adventures into perhaps the higher realms of mathematics. In my case it is the probability theory from time to time just to see what the chances are of this or that. One makes use of that. One almost wants to turn to a blackboard, which is not there, when one is thinking about these things.

My congratulations to the noble Lord, Lord Peston, are not just conventional. He has introduced a subject that is very rarely debated in either House. He has pointed out that mathematics is not just calculation, which it is essentially for most people, but that a much wider use can be made of it. We perhaps should take that into account when we consider the work done at universities in teaching some of our young men and women.

It is right to say that there is the real problem of the cost to students of taking university courses. It is a very serious problem in the context of mathematics, which is a great expression of intellect. Mathematics is not the easiest route to earning the kind of money needed to repay the cost of university study.

For myself, mathematics is probably the only discipline which would be unaltered in any parallel universe which may exist. It is this abstraction which one finds so fascinating and which impels one's enthusiasm. It has a fundamental role in the practical aspects of our industry, economy and all parts of our practical world. I believe that although many other disciplines are necessary, mathematics as well as English are very special. They stand out above all others. Although they are all important, we need to take into account what Smith says in his report at page 14, paragraph 1.15. He points out that,

"in many respects [mathematics] is 'special' and that we must be prepared to consider, particularly in terms of organisation, structures, and investment, that different approaches and prioritisation may be required for mathematics"

That is wholly right and very important indeed.

I was an engineer in my younger days and I took a number of qualifications including an external degree at London University, which included a very high level of mathematics. I became particularly interested in the mathematics side of my studies. There was a lecturer at the college evening classes that I attended who was the eighth wrangler of Cambridge University in his day. He gave one a feeling of the greatness of mathematics and stimulated interest, which is vital to anybody who wants to regard mathematics as a serious and fascinating subject.

By contrast, another lecturer would put down equations on the blackboard without setting out their meanings. The contrast between these two kinds of instructional education is particularly important in showing that the one can enthuse a person wanting to look at mathematics and the other can regard it as a conventional background to the kind of work that that person is undertaking. This contrast showed me the importance of the subject and that how it is taught is so important to how students can be enthused.

Like the noble Lord, Lord Peston, in preparation for this debate, I have been looking at certain aspects of mathematics. I was looking at some differential equations to see just how much I understood them at this rather remote time of my life. I understood what they were about. I realised the concept of it all, but much of the detail I had lost long ago.

From the note that is produced by the Mathematical Association we can see the decline in student numbers. On page 23, in table 2.2, in the very important report Smith report, we see that the teachers qualified in mathematics have declined from 46,500 in 1988 to 30,800 eight years later. That is an enormous decline. Given the numbers interested in the subject and in university education, one might have expected to see a big increase.

I know there are problems about what is included, but it shows the decline in the numbers of those wanting such detailed knowledge of mathematics in their background. Also, 20 per cent of those who are teaching have no post-A-level qualification. Clearly, that is wrong. One needs to have quite considerable expertise to interest students and to create sufficient enthusiasm in them. The Mathematical Association, in a useful response to the post-14 mathematics inquiry, in paragraph 3.6, deals with the decline in A-level results. We see that in 1989, 12.8 per cent of students studied mathematics but that figure fell to 7.7 per cent in 13 years. That decline came in the late 1980s, but we have seen a further decline in more recent times, which is of great concern to us now.

Why has that happened? I believe that the decline in manufacturing industries may play a part, but another cause may be that the discipline of mathematics is different from that of other subjects taught in schools. In many subjects, an examination question can be answered in different ways; one can modify one's answers and still be broadly right. Mathematics is a much tighter discipline. There is usually only one way to produce an answer.

We have seen the perils of too frequent examinations. How can we repair the damage? The frequency of examinations is one aspect. Assuming a teacher has a certain amount of enthusiasm and background knowledge, frequent examinations do not allow a teacher to develop the broad approach that is required.

Are employers doing enough to influence the decline? They can play an important role by the very demands that they make on the students to study certain aspects to provide for a career structure that will be of use to them. Looking at paragraph 1.7 on page 12 of the very good and most valuable report of Professor Adrian Smith, we see that major employers in the engineering, construction, pharmaceutical, financial and retail sectors all make clear their continuing need for people with appropriate mathematical skills.

Given that pressure, I would have thought that there would be much more interest and enthusiasm for undertaking mathematics, just to meet the requirements of potential employers. Unfortunately, that has not happened. Why are they not demanding the standards that I am sure the schools and universities will be able to meet?

The next question is: should mathematics be compulsory after the age of 16? The Mathematical Association, in paragraph 2.1 on page 5 of its very useful report that has been sent to us, considers the possibility that there should be compulsory mathematics education for all students beyond 16. Although that is attractive, it should be carefully weighed as a priority against the need to improve substantially the quality of learning up to the age of 16. It is said that the quality of learning is central to the contribution that mathematics can make to this country's future. That is probably right.

The Roberts report, published in April 2002 pointed out the mismatch of the supply of young people for science, engineering, financial services and computer sectors. So there is a failure to meet the requirements.

On the suitability and qualifications of teachers, the report points out that 50 per cent of maths teachers are over 50 years of age. The figures are not exact because two kinds are taken into account, but it shows quite clearly that the maths teachers in this country are much older than teachers of other subjects. The worry is that the shortage of qualified teachers to come will lead to problems. Figure 2.2 on page 30 of Professor Adrian Smith's report shows that vacancy rates in maths are much the highest in a whole range of subjects. That cannot be right. It concerns our future industrially, commercially and in wider areas. We need to encourage people much more than we have done so far and attract to this important discipline many more young people than we see at present.

My Lords, I hope that in the wind-up speech we shall hear a great deal about how the Government are taking the recommendations of the Smith report further. It is an extremely valuable and highly detailed report and it makes some important recommendations. I shall touch on some of them. In no sense am I a mathematician, but I declare a parental interest as the father of a son who is embarking on a PhD in pure mathematics in the United States. If there are opportunities here still for people like him, I hope that, when he has finished, he will be attracted back from the United States.

One of the first things that Professor Smith says in his report is that maths is important "for its own sake". It involves logic and calculation; the enjoyment of mathematics seems to me to be an important aspect which, I regret to say we are in danger of losing as a result of changes to the school syllabus. The proposals that maths A-level should shift more towards functional mathematics and away from pure mathematics seems to me to be part of what is wrong.

It is important to remember the number of different functions that mathematics plays in our society and economy. Professor Smith refers to logic, calculation, relevant work skills, the gateway to many other subjects, engineering, computing and even economics. I cannot resist saying to the noble Lord, Lord Peston, that we persuaded our son to take an economics course at an American university, where he is currently, with the thought that he may do something a little more relevant in the real world. His conclusion is that economics, as now taught, is muddled mathematics.

The report makes it clear that in Britain there is a crisis in maths teaching at all levels. Universities have suffered a decline in numbers studying the subject. From the latest figures that I have, I am happy to see that that decline appears to have stopped, although the numbers going through are not sufficient to sustain mathematically qualified teachers in schools.

A number of university maths departments are now surviving by, in effect, providing service teaching for other departments and the Government have to recognise that the system of university funding provides perverse incentives to reduce not just chemistry departments but also maths departments. There are three or four international-quality maths departments in universities in this country.

One of the objectives of all those concerned with higher education in this country should be to reverse that decline and to increase that number. The report suggests that regional maths centres should be developed as part of the national centre for educational excellence in mathematics. Those regional maths centres should be linked closely to regional universities. That means that there needs to be a top-class maths department in every region of this country, which sadly is not the case at present.

We have seen the figures on teacher supply; we understand what is happening in secondary schools where the number of those going on to A-levels is sadly declining. One of the teachers who taught my children, who has become a teacher-administrator, having worked for the QCA since then, tells me that one of the biggest problems is that too many students between the ages of 14 and 16 see mathematics as boring and obscure and more difficult than other subjects; therefore something

that you should get out of as quickly as possible and do something that will get you a better grade. How do we reverse that?

I declare a different interest as a shareholder in Filtronics, a company with its headquarters in Saltaire. It employs maths graduates and it works in narrow band electronics. Filtronics attempted to stimulate maths teaching and qualified mathematicians who it could recruit in West Yorkshire through a six-year scheme, in which it worked with relevant university maths departments and schools to provide small bursaries of £750 to people who stayed on at the age of 16 and studied maths. It underwrote schools with fewer than 10 students in their A-level maths classes to carry on teaching the subject at that level rather than to take the easy way out and stop it. It also sent professionals into schools to talk to 14 year-olds about why maths is fun and why maths is useful in your future career. They claim that over six years and at a cost of £125,000 a year they have enormously increased the throughput of students staying on to study maths in schools.

That is one experiment done by a particular company with particular assets at its disposal, but clearly we must learn from it. We must get practitioners into schools; we must get universities and schools working together much more; and above all we must enthuse that crucial group of 14 to 16 year-olds to understand that it is worth continuing with the subject. We ought to encourage the Government to engage not just business, but banks, which after all recruit a great many of these people, to work in partnership with them to get that enthusiasm going.

What other remedies do we have? Clearly, at university level the Government must make clear that maths departments are part of the core of any university, and to some extent they need to be treated differently from some other departments in funding terms. There is a general problem with the funding of particular low-level recruitment departments in universities, but we must not let maths go the way that chemistry is in danger of going.

I note a number of experiments with teaching internships for maths undergraduates, which is a way of providing them with some additional funding and showing them that teaching and learning can go well together. As it happens, my son taught in Uganda for a summer at the end of his first year of university because one of his schoolteachers had gone off to Uganda to teach maths. It made a huge difference to his understanding of the subject, and he enjoyed it enormously. Again, that is the sort of thing that the Government and others could be encouraging. We should be sending more practitioners into schools, and we should be teaching the history of mathematics much more at that level, because that is part of what explains to students why maths relates to real life. That would help the flow into A-levels from there.

Professional training for the many teachers who have come into maths from other subjects is clearly important. I trust that in the wind-up we will hear much more about what is going to happen about a national centre for excellence in maths teaching, and how it and the regional centres will be set up.

There are other things that one can do. My son was lucky enough to be entered by one of his schoolteachers in a not-bad comprehensive for the Maths Olympiad, a major scheme that gives extra assistance to bright students from different places, and he went through to the finals. I regret to say that only three students from state schools had got through to the last 20, which tells us something about the quality of teaching in independent and state schools. Some teachers from independent schools were extremely helpful at that stage. When we come to debate the Charities Bill, perhaps the Government might like to consider asking our independent school sector to run extra schools for bright children from the state sector at weekends or in the holidays. I know from the experience of friends that the independent sector pays its maths teachers far, far better than state schools. We could ask them to do that as a contribution to the public interest.

It is clear that we must encourage good maths teachers not to rise too quickly, as too many of them do, to become assistant or deputy heads because they are very good at constructing the timetable while no-one else can. Instead, they should stay on as senior teachers with the benefits that they can gain from that. It is also clear that we should be doing more to attract people who have pursued other careers to return to teaching in their 40s and 50s. The City of London pays mathematicians and physicists extraordinarily well—I declare a different parental interest in that—but they want to push you out by the time you are 40. Incidentally, by the time you are 40 you do not want to continue working 10 to 12-hour days. We should be trying to develop schemes to encourage those people to return to maths.

I repeat that maths is the core of education as much as is English; numeracy, logic and calculation stand alongside literacy as skills that we should encourage all children to learn, not only because they are useful, but for the joy of learning.

I am delighted to congratulate my noble friend Lord Peston on introducing this debate and moving the Motion, which is not, incidentally, on pure mathematics. It is on mathematics which, in my experience, most people think of as pure arithmetic rather than pure maths. In fact, in my studies for an accountancy qualification, pure mathematics never entered into it. Equally, as Chief Secretary to the Treasury, in my experience pure maths never entered into anything—I see a former Permanent Secretary who can perhaps confirm that. Arithmetic may just about have entered into my work as Chief Secretary over the years.

The importance of maths has been emphasised by many, not least by Professor Adrian Smith in paragraph 0.12 of Making Mathematics Count:

"The Inquiry regards it as vital that society fully recognises the importance of mathematics; its importance for its own sake, as an intellectual discipline; for the knowledge economy; for science, technology and engineering".

There is no reference to economics—I do not know what my noble friend has been doing all these years. Economics was not mentioned by Professor Adrian Smith in his excellent report.

Most of this debate has concentrated on education in secondary schools and universities. In practice, many experts believe that the problems that have arisen stem from failures in primary schools; right from the beginning. Indeed, some experts have said:

"The introduction of numeracy hour into primary schools may have damaged children's long-term understanding of maths".

I am not sure about that, but it came from a government-funded report on research by London University, although I gather that the actual research was done by two students from the University of York. They argue that children may have been taught bad habits, and they refer to what is called "quick-fire mental arithmetic sessions". It is a long time since my primary school days, but I am sure that we had quick-fire lessons, which I do not think did me any harm throughout my career, either as an accountant or as Chief Secretary. I should be interested to know whether the Government have a view on the matter, or whether they let it go by.

The "experts"—I put the word in quotes—fear that falling numbers of maths students at A-level stem from primary level, where unqualified staff simply do not understand the subject they are teaching. That is rather disturbing, and I hope that the experts are wrong. I shall be glad to hear whether the Minister thinks they are wrong.

I turn to the excellent report on secondary education produced by Professor Adrian Smith, which was published as long ago as February last year. It follows a review by Sir Gareth Roberts, which was carried out, I assume, following an instruction from the Chancellor of the Exchequer, while Professor Smith's report was sought by the Chief Secretary to the Treasury. I do not know whether there are implications that that report was requested by the Chief Secretary rather than the Secretary of State. I see that Professor Adrian Smith sent his report directly to Charles Clarke, who was then the Secretary of State for Education and Skills. I assume that he sent a copy to the Chief Secretary because funds were required. I hope that that does not signify a significant change in who should control education or any other departmental expenditure.

The report, which has been mentioned often in the debate so far, refers to the deeply disturbing fact that many believe there is a major crisis in the teaching of mathematics. Professor Smith noted three major areas of concern. First, the curriculum and qualification framework has failed and fails to motivate students. Secondly, there is a serious shortage of specialist maths teachers. Thirdly, there is a lack of support for the infrastructure.

Professor Smith makes some 44 recommendations—I shall not refer to them all. There are three areas that are worth considering. First, in Chapter 1, entitled, "The Importance of Mathematics", he recommends the creation of a high-level post. I am glad that the department has advertised such an appointment. I shall

be glad to know whether that appointment has been made, or whether the temporary person put in charge, Anita Straker, has been made permanent.

Secondly, Chapter 2 refers directly to one of the central points in the debate so far, entitled:

"The Supply of Teachers of Mathematics.

The issue of pay and other incentives has been referred to already, not least by my noble friend Lord Peston, who pointed out that the financial incentives are not in favour of producing more maths teachers. The question of paying more to provide such teachers will no doubt concern our right honourable friend the Chief Secretary. I do not know whether some discussions have already taken place, but no doubt the Minister will tell us. Chapter 6, headed,

"National and Regional Support Infrastructure,

is the third issue referred to by Professor Smith in his covering letter. There are 18 recommendations under that heading. I shall refer to just one in the time available. Paragraph 6.1,

"recommends that the work of the National Numeracy Strategy … be continued and built upon, and that resources for mathematics are ring-fenced",

for precisely this part of the problem. Again, I shall be glad to hear from my noble friend whether anything has been done in that regard.

As I said, it is now nearly 12 months since the report was published. We have had a sort of reply—I say that because it is a pretty generalised initial response from the department. It refers to a schedule of work, a 10-year investment programme and a five-year strategy, which we shall have shortly—I should like to know when.

There is too much generalisation in that initial response. To be told that it is dynamic, and so on, is all very nice, but we need something more specific in response to Adrian Smith's excellent report. We are told that there will be an incorporation of vision. I am all in favour of vision, and of incorporating it all over the place, but it is not an adequate response to a serious report.

The initial reply says that the Government will invite tenders by March 2005 for the establishment of the national centre for excellence in the teaching of mathematics. That would be a useful start, but will it be in March, which is now very close? I am glad to see that my noble friend is nodding. Such a centre for excellence could be very useful if it worked effectively.

We are told that there will be an increase in the value of the golden hello. It would have to be a pretty substantial increase to persuade many to stay in teaching mathematics rather than taking up accountancy, where they might feel that there would be a better personal financial reward, even with a small golden hello. No doubt my noble friend will tell us what she has agreed with the Chief Secretary in this regard.

We are told that there will be a development of excellent teacher status, giving top teachers access to salaries of more than £35,000 a year. The Government make it sound like such a huge salary, but how many top teachers will get even that modest £35,000 a year? It will sound a lot to many teachers, but it will not sound a lot to those who have gone to work in other parts of the economy rather than carrying on working as excellent teachers whom we so desperately need.

We are also told to expect the final report in the autumn of a working group that is being set up to sort out the proposed model for delivery of mathematics within a diploma framework. Maybe I have missed it, but I have not seen that yet. I assume that the report should have been published last autumn rather than autumn 2005.

Generalised answers in the initial reply are fine, but it is time that we had specific answers. I have read, as has my noble friend Lord Sheldon, the questions put by the Mathematical Association. I cannot refer to too many of them, but a couple are well worth mentioning. Recommendation 2.2 on the question of teacher supply requires, as suggested by Professor Smith, that a,

"revised form of SSCSS [Secondary Schools Curriculum and Staffing Survey], requiring a mandatory response …should be designed and undertaken as soon as possible.

I hope that we will get it as soon as possible.

I want to end on a more constructive note. In doing so, I declare a non-financial interest as chairman of a non-financial charitable trust, called the Education Broadcasting Services Trust. It has been working closely with universities to produce a disk and a website, which will advantage many in the field. The programme has been running for only a year, but it already gets 10,000 hits per day. It gives pupils and students the opportunity to be taught by major national and international teachers. Help is being given by the Higher Education Funding Council and the likes of the Gatsby Foundation that do a marvellous job in the area.

I gather from the initial response of the Government that they are interested in using the web. Could they provide a little help, although not necessarily to the Education Broadcasting Services Trust? Many other organisations want to work in the area and do a first-class job. I would like to hear from my noble friend that she could get a bit of money—an extra few million pounds from the Chief Secretary, which would really only be petty cash—to help in this vital area.

My Lords, I draw noble Lords' attention to the fact that there has been a miscalculation in the allocation of time for this debate. We are actually five minutes short, so no one must overrun their time.

My Lords, perhaps whoever did the calculation did not do mathematics at school. I also thank the noble Lord, Lord Peston, for introducing the subject, which is of enormous importance. I have a personal reason for thanking him. A little more than 50 years ago, I was teaching mathematics at the London School of Economics, and one of the more promising students in my classes was young Maurice Peston. I feel now that I did not totally waste my time.

Enough has been said to underline the importance of mathematics for me to be very brief on that aspect. It is a wonderful discipline in its own right. It underpins almost all other disciplines, whether physical, medical, social or economic. It is crucial for an understanding of everything that goes on in business, the financial sector and everywhere else, and of the evidence adduced for issues of health, food, taxation and so on. It is at the core of our ordinary life.

I do not really distinguish between numeracy and mathematics. Numeracy is a core part of mathematics. A lot of mathematics is to do with numbers, and pure mathematics is to do with abstract matters, but numeracy is a part of it. I shall come back to that in a moment. For the ordinary citizen's life—to understand what goes on in a mortgage, banking, league tables and political announcements about taxation—an understanding of numbers and how to deal with them is crucial.

What is sad about the necessity for this debate, rather than about the debate itself, is that the concern with the state of mathematics in our society—it is not just in education—has been well known for decades. The Robbins report, with which I was involved, has been mentioned. We drew attention to it 40-odd years ago, and we were not the first. Since then, every educational inquiry of which I can think has highlighted mathematics as a key concern. The National Commission on Education—it was chaired by the noble Lord, Lord Walton—drew particular attention to it. There have been task forces and endless conferences, and somehow it needs a crisis to get a government into action.

The crisis is that, for most of the 1990s, mathematics has been in decline in the world of schools and A-levels. That has been known for 12 or 13 years. One-third of universities now say that they have to put on remedial courses in mathematics to enable students to cope with the subject, so the problem is not new. Given that, all that one can do is at least to welcome that this Government have commissioned the Smith report, and that they have appointed the chief adviser on mathematics, Professor Hoyles. That is good news.

The Smith report has been referred to by all speakers as excellent. The professor is a statistician, so he knew what he was doing. It focuses on teacher vacancies—the worst of any subject in schools—curriculums and the approach to teaching and learning. I do not need to repeat what other noble Lords have said. I want to talk about the fact that the problem, sadly and in a mysterious way, is much more deep-seated than can be coped with, even with good reforms in schools.

I notice that, in welcoming the report, the most recent Secretary of State, Mr Clarke, referred to numeracy and the importance of improving that part of the mathematical equipment. That makes me really worried, because the problem of dealing with numbers goes right through society. Where it comes from is a bit of a mystery, more in this country than in any other, certainly in Europe. I know from my decade as head of statistics in this country that there is more discomfort in the presence of numbers than was ever recognised by

any of my European or even American colleagues. They could not understand why we were so concerned with improving trust in statistics and with misuse of statistics.

I offered my resignation twice as director of statistics because governments of the day were inclined to misuse figures. In one case they did so rather innocently, and in the other they did not understand what the figures said. That is all around us. I remember at that time talking to the head of a very major FTSE company. I happened to say something about compound interest, and he said, "I have problems with compound interest". Then he corrected himself, saying, "To be honest, I have problems even with simple interest". What worried me about it was that, in a way, he was boasting. He was not ashamed. Such a statement would never be heard from a top industrialist in a European country.

I have often asked myself where that slight discomfort and boasting that one is not good with numbers comes from. I think that it comes from a school ethos that regards someone who is uneducated in classics and perhaps theology as truly uneducated, but does not feel the same about someone who is uneducated in mathematics. So there is a very serious problem that goes through the rest of society.

I became really concerned about the matter because—I must declare an interest—of something in a report that I wrote for the Government four years ago. It was called A Fresh Start and was about literacy and numeracy, examining both problems. The numeracy problems are much deeper than the literacy problems. Although there are definitional problems, if you take what is internationally regarded as the definition of severe innumeracy—people who cannot multiply two figures together and certainly cannot calculate change in the supermarket—24 per cent of the adult population are deeply and seriously innumerate. That leads to what other colleagues have been saying about mathematics. It is a very deep-seated problem. In Germany the equivalent figure, with the same test, is 7 per cent.

I come to my conclusions. In tackling the problem of mathematics in education now, priority number one is to implement the Smith report. Other noble Lords have focused on priorities including teacher supply, teacher retention, pay and the constant monitoring of what is happening with such an urgent problem—Smith suggested it should be once every two years. The immediate response from the Government was a little on the vague side as the noble Lord, Lord Barnett, said. I did not feel that the Government were grasping the problem with any real urgency. There will be too many inquiries, committees and so on. I would like the Minister to say that this matter will now be one of serious urgency within the educational strategy. I also hope that Professor Hoyles, the new chief adviser for mathematics, will focus on it.

Priority number two is that I hope that Professor Hoyles will focus, secondly, on primary schools. There is a lot to be done to get children of that age through numeracy, to experience the joy of figures and how they relate to everyday problems on television, on evidence for food and health prices and so on. Children are responsive to that, which could lead to a different approach to mathematics at secondary school—an approach based not on fear and boredom but on excitement.

If, as a result of the debate, the Government take the problem more widely through society—dealing also with family problems, because of the importance of parents in that particular game—then the noble Lord, Lord Peston, will have been justified in choosing the subject.

My Lords, I welcome this debate, initiated by my noble friend Lord Peston, as it raises important issues for our time. Any debate about education could be fully absorbed into the wider issues of the fundamental purpose of education policy: how much it should be about encouraging and empowering individuals to develop, to learn about learning, to become citizens in an increasingly complex and diverse society, to develop values and reference points and to experience achievement and fulfilment. That debate could be about the narrower issues of education associated with specific attainment and with acquiring skills and knowledge for employment.

Whatever the philosophical starting point and at whatever level, it is hard to overstate the importance of mathematics. As the report by Professor Adrian Smith, to which other noble Lords have referred, states, mathematics is important for its own sake as it helps to discipline the mind and develops logical and critical reasoning and problem sharing. It is essential for the development of the knowledge economy and forms the basis of most scientific and industrial research and development. The attainment of basic mathematical skills—whether they are called numeracy or calculation—is vital for everyday living, enabling individuals to participate in their communities, workplaces and places of leisure just as does their ability to communicate by language or, increasingly, to master the empowerment of ICT. If it does not lower the tone of the debate, a game of darts cannot be played without some mathematical skills.

To compete economically, we need to have more people engaging with mathematics at the highest level. To remain a cohesive and inclusive society, we need to enhance numeracy skills for all those currently at school and for those adults whom prior systems have failed. Mathematics is not just a narrow academic pursuit; however beautiful, it has to be part of the mainstream of our lives.

In preparation for speaking today I not only read the report of Professor Smith, but undertook a brief ring around of my local community to obtain an update on how various companies and organisations currently assessed this issue. I spoke to the LSC, the chamber of business, some employers, one of our secondary schools, the LEA and our sixth-form college. I should disclose that I serve on the governing body of the last two. The feedback is obviously anecdotal but there is undoubtedly a theme from business expressing concerns about the competencies in mathematics which is entirely consistent with the messages from the Smith analysis.

The individuals to whom I spoke referred not so much to the more sophisticated, higher level competencies but to more basic abilities to deal with problem solving, percentages and multiplication. One of our locally based airlines, for example, referred to some of their finance personnel not having a sufficient appreciation of numbers to be always able to gauge intuitively whether the outcome of a computation is right or wrong, or whether the order of magnitude is correct. They may be very competent at handling ICT systems but are not always good at recognising erroneous outputs which derive from incorrect inputs. The company sought to overcome that by encouraging its finance staff to take professional exams. There is a particular issue in ensuring that we reap all the benefits of technology—and the speed and ease of computation that this can bring—without losing core competencies around the understanding of numbers. I would not advocate a return to such far-off days but when I was studying for my accountancy exams, as an articled clerk, the advice I obtained from my principal in preparing for them was to practice adding up columns in the telephone directory.

These messages about competencies were echoed by the LSC, which was concerned that mathematics education in the past had not done enough to equip young people for employment—in particular, whether the curriculum was robust and flexible enough for some to succeed. Employers were having to backfill this deficiency. Our local sixth-form college—in fact, the first such college in the country, now with beacon status—has an open access policy and requires all of its students to study for the GCSE in maths and English if they arrive without those qualifications. This is both to develop core competency and in recognition that it is necessary for better access to higher education. Nevertheless a question was raised as to whether achieving grade C at GSCE is a truly adequate preparation for A-level.

The issue for schools, particularly secondary schools, is the shortage of sufficiently qualified specialist mathematics teachers. That of course is the paramount issue arising from Professor Smith's report, as other Lords have said. Secondary schools which do not have a sixth form suffer a particular disadvantage in this respect, as there is a natural and understandable tendency for maths specialists to go to schools and colleges where they can engage with students following AS-levels and A-levels. At a local level, LEAs and schools can and do develop programmes which attract teachers into the area, but they are essentially bidding them away from other areas. This of course does not help the national picture. There is, of course, no better way to enhance the numbers of students taking mathematics at a higher level than confronting them with enthusiastic, skilled teachers who have a passion for their subject.

Great emphasis has been placed on enhancing teaching skills, which must be absolutely right, but we should not overlook issues of learning. Understanding that young people have different learning styles should be an integral part of good teaching in any subject, including mathematics. Professor Smith's report does set out concerns over the curriculum and assessment for mathematics and how it is perceived to be a disproportionately hard subject. Again, other noble Lords have referred to that. This has influenced pupils' subject choices post 16, and has discouraged youngsters from continuing with the subjects. In this regard, his proposals to redesignate GCSE mathematics as a double award seems particularly sound. Finding more space in the mathematics timetable by switching teaching and learning of statistics to other disciplines also has some interesting possibilities.

An issue with which we have been grappling locally in the LEA is the differential performance in mathematics, particularly of students who do not have English as a first language. I am not sure whether we have solved or unravelled this matter, but it relates to the language in which the problem is expressed. If the nuances of that cannot be readily understood, it is difficult for youngsters to participate fully.

We should recognise that there are positive developments, despite the changes which we face. Professor Smith concentrates on post-14 issues, but we know that mathematics teaching does not start there. It starts in primary schools, where significant progress has been made since 1995, when the trends in international mathematics and science surveys showed that maths test scores for 10 year-olds in England were falling below the international average. More recent studies have revealed that mathematical attainment for England's year five pupils is now well above the international average and only a little behind the highest performing countries in the world.

However, more needs to be done and further progress will be hard to achieve. That will be greatly helped by more support for primary teachers to help them develop a wider understanding of the subject matter, greater skills on how to teach maths and using technology to enhance learning. The emphasis on post-14 development should not detract from that. We need to help primary teachers gain confidence to stretch young people. Neither should we ignore the progress that has been made at key stage 3, where the percentage of students who are attaining level 5 or above in mathematics has increased from 67 per cent in 2002 to 73 per cent in 2004—albeit that the 2004 outcome is a little behind target.

The Government should be commended for responding positively to a range of Professor Smith's recommendations, including improvements to pay, however inadequate these may be deemed by some noble Lords, and teacher training bursaries for mathematics graduates. A new national centre for excellence in mathematics and a chief adviser, the "maths tsar", has been appointed to oversee the implementation of the strategy and to raise the profile of the subject.

Changes to the curriculum, particularly to the prospect of being able to achieve a grade C or higher, whichever tier is followed at GCSE, will be generally welcome. The debate about where statistics fits into the new arrangements will undoubtedly be lively. Despite the clear progress which is being made, we should be realistic about how much needs to be done if we are truly going to make mathematics count. This must be a long-term project that is sustained by clear consensus in the mathematics community, as well as by politicians. It is an endeavour in which we must not fail.

My Lords, when I was a schoolboy, I was very bad at reading and writing. Frankly, I am not very good at them now. For me, the word processor and the spell check have been a salvation. However, I was good at sums. I did sums, pursued them and was introduced to the wonderful world of mathematics, which, if you have not been there, is almost impossible to describe: the magic of algebra, the fascination of trigonometry and geometry, the understanding of rate of change and, in Newton's words, the "summation of infinitesimals".

So I was good at sums, which, by then, we were calling mathematics, and I went to study it at University College, London. I did not have a good first day there, because the provost stood up to say that anyone who did not go on to take a PhD would be a failure. The college staff's sole role in life was to create graduate researchers. So I took that knowledge away and thought, "Well, there are other things to do at university". Indeed, I learned to fly, to run a small business and, en passant, obtained a maths degree. But that left me, throughout my life, with the question: how much had that degree contributed to the world that it opened up for me and the successes that I gained?

So I thought that I should participate in this debate. Like everyone else I turned to Making Mathematics Count by Adrian Smith. It was a superb report which, although long, considers three general areas—the shortage of teachers, the failure of the curriculum and the lack of resources for continuing professional development. I disagree with the noble Lord, Lord Barnett, on the response, which, curiously, was also called Making Mathematics Count, published by the Government.

The responses to the first and last points were good. The moves that the Government have made to counter the shortage of teachers and the moves promised on continuing professional development were quite good. Perhaps I may assure the noble Lord, Lord Wallace, with anecdotal information from my pub, where we do not, in general see too many burned-out city types although we have an individual who spent half a career in information technology. He found that the arrangements available to change career to have been flexible and rewarding and he is now a couple of years into what he sees as a rewarding career as a mathematics teacher.

However, he faces one crucial question from time to time from pupils—"Sir, why are we doing this?". The area of fiercest criticism in the report and of least satisfaction in the response was the key issue identified in the overview, where it states that,

"the failure of the current curriculum, assessment and qualifications framework in England, Wales and Northern Ireland to meet the needs of many learners and to satisfy the requirements and expectations of employers and higher education institutions".

The most acute failure in the curriculum identified in the report relates to AS levels. The words are extreme and identify a serious reduction in children moving forward to take A and AS levels as a result of the restructuring. The response by the Government, which starts on page 42 of their report, sets out a programme to counter this issue and calls upon the QCA to take action to counter this problem. I hope that the Minister can say how that programme is progressing, because the impact of the present A/AS curriculum is significant.

Briefly, I should mention the broader issue of what I would call the demand side of the equation. Professor Smith's report covers well the supply side—what is right and what is wrong with it. But the demand side—regarding what sort of mathematicians we need—is covered less well by the Government's response. The ability to create mathematicians, who are not a well defined group, depends on a scarce resource. It depends on mathematicians who are willing to be in teaching. While the Government are doing good things to try to improve that, they will be up against the fact that anyone who is good at mathematics is generally extremely employable. To employ well that limited resource, a curriculum that is appropriate to the needs of society is crucial.

We also need to motivate young people. We must give my friend in the pub the answer to, "Sir, why are we doing this?". We must be able to say to that young person, "It relates to your future work. You will find this useful. It is part of a total package".

While I have considered this problem for 30 or more years, I am privileged to have discussed this matter with the new chief adviser for mathematics, Professor Celia Hoyles, who was, at that time, Dean of Research and Consultancy at the Institute of Education—an institution with which I have had a relationship through my wife. Professor Hoyles and I had a long discussion about the question, "What do industry and society need from maths education?". I thought about that for some time and after our conversation I realised that I could not answer the question. I am in a pretty good position to answer the question. I have had a wide and varied career and I am a maths graduate. I realised that the question would require much more research than we presently carry out.

It was easy for me to say that none of my maths degree was at all relevant to my career. Indeed, just to ensure that I was not too numerate, the largest number I met during the years of studying for my maths degree was 34. Suddenly, I realised that, as I look back on my career, there is a whole series of subtle skills and subtle ways of

thinking about things—an ability to be able to communicate with other people's specialties for which maths equipped me. We therefore need to invest in understanding the demand side of the equation. We need a different set of mathematicians to do mathematics research. We probably need similar mathematicians to get involved in fundamental physics research, and so on.

As one comes from that rarefied position among engineers, relatively few engineers need to be at the cutting edge of mathematics but they do need to be good practitioners and able to use mathematical tools. It was said earlier that, in business and commerce, people could not understand compound interest and that sort of numeracy. There is something bigger than numeracy. It is about how things behave, how things lever, and so on. Yes, those skills probably are quite important but how much is that in demand and should you be putting scarce resources into it? In wider industry, there is the need to be able to cope with computation and numbers, but to what level and in what areas?

Finally, as has been mentioned, the modern citizen cannot exist and judge without some understanding of mathematics, numeracy and, particularly because they are the common language of our world, statistics.

The specific recommendation 1.3 in Professor Smith's report recommends the setting up of an advisory committee on maths research and industry. That committee, or something like it, is essential. The present decision-making in maths education is dominated by mathematicians and educators. We must bring the demand side of the equation into the debate.

Summing up, I think that this is a very good report and it is a pretty good response. In those immortal words, it is "good in parts". There is an urgent requirement for the QCA to address the A/AS problem. It is urgent that we develop and understand the curriculum changes necessary to motivate our young people and to create the skills for the modern world of work and for modern society. I would particularly like to hear the Minister's comments on the extent to which the Government will help in setting up the ACMRI.

My Lords, I apologise for being absent from the Chamber during three of the speeches, but I am very grateful to the noble Lord, Lord Peston, for introducing this subject. I can think of no subject that is in greater crisis or where there are more grounds for concern than in mathematics.

In 1996, I was invited by the then Government to conduct a review of qualifications for 16 to 19 year-olds. My research showed me that there was no subject where there was more dissatisfaction from employers, and, for different reasons, the universities, than in mathematics. The noble Lord, Lord Peston, referred to a problem that goes back decades. With employers, I found that it went back for at least a centuryߞand we have not resolved it.

The noble Lord, Lord Moser, referred to 24 per cent of our people being innumerate. My understanding of the term is that it means those people have, at best, what is expected of an average 11 year-old. It is appalling. They cannot function effectively in the ordinary business of life. As for students—and this is part of the problem—too many of them find it difficult, boring, and not relevant to life as they see it. It is passing them by. Wherever I look, there is dissatisfaction.

When we look at the teaching side of it, reference has been made by the noble Lord, Lord Peston, to the number of teachers who are qualified to teach maths but who do not do so. Although the noble Lord was not absolutely certain about it, I think that the figure in Adrian Smith's report was 25 per cent. It would be very interesting to research in depth why that is so, because it is a serious problem: we have a serious shortage.

Reference has been made to the shortage of maths teachers. It is about two and a half times as great as that in Europe. We have a shortage of about 30 per cent, in terms of schools saying, "We do not have the qualified teachers to give the students what they should have". In Europe the figure is 12 per cent. However, we have 25 per cent who could be teaching maths and who have chosen not to.

When I deserted mathematics nearly 60 years ago, I had accomplished what was then called the School Certificate with some credit in mathematics. I knew about Pythagoras and I could probably do the proof, if given half-a-crown! I could do the unapproachable height problem in trigonometry and use the cosine and the sine. I could even do the odd quadratic equation. I went for a job when I was 16. It was a temporary job: male clerk, grade 3, in the tax office. I went to the Labour Exchange and I got a green card to introduce me. Off I went, with my good marks in the School Certificate. The guy I met sat me down at a desk. He sat on one side and I sat on the other. On my side was a great, long column of numbers. He gave me back the green card. I was not suitable. I could not add up that long column! I needed to practise on the telephone book! There is a problem between the ordinary everyday needs and mathematics of the kind to which the noble Lord, Lord Lucas, referred.

I am glad that the Minister is not commenting on the Tomlinson report, because the Government's reply is in gestation and the last thing we want is to hurry it. I am very concerned that we achieve a consensus on this before making any changes, because that is the best gift the politicians can give to education.

One of the good things about the Tomlinson report is that it suggests—as other noble Lords have suggested, including this one in his report in 1996—that we need to develop the basic competencies in number, functional mathematics, if you want to call it that, communication, and IT. The report proposes that in order to gain one of his diplomas—which he sees all kids doing at their appropriate levels—you have to reach the required standard in those three areas. It is a mastery test. You cannot compensate for doing badly in one area by doing well in another: you have to reach the required standards. For those three core subjects there are about 30 per cent of the marks for what we now call the A-levels.

Adrian Smith proposes that you should get more for mathematics than for the average subjects. I do not agree with the "snitching" point which was referred to. However, what Tomlinson proposes is that you do supplementary mathematics to get extra marks and credits. By that means, you can move towards what Smith wanted, namely, more reward for the work—which motivates students—without, as he suggested, solving a problem by just doubling it and shifting data-handling to poor old geography or biology. Trust mathematicians to think of something as unacceptable to biologists, et cetera, as that!

I believe that Tomlinson has something here, recognising that every man and woman requires this functional ability in the basics of mathematics and then to reward and encourage those who can—and most could, if there were good teachers—go on to gain extra credits in that subject. There is more corn for effort. For those for whom the joys are beyond the horizon, they can do what they can see is relevant.

Perhaps I may now come to one or two reservations about Tomlinson, in relation to the Smith report. Smith is concerned that you do not stop at 16, having got your credit in maths, and do not do any more in terms of A-levels. He wants to find ways of encouraging students. Tomlinson, as I see it, is not providing that motivation, which I think is a pity.

Generally, if there is a problem, do not blame the customers: have a look at the product and its delivery. Yes, I agree with Smith. One has to look at the curriculum. For those doing vocational subjects, I strongly believe that it is no good expecting them to enjoy doing maths in the abstract.

I recall going into a college and seeing GNVQ students in art and design. The idea that mathematics was relevant to them was beyond their comprehension and perhaps that of their teacher. It could be explained to them that, "Look, you might run your own little business. You have got to be able to cost a job". "Oh yes". "You have got to be able to do budgets. Oh, and you need to allow for overheads". "Oh, that is per cents, is it?". If one does that, one can get them into mathematics. A good aspect of the Tomlinson report is the proposal that while what you learn is the same, it is contextualised to make it relevant.

As regards teachers, I do not think that we shall ever solve this problem unless we get teachers who are very good. Good teachers will get pupils. Therein lies a very large part of the problem whereby 25 per cent of people who are qualified choose not to teach. That needs to be researched.

Other noble Lords have suggested the "golden hello". With tuition fees, we especially need a really good, attractive "golden hello". Yes, there should be reward for those who are excellent teachers; that is, not for being promoted to a supervisory job, but to stay as a first-rate teacher on the classroom floor. The rewards must be there. Continual professional development of high quality must also be there, so that teachers know that their professionalism is cherished and will be enhanced. They are very important guys who should be rewarded for achievement.

We shall never solve this problem until we solve the problem of why teachers are abandoning the subject and not enjoying it. Rewards are part of that, but enjoyment of the job, which turns on the curriculum, is very important. Perhaps we should take notice of the real opportunities from information technology. I believe that this has been looked at time and again. We have an excellent report from Adrian Smith and an interesting vehicle for development of those proposals through Tomlinson. Now is the time, after due consideration, for the Minister to stand up, before many weeks have gone by, and tell us what she will do.

My Lords, I should like to join others in thanking the noble Lord, Lord Peston, for initiating this debate. He and I have long tried to contrive to secure a debate on the Smith report. I am delighted that we finally have.

I was very taken with the speech made by the noble Lord, Lord Tunnicliffe, when he spoke about the subtle skills that he learnt from his degree in mathematics. That is summed up in the letter that Professor Smith sent to Charles Clarke when he introduced his report. He wrote:

"Mathematics is of central importance to modern society. It provides the language and analytical tools underpinning much of our scientific and industrial research and development. Mathematical concepts, models and techniques are also key to many vital areas of the knowledge economy, including the finance and ICT industries. Mathematics is crucially important, too, for the employment opportunities and achievements of individual citizens".

That is enormously true. One of the great dangers for this country is that if we fail to produce these mathematical skills, the knock-on effect of our not being able to undertake scientific research to keep up with ICT in other countries is enormous. We have a horrible phrase that I have used as an economist in relation to being able to understand knowledge; namely, the "absorptive capacity". The concept is that if we do not have scientific research that takes us to the leading edge of science, that is fine because 95 per cent of research is done in other countries and we can use that. But we cannot use the research if we do not have the tools. Mathematics is a key tool for making use of the research. If we fail in mathematics, we can fail abysmally.

Are we failing in mathematics? On reading the report produced not very long ago by the EPSRC, which looks at the relative excellence of maths in this country and elsewhere, the answer is "no" and that we are holding our own internationally. But I was brought up sharp by the figures that the Mathematics Association produced in relation to A-level entries. I had not taken them in. Are noble Lords aware that in 1989, 85,000 young people took A-level mathematics? In 2002, which was admittedly a very bad year because of AS-levels, that figure nevertheless had fallen to 53,000. 1 repeat: 85,000 in 1989, and by 2002 that figure was down to the 50,000 mark.

If we do not have young people taking A-level mathematics, what chance have we of them taking mathematics at university? Combine that with our serious shortage of teachers. Yes, I congratulate the Government, who are now recruiting 2,500 teachers of mathematics a year. But are noble Lords aware of the shortfall? Of those currently teaching mathematics in our schools, 25 per cent have no qualification or only a very weak qualification in mathematics. That is in the Smith report.

We have a shortfall of 30,000 teachers in mathematics. Recruiting 2,500 teachers a year, particularly as after five years something like 50 per cent of them have fallen by the wayside, is not enough. You have to look only at the balance—disproportionately, those teachers of mathematics are in the 45-plus age group—to realise that we face a very serious crisis. We need to do something about it. The question is whether the Government are doing enough about it.

The key issues are those raised by the Smith report; that is, the supply of teachers, continuous professional development and pedagogy. Let us look first at the supply of teachers. We are in very serious danger of falling into a vicious circle whereby because we are not producing enough teachers who are competent to teach the subject and inspire people, we are not getting the young people going through to A-level; we are getting them into university, but we are not producing enough university graduates to fulfil the teaching profession. Unless we can shake that up, we will not cope with it.

I was struck by a report from a group at the London School of Economics about the future shortages of teachers and their age profile. It noted that,

"Now the shortage of teachers looks set to become even more of a problem as large numbers of people currently in the profession near retirement. Shortages are especially acute in subjects like maths, science".

One of the answers that the Government give is, "Ah, but we are moving to performance related pay and that is such a good thing". The report says that performance related pay,

"may not be the best vehicle to improve teacher performance, since the outcome of interest—pupil achievements—is multi-dimensional and depends on the efforts of a group of teachers rather than individuals. Evidence from elsewhere in the world tends not to support PRP schemes. In fact, over time, most schemes for teachers have collapsed and there is evidence that the ability of PRP to motivate staff is limited".

So I think that we have to be quite careful about looking to something like PRP to motivate where we want to go.

How far have the Government gone with the survey that we need? One of the problems with the Smith report was that those who were writing it did not have even the figures that they needed. They did not even know how many teachers were properly qualified. How far has the secondary school staffing proceeded? Where are the Government going with that? That is a very important question.

I turn to CPD—continuous professional development. I am sorry—the awful part about the education world is all the acronyms that one gets into. CPD is desperately important, all the way up from the nursery school right through to the secondary school.

I ask again: are we doing enough? What about the national centre of excellence? What is happening to that proposal? What about the regional centres which go along with it? We really need to know much more about what is happening. The programme needs to be accelerated because we really have to get moving on this problem, which, as I indicated, is very serious.

I come lastly to pedagogy. I agree strongly with the noble Lord, Lord Tunnicliffe, who, I think, said that we had not talked about it very much, although we had talked around it a great deal. This issue is a fundamental problem. It takes us back to the point of the noble Lord, Lord Moser; namely, that 24 per cent of adults in this country are innumerate. As he said, that means that they cannot do simple calculations. On top of that, we have to bear it in mind that 30 per cent of those who spend 10 years studying mathematics in our schools come out with no qualification. Surely, that is an indictment of our schools.

Yet people say that the answer lies in teaching that is more relevant to everyday society. We have to be careful about moving in that direction. The noble Lord, Lord Dearing, talked about the Tomlinson report, but the Mathematical Association has great reservations about it. I have to say that I share its view when it states:

"It is a serious mistake to imagine that there is some part of mathematics which relates to the real world which does not require a theoretical or conceptual underpinning. The constant difficulty that many students have in handling simple ideas with number is at least as much to do with a lack of conceptual understanding and a suitable level of fluency as it is to do with a failure to see any 'real world' purpose for the ideas".

Are noble Lords aware that one can get an A grade in GCSE maths without doing any algebra? That is where we have got to. It requires a real questioning of what we mean by teaching mathematics. There is a great danger in thinking that we can teach arithmetic and that it teaches people the logical skills of mathematics that are so important.

The noble Lord, Lord Moser, raised the whole question of why people have such a hang-up about teaching mathematics. That is a vital question to tackle. We have not done enough research on it. It is fundamental to the way in which we teach the primary school, and even the pre-primary school, curriculum. It is an area where we need a lot more research and a lot more thinking. We need also to move as quickly as we can because there is a crisis. In their response to it, the Government have been totally complacent. They are operating only in the teacher supply area, which, so far as it goes, is quite good but is not nearly enough. Even we in this debate today have been too complacent.

My Lords, I too congratulate the noble Lord, Lord Peston, on securing this important and timely debate. I welcome the opportunity to contribute from this Bench. The tremendous and learned contributions that we have heard today show the enormous value and expertise of this House. We could not have had a better debate on the problems of mathematics.

Like the noble Lord, Lord Tunnicliffe, I was quite good at maths at school. It was called arithmetic then. However, I did not go into the academic world as he did. I became a farmer and a politician. Perhaps if I had followed the academic route, I might have been able to make as valuable and learned a contribution as many other noble Lords have done today.

I have known the noble Lord, Lord Wallace of Saltaire, since my early twenties. If someone had told us then that we would be debating maths together in the House of Lords, we would not have believed it. Other noble Lords referred to their background, so I thought that I would mention that.

As everyone has said this afternoon, the state of mathematics in our schools—a matter that has been raised time and time again—is something about which we should all be concerned. The fact that around a third of pupils emerge each year without a qualification in mathematics that is valued by employers and by society gives some idea of the problem that we face.

I must state from the beginning that what I say is no criticism of maths teachers. They do a magnificent job, often in trying and difficult circumstances. The problem does not lie with them. All the speakers this afternoon have highlighted that fact. In fact, as most noble Lords have said, the problem is that we have far too few maths teachers. Furthermore, we have too many teachers who are not actually trained in maths but are expected to teach the subject. I was interested to hear the noble Lord, Lord Dearing, say that there were 25 per cent who could participate in teaching maths. That says something that we should think about.

Pupils in schools and the general public seem to be less interested in the subject year by year. It is now possible to see that the decline in maths as a subject and in the quality of provision has a significant impact on the country's economic and educational well-being. Everyone has quoted reports and figures this afternoon, so I shall quote some.

The second round of the OECD's programme for international student assessment, which involved more than 250,000 15 year-olds in 41 countries, showed in December 2004 that the UK had fallen from fourth to eleventh place internationally in science; from seventh to eleventh place in reading; and from eighth to eighteenth place in maths. In only three other OECD countries—Turkey, Luxembourg and Mexico—were more pupils held back by a shortage of well qualified and experienced teachers. The shortages were especially marked in maths, in which subject heads estimated that 41 per cent of pupils were hindered by a lack of appropriately qualified teachers, and in science, where the figure was 35 per cent.

The National Audit Office also reported on adult literacy just before Christmas. It concluded that 26 million people of working age had levels of literacy and numeracy below those expected of school leavers. The UK has a higher proportion of adults with a low level of numeracy than 13 other developed countries. Only six countries did worse: the Republic of Ireland, Hungary, Slovenia, Poland, Portugal and Chile. The number of adults without adequate numeracy skills is still growing by 100,000 a year. Those figures, which are dramatic, underline a lot of what has been said this afternoon.

The Tomlinson report has been talked about this afternoon. Mike Tomlinson learnt from employers and universities that they felt that they had no guarantee that someone who had obtained a top grade in GCSE maths was any good at the subject. Although 94 per cent of GCSE students sit maths, only 50 per cent achieve a grade C or above. Ninety per cent drop the subject at 16. The Smith report, to which everyone has referred this afternoon, highlighted a 25 per cent drop since 1991, and the number taking A-level maths has dropped too.

The number of young people studying mathematics and physical sciences is in sharp decline. That is particularly worrying when the demand for graduates and postgraduates in mathematically orientated subjects is, as we heard this afternoon, rising. In particular, science-based industries, financial services, telecommunications and information technology all require graduates in maths-based subjects. A-level entries for all subjects rose by 7.4 per cent in England, Wales and Northern Ireland between 1991 and 2003. However, entries fell by 18.7 per cent in chemistry, 24 per cent in maths and 29 per cent in physics.

A recent report in the Financial Times stated the obvious fact that the subject that lay at the heart of science and technology and played a vital role in economics, social science and medicine was maths. People want maths A-levels. Those who obtain A-level maths will probably earn 10 per cent more on average than those who do not.

As I have said, many noble Lords have referred to the extremely good Adrian Smith report. He concluded that the Government's record on maths provision was not good, as we know, and no doubt the Minister will respond to that later. But let me repeat what has been said by several noble Lords because these issues are very important. Professor Smith said that the real problem is that there is a shortage of maths teachers in secondary schools—a point made by the noble Baroness, Lady Sharp, and by many other noble Lords during the debate—and that approximately 30 per cent of teachers currently in post are under-qualified, the highest maths qualification for some teachers being only A-level. Young people are not stretched enough by either the current GCSE or A-level courses. As many noble Lords have said, the curriculum is not adequate.

Professor Smith's report states that priority must be given to the supply of maths teachers, a point made several times today. This cannot be done quickly, as we know, particularly given the small number of maths graduates each year. Nevertheless, he suggests that much can be done to improve the skills of those already teaching the subject. However, he concluded that, in the long term, maths teachers must be offered significant extra pay to attract more graduates into teaching and to strengthen the signals to young people that maths teaching can be a remunerative career worth choosing.

We have heard about the Government's response to the report—no doubt the Minister will add more later—and the proposal that maths teachers should get a £1,000 premium on the normal £6,000 bursary. In addition, from this year, the "golden hello" given to trainee maths teachers who continue into schools should rise from £4,000 to £5,000. Several noble Lords have commented on the "golden hello" and I ask the Minister to tell the House how far these reforms have been implemented and what impact they have had in reforming the teaching of maths, including the recruitment of additional maths teachers. I should be grateful, too, if the Minister could up-date the House on the establishment of the national centre for excellence in the teaching of mathematics.

We are doubtful whether a £1,000 premium will have a significant impact on enticing maths graduates into the profession. What is likely to be more important is how they perceive the teaching profession. To a certain extent, I agree with the noble Baroness, Lady Sharp, on that. Working conditions, reduced bureaucracy and excellent opportunities for continuing professional development are most important.

I am the leader of Essex County Council. One of our senior officers is Dr Puleston. His wife, Michelle, teaches in a comprehensive school. I asked her to give me her personal views and to obtain the views of other maths teachers in the school. The collective answer from this group of maths teachers was that there was a lack of time. Teachers are spending the vast majority of their time with all year groups preparing for examinations, with realistically little opportunity to encourage the investigative and thinking skills that would develop good mathematicians.

Teachers would like maths to be fun. They would like to teach pupils to love maths for maths' sake, or to think about the subject in such a way that they understand it. However, due to the pressures they face, they are teaching their pupils to achieve a particular level at key stage 3 or to achieve a particular grade at GCSE; they are not teaching pupils to love maths.

Examinations test processing skills, so teachers teach pupils how to process and how to get through examinations. This is not fun or stimulating for many students; it does not make them want to study maths further. It also does not enable them to use the maths that they have studied in the future if they have not fully understood what they are doing. So teachers feel rather disenchanted about the way they have to teach maths in schools. Teaching pupils in this way, with such an emphasis on examinations, is turning students off maths.

There are also concerns about the examinations themselves—a point made by several noble Lords today—and the curriculum that enables them to participate.

This has been a valuable debate with important contributions. I have been most impressed by the emphasis that all noble Lords have laid on how we can make maths more fun; on how we can get pupils involved at a primary level—or even a nursery level—so that they go into future education wanting to enjoy

it. I was quite good at maths because my parents enjoyed it and it was in our culture and in our thoughts; maths was part of our lives. I hope that we can inculcate that attitude into young people, and many of today's valuable contributions will help that. We need to help the teachers, as I have pointed out, to enable them to help children and young people to enjoy maths.

It has been a great debate. I hope the Minister will be able to give the House some answers.

My Lords, this is a maths debate so I shall try to give some answers. It has been a hugely enjoyable debate. It goes to show that maths can be fun, a theme that has run throughout the debate. I am indebted to my noble friend Lord Peston. I am glad that he has realised what has clearly been a long desire to have such a debate—quite rightly so—and I am sure that it has lived up to his expectations. It has been extremely good.

Noble Lords have been extremely diffident, not to say modest, about their mathematical abilities and achievements. They have then gone on to show that there was no reason for them to be so at all as they all seem to be particularly expert in different ways. I am probably the only Member of the House who has a real reason to be modest. It has felt to me like being in a collection of senior wranglers, with the senior wrangler par excellence sitting directly behind me. I hope that I, too, can live up to expectations.

The language of our debate has been extremely stimulating and generous. We have had mathematics compared to poetry but not yet to music. I shall make that connection, however, because it is often the case. Certainly maths is absolutely fundamental to our intellectual life in every respect. From the Greeks and Romans and the Persian mathematicians to the success of the Titan space mission last week maths affects every single application; it is the purest form of intellectual activity.

Yet, paradoxically, which is where the challenge presents itself, mathematics affects the informing and underpinning of the ordinary processes of everyday life, its common languages and experiences. In that paradox lies the challenge of the pedagogy: how to stretch and challenge the most able; how to give the less able confidence, in school and beyond; and how to ensure that not only the teaching environment but the learning environment produces the stimulation and the confidence that creates the mathematicians of the future. So that is the challenge the Government face.

As to the Smith report and how we responded to it, far from being fitful in our response we very much welcomed the report. It was an excellent, coherent report. We have accepted the vast majority of its recommendations and are working our way through them. We have publicly expressed our satisfaction. The implementation is being overseen by a programme which is based by the DfES's own Director General for Schools. Celia Hoyles, who is heading up the programme, is also a board member. So, far from lacking a sense of urgency, we are combining urgency with coherence in our response, and I hope I can go on and prove that.

It is interesting to know that Professor Smith was a close colleague of my noble friend. His challenges were to maintain motivation past compulsory education and then beyond A-level; to ensure that we have a system which understands the skills needed for a changing world, how the curriculum can respond and—this is particularly interesting—what mastery of the subject means. This is a particular challenge in a subject that is moving so fast, where the frontiers are so broad and where the definitions pose such problems. Thirdly, of course, there is also the challenge to create the optimum environment for teaching and learning.

I was particularly struck by the reference of my noble friend Lord McKenzie to different teaching styles—learning to learn. Having been involved in education for some years, I have become more aware of how much emphasis is now going into the notion of how we learn to learn. That is particularly critical at the edge of mathematics.

Indeed, the noble Lord, Lord Moser, was right to say that this is not a new debate. I shall not quote from the Cockcroft or the Robbins reports. I merely say that,

"The failures in arithmetic are mainly due to the scarcity of good teachers".

That is from an HMI report of 1876. I am sure we could find a Tudor quotation as well.

Just as the problem is complex, long-standing, problematic and exercises our best brains, so do the solutions. That is not an excuse; it takes a long time to create a better culture in which to have confidence in, understand and value mathematics. We cannot do it alone. I agree with my noble friend Lord Barnett that it is the Government's responsibility, but as other noble Lords have pointed out, it is also the responsibility of other partners including industry, QCA and the voluntary sector. I take my noble friend's point that the Gatsby Charitable Foundation has done excellent work in stimulating mathematical research, and many other voluntary organisations do so as well. However, the noble Lord, Lord Moser, is right that we are confronting a profound cultural issue which goes to the heart of what people think they can learn and what they can master to live their lives.

The broad policy areas identified in the Smith report included the failure of the curriculum and qualifications framework; the quality of the teaching and learning experience; the difficulty of the subject; the failure to excite and provide appropriate motivation, to which so many noble Lords referred; and the lack of awareness. There are also the issues of difficulty in recruiting and retaining mathematics teachers and of professional development, to which the noble Baroness, Lady Sharp, referred. The report calls for a profound cultural change.

Those are our challenges and we are wrestling with them. It is not simply a question of how to incentivise mathematics teaching and learning for the brightest but how to make it relevant and exciting for all our children in school. So I am very pleased that my noble

friend Lord Peston talked about primary education. My noble friend Lord Barnett and the noble Baroness, Lady Sharp, talked about the foundation stages and the importance of what we can do to give the very youngest children confidence in and understanding of maths. I am referring not to numerical skills but to showing that shapes, numbers, perception, ratios are fun and enjoyable, because that enjoyment will go with them to the next stage.

The story is good when it comes to primary education. The mathematics performance at year five in primary school, according to the Trends in International Mathematics and Science Study, has increased by 47 scale points since 1995, the largest increase in any country. The increase is also evident across the range. The report that my noble friend Lord Barnett quoted from found that most teachers thought this was a success. It was not an entire, or indeed an original, judgment of our numeracy strategy, as I understand it. It was a synthetic study, which has to be considered in context. We should put it against our Ofsted and our international findings, which show that there have been significant improvements.

Having said that, we have a long way to go. I do not deny it, and there is no trace of complacency in anything I say this afternoon. Most recently, 74 per cent of 11 year-olds have reached the expected level of attainment—up one percentage point on 2003. In fact, we are focusing our teaching and learning in primary schools by introducing a much wider range of guidance and materials across the curriculum precisely to address the issues which noble Lords have raised about content, creativity and enjoyment, particularly for those who find the subject more difficult. We are looking hard at how to extend the range of materials. We are also developing central points of mathematics expertise within the new primary networks. That will lead to 1,500 to 2,000 primary maths centres nationwide. We are also increasing the impact of the primary leadership programme, making mathematics compulsory in the associated training programme. For unqualified teachers in primary school, that is a series of very specific responses.

My noble friend Lord McKenzie talked about the key stage 3 strategy. That is extremely important, because we have to keep the motivation and the confidence alive. The transition between key stages 2 and 3 has very often led to a loss of confidence for young children going to secondary school.

Our key stage 3 strategy is very specific, and we are seeing a real impact. The number of pupils achieving the expected level at key stage 3 has risen by 7 percentage points since 2001. I was very interested in what the noble Lord, Lord Wallace, said about excellence programmes and innovative programmes such as the Millennium Mathematics Project and the Olympiad.

We are looking, in transition and beyond, at a range of innovative programmes for the gifted and talented, in both primary and secondary schools, which will bring out their mathematical skills. A lot of very interesting work is taking place in the teaching of maths, such as brain gym, gifted and talented programmes, after-school clubs—very dear to my heart—out-of-school learning programmes and holiday schemes. We are looking at ways in which particularly enthusiastic young people and those who are good but are not confident can build on their skills outside school hours. So I think we have somewhere to go there.

My Lords, will the noble Baroness comment on the fact that for these more gifted children at key stage 3, that is not assessed within the curriculum? The curriculum is being developed to have, in effect, a further maths element—an extension element—but because it is not being assessed, it is not carried through in all schools and, to some extent, the children themselves write it off.

My Lords, I know that the National Association of Mathematicians has made that criticism. While the extension programme is very new, that is possibly true, but we are seeing a transfer of technique and content into the mainstream curriculum from many of these programmes. I should have thought that that was very likely, but I will certainly give it some further thought.

Let me turn to the curriculum and assessment issues raised by the Smith report and by noble Lords. What has been said this afternoon is correct: maths has the highest entry of all GCSEs. Some 50 per cent of the cohort obtained grade A^* to C and 91 per cent obtained A^* to G. The Smith report pointed out that the current GCSE structure seemed to have a lot of disincentives built in. Many young people could not achieve a grade C in the first place and there was also the double award effect, as my noble friend said. Some were unprepared to make the transition to A-level. The perception was that the content of A-level was too large to be mastered. Those are very specific criticisms, to which we have responded.

We have been presented with an opportunity in terms of the GCSE. We expect very shortly to take a decision on the QCA's authority about the introduction of a two-tier maths GCSE. It has been piloted over two examinations. Rather than having a three-tier GCSE, a two-tier GCSE looks very likely, which will give all candidates access to grade C. It will also ensure that those who attain grade B are tested on higher grade material. That will, in itself, inspire many more to go on to A-level.

In terms of A-level, we have addressed the issue of an overloaded, demotivating curriculum. As of last September, we have revised the AS and A-level specifications and the core content is now distributed over four rather than three units, with two applied units. That will help to address the drop in A-level numbers, to which many noble Lords have referred, not least my noble friend Lord Tunnicliffe, who asked specifically what was happening in this field. QCA is monitoring the position; it is also monitoring those who get good GCSEs but do not go on to take A-levels and those who start but do not finish. So we are addressing the point very specifically.

The QCA has an enormous programme of work. I do not agree with the noble Lord, Lord Lucas, that we should abolish it. It is an extremely important and creative body. It is looking at a whole range of longer term issues to do with GCSEs: the content and size of the curriculum; the impact of technology on the mathematics curriculum; the use of ICT in maths; and statistics and data handling. It is looking at many aspects in order to clarify the amount of teaching time needed, taking on board what the Tomlinson report said about the load of casework and how we might address that. That is going to be in the longer term.

I have spoken a bit about the high achievers, and where in fact we hope that that will lead us.

The noble Lord, Lord Dearing, raised the issue of the Tomlinson report in a very courteous and understanding way, and discussed the relationship between that and the Smith report. He did a brilliant analysis of the relationship between the two reports. We shall have to wait for the White Paper, which I am sure will not be too long in coming, to see how those two sets of imperatives will sit together. The Tomlinson report referred very much to the core of functional competencies and the main learning programmes—and I am sure that we shall draw on what the Smith report said.

On that theme, the QCA is expected very shortly to let contracts for the first phase of development work on potential models for a curriculum assessment model, which will have a course of functional maths.

Higher education was something that we touched on very briefly. We are very much aware of the need to maintain and improve our levels of recruitment to maths teaching. Feeding through the system as we do, I feel sure that we are actually better placed than we were. We are also very alert to the situation in science and engineering departments; that is why the former Secretary of State, Charles Clarke, asked the Higher Education Funding Council to advise us on how we might maintain the profile of key subjects such as maths and sciences in the higher education sector. We look forward to receiving that feedback. For those who get to university and cannot cope with the maths, the Higher Education Academy provides support for providing them with additional skills.

I move swiftly on to the second major issue—the importance of the charismatic teacher, the one who makes all the difference. Many noble Lords have referred to that issue. How do we get the very best teachers in sufficient number? I do not want to conceal or diminish the problems, but nor should I underplay what the Government are doing and how seriously we are taking the matter. Although the number of vacancies for maths has fallen by almost 40 per cent during this Parliament, there are still more vacancies than for any other subject. But the picture is improving; recruitment is up by 60 per cent since 2000, and we have more people starting teacher training this year than there have been on record for 15 years—that is, 2,500. This is the fourth year of successive rising achievement.

Yes, I can tell the noble Lord, Lord Hanningfield, that we believe that the bursaries, which now amount to £6,000, are making a difference. That sum will rise to £7,000 in September, just as the "golden hello" will rise from £4,000 to £5,000. However, we believe that it is not just higher pay that encourages recruitment; the noble Lord, Lord Hanningfield, was right to refer to the workload, for instance. We are trying to address that by training a cadre of specialist higher level teaching assistants, for example, and by reducing bureaucracy wherever we can.

The good news is not only that we are recruiting more teachers at initial teacher training. A TTA report is due out tomorrow, and I believe that I can anticipate it without taking too many risks. It shows that there is a whole cadre of people coming from sectors such as banking, who are taking early retirement from those sectors and coming into teaching. I recommend that we all read that report very closely. As for age profile, we are also introducing graduate teachers from other professions. But the pay has gone up, and we have schemes such as the advanced skills teaching programme, which will keep teachers teaching and not administrating.

The crucial point, as the noble Baroness, Lady Sharp, pointed out, is continuous professional development. The noble Baroness said that a cultural shift was required, and I believe that it is absolutely vital. We are grasping the nettle, and our five-year strategy is full of it. But the National Centre for Excellence will involve the establishment of a nationwide network of quality subject-specific continuing CPD opportunities. This is our big chance; this is our opportunity to look at mathematics, across the whole range of what we want for the future. Our approach will provide strategic direction but it will also actually get down at the sharp end to what we want in terms of the best quality teaching and content. I hope that all those measures together will address some of the problems raised by the noble Lord, Lord Moser, about basic skills.

Sadly, I have to finish there; it has been a bit of a gallop, but I have come a sort of full circle. The noble Lord, Lord Tunnicliffe, asked what sort of mathematicians we wanted in future. That is the key question, and I have no glib answer to it. But we do want to see mathematicians who are fit for purpose, whatever that purpose may be; who are literate in all forms of mathematics at the frontiers of knowledge but are also able to manage their own business in daily life. We believe that the appointment of Professor Celia Hoyles as chief adviser in mathematics with the Department for Education and Skills will make a big difference. She is very committed to raising the profile and the value of maths—that, plus the national centre, which will be putting out tenders in March. I am pleased to say that we are well on track with that.

We are doing what we can. I am sure that there is more to be done, and noble Lords have pointed out that there is more to be done. But with the scope and determination that we have, we are in with a chance of addressing some of the basic problems which we have faced for so long.

I am conscious that I have not answered all questions, including the one about the staffing survey. But when I have not been able to answer a question I am very happy to write to noble Lords and to circulate the letters. I thank my noble friend Lord Peston on behalf of all noble Lords.

My Lords, in the few moments that we have left, I shall rectify a gap in my speech. This point was in my speaking notes, but I decided not to mention it in the hope that another noble Lord would do so. Professor Smith's recommendation 2.6 was that consideration should be given to the introduction of new mathematics teacher certification schemes, with the aim of increasing the overall supply of teachers appropriately qualified to teach at least some part of the curriculum. That struck me as an exceptionally good recommendation and, since no other noble Lord has underlined it, I shall just draw it again to my noble friend the Minister's attention.

The noble Lords, Lord McKenzie and Lord Tunnicliffe, pointed out that learning maths is hard. The other point is that teaching maths is hard. That is the other thing that we have to bear in mind. Going back to my days as a teacher, I remember year after year, since all that you needed to know in economics was demand and supply, making remarks like, "Well, the equilibrium is where the demand curve intersects the supply curve and that is the solution of a pair of simultaneous equations". Everybody would look at me blankly, so I would say exactly the same again and they would still look at me blankly. But then in those days, before the reforms of the present Government and their predecessor, professors were completely above criticism—so if the students did not understand something it was just too bad! That is the difference between what I used to have to do and what maths teachers in schools have to do now, so I am deeply sensitive to their problems.

In response to the comment made by the son of the noble Lord, Lord Wallace of Saltaire, I really do agree with him. I still read the academic journals. An article will have an interesting opening paragraph, written in English; then it will have a dozen pages of mathematics and then the same opening remarks repeated in equivalent English, though not identical. So you read the opening remarks and say, "That is a very good point and it is obvious what follows". Then you go to the end, and you have the ethical dilemma of deciding whether to read the 12 pages of mathematics in between. I have never cracked that, because I know that it is my ethical duty to do it but I also know that the maths is there because the chap has not the slightest chance of getting his paper published in an academic journal unless he includes in it maths that most people cannot understand. So that is a serious question.

I conclude, however, with a remark on darts, which was raised by my noble friend Lord McKenzie. I swear that I read in the paper not long ago that there was a crisis in the darts business because far too many darts players cannot work out the score and, in particular, cannot work out what double they need to win. I am certain that I read that somewhere. So we have a maths crisis in darts, as well as everywhere else.

It remains to me to thank all noble Lords who spoke. I am a lifelong learner, and I learned a great deal today from noble Lords. In addition, I thank my noble friend the Minister. This is about as difficult a subject to respond to as one can imagine, and she did an outstanding job in addressing your Lordships' House. My Lords, I beg leave to withdraw the Motion.

Motion for Papers, by leave, withdrawn.

rose to call attention to the problems in the electricity supply industry created by the absence of a strategic decision mechanism; and to move for Papers.

The noble Lord said: My Lords, this is the third debate in which I have sought to draw attention to the absence of a strategic decision mechanism in the electricity supply industry, the earlier ones being in January 2003 and January 2004. I congratulate those noble Lords whose interest in the topic has induced them to attend this year's instalment in a largely unrewarding saga. In addition I welcome the attendance of the Minister, the noble Lord, Lord Triesman, for whom it is a new experience. I say at the outset that I hope that the arguments which I and others seek to advance will not, as hitherto, be dismissed by the mantra that market forces will solve long-term problems so that no strategic decisions are called for.

Although a number of noble Lords present know of my interest in this matter, it may be desirable to set out very briefly the reasons for it. I spent the major part of my engineering career in the electricity supply industry in Scotland and then in England and Wales, becoming chairman of each organisation, and resigning in 1980 when the government of the day insisted on an organisation which I considered wrong and which subsequently became the organisation adopted for privatisation. It was a highly fragmented one in which strategic thinking has no place.

An important part of the strategy of the electricity supply industry when nationalised was security of supply. That statutory requirement was based on recognition of the essential role of the industry in maintaining the economic life of the country. To some, security of supply is just a matter of having sufficient generating plant to ensure reliable supplies in the next few years—an adequate plant margin. That is, of course, an important requirement which relies today upon indicative figures collected by National Grid on behalf of the regulator, Ofsted. I use the word "indicative" because the information supplied about future commissioning and decommissioning intentions is not binding in any contractual sense. It follows that the information given is only indicative of present intent and that deficiency has been claimed by government to be remediable by the operation of market forces. I would like to return to the reasons for the inadequacy of that argument later.

However, even an adequate plant margin is not sufficient to secure even moderate security of supply in circumstances where important supplies of primary fuel may be interrupted for considerable periods. In its nationalised days, the industry sought to provide against such conditions by ensuring that adequate stocks of fuels were available and that there was sufficient diversity of types of generating plant to allow some of the shortfall to be made up from alternative fuel sources. So it was that the industry and the nation managed to survive strikes of the coal industry, then its principal fuel supplier, in the 1970s and 1980s.

Today, little such flexibility exists. Virtually all new generating plant installed since privatisation has been gas-fired and we are becoming steadily more reliant on gas imported from overseas, with very limited storage in this country. The alternative fuels are becoming steadily less able to substitute for a prolonged interruption in those imports, despite the vulnerability of pipelines to accidents or to terrorist attack. The security of our electricity supplies is consequently vulnerable in a quite major way. The Government's answer to this problem appears to be that commercial contracts and diversity of potential gas supplies will ensure that the risk of such interruptions can be ignored.

But the future is full of surprises, some of them inevitably unpleasant, and the National Grid Winter Outlook Report 2004–05 contains some of those. The report says:

"Decline of UK CS [Continental Shelf] gas supplies is occurring faster than previously forecast. A consolidation of industry data suggests a beach gas availability of 346 mcm/d for a sustained period over the coming winter".

This represents a reduction in gas supplies of about 10 per cent compared with estimates of only six months earlier. The statement goes on to say that some offshore operators consider those revised figures to be optimistic.

The report then considers extreme weather conditions of a 1 in 50 likelihood and concludes that:

"under such conditions the market will need to deliver a response of around 2.4 bcm over the winter period to maintain a balance. This would be equivalent to the cessation of gas consumption for approximately 25% of all non-domestic demand"—

25 per cent—

"over a 40 day period. This would have to be provided through a combination of interruption contracts and other demand-side arrangements developed between suppliers and customers".

The figures I have quoted are for extreme weather conditions but the suddenness of the foreseen changes in supply availability, and the draconian nature of the necessary response, are, to put it mildly, of great concern. This reliance on the market to redress a prolonged failure in gas supplies would involve major dislocation, the consequences of which are not spelled out. I hope that somewhere, perhaps even in DTI, there is a serious plan to deal with such contingencies in what is clearly an increasingly uncertain situation.

Reliance on the gas supply market to insulate us from such uncertainties is a hazardous course. Some of our projected suppliers of gas will be far away and in variably stable political environments. In such circumstances, the operation of free market forces to protect our interests cannot be reliably assumed. We should bear in mind that the maxim "charity begins at home" is as current overseas as it is here—perhaps more so.

Of course, some reduction in gas demand will be produced from the very highly subsidised investment in wind power, interruptible though that is. Perhaps I can remind noble Lords of the estimate of the size of that subsidy until the year 2020 which was given by the noble Lord, Lord Sainsbury, on 5 May 2004 as £30 billion. I repeat that number: £30 billion. I will leave noble Lords to contemplate the wisdom of that enormous investment of electricity consumers' money—not taxpayers' money, let it be noted, despite the fact that the expenditure is in furtherance of a national government policy. For my part, I do not believe that such expenditure would have survived a rigorous strategic assessment by a coherent industry—or perhaps even a coherent government.

But, that question apart, we are clearly becoming steadily more dependent on supplies of imported gas and I hope that I have been able to show why I consider that course to be a highly dangerous one. For it must be remembered that the time requirements for any remedial actions are very long—not a matter of weeks or months but of several, perhaps many, years.

So much for the likely effectiveness of market forces in remedying serious fuel supply shortages. Yet the Government believe that market forces will solve these problems and that therefore no strategic planning is needed for future energy supplies.

A similar situation arises when we turn to the question, which I mentioned earlier, of plant margin. The privatised industry inherited a substantial legacy of coal and nuclear plant and has since been active, with government agreement, in sacrificing that legacy in favour of gas-fired generation which has the advantages of low capital cost, short construction periods and short payback periods for investors. For a time, the low cost of gas underpinned that commitment—it certainly cannot be described as a strategy. But the coal-fired plants are ageing and many have been permanently closed in the interest of short-term savings, leaving the nation, as I have shown, open to serious damage.

In fairness, we should recognise that an important plank of what is sometimes optimistically described as an "energy policy" is the reduction of emissions of greenhouse gases which contribute to climate change and the introduction of gas-fired plant furthered that end. But such a desirable objective could have been achieved also by building modern coal-fired plant, although at a higher capital cost. This was not, of course, acceptable to the market forces on which the Government place such reliance and so was not considered. That it would have preserved some real diversity in the supply of primary fuels carried no weight because no strategy existed. The attraction of financial projects which are not short-term or subsidised has been dampened by the substantial losses suffered by those financial institutions backing them as a direct result of other government actions in the electricity market. I speak, of course, of those liquidations that followed the introduction of NETA.

Meantime, our nuclear contribution, which provides no greenhouse gas contribution to climate change at all, has been subject to constant damaging actions by the Government. It is subject to the climate change levy, although it does not contribute to climate change, and pays disproportionately high business rates in comparison with other forms of electricity generation. However, those burdens were eclipsed when the Government introduced, through Ofgem, new trading arrangements, to which I have referred, known as NETA, which suddenly and seriously damaged the trading arrangements of several large generators, most notably British Energy.

Faced with the inevitable crisis at British Energy, the Government then proceeded to compound the damage by a financial reconstruction that has left our nuclear generator a lame duck. This is not the place to consider how the Government produced such an undesirable situation; suffice it to say that again an effective strategy would have placed the problem and its solution in a coherent framework of objectives and avoided the panic reaction which occurred. Instead, we are left with a financially weak nuclear operator and little likelihood of expropriated investors wishing to repeat the experience. Let me say here that we should not be influenced by the interest shown in the shares on re-listing earlier this week. The volume of share trading, though large on a daily basis, was pretty small in relation to the needs of British Energy now and in the future.

The era of cheap gas is plainly over and serious thought must be given to future energy supplies. Present energy policy vaguely sets out general aims that are in random competition. I suggest that we should recognise the primacy of security of supply and only then the reduction of CO₂ emissions. The other laudable aims could follow.

Renewable energy has an important role in reducing CO₂ emissions but a very limited one in security of supply. Modern coal plant and nuclear plant can do both and must be essential components of our future energy plans.

That sounds simple enough, but the present fixation with renewable energy has frozen out rational consideration of the necessary actions. The £30 billion being spent on wind power could have made a large contribution to both of the objectives which I have suggested should have primacy—security of supply and reduction of CO₂ emissions. That they have not done so results from the absence of a strategic approach, for which the fragmented nature of the industry is largely responsible. Its present constitution is of competing companies of varying financial and technical strengths, with no duty or incentive to take a long-term view of the industry's obligations.

As a result, that role has been neglected and that neglect has left the field open to the DTI, Defra and Ofgem to fill by a mixture of aspirations combined with a belief that the market will solve all problems, be they short or long-term.

Recovery from this situation will not be an easy matter. The present regulatory structure favours the construction of heavily subsidised wind power and of low capital cost gas turbines. To move from this will require regulatory adjustments to address long-term problems as well as short-term ones. Such a change cannot take place without a clear strategic framework. The industry itself is too fragmented to produce one, and the Government have shown themselves unable to do so.

I should like to return to my suggestion in our first debate in 2003—that we should re-examine the role of the Electricity Commissioners who operated in the 1920s and 1930s to regulate an even more fragmented industry than we have today. The commissioners expired on nationalisation, but some such body will be necessary if the problems I have outlined are to be addressed.

Past experience does not give cause for hope. That suggestion which I made in 2003 was met by a suggestion by the Minister replying to the debate that I was looking for a job! I believe that I managed to disabuse him of that attempt to trivialise a serious problem.

The problem has not gone away, nor will it do so. However, in the short space of two years the scale of the problem has made its evasion much more difficult.

I know how difficult it is for the Minister replying to do so effectively, given the nature of a balloted debate and the consequent difficulty of anticipating the arguments that will be advanced. However. I would urge him at least to recognise the very real concerns that I and others share and to undertake to take them away for serious consideration. My Lords, I beg to move for Papers.

My Lords, I am sure that I speak on behalf of all noble Lords in expressing my gratitude to the noble Lord, Lord Tombs, not only for the persistence with which he has addressed this problem over the years but also for initiating this debate today.

I am sure that when he replies to the debate my noble friend Lord Triesman will be inclined to protest about the alleged,

"absence of a strategic decision mechanism"

in the Motion. If that is the case, I should tell him that if there is such a strategic decision mechanism, it remains a closely guarded secret. I have looked for it but have not been able to find it. If it exists, perhaps in his reply he will share with us its precise nature.

I think that we all start from the same position—that it is a fundamental responsibility of government to ensure the adequacy not only of current but also of future energy supplies. We have seen too many examples of the catastrophic consequences that flow from even temporary failure in electricity supplies to have any degree of complacency about this. Guaranteed electricity generation has to be sufficient not only to guarantee our existing needs and demands but also the future needs and demands that will come from the prospect of economic growth. That prospect is constantly put forward by all political parties as part of their economic policy to sustain the ever improving standard of living that they are all inclined to promise to their electorate.

Given those circumstances, the omens are not good. The noble Lord, Lord Tombs, referred to our present level of dependence on gas. I believe that about a third of our present electricity needs are dependent on gas. However, it is clear that Europe's indigenous gas supplies, following the "dash for gas", are near exhaustion. Europe is therefore becoming increasingly heavily dependent on imports of gas from regions that are actually, or potentially, extremely volatile. Four of the most important regions are Russia, the central Asian republics, the Middle East and Libya. If we are currently dependent on gas for a third of our electricity, it is not responsible to view gas as being potentially available to fill a gap in our needs.

Against that background we have all focused more clearly on the issue of climate change, which has been an increasing force on the political agenda. Sir David King, the Chief Scientific Adviser to the Government, warned that global warming was a greater world threat than international terrorism. The UK is sufficiently persuaded of that threat to promise a reduction in carbon emissions of 60 per cent by the year 2050. It is impossible to chart any course based on current policies and promise that 60 per cent reduction in carbon emissions without attaining the target for generation from renewables of 20 per cent by 2020. I have doubts whether that is sufficient. But much as I wish to see that target achieved, it is a target that daily looks increasingly incredible. It requires 600 per cent improvement in the quantity of generation from renewable sources over a period of a mere 15 years, three times longer than the noble Lord, Lord Tombs, has been regularly reminding us of the increasing scale of the problem. I wish the target well. I am not against the efforts in relation to renewables, but my scepticism remains. I do not believe that a wish and a prayer are really an adequate substitute for the strategic decision mechanism.

Over the period 2020 to 2025, Britain's nuclear power stations—the non-carbon emission area of electricity generation, the non-global warming nuclear power stations—will reach the end of their existing useful life and will close. That will happen automatically in the absence of decisions being made. The effect of no decision is that those years 2020 to 2025 will inevitably see the end of our nuclear industry. As this happens, we will see nearly a quarter of our electricity supply needing to be generated by an alternative. But it will be 25 per cent of clean-generated electricity that will have to be replaced

by either renewables about which I am already sceptical, fossil fuels which will directly conflict with our obligation in relation to carbon emissions, or by new nuclear provision. If there is a magic alternative, I hope that somebody can show it to me because if it is that self-evident, we ought to be able to expose it to examination in the course of a debate such as this.

I believe that we have a serious conundrum. About a third of our demand is coal-fired and producing carbon emissions. About a third of our electricity is gas-fuelled in terms of generation, but with the gas supplies running out and the alternative supplies being potentially politically volatile, the rest has to be the combination of nuclear, renewables and oil or others which are such a small part of it. The renewables are clean, but their delivery cannot be guaranteed. The nuclear was seen in the White Paper 2002 as an option, but only if the skill base of the nuclear industry was maintained.

Can my noble friend honestly stand there with his hand on his heart and say that the statement in the 2002 White Paper of maintaining the skill base of the nuclear industry has been achieved? I am available to be convinced, but at this moment I remain to be convinced. But even if it is so maintained, nothing is happening on the Royal Society demand for a new generation of nuclear power stations.

When my noble friend replies to the debate I would like him to imagine for a moment, but not to concede, the possibility that we do not get 20 per cent generated by renewables and we decide that the policy has the potential for failure. I would like my noble friend to address the question of what is the lead time for a new nuclear power station, from the day at which we decide that either our renewable energy generation is inadequate or we are failing in our goals for reduced carbon emission. How long do we need to create an alternative clean generation?

I said earlier that a hope and a prayer is not a strategic decision mechanism. As regards hope, I am always an optimist. I am even an optimist who could be persuaded about the efficacy of prayer, but I would not be prepared to plan the future economic well-being of our industry and the future of the economy of UK plc on such a policy.

We are leaving strategic decision-making too late. If the decisions cannot be made today or this month, or next month, then I say in all consciousness of what I am saying to my noble friend that they must be made very soon after 5 May or whenever the date of the next general election is.

There is an excellent, recently published book on the Spanish Armada. When I first saw its title I thought it was a new title for government energy policy on electricity generation. I hope that we never have to have a policy entitled "Confident Hope of a Miracle". I hope that I am not tempted for much longer to look enviously at that title because for me it very much describes where we are today. It is one of the issues which transcends party politics because the very security of our society is based on the guarantee of a continuous supply of the energy on which that society depends both economically and socially.

My Lords, I certainly share with the noble Lord, Tomlinson, our gratitude to the noble Lord, Lord Tombs, for once again bringing this very important subject to the attention of the House. I say in relation to the speech which we have just heard that it really is a very powerful indictment of the policy which the Government are seeking to put forward. The noble Lord, Lord Tomlinson, suggested that he might be persuaded—I believe that we understand the language that he will require a very great deal to be persuaded—that they are on the right course.

In the middle of last year there was a television programme which attracted a lot of attention. It was called "If the lights go out". Although it was fictional, it was not fanciful. I recently met the producer of the programme, Dai Richards, at a conference at Church House. He said that although there had been a huge audience for the programme, he had been immensely disappointed that there had been no political consequences. That is a problem for this House because any of my noble friends and noble Lords opposite who took part in the debates on the Energy Bill after that programme will know that amendment after amendment was debated—the programme provided powerful ammunition—and we succeeded in putting into the Bill a number of provisions which raised the security of energy supply to the top of the scale.

I find it disturbing that the television company knew nothing about that at all. Perhaps the House authorities might be persuaded to look at how we can get our message more firmly across to the public. While on the issue of media awareness, perhaps I may refer briefly to the exchanges at Question Time yesterday. When I asked the noble Lord, Lord Triesman,

"what is being done to draw the attention of the media"—[Official Report, 18/1/05; col. 647.]

to the Government's response to the Select Committee report on renewables, at col. 648 he said,

"I give the straightforward undertaking that I will ensure that there is proper discussion regarding how to make sure that it is widely available and discussed in the media.

In the course of this debate, can he tell us what he has been able to do about that?

I turn briefly to one of the Select Committee's main criticisms in the context of the security of supply, that no one seems to be in overall charge of security. This follows directly on what the noble Lord, Lord Tombs, has put before the House. Page 3 of the Government's response states:

"We do not accept the Committee's assertion that there is no one at the executive level with responsibility for ensuring that there is continuity of supply. Both the Secretary of State for Trade and Industry and Ofgem have responsibility for the long-term security of supply".

Well may the noble Lord, Lord Tombs, smile, but that is what they said.

"Ofgem has important statutory duties relating to security of supply, which inform everything it does; the Secretary of State has ultimate responsibility for energy policy".

I want to draw attention to three points that arise out of that remarkable paragraph. First, any responsibility that rests on Ofgem for the long-term security of supply stems from amendments that we carried in this House in 2000 on the Utilities Bill, five years ago. With support from all sides of the House, we carried the relevant amendments with a majority of two, against very fierce government opposition. I am delighted that they should now be prepared to boast that Ofgem has responsibility. Perhaps the noble Lord, Lord Triesman, may be prepared to concede that we were right and that the Government were wrong.

Secondly, the Secretary of State may have responsibility for energy policy, but does that put her in charge of,

"ensuring that there is continuity of supply"?

I do not believe that is the same thing at all. That is what the Select Committee was looking for. Does policy include security? Perhaps we could have a very clear answer to that.

The third point concerns the long term. Central to the case made by the noble Lord, Lord Tombs, is the fact that there is no strategic mechanism for the long term. I refer briefly to the Ofgem briefing for this debate which appeared in my letterbox this morning. Under the heading,

"Will the market ensure future security of supply?"

there are several paragraphs, but most of them look forward no more than three years: the three-year forward price mechanism and the three to four-year time for building a new gas-fired station. That is all short term. There is nothing there for the long term at all.

As has already been pointed out, with the decommissioning of the existing nuclear reactors in the next 15 to 20 years and with the closure of the polluting coal-fired power stations under the EU restrictions, it is inconceivable—I agree entirely with the noble Lord, Lord Tomlinson—that renewables or energy saving can possibly fill the gap. We will need major new generating capacity and such projects may well take 10 to 15 years to come to fruition. It is never too soon to start.

There is a growing awareness in the country that existing policies will simply not lead to the market making long-term investments and that changes are becoming essential. If Ministers need any further evidence to convince them of that, I suggest that they ask their officials to obtain for them the paper, Will the New Electricity Trading Arrangements Ensure Generation Adequacy?, by Miles Bidwell and Alex Henney, published in the Electricity Journal last year. It is a complex argument, but to my mind it is irrefutable.

Before I turn to my final point, I want to raise one matter on which the Minister may be able to give me a response. When we debated the way in which the renewables obligation works, as we did during the passage of the Energy Bill, we made several points. The Minister was quite right to claim in a recent response that the RO system for encouraging renewable resources has general support across the political spectrum. But, as has been pointed out, wind energy is very much more expensive than energy produced from gas and offshore wind energy is more expensive still. Therefore, it can attract investment only by being substantially subsidised.

When, during the course of the Energy Bill, we debated the need for subsidies to encourage the provision of new transmission lines to remote wind farms, I argued that, while the Government were perfectly entitled to provide that support for transmission lines, should not the subsidy that is being provided appear as a line on consumers' energy bills so that they know how much they are paying for renewable energy?

The RO is a mechanism for transferring the burden of subsidy from the Government to consumers. I believe that consumers are entitled to know how much they are paying for that. At the moment there is nothing that tells them the cost. I believe that the Minister should now be able to give us an assurance that the Government will consider the matter again.

I turn now to the nuclear option. Those who have heard me speak in these debates before know my view perfectly well and I do not need to elaborate it. Suffice it to say, I believe that this country has now reached the stage when the question is not whether we shall need nuclear power, but when and by whom will it be provided? I want to talk about that in the context of British Energy, which has been mentioned by noble Lords.

The Minister will know that in Questions and in correspondence I have expressed serious concern about the very harsh treatment meted out to British Energy. Due to the collapse of wholesale energy prices under the influence of NETA—the system for establishing prices—British Energy found itself in serious financial difficulties. Of course, I take the point that as a major generator it could not be allowed to collapse. On another occasion I said that the Government were, therefore, right to intervene. I also accept the point made very bluntly by the noble Lord, Lord Sainsbury, on 2 November:

"when you run out of cash you are not in a position to demand whatever terms you want".—[Official Report, 2/11/04; col. 137.]

The Government have driven that argument to its ultimate extent. One example is the forced sales, at the bottom of the market, of British Energy's American and Canadian assets—Bruce Power and AmerGen. They were gravely misconceived and have caused very serious damage to the long-term prospects of British Energy. What do we see now? Bruce Power's plants have been brought back on stream and are making substantial profits, but of course for the benefit of the purchasers who bought the shares at a discount and not for the benefit of British Energy.

Turning to the requirements that were imposed by the European Union on state aid, one can see the real damage to British Energy's prospects. But British Energy is now back in profit. With the recovery of prices, the company is making a good profit.

The Commission decision is a substantial document which runs to 90 pages. I do not suggest that noble Lords should read it. Apart from anything, it is marked "EU restricted", so I do not feel free to quote from it. However, I shall quote the DTI's press release, which states that the Commission has imposed on British Energy the following measures:

"no nuclear or fossil-fuelled capacity expansion (above British Energy's current capacity) by the company in the European Economic Area for six years, and no hydro-electric capacity expansion".

Does that preclude British Energy from fulfilling its plans to extend the lives of its power stations? Does it preclude British Energy from making any plans to invest in new nuclear build? It is the company with the sites and the expertise and it could well be in the market for doing that.

I hope that the Minister will be able to give the House very reassuring answers. If we do not have new nuclear build from British Energy, from where will it come? I share the grave misgivings expressed by the noble Lords, Lord Tombs and Lord Tomlinson. I believe that we are heading towards disaster.

My Lords, as we know, this is the third annual debate initiated by the noble Lord, Lord Tombs, on the need for a strategy for electricity. The noble Lord is building up a small band of devoted followers who have reappeared on each of these three occasions. I very much hope that he will persist with this annual event, but the trouble so far is that these debates have inevitably tended to be rather repetitive, because very little has changed. Let us hope that in years four, five and six when he introduces further annual debates we will have a more positive view before us.

It is certain that there are continuing doubts as to how the prospective electricity-generating gap is to be filled in the years ahead. In the period up to 2020, as the noble Lord, Lord Tomlinson, has pointed out, there will be a progressive reduction in coal-fired and nuclear capacity, which at present represents about 60 per cent of the total capacity, but by then could well be about half. The question is how that other half is to be filled. The only new generated capacity so far committed is a limited amount of wind power, as we know, which at present is contributing about 3 per cent of total electricity generation. The aim is 10 per cent by 2010, but grave doubts exist about whether that will be achieved. Certainly, there are more doubts about whether the further targets will be achieved. The important issue is that no new generating capacity of any other sort has been committed at present, although a number of consents have been granted that will expire later this year. If they are not taken up by, I believe, October, renegotiation for consents will have to be embarked on. This has been revealed in the latest report of the Joint Energy Security of Supply Working Group.

It is not surprising that investors in new generating capacity are holding back, for there is great uncertainty hanging over the market. In recent years Ofgem, the industry regulator, drove wholesale prices down by some 40 per cent of their previous level, to which the noble Lord, Lord Jenkin, referred. More recently, although electricity prices have moved up again, gas prices have moved up even faster, and as this is the main input fuel for non-renewable electricity generation it has created a further element of uncertainty.

During the next two years, while new interconnectors and terminals are put in place, gas prices are bound to go up further and are already showing signs of doing so. After that, as gas imports into the UK will rise rapidly due to the depletion of North Sea reserves, which are already depleting faster than expected, as the noble Lord, Lord Tombs, pointed out, a continuing upward pressure on European gas prices can be anticipated. This leaves out of account the risk of supplies from distant sources and possible pipeline interruptions, to which the noble Lord, Lord Tombs, also referred. There is grave uncertainty on the gas price and supply front.

In the light of these shorter and longer-term uncertainties, it is by no means clear how potential investors in new power stations would react. This bluntly raises the issue put to us by the noble Lord, Lord Tombs, in this series of debates. What is so far lacking in the broad energy framework is a strategy for electricity. It is difficult to find such a strategy emerging out of either the White Paper or the Energy Act, and yet security of electricity supplies is far and away the most important factor in the whole range of energy considerations.

As things stand today, we can be reasonably sure that demand for electricity will at least be maintained, and could even go up by a small percentage each year. It is unlikely, in spite of all efforts being made to curb consumption, that the demand for electricity, with new gadgets coming on to the market all the time, will decline. Against that, there is much uncertainty about how this fairly steady and possibly rising demand is likely to be met. We have on the one hand a fairly firm demand picture, and on the other an uncertain supply picture.

An essential element in the strategy that needs to be put in place to deal with this situation is the maintenance of a reserve capacity, to which the noble Lord, Lord Tombs, referred. There is no such provision in present arrangements. In the now far-off days of the CEGB, when it had the clear and unambiguous responsibility for maintaining the security of electricity supplies, it kept a substantial reserve in hand. In the electricity pool, which succeeded the CEGB and was set up on the privatisation of electricity, there was also provision for some reserve capacity in the form of capacity payments. Those were not continued under the new electricity trading arrangements, and with the collapse in wholesale prices, stimulated by NETA, a number of generating companies withdrew or mothballed excess capacity. In previous debates on this subject, Ministers have contended that mothballed capacity was equivalent to an available reserve, but that very much depends on the time taken to bring the capacity back into operation, and in some cases this could be a year or more.

In view of the supply uncertainties lying ahead, the Government should give serious consideration to the reintroduction of a form of capacity payment, which could offset the impact of fluctuating market conditions, which in the case of such a basic commodity as electricity would have a serious impact on consumers. Such capacity payments could ensure that a necessary proportion of plant remained on standby even when not generating, rather than being withdrawn and mothballed.

There is also a case, both on security and environmental grounds, for extending special support for other forms of electricity generation, in both the renewables sector and the non-renewables sector. More, for example, should be done to stimulate biofuels, on which no doubt the noble Lord, Lord Palmer, will be speaking later on. On Monday 17 January, I asked a Question about combined heat and power and its contribution to carbon abatement. CHP also has a major advantage in contributing to security of supplies by taking pressure off the grid and making use of the waste heat. I have an interest in the small-scale generation of electricity, a concept that the Government have supported both in the energy White Paper and in the subsequent Energy Act. The most effective way to promote this concept is to introduce a CHP obligation similar to that applying to renewables, a point that I have made repeatedly.

Similarly, as the Government are well aware, there is a way in which coal, of which we still have plentiful reserves, can contribute to security and the environment. That is by supporting projects for clean coal technology, and the improved combustion of coal, together with carbon extraction. The Government have issued a further consultative document on the subject, but what we need is not more consultation but action on the basis of existing and proven technology. There is potentially a substantial export market for such a technology, particularly in China and India, if we can demonstrate it in action, as has been done in the United States, Canada and elsewhere.

Finally, there is the vexed question of the future of nuclear power, to which the noble Lords, Lord Tombs, Lord Tomlinson and Lord Jenkin, referred, and on which a decision must surely be reached soon.

I do not speak as someone who particularly supports nuclear energy—in fact I have spent most of my life fighting against it. Nevertheless, it is an issue that must be decided. To do so, we must be clear about waste disposal, capital cost, security and public acceptability. Those issues must be tackled now. Without a decision on nuclear power it will be impossible to construct a credible strategy for the future of electricity on which our economy and well-being depend.

In conclusion, there needs to be a strategy for electricity that ensures the maximum practicable security of supply combined with minimum harm to the environment. Such a strategy, regrettably, is not yet in place. The steps that other noble Lords and I outline will help to achieve that objective.

My Lords, the general direction of my remarks will be not dissimilar from that of previous speakers, although the content will be rather different. In particular, I shall say more about wind than we have heard so far.

I begin by recollecting the Second Reading debate on the Energy Bill on 11 December 2003, when I drew attention to the fact that the Bill did not focus on the gap that was likely to develop between demand for electricity in this country and the generating capacity available. The noble Lord, Lord Whitty, explained that that was not the purpose of the Bill.

The Government have now nailed their colours firmly to the mast by embarking on an extensive programme of promoting new generating capacity from wind, as part of their campaign to reduce, and when possible eliminate, generating plants that emit carbon dioxide. That programme does not seem to require specific legislation, although it is in fulfilment of our undertaking as signatories of the Kyoto agreement, which is evidently very important to the Government.

I emphasise that particularly because the main component on this policy appears to be the political commitment to Kyoto. Embarrassingly, the result is likely to be an even larger gap between demand and capacity, which will occur because, by its nature, wind power is available for only part of the time. As I said in that previous debate, we could in our current circumstance improve the well known phrase in St John's gospel:

"The wind bloweth where it listeth",

with the words,

"and the wind bloweth when it listeth".

It is important to understand that by installing wind turbines we do not, and cannot, guarantee that a certain generation of power and its transmission through the grid will follow, or that it will occur when most needed.

I refer to a paper dated December 2004, produced by Mr David White of the Renewable Energy Foundation, whose arguments I found very informative. I commend the paper to your Lordships who wish to follow the subject in more detail. He looked carefully at the experience in Denmark, which has made large investments in wind power.

Mr White explains that when the wind activates the Danish generators, the electricity so generated meets most of the domestic demand, and permits the export of the balance not required to its neighbours—particularly Sweden, which happens to have a large spare capacity of hydro power. When there is no wind in Demark, the Danes can call on the Swedish hydro-electric reserves for electric power. There is, thus, a balance available to meet the internal Danish demand. Electricity cannot be stored, so the rule is that generation must equal demand, which occurs in the Scandinavian market in the case I have cited.

That will not happen in our case when there is no wind as our reserve capacity is declining. We are also worse off than the Scandinavians because our land mass is not large, and anticyclones may cover the whole of our country which becomes windless. There seems to be a serious risk that we shall be unable to meet likely demand if we rely heavily on extensive wind power for generation without reserve capacity from other sources to fill the gap on windless days.

It is worth recalling that the only external link that we have for power exchange, apart from Ireland, is with France from whom we import large quantities of power through the Interconnector. The original intention was to use the Interconnector for precisely the purpose of exchanging supply to balance demand at peak levels that occurred at different times in the two countries.

That worked well for more than a decade, but following the sale of London Electricity to foreign companies, the Interconnector is now used, as far as I know, only to supply French-generated nuclear electricity to our domestic market. I believe that it is almost wholly, if not entirely, generated by nuclear reactors in France.

That situation has worried me for some time as it will be open to the French authorities when their nuclear generator has reached the end of its life to present us with a heavy bill for reprocessing the nuclear waste caused by the generation of our electricity in the British market.

I suggest that we examine the French market for electricity generated by British wind power—say, at Dungeness—so that we can reach a better balance between the two markets and meet the principle that generation must meet demand, or at least make a worthwhile step in that direction. That would adapt the interesting Danish/Swedish example to our own circumstances.

The difficulty, as I see it, is that the Government have been heavily influenced by their desire to reduce CO₂ emissions as the guiding factor in their policy. There is what one might call an ideological commitment to Kyoto. That view is not related primarily to the needs of the British energy market, which should surely be the objective of energy policy in this country. The Kyoto commitment was the objective.

If we continue on the course on which we are now embarked we shall have both unreliability of supply and higher electricity prices as a result of subsidies to the distributors paid by the Treasury and higher prices paid by the consumer.

I do not pretend to have a solution to those problems, but I have suggested a way in which they might be alleviated. My main concerns are that we are on a course away from the system that we enjoyed in the past—a reliable source of supply via an efficient national grid at reasonable prices. We need to formulate again a national policy enabling industry to work and citizens to live within the conditions that we have enjoyed in the past.

The Government will no doubt claim that they are just attempting to cope with the excessive emissions of CO₂, but our citizens will not be pleased with the result that leaves them freezing in the dark. The improvement in the upper atmosphere may be a comforting reflection but it is not a prime requirement of our citizens in their daily lives.

I end with a plea to the Government to propose to Parliament an energy policy that meets the objectives that I have mentioned. That is what our citizens want and what our commercial companies expect.

My Lords, I enter this series of debates, promoted by the noble Lord, Lord Tombs, with considerable trepidation. The debates have been going on for a number of years, and this is the first in which I have sought to take part. I want to talk about the subject from a slightly different perspective.

Like my noble friend Lord Jenkin, I was pleased to see the briefing from Ofgem, which it kindly supplied for the debate. I was interested to read it, but when I did so I was disappointed. As my noble friend said, the document is essentially short term. It makes no mention at all of global warming and the problems of carbon dioxide generation.

One has to assume that that is outside the context of the work that Ofgem does. But I had always assumed that the work that it does was established by the Government. My fear is that the subject is outside the perspective and time horizon of the Government themselves.

I hope that that is not the case. The Prime Minister pays lip-service to the problems created by global warming, although there are doubts from some of his recent remarks on whether his devotion to the subject is as keen and clear as one would wish. The subject is very important. The only mild genuflection in that direction is a passing comment about 185 megawatts of wind generation at present on stream.

What is the situation if we look at the problem of global warming from the global perspective? Carbon dioxide is currently at 375 parts per million in the atmosphere, as measured by the Mamalahoa observatory in Hawaii. It was 280 parts per million a century ago. There appears to be an increasing problem because, for the past two years, instead of going up at one part per million, which the century's progression implies, it has been rising at more than two parts per million per annum.

Against that is a growing scientific consensus that the upper limit at which we ought to accept the growth of carbon dioxide in the global atmosphere is probably somewhere around 500 parts per million. Beyond that, there is a point at which the consequences become wholly unpredictable. Certainly, 550 parts per million is probably when the safety valve bursts. If you put two parts per million into the time interval, we have 70 or 80 years to solve the problem. In the context of the electricity supply for the next five years, that may seem a long time. However, in the context of the strategic decision mechanism of the noble Lord, Lord Tomlinson, it is a remarkably short time, because we do not have such a mechanism.

I have considerable scepticism about the Kyoto agreement. The noble Lord, Lord Bridges, says that devotion to Kyoto cannot be allowed to interfere with our national energy security; I took it that that was what he was really implying. I am afraid that I take a rather different view—that we cannot avoid and escape from the consequences of what is happening globally so far as CO₂ emissions are concerned. The Kyoto agreement now in place is the only game in town. If it works—there is an if—something more than 480 million tonnes of carbon dioxide emissions per year will be saved by 2012.

In that time China has 562 coal-fired power stations planned but not all approved, while India has 213 planned but not all approved. The United States has not helped us—it ought to know better—as it has 72. If those power stations come on stream, they will produce more than 2,500 million tonnes of additional carbon dioxide emissions per annum, five times the saving that Kyoto will achieve. The arithmetic is deadly. Its relevance to today's debate is that the need to reduce carbon dioxide emissions must be a paramount priority in everything that we do for increased generating capacity.

My Lords, will the noble Lord allow me to correct a remark that he attributed to me? I think I said not that we must obediently disregard Kyoto, but that we should apply it with some caution. My argument at the moment is that that is not being done. It is being taken as something engraved in tablets of stone, and we have to get on with it and think of something else. Maybe we do, but we have rather more flexibility than he suggests.

My Lords, I apologise to the noble Lord if I tightened his remarks, but I am afraid that I was trying to say what he has just said in a much more brief way. If that was inaccurate, I apologise.

If carbon dioxide emissions are the priority concern, replacing coal with gas is not an option because they are both carbon dioxide emitters. Although one is better than the other, it is still part of the problem. Where do we go? The noble Lord, Lord Ezra, has for a long time been an advocate of carbon dioxide sequestration?—so-called clean coal technology. It is proposed that two of the new American power stations will have that built into them during their construction.

The success of the process is not guaranteed and the costs are unknown, so we need to be wary of that. Certainly a major effort needs to be put into that if it is to come forward. My own feeling is that, unless carbon somehow becomes a raw material for the materials industry, it will not succeed. Simply burying it may be a short-term solution, and so-called carbon sinks producing more trees may give us a 50-year time relief, but that is about all. Once the tree is mature, it stops absorbing more carbon. That means that we need to move on.

One of the questions that one has to ask in all this is what would happen if the —30 billion subsidy that the wind industry received were reapplied to other more reliable sources of energy, such as the Severn barrage or, indeed, a Thames barrage. Such a barrage is now being talked about as flood protection for London, with no mention of its energy-generating possibilities. I find that odd. The noble Lord, Lord Palmer, will talk about alternative crops so I shall say nothing about that, but they will make a contribution. I merely observe that one can extract rather more energy from solar power per acre, using solar panels, than you can with plants.

It was the noble Lord, Lord Flowers, who remarked to me one day when I worked with him on the Science and Technology Committee that, in fact, we have only one source for our energy—nuclear. The question is whether we have nuclear generation 98 million miles away or here. It is worth remembering that all the hydrocarbon fuels that we consume are the product of solar energy built up over immense periods many millennia ago, and are being burnt off at a rate of knots.

All the other factors—energy conservation, combined heat and power, heat recovery and so on—will have to contribute. What do we see? We see little progress and little leadership or urgency from the Government. If the facts are uncomfortable, we push them out of sight if that can be done. On this issue, the Government are putting party politics before national interest.

My Lords, it is with great trepidation that I rise among a distinguished group of speakers. I do so as a farmer and the unpaid president of the British Association for Biofuels and Oils, more commonly called BABFO. For years I have been concerned about all our energy supplies, most especially where fossil fuels are concerned. I, too, am grateful to my noble friend for his excellent introduction to the subject. I am a new recruit to his loyal band of followers on their annual outing, although I did have my trials and tribulation during the passing of the Energy Bill. As by far the youngest member of tonight's band, I have become more and more depressed as speaker after speaker has warned of the dangers we are likely to face in future.

The problems of gas have been mentioned tonight. With oil at around 50 dollars a barrel, we ought to be urgently seeking alternatives—and so desperately need a cohesive strategic decision mechanism where the electricity supply industry is concerned. This is where I feel the role of renewables can be very useful. The Government's strategy to replace electricity generation from fossil fuels by low-carbon alternatives is in tatters. Leaving aside wind, which many noble Lords have mentioned tonight, and which is no more than partly replacing nuclear in all its unsightly platings—let alone its heavy subsidy—the biomass alternative has sadly been little short of a fiasco.

BABFO warned years ago that unless a proper commercial strategy were put in place, the effort would be wasted. It is tragic to think that after several years and nearly £100 million of research and development—yes, £100 million—that is has effectively been written off. The total area of relevant energy crops is hardly more than 1,000 hectares out of a total of 6 million. What a terrible waste of £100 million and, indeed, of land.

Farmers are in fact feeding the nation with half a million hectares which are set aside, wasted, idle and out of production. One obvious use for this land would be for biofuels, but there are biofuels and biofuels. For some extraordinary reason, Defra bureaucrats seem to have an infatuation with specialist biomass crops. The noble Lord, Lord Whitty, has recently announced a further £3.5 million of sweeteners for biomass. I had naively believed and hoped that the role biomass could play had been properly evaluated, especially bearing in mind the time taken for a biomass crop to come on stream, in comparison with the fuel use for a nine to 11-month growing crop such as sugar beet, wheat and oilseed rape. It must not be forgotten that energy from biomass crops costs a lot more than energy from fossil fuel.

We have already had the disaster of ARBRE. Until the actual costs of energy from these crops is known and the gap with fossil fuels known and bridged, I fear that Defra's dalliance with willow, grass and waste is doomed to fail. Liquid biofuels are different. They come from existing crops, they use known technology and have been fully costed. One must not forget that our current energy requirements are prone to unknown market forces all from increasingly unstable parts of the world, with no long-term supply guaranteed, let alone the volatility and fluctuation in price. The noble Lord, Lord Tomlinson, made this point most effectively.

It is also worth reminding your Lordships how relatively clean biofuel crops are to burn. I believe they have an important part in helping the Government to meet their Kyoto targets. Farmers are ready and willing to help Her Majesty's Government, which would in turn help their ailing industry.

Why do Her Majesty's Government not fund, for example, a small trial of biofuel plant to supply the National Grid? It would not be horrifically expensive. Farmers need help, guidance and a sympathetic ear from the Treasury. They could so easily play a significant role in a realistic and successful electricity industry. I urge the Government to seize the opportunity, before it is too late.

My Lords, I join other noble Lords in thanking the noble Lord, Lord Tombs, for securing this evening's debate, in view of the important decisions which must be taken on the security of our energy supplies.

The Government will have some difficult choices. On the one hand, how to replace our present mix of energy sources as they become exhausted, as with North Sea gas, or are withdrawn from production, as with nuclear. On the other hand, they must find how to reconcile that with our commitment to meeting our Kyoto targets. If these targets seem an expensive way of achieving little in terms of reducing global warming, Kyoto is none the less important. As a signatory, the UK has set itself some demanding targets; as other noble Lords have pointed out, to produce 10 per cent of electricity from renewables by 2010 and what it terms an "aspiration" of 20 per cent by 2020. I am unsure of the difference between an aspiration and a target. Presumably an aspiration is a target that is thought unlikely to be achieved.

The Government seem increasingly reluctant to get to grips with the consequences flowing from their energy White Paper and their Kyoto commitments. For example, the House of Lords Science and Technology Committee report on renewable energy recommends that the Government:

"review the allocation within Government of responsibility for energy policy, with a view to providing strong and coherent leadership".

The DTI response is really extraordinarily limp. It simply lists a number of committees and review bodies, such as the sustainable energy policy network and the high level energy group—or in other words, "Yes, we have no leadership".

Yet this leadership is essential if we are to have a properly informed and balanced public debate. As the Science and Technology Committee goes on to say, on page 7:

"We could not avoid the conclusion that the Government are not taking energy problems sufficiently seriously. We could find no one … whose responsibility it was to ensure continuity of supply".

The noble Lord, Lord Tomlinson, and my noble friend Lord Jenkin of Roding, were not alone in being sceptical. Again, the report says:

"We found almost no one outside Government who believed that the White Paper targets were likely to be achieved".

That is strong stuff, but entirely justified. There appears at present to be a strong reliance on renewables and in particular on wind power to achieve the Government's self-imposed targets. While the consequences of this policy have been extensively debated outside government, the Government themselves have not produced any coherent and workable strategy for achieving security of supply while meeting their carbon emission reduction targets.

As the noble Lord, Lord Bridges, pointed out, wind power is both intermittent and random. This means that wind power will almost always need fossil fuel back-up plants running at low efficiency. Given that need for fossil fuel back-up, wind power, while emission-free at the point of electricity generation, does not give us an emission-free energy policy. When the noble Lord, Lord Bridges, mentioned the Danish experience of wind power he did not point out that the cost of the Danish model of wind power electricity generation is something like twice the current cost of electricity in the United Kingdom. So far, the Government have not addressed those problems.

If wind power is expensive—the noble Lord, Lord Tombs, pointed out that astonishing figure of £30 billion up to 2020—if it is not emission-free and if it has serious environmental limitations, what have the Government to say about nuclear power, which is reliable and carbon-free? Not very much, it seems, and

that is, I would argue, irresponsible. The Government have so far said only that they will be keeping the nuclear option open. That amounts to masterly inactivity in my book.

Under the Government's forecasts, as the noble Lord, Lord Tomlinson, reminded the House, nuclear-generated power is due to reduce to zero by 2020. Like the noble Lord and my noble friend Lord Jenkin, I would like to know how that energy gap will be filled. Will it be by coal; by imported gas; or by building, in the teeth of strong opposition, thousands of offshore and onshore wind farms at vast cost? But we do not know the answer. Why? Because the Government do not know. We should know. After all, we are paying the bills. I hope that this debate will help focus the Government's mind on their responsibilities for future energy supplies.

My Lords, we are all indebted to the noble Lord, Lord Tombs, not only for having secured today's debate but for his tenacity in constantly returning to push everyone into considering these matters—having brought them to our attention, not just this January, but last January and the January before. It is a great pity that his concerns over the subject, which so many of us share, do not receive the publicity that they deserve.

Indeed, I support my noble friend Lord Jenkin, in particular, when he talked about the lack of publicity and the fact that wonderful programme, "If", whose producer he met and who knew nothing about what we had done afterwards. Only yesterday, in the Daily Telegraph, a piece was published by three eminent scientists who mentioned the problems of the committee dealing with nuclear waste. Nowhere in that article did it say that we dealt with the matter extensively last Wednesday. Perhaps it is time, as my noble friend said, to ask the authorities in the House to find out why no one is reporting excellent debates such as this and no one will hear about them. All will depend on the few people who read Hansard.

I shall not rehearse the statistics concerning the steadily deteriorating supply situation and the current inexorable march towards almost total dependence on supplies of gas from foreign suppliers, many of whom are from far from stable regimes, because many noble Lords have already raised that matter. However, it is right to point out that, in so far as the Government have any discernable policy, it is to have no definite policy, or a minimum of policy outside of the continuation of that increasing dependence on gas, coupled with placing a fervent and optimistic faith in supplies that they hope will come from as yet undeveloped renewable sources. I am not that optimistic. The noble Lord, Lord Tomlinson, said that he was optimistic by nature, but he, too, did not think that the Government would achieve that.

Among the foremost of these sources is wind power. I shall leave aside the economics of the capital costs—I was shocked at the figures given by the noble Lord, Lord Tombs—and the adverse effect on the environment of the giant windmills, of this source of generation. The simple fact is that wind is not a consistent and reliable source of power. The noble Lord, Lord Bridges, and my noble friend Lord Willoughby de Broke, have mentioned that. The wind does not blow all the time or at times when there is a major demand for power.

In an article in Power UK in April 2004, Alex Henney and Miles Bidwell reminded us:

"Electricity cannot be stored. The amount produced each instant must equal the amount being demanded … or the system will collapse".

All that wind power can do is to supplement existing major sources of generation—which, apart from gas are declining, as other noble Lords have said—when weather conditions are right, to reduce the calls on, and use of, fuel by those sources.

Despite this, we on these Benches support the use and encouragement of all forms of renewable energy as part of Britain's power resources and our contribution to protecting the environment. Contributing to the reduction of CO₂ is an important part of our considerations and I was concerned about an answer that the Minister answering this debate gave to my noble friend yesterday, regarding the reduction of carbon emissions. It is clear that Her Majesty's Government had tried to delete from the key European text the targets that had been set for carbon emissions and I should be grateful if the Minister would comment on that.

The Leader of the Opposition, in his speech to the environment forum hosted by the Green Alliance and Environmental Resources Management last September, made clear his support for all kinds of renewable energy. But the truth is that we have heard tonight that meeting those targets will be extremely difficult. A snapshot of what the Government must address can be found in the statistics published on 6 January by the DTI, comparing the third quarter of 2004 with the same period in 2003: generators used 0.07 per cent more fuel; coal usage was 2.6 per cent lower, nuclear generation was 10.6 per cent down, but gas usage was 6.4 per cent up; the use of electricity was 3.6 per cent up; and domestic consumption increased by 3.8 per cent and industrial consumption by 3.7 per cent.

These statistics show a growing demand for electricity by all consumers and an increasing dependence on gas, coupled with a decreasing use of our own independent sources of supply. They send a message to the Government that they cannot continue to dither about the problem of ensuring the security of supply for the UK. The Government have also received a stark warning from Dr Dieter Helm, a member of the Prime Minister's own Council for Science and Technology, who described our power generation system as "clapped out". The increasing demand to which I have just referred and the precariousness of our supplies of fuel mean that the Government will ignore this warning at their peril—perhaps I should say, at the whole country's peril.

Another problem faces our electricity supplies which has nothing to do with the fuel used to generate them. Noble Lords will recall the major "brownouts" and blackouts in places as widespread as California, New York and north east USA, Canada, Italy, France and Switzerland in 2003. In the course of six weeks during the heat wave of 2003, 112 million people across six European countries were left without power. It took only four seconds to produce the chain of events that wiped out most of Italy's electric power and a full day to restore it.

The recent disastrous floods in Cumbria resulted in tens of thousands of people having their misery added to by power being cut off for days. Admittedly the situation in Cumbria was unprecedented and the power company called in engineers from around the country, even from Ireland, to work on the problem and is offering compensation to customers who were cut off for more than 48 hours. But customers do not want the prospects of compensation. They want to know that if the very worst came to the very worst, they would not suffer long-term disruption. They want to know that normally occurring adverse weather conditions, of which we all know—and the conditions in Cumberland were certainly not just adverse—will not cause needless disruption.

Following the blackouts that occurred in London and Birmingham in 2003, Ofgem said that while the problems were,

"not a breach of the National Grid Company's licence, its wider conclusions do not give the company a clean bill of health over the blackouts … and there are … important lessons for the company to learn".

Well, we all know what that means, do we not? Ofgem has said that it will introduce a scheme to supplement the National Grid's licence and statutory obligations, and has threatened National Grid with severe financial penalties if the London and Birmingham blackouts are repeated. Could the Minister say exactly what those new conditions are and whether they are yet in force?

The fact is that, apart from the long-term strategy required to secure our electricity supplies, there have to be contingency plans in place to minimise the short-term effects of one-off incidents, such as in Birmingham or Cumbria or on the London Tube. Individually, they may be isolated incidents, but they are always occurring, and need to be planned for.

I now turn to a topic to which I referred in the speech I made to your Lordships on 8 February 2003—the new electricity trading arrangements, NETA. The time has long since passed when it could properly be described as "new". I stated then:

"They seem to have been successful in increasing competition and reducing wholesale prices".—[Official Report, 8/1/03; col. 1041.]

However, as the noble Lord, Lord Tombs, pointed out in that debate, despite the reduced wholesale prices, domestic prices remain unchanged. The noble Lord used the word "chaos".

It is right to remind your Lordships that, during the debates on the Energy Bill, the Government strenuously resisted our amendment placing the responsibility for security of supply on the Government. They eventually reached a compromise over the wording, but the responsibility is still there and it is still theirs.

After the passage of the Energy Act, the question raised by this debate is: what are the Government currently doing to meet their obligation? Clearly, the issue which cannot be fudged or evaded is the part, if any, that is to be played in our economy by the nuclear industry.

I heard the Home Secretary say in an interview last week that his mind was not closed to the future of nuclear power as part of the equation. I suppose that is a small step forward from merely "keeping the nuclear option open", but this was offset by the Home Secretary's refusal to describe nuclear power as a renewable source. All he would say, with manifest reluctance, was that it is a non-carbon fuel.

Two years have elapsed since the first time we debated this subject. The Minister, agreeing with my noble friend Lord Jenkin of Roding, said,

"the role of the Government is to provide a co-ordinated and coherent framework in which the decisions are made by private industry".—[Official Report, 8/1/03; col. 1046.]

There are some matters that private industry cannot decide. They are the proportion of fuels which generators are enabled to use; the siting of new power stations; and, indeed, whether to build new nuclear stations. Also since the last debate, the Government have been given the statutory responsibility of ensuring security of supply.

The present debate calls the Government's attention yet again to the absence of a strategic decision mechanism for the electricity supply industry. Perhaps the Minister will now be able to tell the House what, if anything, the Government have done in the two years since we last discussed these matters to see if we are anywhere nearer fulfilling that role which is continually asked for by the noble Lord, Lord Tombs, or whether, this time next January, we shall be standing here, saying exactly the same things again.

My Lords, I am very grateful that the opportunity has fallen to me to reply to this debate, notwithstanding the difficulties and criticisms that have been raised. It has again shown the depth of experience and expertise in the energy field that resides in this House. It is an experience and expertise which I do not have in the sense that some noble Lords do. I therefore start by thanking the noble Lord, Lord Tombs, for continuing to instigate vital debates on this matter. I was about to say "long may he continue to do so", but he may not want to be doomed to do so very frequently.

I thank enthusiastically all noble Lords who have taken part. The noble Baroness, Lady Miller of Hendon, has asked what we are doing to meet the obligation. I hope that the general tenor of what I have to say, aside from replying to the specific points which have been raised by noble Lords, will give some indication of that.

I will start by setting out the basis for the Government's present approach and I will then turn to the alternative which has been proposed by the noble Lord, Lord Tombs, vigorously supported by other noble Lords.

It should be stated very simply that ultimate responsibility for security of supply clearly rests with the Secretary of State. Noble Lords will recall the duty, introduced by the Energy Act 2004, to provide for parliamentary consideration an annual report on the security of supply. That responsibility is plain, and the DTI has the lead responsibility. Others have an interest, of course. For example, in this House my noble friend Lord Whitty leads on energy efficiency. Defra has responsibility for environmental concerns. There are issues that concern the devolved administrations. They cannot be taken out of this strategic equation. My right honourable friends Patricia Hewitt and Margaret Beckett jointly chair the ministerial group responsible for the implementation of the strategy in the energy White Paper.

We have established a sustainable energy policy network to implement those parts of the White Paper and this is again co-chaired by the two Secretaries of State, who do have that specific responsibility. As to the manner in which the Secretary of State's responsibility is discharged, we firmly believe that this is best done by leaving the key functions that others must have to those who are best able to deliver them. This, we believe, is the strength of our current regulatory system.

Noble Lords have made a number of specific points, which I will come to. However, I would like to look at the crux of the argument of the noble Lord, Lord Tombs, that the current regulatory system in energy is not an optimal means, and not a strategic means in a strong sense, of delivering the Government's energy policy. Looking at the history of energy supply and the industry since privatisation, I think it fair to say that the market-based policy framework is effective in achieving the goals of an affordable, reliable and sustainable energy supply.

If central planning were omnipotent or omniscient, as perhaps some people might suppose, I have no doubt but that we would have had a very much stronger, centralised, state regulatory system. However, I know that the Official Opposition itself believed that to be a completely unsustainable way of going forward. I simply put this general point to noble Lords about the nature of the political decisions that we have taken in this country, because they reflect where we are. In moving from a state-managed system, a highly centralised system, to a system which was privatised and allowing that to deal with some of the key strategy areas, it is inevitable that, the more we involve the state, the more we take it out of the blend that can be achieved by the market. That is simply a truism of economic performance.

In this respect, it may help if I outline how the current UK regulatory regime works, particularly with regard to securing the UK's energy supplies—an issue which this debate has proved continues to be at the top of the agenda for the Government and for your Lordships.

As noble Lords will be aware, under current energy legislation, the DTI and Ofgem, the energy regulator, have complementary roles in maintaining security of the UK's energy supplies, subject, as I have said, to the ultimate responsibility of the Secretary of State. The Government's role is to set the overall policy direction and the environment in which energy industries are regulated.

Some noble Lords, in particular the noble Lords, Lord Tombs and Lord Ezra, have put security as the most important of the elements they have discussed. Very fairly, however, the noble Lord, Lord Dixon-Smith, has said that you cannot step aside from the climate and protection of the climate issues. It is very hard to prioritise one without proper regard for the other.

The energy White Paper set out the direction of energy policy for the next 10 years. In particular, it stated that maintaining reliable supplies of energy is one of the four goals in government energy policy. The other goals are to put ourselves on a path to cut UK carbon dioxide emissions—the main contributor to global warming, as noble Lords have made clear. The cautionary comments of the noble Lord, Lord Dixon-Smith, about those countries which are very reliant on fossil fuels—India, China and the United States—have particularly exemplified the point. However, our aim is to cut them by some 60 per cent by about 2050, with real progress by 2020. The second of the additional three elements is to promote competitive markets in the UK and beyond. Also, helping to raise the rate of sustainable economic growth and to improve our productivity, and to try to ensure that every home is adequately and affordably heated.

It also recommitted the Government to a market-based approach in ensuring security of energy supply. In recognition of the fact that if the market is to work, it has to be allowed to work in an environment of regulatory predictability and stability. In that light, the Government undertook not to intervene in the market except in exceptional circumstances; for example, a potential serious risk to safety.

Ofgem also has a role to play in ensuring that the market works, particularly through monitoring the market for signs of anticompetitive behaviour, with the potential to fine transgressors very considerably and to ensure that companies meet their licence conditions. In addition, Ofgem helps to ensure that energy can be delivered by allowing sufficient investment in networks in its price controls.

There is of course an important role for the National Grid Transco in maintaining security, particularly in balancing the system and providing the market with information on demand and supply, the winter operations report and the seven-year statement. The NGT also maintains an operating margin to meet unforeseen events. The market has a role by encouraging cost reflectivity and providing a strong incentive for suppliers to provide electricity for which they have contracted.

Market signals, and especially prices, will indicate when investment in new build is both needed and economically viable, although I know that that is not the answer that the noble Lord, Lord Tombs, will be looking for. I want to return to some of those strategic issues in a moment. The system is broadly working well. For instance, generation margins are currently 20.3 percent. No problems have been experienced with the overall demand/supply balance so far.

We also saw evidence of the way that the market is working to deliver secure energy supplies last winter. In the winter of 2003–04, generators brought mothballed plant back into service in response to rising electricity prices and signals from the National Grid Transco that they would like greater capacity going into the winter. As a result, the plant margin for last winter rose from a projected level of just over 16 per cent in July 2003 to 20 per cent by Christmas. Electricity supply was sufficient to meet demand throughout the winter. There is clearly a point in the argument advanced by the noble Lord, Lord Ezra. It is not the same as having a reserve unless mothballing can be reversed quickly so that that plant comes on-stream very rapidly.

Looking further ahead, recent announcements show that the market is thinking about the need for new build to meet future demand even before prices reach levels that would indicate a tightening of supply/demand balance. For example, Centrica proposes to build a new power station in south-west England, and EON recently announced plans for an upgrade of its generating facility on the Isle of Grain.

There are also a number of projects to increase the capacity for gas imports to the United Kingdom, with three planned interconnections from Norway, Belgium and the Netherlands—not in my list of unstable regimes. There are also three new, liquefied natural gas import terminals planned—two at Milford Haven and one at the Isle of Grain. Those projects are expected to become operational between 2005 and 2008. Together, those projects could make a substantial contribution to meeting UK demand in the future. They are all initiatives from the market.

I understand the point that has been made by many noble Lords about the security of supply in relation to unstable regimes. I have mentioned some that are plainly not unstable. But it must be said that, over a period of 20 years, the supplies from some of the regimes in what was the Soviet Union—now Russia—around the Caspian, and so on, and in North Africa, have been reliable. I would suggest that that is largely because the economic dependence of those countries on reliability of supply is fundamental to their economies. Of course, that is not an argument for being complacent or disregarding the possibility of risk. But there has been no evidence of it so far.

The Netherlands and Norway, in the formula for import that I have mentioned, have 4 trillion cubic metres of gas reserves. Pipelines to the UK from both countries are now under construction. I repeat: ultimate responsibility for security of energy supply rests with the Secretary of State. It is a responsibility best discharged by leaving key functions with those with the expertise and resources to deliver them in a policy framework that provides appropriate incentivisation.

That is the strength of our regulatory system. No system is entirely risk free, but I propose that the British market framework is no riskier in terms of government energy policies than was the case under nationalisation. When the electricity supply industry was notionally under the control of a single authority before 1990, its experiences were not happy ones. Since liberalisation in 1990, however, the British generation market has demonstrated that it can provide adequate supplies under the present regulatory system. There is no inherent reason why it should not continue to do so.

Perhaps I may turn to the specific points that a number of noble Lords have made. I have made the general points about the strategic centre of what we are doing, which I know will not satisfy noble Lords. None the less, they are, at the moment, the central part of the Government's policy.

The noble Lord, Lord Ezra, raised several important points. He advocated, as he has frequently in your Lordships' House, diversity from small-scale generation through to renewable generation. He knows from responses that have been given from this Dispatch Box by a number of my noble friends and, I hope, by myself that we fully support that. We looked just last week at the notion of a CHP obligation. On that occasion, I made the point that it is a very diverse set of resources to bring together under one obligation. I think that other noble Lords made the point that it would probably be very hard to do that in a cost-effective way.

The noble Lord, Lord Bridges, raised a number of important points about the intermittent nature of wind energy. I am told, and I have no reason to disbelieve it, that it is now very much more predictable and models can be drawn together that give greater predictability to that kind of capacity.

The noble Lord, Lord Ezra, mentioned the reserve capacity targets and the capacity payments between 1990 and 2001. The CEGB did target plant margin, but that did not prevent involuntary demand control. Post privatisations, there have not been any incidents of involuntary demand control, despite there being no specific target. Capacity payments were inherently arbitrary and prone to manipulation by the generators. Other countries also have energy-only electricity markets—for example, Australia.

The noble Lord, Lord Bridges, raised the relationship with the French. Daily flows of electricity depend on differential wholesale prices. We import because of price signals—we also export on that basis—which are governed by the supply/demand balance. The United Kingdom will not be presented with a bill for the decommissioning of French nuclear reactors. It is a French responsibility. Proposals to build the 1.3 gigawatts interconnector with the Netherlands and the new interconnector with the Irish Republic are also key parts of our policy.

My noble friend Lord Tomlinson raised a number of points. Soon I shall turn to the fundamental questions of nuclear. But I would just ask him, particularly because he has indicated that he is open to the argument, not to write off—even if he says that he is not, I kind of pick up the flavour that he might be—what might be done in the renewables field, which is a very new field that shows a huge amount of potential. I shall return to the point that he and others have made about nuclear in a moment.

It is very hard to deal with the question about how long it takes to build a nuclear power station. I understand that the bulk of the time is taken up in the planning rather than the building. Of course, the different technologies would take different amounts of time.

The noble Lord, Lord Dixon-Smith, has made a number of important points. I shall mention just one of them in response to a specific point that he made. It is my understanding that there has been some discussion about whether the Thames barrage might have electricity-generating potentiality. I want to look into that to ensure that my memory is not at fault. I shall write to him about that when I find the information.

The noble Lord, Lord Palmer, asked about the Government's view of policy in relation to biofuels. The Government intend to set an ambitious, but realistic target for biofuel sales by 2010 as soon as possible this year. They will do so once the feasibility study is under way and consultation on a renewable transport fuel obligation has been concluded, and once a decision has been taken on the most appropriate method for promoting biofuels. They are a crucial part of the way forward, and it certainly could not be the case that we did not look at them with seriousness and intent.

The noble Baroness, Lady Miller, asked me to comment on a point in relation to the Question that I answered. I said in my Answer the other day that we had not changed our objectives. Indeed, I have repeated some of those objectives in the United Kingdom. I understand that the United Kingdom Government have not opposed the EU setting longer-term targets for emissions. The Greenpeace allegations are a distortion of the position. However, we have appealed to the EU not to set targets out of thin air. It is essential to make sure that a cost-benefit analysis is being carried out in the light of the latest scientific information. The Commission is undertaking that analysis. The results will be available at the end of January or early February. When that information is available, there is no reason why the 2050 targets for carbon emissions cannot be set on an informed basis. That is why that dialogue took place in Europe.

I turn to perhaps one of the cardinal issues; that is, the nuclear option. Many noble Lords have raised it. There has been a lot of debate about what the Government mean about keeping the option open and what we are doing to keep it open. The Government recognise the central importance of preserving and developing the skills base needed to do so. The Cogent Sector Skills Council was licensed on 2 March last

year. It is undertaking a strategic view of the nuclear sector, ensuring that the education and training base can meet the nuclear employers' future needs. Cogent will work closely with the Nuclear Decommissioning Authority. The research councils are playing a part as we have discussed at length. A great deal more effort is being put into a co-ordinated approach to nuclear research and energy research more generally. Therefore, we have established the new UK Energy Research Centre to achieve this.

However, the fundamental issues still remain. Keeping the option open—and I am an enthusiast for keeping the option open in a robust way—means that we are going to have to deal with some of the legacy issues more successfully as well. What happens in terms of security? What happens in terms of waste? What gives confidence to people that it is not a dangerous line to go along if the market decides that it wants to do so? We are going to have to resolve the questions about where installations will be built and who the welcoming hosts to new build will be.

We have been faced in today's debate with some fundamental issues. The noble Lord, Lord Tombs, made one appeal to which I shall respond directly, as I respond directly to the appeal that the publicity is properly secured for these matters. I am discussing how to make sure that that is the case with officials in the department. The noble Lord, Lord Tombs, asked that we take some of the ideas away and give them further thought. I give the undertaking that we will do that. I am keen to do so. It is the Government's wish to make sure that the ideas that are raised in debates of this kind and on many other occasions are given that proper ventilation and proper and serious attention. I undertake that we will do that.

My Lords, I thank the Minister for that reply, which, as he would expect, has disappointed me somewhat. However, I recognise that he has done his best to lend an air of coherence to an essentially incoherent policy. I recognise the need for that in the present circumstances.

I do not propose to waste noble Lords' time by dissecting the Minister's arguments; I might do that privately if I get the opportunity. However, I cannot resist saying that the very idea of "joint chairmen" of an area requiring positive action is a total contradiction in terms. I just cannot understand the need for, or desirability of, such a situation.

The Minister mentioned that some of the problem areas have had 20 years of stable government. One only has to mention Belarus, Ukraine and the present situation in the Middle East to have some doubts about whether that will continue for another 20 years. In any case, 20 years is a short time in energy policy, so the argument is not convincing.

On the question of the press coverage of the dealings of this House, I share the disappointment that was expressed by the noble Lord, Lord Jenkin, and the noble Baroness, Lady Miller, but perhaps the press shares with Ofgem and the DTI a short-term vision.

I thank the faithful few who turned up this year, last year and the year before. Given the reply that we have heard today, I have every confidence in meeting you again next year. Perhaps I can thank also those who have swelled our numbers a little this year and those who have come to listen. I hope that you will all come again to the debate next year, which, if I am able, I shall certainly promote. My Lords, I beg leave to withdraw the Motion for Papers.

moved Her Majesty's Government what steps they are taking to ensure the independence and integrity of HM Inspector of Prisons in the light of the proposed consultation on merging criminal justice inspectorates.

My Lords, I remind the House that I chair the All-Party Group on Penal Affairs. I congratulate the noble Baroness on introducing the debate. I apologise for the flamboyancy of the tie I am wearing, but it is in the good cause of publicising bowel cancer. I know that other noble Lords have them around their necks as well.

The Minister will know, because I have written to her, of my concerns about the separate and independent future of the Chief Inspector of Prisons. The review which led to proposals for better cohesion and co-operation between the Prison and Probation Services was designed to reduce re-offending through well planned and resourced programmes dealing with major issues such as behaviour and drug and alcohol abuse.

That is fine, but I see immediately two real risks. First, things will be done in too much of a hurry in the Prison and Probation Services, rather than simply bringing the headquarters together first and taking, say, three or four years to join the services together at local level. We have had too many experiences of doing things in a hurry which have gone terribly wrong. Secondly, and perhaps more importantly, it runs a real risk of concentrating on process and the way in which things are done, to try to improve efficiency and outcomes.

I do not believe that it is either solely or mainly about process. The process is not the master but the servant of achieving better aims and outcomes in the criminal justice system. With prisons, this is to ensure the human rights of prisoners and that they are treated with decency and dignity. That responsibility is more than enough for a separate and independent prisons inspector given the appalling levels of overcrowding in most prisons which sabotage plans to cut re-offending and aid resettlement.

Successive inspectors—the late Stephen Tumim and his admirable successor, Sir David Ramsbotham, as well as the present inspector, Anne Owers—bear testament to the failures of the Prison Service which deserve and demand rigorous independent scrutiny and examination. It makes a mockery of independent scrutiny to have an inspector report to a civil servant rather than, as now, direct to the Home Secretary.

The strong case to continue with an independent and separate prisons inspector can be summarised in a few words: Feltham Young Offenders Institution and HMP Liverpool. The inquiry into the murder, four years ago now, of Zahid Mubarek at Feltham by his known racist cellmate was bad enough—but it was not a one off. The inquiry into that death this week heard how three racist prison officers handcuffed an inmate to his cell bars, removed his trousers and smeared his buttocks with black boot polish. Were the officers sacked? No. Were they docked any pay? No. Were they transferred? No. They were simply given written warnings.

At Liverpool, the inspector reported yesterday that some areas of the prison were no-go areas for prison officers, that bullying and violence thrived among the 1,400 inmates, and that some prisoners were afraid to leave their cells.

These are just two of the latest examples of what is going on in our prisons. In my view, they underline inescapably the need to continue with a separate and independent prisons inspector.

A public service which allows such things to happen is one in which the independent inspection regime should be extended, not weakened. There is, against this background, an unanswerable case for the Prison Service itself to be subject to inspection by the prisons inspector, and not simply the prisons.

Many will be pleased that the new Home Secretary has dropped plans to privatise the Forensic Science Service, and I am among them. In the same spirit, I invite the Minister to tell us that a separate and independent prisons inspectorate will remain, or, at the very least, will be kept in place until the Prison Service and those who head it better demonstrate their ability to protect the human rights, decency and dignity of those for whom they are responsible in our prisons.

My Lords, I join in thanking the noble Baroness, Lady Stern, for raising this issue; and, in view of the imminent publication of a related government consultation paper, I congratulate her on her good timing in doing so today.

All of us share concern about three separate, if connected, aspects. First, the independent and efficient work of Her Majesty's Inspector of Prisons should be encouraged and supported. Secondly, between criminal justice services, much better working links should be engendered to improve our poor national indicators for prisons and crime. Thirdly, however, any attempt to bind services more closely together should never be made at the expense of the necessary independent role of Her Majesty's Inspector of Prisons.

Clearly there is a risk, as has already been said, that the merging of criminal justice inspectorates will dilute the quality of prison inspection and thus also lessen the protection of prisoners' rights. Quite correctly, the chief inspector has spelt out, as have the noble Baroness, Lady Stern, and the noble Lord, Lord Corbett of Castle Vale, which parts of inspection duties should not alter. Chief inspectors must decide how they will inspect, and what they will inquire into. In the future, they should inspect individual prisons and young offenders' institutions no less regularly than they do at the moment. They must continue to carry out unannounced inspections without outside consultation, and they should not change the practice of reporting only and directly to the Home Secretary.

The Minister for Prisons has already given assurances that it is not the Government's intention to interfere with those functions. However, can the Minister refer to particular safeguards envisaged and explain why they may be able to protect these independent functions of inspection within a merged criminal justice inspectorate?

Within criminal justice, and between its services, there are clear advantages arising from the right kind of improved co-operation, if that should come into being. The aims must be to decrease our prison population, reduce recidivism and deter crime.

Regarding prisons, the starting premise may be fairly obvious. A significant proportion of the total prison population is made up of young people sentenced for minor offences, who should not have been sent to prison in the first place; instead, they should have been given effective community sentences. Does the Minister agree that while the courts do not use community sentences nearly enough, there are nevertheless three recognisable benefits arising from their deployment? I refer to the decrease which will arise in our overcrowded prison population, a reduction in recidivism and, through cost savings, the inference that there will be much more money to spend on education and rehabilitation for others for whom a prison sentence is necessary. Yet the courts often remain diffident about using community sentences rather than prison. What plans do the Government have to promote these expedients, through the revised design of such sentences, where necessary, and through achieving better understanding between criminal justice services, not least the courts and sentencing policy?

As the noble Baroness, Lady Stern, warns us, any new steps in the direction of criminal justice co-ordination should be taken with great caution. They must not threaten the independence of Her Majesty's Inspector of Prisons, and they should ally themselves to targets—and why not ambitious ones?—for the reduction of the prison population, recidivism and crime.

It is a depressing fact that among our European Union partners, per head of population, the United Kingdom has one of the largest prison populations and one of the highest levels of recidivism. Can we not now grasp the nettle, reverse this trend and, at last, disseminate good practice?

My Lords, I, too, thank my noble friend Lady Stern for initiating this debate on the work, role and function of Her Majesty's Chief Inspector of Prisons, and for doing it so clearly and effectively. I fully endorse her reasons for initiating this debate and the questions which she has posed to the Minister.

In my contribution, I want to emphasise why I believe that focused, robust and independent scrutiny of our prisons is necessary. I seek assurances from the Minister that the principles and values which have guided the work of the inspectorate to date will not be diluted or eroded in any reorganisation of the criminal justice inspectorates.

There is no doubt that we need arrangements in the criminal justice system which will monitor the system as a whole and ensure that different parts of the criminal justice system work together and with others in pushing forward the resettlement agenda. But the function of the prison inspectorate is different. It focuses specifically on the treatment and condition of those whom the state holds in custody—a function which needs to be carried out robustly and independently.

Solutions to crime and crime reduction have to be sought not only by punishment but by providing opportunities for rehabilitation—rehabilitation which respects human dignity and human rights. We must constantly remind ourselves that those in custody are not a separate class to be excluded or forgotten. They are fellow citizens to be brought, as far as possible, into a position where they can be reintegrated into society and gain respect. Above all, we as a society respect their human rights.

To achieve this, the criminal justice system must be efficient but also accountable. However, efficiency must not be judged only by means of internal performance indicators and targets; there should be a wider vision of accountability based on recognised principles and values.

To date, we have been served really well by successive chief inspectors of prisons. They have ensured that the conditions and treatment of those in custody are highlighted, and have held to account those responsible. As a society, we can rightly be proud of this institution, for it is a reflection of our attitudes towards those who are excluded and could easily be forgotten. Any erosion of the role and function of the prison inspectorate will mean losing an important safeguard and a mechanism of accountability.

The function also needs to remain independent. As we have already heard, in expressing concerns about the changes, Anne Owers, the current chief inspector, said that it is important that she continues to inspect by her own criteria and methodology; to inspect no less regularly than at present; to retain the power and resources to authorise unannounced inspections with outside consultation; and to continue to report only and directly to the Home Secretary. Any changes in the current arrangements will undermine independence, and I hope that we can be reassured again that they will not change.

Any drive for efficiency must not lead to open, expert, informed and independent inquiries. An assurance on that would really be welcome. A move towards reform these days means that you have to compromise principle. In my view, reform and maintenance of values and principles is not incompatible. There should really be a benchmark for the reform.

My Lords, the noble Baroness, Lady Stern, is by common consent the chief inspector of our consciences in relation to the subject of prisons and I am very grateful to her for being that. It cannot be anything other than a lonely position to occupy. The question that she has raised today is of the profoundest importance, and I support everything that has been said so far, but I want to focus on two particular matters by way of support for the continued independence, separateness and robustness of the prison inspection system that we currently have.

When I act as Bishop to Prisons, one of my functions is to arrange regular meetings in conjunction with the General Synod of the Church of England in which those synod members who are interested in the subject are gathered to listen to a speaker of note. It was our privilege to have with us the Chief Inspector of Prisons for Scotland, Dr Andrew McLellan. What I remember about his speech is being sternly and firmly rebuked by him for having used in the material inviting people to the meeting the expression "alternatives to custody". He reminded us that custody is not the default penalty and must not be allowed to become that in our thinking or in the sloppiness of my and other people's languages.

I thought that it was good to have a taste of the medicine handed out by a chief inspector of prisons. But in saying that, he was drawing my attention—and I wish to draw the attention of the House—to what it means to put somebody in prison. Although we all know that, and although the Minister has demonstrated on many occasions that she knows that and has a high level of passionate concern about it, it is very important that it does not pass unmentioned in a debate of this kind.

Putting somebody in prison is an awesome thing to do. I often warn people who are considering doing voluntary work in prisons that they must expect a conversion experience. I think it reasonable to say that the late Judge Stephen Tumim and General Sir David Ramsbotham were probably not recruited from the anarchist hard left of our society, and I have to assume that something happened to them when they got involved in the work of being the inspector of prisons, which also happened to me, some 35 to 40 years ago, when I first became involved in that work. What happens is that you are confronted with the sheer awesomeness of the prison experience.

Let me invite your Lordships into a fantasy world. Let us suppose that we never had prisoners who were denied access to education; let us suppose that the horrendous episodes to which the noble Lord, Lord Corbett of Castle Vale, drew attention never happened; let us suppose that the majority of prison officers who go into this work with commitment and dedication were not simply the majority but everyone in the Prison Service—so we never had any of these scandals. Would we still perhaps need a prison inspectorate? Even in that fantasy world, from which we are so far distant, we certainly would, because prison is the publicly sanctioned deprivation of basic human rights from people. We cannot allow ourselves to carry out that highly specific act against persons in such a way as to make it possible for them to become non-persons in the way in which they are treated and regarded. We cannot allow them to be forgotten.

I absolutely respect the instincts and reports that have led the Government to try to achieve the maximum unity of effort and policy among the different parts of the criminal justice system—and the creation of NOMS,

the National Offender Management Service, is of course the current activity in pursuit of that policy. But while I understand those impulses, the specificity of the nature of imprisonment is such that we cannot afford to deprive ourselves of that separateness and independence—separateness, I stress—of Her Majesty's Chief Inspector. We cannot allow the criminal justice system to become what the present chief inspector has called "a primeval soup", in which we inspect in some vague and general way the effectiveness of a system without the constancy of contact with actual persons who are enduring it.

The chief inspector of prisons is, of course, the inheritor of the statutory requirement that is still in place, which allows diocesan bishops unfettered access to the prisons in their dioceses. That is very important, but it does require to be professionalised in the way that the creation of a chief inspectorate has made possible. That is why there has to be a chief inspector of prisons who is independent and separate.

My second point is more positive, can be said more briefly, and perhaps is more abstract. I believe that the existence of a chief inspector of prisons models something about our society that is profoundly important—that there is nobody, however mandated, whatever majority they have, whatever instruments of sovereignty they wield, who should be immune from the possibility of independent, unannounced and well-resourced inspection. That is crucial as an arm of the democratic state, and it is for that reason that I fully support the noble Baroness in raising this sharp Question. I look forward very much to the Answer from the Minister, which I hope will give us reassurance on these points.

My Lords, I thank the noble Baroness, Lady Stern, for raising this important question about the independence of the prison inspectorate. I have just completed a period as the chair of the British Council and in that role I had the opportunity of visiting quite a number of prisons around the world. What becomes clear as one sees other institutional arrangements is just how precious our own inspectorate is. It really is one of the great British triumphs.

When the state removes a citizen's liberty it is always important to remember that the state's responsibilities do not end there. Even those who have committed serious crimes have to be protected from abuse and treated with dignity. That is not just because we should respect the humanity of prisoners—which of course is crucial—but also because we degrade our own humanity by ill treating others.

The great strength of the inspector's role is that the inspector is a robust, independent voice, as others have said. That power, which others have mentioned, of arriving unannounced at a prison and insisting upon entry; the ability to speak directly to prisoners about their experience and about their treatment; the direct access to the Home Secretary, not via some functionary who might dilute the message; and all that

openness of the reports which are produced—all these elements of the role make it a powerful check on the system, and that is why it is so important.

We have yet to have an inspector of prisons who has not incurred the wrath of politicians. We have to ask ourselves why that is. I suspect it is because they speak the truth about what they see and sometimes there is a gap, which may be unpleasant to hear, but there is a gap between policy and reality.

Sir Stephen Tumim and Sir David Ramsbotham had to deal with the brickbats of Michael Howard and Jack Straw respectively. The assumption was that when Sir Stephen completed his term he should be followed by a harder, tougher personality, and that a military man like Sir David would be no faint heart. But David Ramsbotham was someone with a highly developed sense of fairness. You only have to read his book about his account as an inspector to understand that. He was unafraid about speaking out. The current inspector, Anne Owers, who is a director of Justice, came with a full awareness that these are human rights issues on which the Government should take action. But she herself has also had to travel quite a rocky road.

The Government do not tend to like their shortcomings to be exposed, but I am afraid that that is the role of the inspector. The inspector is an alarm system so that we know what happens in our name in hidden corners.

My concern is that we are seeing the teeth of the prison inspectorate being drawn—its specialist role being undermined; its independence eroded. I have no contest with there being more collaboration and closer working between the different elements of the system. But I am concerned that the reforms will mean a reduction in the scale of inspections in individual prisons and of their potency. I am worried that we are creating something that will be termed "Offmoff"—the office for the management of offenders.

In the past 10 years we have seen an extraordinary escalation in the numbers of people being sent to prison. An area which I know quite a lot about is that of female incarceration and we have seen an incredible increase in the numbers of women being detained. The pressure of numbers makes for great demands on prison staff and prisoners. We should be mindful of the cost of that. Today's Guardian carried a report into the death of Sarah Campbell who committed suicide in Styal Prison last year. Her mother Pauline has been a powerful campaigner ever since on the issue of women's incarceration and the risks there are for many vulnerable women. Six women died in Styal within a period of 12 months.

The reports of the inspector, Anne Owers, over the past few years have shone light into areas that we might never have known about and are really important in a civilised society. In her report into Huntercombe where girls were detained she wrote:

"[It] was holding far too many young people, in unmanageably large units, to be able to provide a safe environment".

There was no assessment of risk or vulnerability being carried out.

Her report into Ashfield, a privately run juvenile gaol, exposed the scandal of bullying children who became so afraid that they did not come out of their cells. In May 2003 at Pentonville she wrote that every day 100 prisoners came out but another 100 went in; there were 40,000 movements in a year and the pressure on the staff was such that conditions fell so far short of decency.

On the front pages of today's newspapers were horrifying photographs of apparent abuse of Iraqis in custody. We know that the same thing happened in relation to prisoners in Abu Ghraib; they were subjected there to inhumane, degrading treatment. We came to know of those abuses only because of photographs that leaked into the public domain. That should never be necessary. We should be hearing about it through inspectorates in those prisons too.

When people are in prison they can readily become forgotten, but the inspector becomes our eyes and our source of intelligence. That person must have public trust. That trust is developed because the prison inspector has status, independence and autonomy. I hope that the Government will really accept the arguments being made here tonight that the prison inspector should not have her powers reduced and should remain in all her glory.

I fear that we are seeing a professionalising of control—the turning of those who act as inspectors of regimes into managers. The risk then is that the inspector is drawn into an overall embrace which would be very unhealthy for the whole of our criminal justice system.

My Lords, I too thank my noble friend Lady Stern for securing this debate and for inviting me to participate in it.

My interest in tonight's debate is related to my membership of the Sentencing Advisory Panel that advises the Sentencing Guidelines Council. I have also recently visited Walton Prison in Liverpool. When one reads the reports of what happens in prison—this was evident from my visit to Walton Prison—one has no doubt whatever that prisoners are vulnerable people whose freedom our criminal justice system removes in order to punish but also to rehabilitate them so that when the time comes for them to return to the community they are better citizens.

The noble Lord, Lord Corbett, mentioned the report of bullying and violence in prison in Liverpool. I saw something of that although when I asked about it I was informed that it was not common. Walton Prison contained significant numbers of black and ethnic minority prisoners. I have no doubt that they were subject to racist abuse as that is what they whispered in my ear. There is no doubt whatever that a separate and independent prison inspectorate service is absolutely essential to uncover those kinds of problems and the conditions that exist in our prisons. We need to maintain the high standards for which our prison system, and in particular our inspectorate, are noted.

The area of my greatest concern, and where I pay greatest tribute to Her Majesty's Inspectorate of Prisons, is that of prison health. If it were not for independent, unannounced inspections, with inspectors who can report directly to the Minister, how would we know when treatment is required for our prison population, particularly as in some prisons 40 per cent of prisoners need mental health care? We now have the useful situation whereby the NHS supplies trained personnel to treat and manage certain prisoners. I believe that in future those prisoners will not be put into prison as we shall have better ways of looking after them within the National Health Service. The use of the health service to relieve overcrowding in prisons is of great benefit. As regards the treatment of offenders under Drug Testing and Treatment Orders, if we did not have independent scrutiny, would that provision deteriorate?

The courts do not impose sufficient community sentences on young offenders. That is without doubt a particularly important issue. The Esmée Fairburn Foundation's report stated that that was probably due to poor communication between courts and probation services. If that is the case, I am sure that it can be uncovered through independent inspection.

I conclude by wholeheartedly supporting my noble friend Lady Stern in this very important issue.

My Lords, there are few Members of this House who can speak with more authority on a matter of this kind than the noble Baroness, Lady Stern. Her extraordinarily effective period as the leader of NACRO and all she has done since, gives her the kind of experience and insight which should be at a premium. I am sure that the Minister will have listened very carefully to all that she said.

As the right reverend Prelate the Bishop of Worcester was making his remarks about the awfulness of prison and the conversion that happens to people who become exposed to it, I was reminded of a conversation that I had recently with a chief superintendent of police who was retiring after a very important career in that service. He was expressing his anguish and concern about the very issues that preoccupy us this evening.

He made a very interesting observation. He said, "My experience is that when the prisoner stands in front of the judge and he is sentenced, that is a terribly lonely moment in anybody's life. Some prisoners carry it off with bravado, some seem less affected than others, but it is in fact a terribly lonely moment". He said, "That's the very time when there should be somebody standing at his elbow saying, 'Right, old chap, what are we going to do now to rebuild?'".

What we all know is that the Prison Service is not yet delivering in terms of that philosophy because rehabilitation matters in terms of civilised values and for humanitarian reasons. But if I dare say so, rehabilitation matters tremendously for economic reasons because it is sheer madness to go on tolerating the level of re-offending we see in society because somehow our Prison Service has proved itself unable successfully to complete the task on the scale on which it should be undertaken.

I have had experiences in the past few years which have strengthened my own convictions about these issues. As I have said in the House before, I am coming to the end of a very interesting learning period as national president of the YMCA, which works with young offenders in prison. In the past year, as a member of the Joint Committee on Human Rights, which draws membership from this House and another place, I have been involved in the report on deaths in custody, which has taken us on visits to a good number of prisons and detention centres.

When I reflect on those two experiences I see countervailing realities. On the one hand, I despair at the number of suicides, the level of self-harm and the despair that that represents. I worry about the lack of adequate educational facilities. I am concerned that not only young people, but older ones as well, are going out ill-prepared to meet the challenge of making a positive contribution in society.

On the other hand, I have seen some dedicated people within the Prison Service. I have met some of the finest people within that service, desperately struggling against the odds and wanting to change. I have not heard one of them in private conversation make anything but positive observations about the role of an independent chief inspector who can bring judgment, objectivity and enlightenment to the task and who can strengthen the position of those struggling within the service to improve the situation. I believe that to remove the independence and robustness, as the right reverend Prelate put it, of an independent inspectorate would be to undermine and betray those who are trying to build for the future.

There are, of course, other observations. Any of us who has had any experience of institutions knows that closed institutions become cosy. They have their own culture. It is important for a voice to ask whether one is achieving the objectives that one should achieve. One does not need to ask just how far one is administering, how far one is keeping the lid on it and how far one is keeping scandal out of the public eye, but one needs to know how far one is achieving the objective of rehabilitation and positive citizenship. That is the tremendous contribution that successive chief inspectors and the inspectorate have brought to the task.

I conclude by saying that I do not always find myself in total agreement with everything my noble friend Lord Corbett of Castle Vale says on this subject or sometimes on other subjects. I also enjoy listening to what he says, because he puts his points provocatively and strongly. Tonight I found myself, if anything, in 200 per cent agreement with what he said. This is the very time at which we should be talking about strengthening the independence of the inspectorate and the role of the chief inspector. For any rumours to circulate about any other possibility is distressing.

Therefore, I hope that my noble friend the Minister, who is a very able and distinguished Minister, will not give us any generous, but equivocal, language about the future of this matter, will not deploy all her legal and professional skills in keeping us at peace, but will give us an unequivocal, straightforward assurance that we shall have an independent inspectorate, a chief inspector who will report directly to the Minister and that nothing will undermine the battle for progress and enlightenment in the Prison Service.

My Lords, I thank my noble friend Lady Stern for her timely Question. For many years I was a member of a board of visitors—now called independent monitoring boards—at a young offender institution. The appalling situation of the racial incidents at Feltham young offender institution has sickened me and is one of the many reasons why the robustly independent voice of prison inspectors should not be endangered with plans to create a merged inspection team, covering the whole criminal justice system. To put a racist skinhead with a history of violence alone in a cell with an Asian inmate seems more than unwise and for prison officers to handcuff a young man and smear him in boot polish is bullying of the first order.

I read in the press that two Home Secretaries failed to act decisively on lay visitors' concerns about frequent suicide bids, squalor and mismanagement at Feltham going back to before 1996. I take it that the lay visitors mentioned were members of the board of visitors who, each year, send a report to the Home Secretary.

It is most frustrating for members of monitoring boards if their concerns are not adhered to. The boards are made up of a variety of people, many of whom are magistrates who give their time freely to try to see that all is well at the prison establishments that they serve. They do rota visits and interview inmates and can pick up all sorts of worrying situations and vibes. It is of the greatest concern if there are cover-ups and if inmates, many of whom are the most deprived and difficult members of society, are put at unnecessary risks from other inmates and bullying prison officers.

Prisons cover so many different categories of person: remand prisoners; murderers, drug addicts; alcoholics; women; children; babies; burglars; driving offenders; rapists; fraudsters; sexual offenders; young; old; disabled. In fact there can be anyone from all parts of the world. There is the prison estate, the closed and open establishments, education and health. The prison inspectors have a great deal to inspect if they are to do a thorough and comprehensive job.

The Chief Inspector of Prisons, Anne Owers, has warned that the scale of inspections of individual prisons could be reduced if a merger takes place of the whole criminal justice system. She said, and I agree, that it is a "critical human rights safeguard" that the prison inspectors have the ability and resources to go into any prison at any time without warning and that they remain sharply focused on inspecting individual places of custody. There is so much to cover.

Crime reduction and community safety are of vital importance, especially now that we must put up with increased drug and alcohol abuse in the community, but prisons are a different matter. The one category that perhaps should be brought in closer to the prison inspectorate is the probation service, as this would help with rehabilitation in the community as regards, for example, tagging and community work. A close link with prisons would be useful, but the inspectorate for prisons must be independent above all else. I hope that the Minister will give us a satisfactory reply tonight.

My Lords, I too congratulate the noble Baroness, Lady Stern, on asking this key question. It gives me enormous pleasure to pay special tribute to my noble friend Lord Merlyn-Rees, for he is the ultimate forefather of the Chief Inspector of Prisons and the prisons inspectorate. It was he who, in November 1978, set up the May committee of inquiry into the organisation of the Prison Service. The May committee reported after the general election of 1979, and in April 1980 the Conservative Home Secretary, Mr William Whitelaw, accepted its recommendations for an inspectorate of prisons. He later announced the appointment of the first HM Chief Inspector of Prisons.

The initial 1981 report of the Chief Inspector of Prisons gave a succinct summary of the May committee's deliberations and recommendations about prison inspection, which are still highly relevant. His report said:

"The Chief Inspector was a member of the Prisons Board and inspections were therefore performed as a management task with correspondingly limited terms of reference, and reports were presented to the Board: they were not published. May saw a need to separate the inspectorial from the management function and to promote openness, as the means of providing an independent and authoritative check on the work that the Prison Service did on behalf of the public".

I particularly stress those words,

"an independent and authoritative check".

Those are the words from the beginning. The Chief Inspector went on:

"Thus in paragraph 5.61 of their report the Committee concluded 'we have no doubt both that the Prison Service would benefit from and that public sentiment requires that … the Prison Service should be opened up to as wide an audience as possible. We therefore think that there should be a system of inspection of the Prison Service which … should be distanced from it as far as may be practicable'".

He then said:

"The committee went on to recommend that the Chief Inspector be a Crown appointment answering directly the Home Secretary with a small staff of appropriate experience, and proposed that their reports be published".

The Home Secretary gave the chief inspector terms of reference, and in 1982, the chief inspector and the terms of reference alike were enshrined in an amendment to the Prisons Act 1952, as the noble Baroness, Lady Stern, reminded us.

The pith of the amendment was that the chief inspector was to inspect prisons and, in particular, report to the Secretary of State on the treatment of prisoners and conditions in prisons.

The system has now worked splendidly for a quarter of a century. When one reflects on the era of the late Judge Tumim, of Sir David Ramsbotham and now of Anne Owers, they have more than passed the May committee's test of,

"an independent and authoritative check".

They have reported fearlessly on the treatment of prisoners and conditions in prisons and have been a shining example. Indeed, on 28 June last year, my noble friend the Minister, in reply to a question about Anne Owers said that,

"the chief inspector does an excellent job".—[Official Report, 28/6/04; col. 8.]

I believe that she spoke for the whole House.

However, storm clouds are gathering over the chief inspector. In another place, in a Question for Written Answer, Mrs Curtis-Thomas asked,

"what assessment has been made of the possible merits of a merger between the inspectorates of constabulary, prisons and probation?".

Paul Goggins, the prisons Minister, answered:

"The Government will consult early in the new year on more coherent arrangements for the end to end inspection of the criminal justice system. There is recognition of the need for inspection to better reflect the way services are delivered and to ensure a user perspective is properly built into the process".—[Official Report. Commons, 15/11/04; c.l 105W.]

I suggest that the present system of prison inspection is not only coherent but admirable. The user perspective of the prisoners is admirably built into the process and nothing should be done which would, to use the words of the noble Baroness, Lady Prashar, dilute or erode the present time-tested system.

I hope that during this consultation the Government will ask three key questions. How would merging the prisons inspectorate with other inspectorates improve the inspection of prisons? How would merging the prisons inspectorate with other inspectorates improve the lot of prisoners? Above all, is not there a danger under both heads of a grim deterioration?

My Lords, I hope that I may be permitted to intervene briefly in the gap. I have two reasons for wanting to do so.

First, I knew Judge Tumim for very many years, and I have known for a number of years General Ramsbotham. Neither of them could be said to have been drawn from the ranks of the anarchist hard left. They were drawn from the ranks—which thank goodness are fairly plentiful in this country—of people of utter determination to do their jobs fearlessly, and people of courage and integrity.

My second reason is that I have learnt in a lurid career the importance of perception, and the way in which it can take root and become just as important, if not more important, than reality. If Her Majesty's Inspector of Prisons is to be merged with other inspectorates of the criminal justice system, and if he or she is to report to an official rather than the Home Secretary, the perception will be that this is a deliberate downgrading of that function and that it derives from the discomfiture of the executive at the trenchant terms in which successive inspectors have expressed their anger at

"the way services are delivered".

I hope that the Minister will find time to say whether she accepts that those perceptions will arise, and if so, what steps the Government can possibly take to dispel them.

My Lords, I add my thanks to the noble Baroness, Lady Stern, for this important debate. Noble Lords are right to compliment her. She is renowned not only here, but internationally, for some very important work on prison reform. Two years ago I went to Kyrgyzstan, right on the border of China, and in a remote place asked to visit a particular prison, thinking that I would probably be the first westerner ever to set my foot in that prison. Alas, I was told that the noble Baroness had already been there.

We expect the annual report of the prison inspectors to be published next week. We can only speculate what it will contain but I hope that, as in the past, it will go some way to establishing confidence in our penal institutions. Inspectors highlight what needs to be done to ensure that the rights and dignity of inmates are not tampered with and that, more importantly, prisons reflect the civilised values we all cherish.

The relationship between prison inspectors and the Home Office has never been cordial. That has been very much reflected in the contribution of a number of noble Lords today. I always value it, because that tension allows us to be able to evaluate not only what the Home Office says, but what the independent inspectors tell us. They are right to compliment their predecessors, Judge Stephen Tumim and Sir David Ramsbotham. I also thank Anne Owers and her team for undertaking some very difficult tasks in the area. The public have a right to know what goes on behind those walls; the inspectors provide us with that information.

Since an independent prisons inspector was first established following the May inquiry into the Prison Service more than 20 years ago, the inspectorate has proved an important driving force for prison reform. That has been partly as a result of its inspections of individual prisons. On every inspection, the inspectors have identified examples of good and bad practice, and their inspections and follow-up visits have resulted in many specific improvements in response to their findings and recommendations for change. For example, follow-up inspections of 22 prisons in 2002–03 found that those prisons had implemented a total of 1,500 recommendations for change. That is a very impressive record.

The second way in which the inspectorate has helped to create change is through its thematic inspections on themes such as sanitation in prisons, life-sentence prisoners, suicides in prisons, young offenders, female prisoners and many other issues. Those have helped to focus the attention of Ministers, officials, policymakers, politicians and the public on the need for strategies designed to tackle deficiencies in key areas of policy and practice across the prison system.

A third and key way in which prisons inspectors help to reinforce the pressure for change is by gaining national and local media publicity for the reports of their inspections. Publicity for reports of the appalling conditions which inspectors discovered at times at prisons such as Holloway, Brixton, Birmingham, Wormwood Scrubs, Feltham and Portland helped to arouse the public conscience and increased the pressure for a rapid improvement in unacceptable and uncivilised conditions. As a result, conditions in those establishments have significantly improved in response to the inspectorate's findings.

It would be deeply regrettable if either the effectiveness of the inspectorate or its readiness to speak out and draw public attention to squalid and uncivilised prison conditions were reduced by a merger which blunted the prison inspectorate's cutting edge. That could happen if it resulted in the loss of an inspecting body with a clear and specific focus on the prison system.

The arguments for a single combined inspectorate covering the whole criminal justice system revolve largely round the need to ensure that the system is operating well as a whole and that it is scrutinised as a whole, not just in different silos or compartments. It is certainly important to ensure, for example, that the rehabilitation of offenders is seamless, as prisoners pass through custody and out into the community under probation service supervision. To take another crucial example, it is vital to ensure that criminal justice agencies work together to tackle institutional racism and to promote race equality across the criminal justice system.

As president of NACRO and chair of its race issues advisory committee, I have been at the forefront of that body's work in this respect and we are constantly pressed for this seamless and integrated approach. However, this does not mean that five separate inspectorates will necessarily operate better if they are combined into a single body. It certainly means that the criminal justice inspectorates must work together closely to ensure that key changes are promoted effectively across the whole criminal justice and penal system. I therefore welcome the fact that joint working—and, particularly, joint thematic inspections—has become a common way of working for the Inspectorate of Prisons.

However, the Inspectorate of Prisons in particular owes its track record of effectiveness in promoting changes largely to its sharp focus on prisons and prison conditions, as well as to the status and visibility of a series of high profile chief inspectors of prisons.

In essence, I pose three questions to the Minister. First, would she ensure that in any future arrangement, the accountability of the inspectorate to the Secretary of State is not compromised? Secondly, will she ensure that any legislation to establish a new arrangement receives parliamentary scrutiny? Thirdly, will she ensure that the independence of the inspectorate will not be altered by such legislation?

My Lords, the House must be grateful to the noble Baroness, Lady Stern, for initiating this debate—bringing, as she does, unrivalled experience of the subject.

If I was required to suggest recommended reading for this debate by a listener or reader, it would be a publication by each of the two most recent holders of the office of chief inspector. The first is a book written by Sir David Ramsbotham in his retirement, entitled Prison-Gate —which has already had a plug from the noble Baroness, Lady Kennedy. This book gives an uncompromisingly frank account of his experience over five years as the chief inspector. My other recommended reading would be the annual report for 2003—and, if the reader has time, for the previous year as well—of the present Chief Inspector of Prisons, Anne Owers. These reports provide unrivalled encapsulated examples, for all to see, of what the work of the chief inspector is about in a day-to-day context. I see this work in its simplest form as unrestricted access to the Home Secretary and unrestricted access to any part of the prison regime.

In my view these publications make the strongest case for the retention in its present form of the brief and terms of reference of the office of chief inspector. What is the chief inspector faced with? In the first place, there is a prison population at the last count, on 7 January this year of 73,085. That is 141 per thousand of the population; one of the highest figures in western Europe, compared with 93 for France and 98 for Germany. This may be in part due to the sentencing regime in this country which it is not the brief of this debate to discuss, but it is a fact of life which the prison administration has to face.

With that comes a sophisticated hierarchy among inmates. It has been well said that prisons are the universities of crime, where, putting it in respectable terms, new ideas and techniques are being continually honed by a continually changing intake of students with the end aim of refining the art of criminality and also, let us be clear, bending the prison system to the wishes of the godfathers among the inmates.

Nowhere has this been shown more dramatically than in revelations in the last few days of goings-on in Feltham and Liverpool. This was, as someone remarked to me, "no bad thing, for at least it has dispelled the image attractive to a certain potential type of criminal that prison is a soft touch". Of course, overarching all of this is the appalling problem of overcrowding and drugs.

If I digress, it is only to remind your Lordships that the prison regime is inevitably a confrontational one, however it is dressed up. Indeed it is not a soft touch, and it is this environment which is so important a part of the chief inspector's work.

The Prison Service does not have a good name with the public, whose attitude, like that towards the work of undertakers, is "the less we know the better". But this is a dedicated service, comprising in the overwhelming majority of cases, regarding both management and staff, totally committed individuals. That point was made with great emphasis to me by Sir David Ramsbotham while he was still in post and the noble Lord, Lord Judd, emphasised that, too.

But there will inevitably be abuses, some inherited from years of past practices, some, particularly those which are not mainstream, which have slipped in—often through lack of resources. A case in point is education and training, about which Anne Owers was scathing in her last report. There would be little disagreement among prison governors that he or she occupies a lonely role and needs a totally independent person to monitor and, in many instances, to be his or her supporter, so often in appallingly trying circumstances. That point was made very forcefully by the noble Baroness, Lady Stern. In this, as the noble Baroness has reminded us, the chief inspector has an invaluable complement in the independent monitoring boards.

As the noble Baroness has also reminded us, this country is still the envy of the world in the integrity of the public servants it produces and there could be no better example than in the sequence of successive Chief Inspectors of Prisons. But the very width of demand on the services of the chief inspector is a herculean task that has been faced by successive inspectors in their work, not least in terms of time and resources. For example, many of your Lordships speaking tonight took part last year in an excellent debate on the role of women in prisons;—a point that was also made by the noble Baroness, Lady Kennedy—when speaker after speaker highlighted the particular problems faced by women prisoners. Then it occurred to me that if there was a chief inspector solely of women's prisons, even with that narrower remit, there would be more than enough to occupy that individual. But as we know, this is but one aspect, albeit a surpassingly important one, of the myriad problems within the regime that the chief inspector needs to address.

This is the challenge for every chief inspector. The role must be totally focused—unfettered, for example, by intermediate reporting lines or overlapping briefs with one or more of the four other criminal justice inspectorates. In short, the role should be unfettered by anything that will prejudice the admirable line of communication and freedom of action which the chief inspector currently enjoys. Our admiration for the huge list of successes in improvements in conditions, and the elimination of abuses achieved in the past, and by the present chief inspector, should be put on record.

In conclusion, I refer to the foreword in Anne Owers' report for 2003, published at the beginning of last year. She refers to the assurance that she received from the Minister, that she may continue to use her own criteria and methodology, that there should be no less regular inspections than at present, that she should retain the power to make regular inspections and, most importantly, report only and directly to the Home Secretary. Perhaps I may I quote her comments after that. She stated:

"This is welcome; but it will nevertheless be important to examine any proposed changes to ensure that they fully reflect these principles, protect independence and provide a more effective, rather than simply a more expedient structure".

The noble Baroness, Lady Stern, asked the Minister five questions. I could do no better and we await her reply.

My Lords, I add my congratulations to the noble Baroness, Lady Stern, on initiating this debate. The right reverend Prelate the Bishop of Worcester rightly said of her that she is the chief inspector of our conscience in relation to this matter. Having heard the several contributions to this debate, she has a number of able deputies; and the noble Lord, Lord Dholakia, even has aspirations for her pre-eminent place.

It is clear that we can all agree that independent inspection in the criminal justice system is an important driver for ensuring the safe and proper delivery of services. The right reverend Prelate the Bishop of Worcester was right to say that removal of liberty is an awesome endeavour, and one should do it judiciously, carefully, and with proper restraint.

It was correct that my noble friend Lord Acton should have reminded us of the history and he placed proper emphasis on the word "authoritative". Perhaps I may reassure the House that I do not dissent from anything said in that regard. I hope that I will be able to give the House much of the assurance that it seeks. I was very grateful to the noble Viscount, Lord Bridgeman, for reasserting the assurances that have already been given to Her Majesty's Chief Inspector of Prisons.

The Government are reviewing inspection arrangements across the public sector, to ensure that all inspection is efficient, effective, offers value for money, and does not impose unnecessary bureaucratic burdens on frontline staff. As part of this general review, we intend to consult on different, more coherent arrangements for the end-to-end inspection of the criminal justice system. The consultation, however, will include proposals for structural reform and outline the advantages of merging the criminal justice inspectorates.

Impartial and rigorous inspection plays an absolutely vital role in maintaining public trust and confidence in the criminal justice system and in improving the delivery of public services. It was right therefore that the noble and learned Lord, Lord Mayhew of Twysden, should make reference to perception.

Inspection reform will not undermine the efficiency or efficacy of inspection, nor will it reduce the independence of the current inspectorate regime. Inspection should be independent of service providers, so that inspectors are free to make objective assessments about the services they inspect.

It is important to be clear that the Government have not taken decisions on the purposes and functions of any new inspection arrangements. We want to hear views, prior to agreeing the detailed design of the new regime. I therefore particularly welcome the views I have had the privilege of listening to tonight.

I agree with my noble friends Lord Corbett of Castle Vale, Lord Judd and Lord Acton, and indeed the noble Baroness, Lady Prashar, the noble Earl, Lord Dundee, and the noble and learned Lord, Lord Mayhew, on these issues. The current inspectorate has done an excellent job in driving up performance. In particular, the prisons inspectorate has been a key agent of change in improving the decency of prisons. The police inspectorate's assessment of police performance, added to the information provided by the Police Standards Unit, means that we benefit from a definitive, up-to-date appraisal of how forces are serving the public.

It is important, however, that our inspection regime reflects the changes in the criminal justice system and does not support old systems and structures. The Government have introduced fundamental changes to joint working across the criminal justice process. They have established the 42 local criminal justice boards, to bring together the chief officers of the criminal justice agencies—to which the noble Lord, Lord Dholakia, has made reference. They are accountable for local targets and are working together to improve the whole of the criminal justice system in their area. The local boards have become a landmark in developing solutions across the whole of the system, and we want the inspectorates to help share this good practice.

The noble Earl, Lord Dundee, rightly alluded to the need to identify that only those who really need to go to prison should go there. The better use of community service so as better to address the underlying causes of the offending behaviour is important if we are to reduce the level of recidivism.

All of that could be contributed to by the partnership working, and an inspectorate which is able to respond to those new partnership ways of working. We want inspection to support those recent changes to joint working and, in particular, to focus attention on the joins between the criminal justice agencies, to ensure that they are jointly focused on striving to provide a high-quality service for the public; that everything possible is done to ensure that crime is tackled; that victims and witnesses are supported; and that offenders are punished—but, yes, rehabilitated.

At the moment, the inspection regime is limited because the five statutory remits do not allow for efficient cross-criminal-justice inspection. However, I, too, would like to commend the efforts that have been made to date to undertake the thematic inspections to which reference has already been made by the noble Baroness, Lady Stern, and others.

We also want to reduce the burden of inspection on inspected agencies and ensure that there is no unnecessary duplication in the system, especially between the different scrutiny bodies. We are committed to ensuring that frontline staff are focused on delivering effective services and not on responding to a plethora of unnecessary or duplicative requests for information.

Perhaps I may now turn specifically to the inspection of the treatment and conditions of those people in custody, which is an issue that has dominated today's debate. Let me make it clear that the Government absolutely accept the need for independent inspection of prisons and other places of detention, so I specifically include, in answer to the noble Baroness, Lady Stern, all those other institutions that are currently subject to inspection.

It is right—the history teaches us—that in closed communities of this kind, it is easy for abuses of power to develop and take root unless there is a powerful, independent and external check on what is going on. Sometimes, that makes life difficult for the government of the day, and it is right that it should. I agree absolutely, and endorse the comments made by the noble Baroness, Lady Stern, and my noble friend Lady Kennedy, in that regard. I assure noble Lords that Her Majesty's Government value—rightly value—the acuity of that examination. Therefore, the noble Baroness, Lady Stern, was right to make that assessment.

So there is no difference of view on the need to maintain a strong, independent inspection of prison and prison conditions and the treatment of prisoners. Therefore, the Government are determined that whatever the future inspection arrangements, inspection of prisons must continue to be independent of those running the service. Inspection must continue to focus on the decent treatment of prisoners and their human rights, which means that inspection must focus on prisoners' experience of being prisoners, not just paperwork and processes.

To safeguard against abuse, inspectors should continue to have the right to make unannounced inspections, as now, whenever they deem it appropriate. To be effective, the inspectorate must have staff that know the prison world and have the skills to probe and challenge what they find. Finally, the inspectorate must continue to have the right to put its findings direct to the Home Secretary and to publish its findings, as now.

We believe that all those features can be incorporated into new inspection arrangements. Further, it is essential that they are so incorporated as a fundamental safeguard against poor treatment or abuse in this very special area of the criminal justice system and as an assurance to the Home Secretary, who carries personal responsibility for those matters, as well as others concerned with the conditions of our prisoners, including many in this House and the public at large.

Of course, there are questions about how precisely we will build those features into any new inspection arrangements. It is precisely in order to address such issues fully and squarely, in public, that we are launching the forthcoming consultation exercise. I have been listening very carefully to the concerns expressed in the House today and will continue to do so.

I would ask noble Lords to read the consultation document that we will shortly produce. Noble Lords will find that we have gone to great lengths to accommodate the points that have been made in the debate today. Designing a new inspection regime presents us with a variety of challenges, not least because the inspection regime being examined supports three government departments and a number of agencies undertaking work both within and without the criminal justice process. We do not want simply to merge the functions of the five inspectorates. That would waste an opportunity radically to re-examine the purpose and functions of inspection.

We want to ensure that the new inspection arrangements act as a catalyst to help the agencies inspected to improve their performance, individually and as they work together to improve the criminal justice system as a whole. We want the inspectorate to deliver independent judgments, reporting in public and providing assurance to Ministers and the public about the safe and proper delivery of services.

My noble friend Lady Kennedy of The Shaws was right to raise the history, in particular, of the difficulties that we have had with young offender institutions and with women prisoners. We have fewer women in prison today than we had a year ago. After the six tragic deaths in Styal, my honourable friend Paul Goggins commissioned the ombudsman to produce a report, and he will investigate all the deaths. We understand the importance of that scrutiny.

The consultation process that we are embarking on will instigate a debate on the independence and accountability of the new arrangements. It will re-examine the purpose of inspection in the criminal justice system, asking for views on what functions should be inspected. In doing so, it will keep high on its agenda the question of how the independence, integrity and effectiveness of the inspection of the treatment and condition of those in custody can be maintained, with full regard to the special considerations that I outlined today.

I hope that I have been able to reassure noble Lords that we are fully conscious of the issues. I look forward to hearing more from all concerned on the detail of how we should go about addressing those issues, as I believe that I will. I am confident of that because of the energy that has been demonstrated in the past by each Member who has participated in this debate—the noble Baronesses, Lady Masham of Ilton and Lady Prashar, my noble friend Lord Acton, who sits so sternly looking at me, the right reverend Prelate, my noble and trusted friend Lady Kennedy of The Shaws and all who have spoken. This matter will not be left alone. Confident that your Lordships will do your duty, I hope that you will allow me to do mine by sitting down.