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Lord Ezra: My Lords, I should like to associate myself with the remark just made by the noble Lord, Lord Peston, in expressing appreciation to the noble and learned Lord for the very effective way in which he has conducted our affairs, bearing in mind that he was not present at the beginning of the proceedings. I should also like to thank the noble and learned Lord for his sympathetic manner in handling matters. The noble Lord, Lord Peston, and I met the Minister after the Committee stage and went through a number of points of concern. I must say that the Minister dealt with most of them, although not quite all, in a very satisfactory manner from our point of view.

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However, there is one issue upon which I must say that I am less than happy at this stage. I refer to the duty to safeguard the interests of consumers. I moved an amendment unsuccessfully in Committee and I proposed a modified amendment on Report, which I withdrew on the understanding that, without commitment, the noble and learned Lord would have another look at the matter. That was on the 18th October. On the morning of the 19th I wrote to the Minister with a suggested amendment asking him whether he would like to put it forward or whether I should; or, indeed, whether he had any other ideas. I did not hear from the Minister until this very day when I was handed a letter dated 25th October as I entered the Chamber. As a result, the amendment I proposed to the noble and learned Lord was rejected by the Public Bill Office because those responsible claimed that it had already been dealt with in Committee. However, had I received the Minister's letter in time and had it not been dated the 25th and handed to me on my arrival today, I believe that I could have proposed an amendment which the noble and learned Lord might have accepted. I say that because he says in the third paragraph of his letter:

    "as I explained at Report, the duties in Section 4(1) are themselves designed with the interests of the final consumer in mind".

Therefore, I could have asked the Minister whether he would accept those words being included in one of the subsections. Unfortunately, however, caught between the Public Bill Office and the tardiness with which I received a reply from the noble and learned Lord—no doubt for a good reason—I was unable to do so. I wonder whether it would be in order for the Minister to comment on that matter now, or perhaps he will write to me. Having said that, I wish to emphasise my gratitude to the Minister for the way in which he has conducted our affairs, with that one small omission.

Lord Skelmersdale: My Lords, only a few moments ago we had an example—a real demonstration—of how cross-party co-operation can improve legislation. I have found that that cross-party co-operation has extended all the way through the Bill's proceedings from Second Reading until this moment. As a result, considerable progress has been made towards devising a sensible framework for domestic competition. It is a framework which I believe combines the principles of consumer protection and fair and equal competition. However, it is only a framework. Therefore, much now rests on the licences and on how they are interpreted and applied.

What we all seek to do by way of the Bill is unprecedented anywhere in the world, so we must edge forward with caution. But caution does not mean sloth, slowness or whatever one may want to call it; it means that we need to exercise a degree of care. In particular, as we hand over our framework to the regulator we must ask her to be vigilant. She must ensure that companies that wish to supply gas to domestic customers are fit to do so and that they will have sufficient gas not to leave customers high and dry. Bearing in mind that since 1986 gas prices have come down by 23 per cent., to achieve only 10 per cent. in the next 10 years—that is the figure currently going around—seems to me to be a pretty poor deal for the consumer. However, I shall leave the matter there.

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The regulator must ensure that all suppliers are able to meet their social obligations and that they do so without, hesitation or deviation, or something like that, which I believe comes from a radio programme. There will no doubt be teething problems along the way, but I hope that all parties can work together to ensure that they are sorted out as quickly as we have done our work on the Bill. We shall watch closely the progress of this project. I, for one, wish it well.

Lord Cochrane of Cults: My Lords, as we have now reached the end of this long drawn-out Bill, I wonder whether my noble and learned friend can give us any indication as to when some of the pruning which has been referred to in health and safety documentation—that is, some pruning of the undergrowth left from earlier gas Acts—and some of the regulations which it is proposed to make for specific and smaller segments of that wide field, the gas industry, are likely to come before Parliament.

Lord Fraser of Carmyllie: My Lords, I should like briefly to respond by saying that I am most grateful to noble Lords for the remarks which have been made. I can only extend an apology to the noble Lord, Lord Ezra, for the tardiness in responding to him. I had hoped that a message had previously reached him stating that I would have to reply along those lines, but it would appear that that, too, had somehow gone astray. I can only repeat my apologies. So far as concerns the point raised by my noble friend Lord Cochrane of Cults, I think that the most suitable way for me to respond would be to write to him on the matter.

On Question, Bill passed, and returned to the Commons with amendments.

PHARE Programme: ECC Report

5.9 p.m.

Lord Lewis of Newnham rose to move, That this House take note of the Report of the European Communities Committee on Environmental Issues in Central and Eastern Europe: the PHARE Programme (16th Report, HL Paper 86).

The noble Lord said: My Lords, in discussing the Motion standing in my name on the Order Paper I should first like to review the history of the potential entry of the eastern and central European countries to the European Union. The six countries considered in the report are Bulgaria, the Czech Republic, Hungary, Poland, Romania and Slovakia. The PHARE programme which was initiated in 1989 was primarily concerned in the first instance with Poland and Hungary, hence the "PH" in the acronym. The project was designed to help in the transformation of their economic programme to a democratic and market force based system.

The programme is perhaps best viewed as a technical assistance programme supervised and administered within recipient countries. That is an important point. The impact of Brussels was supposed to be minimised in these arrangements. It is also considered more than

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an aid programme as it was supposed to give close experience of the workings and the nature of the EU. I am afraid that one of the problems with the programme is that it has been found to be far more complex than had been appreciated, a factor that a number of others found in dealing with the programme. I hesitate to suggest that the diary of the EU Commissioner for the environment might help us in this respect.

It is important to recognise that the PHARE programme was never designed to solve environmental problems in these countries. That is far too great a subject to be accounted for in terms of the finance available in the programme. We are told that in East Germany it has been estimated that a factor of between 50 to 100 is necessary in the financial outlay to account for the problems there. One of the important features is that the moneys are considered as grants rather than loans.

From the point of view of the history of events, the June 1993 Copenhagen European Council offered the prospect of membership of the Union to former communist bloc countries. In December 1994 the Essen European Council established guidelines for,

    "preparing for future accession of the six associated countries of Central and Eastern Europe".

I believe that at this very moment in Sofia—although I appreciate that it is a different type of conference—this must be one of the problems under discussion.

During the course of the study we made a visit to four of the six countries in the report; namely, Poland, Hungary, Romania and the Czech Republic. This gave us a good insight into the variety of the problems of these countries and emphasised the gross pollution issues involved. However, it is also important to recognise that there are areas of countryside which are quite pristine and which will sustain biological diversity. That is of international importance. We need to concentrate on protecting that countryside just as much as we need to remove the pollution from other areas. We are not dealing with a homogeneous group of countries. There is wide variation both of structure and management approach and certainly of economic potential. In terms of their GDP per capita they are poorer than any of the existing 15 members of the European Union.

The PHARE programme needs to be adapted to each particular recipient country. There is no overall solution that is applicable across the board. Any solution must be affordable both economically and socially. During our visit we were constantly aware of the fact that people had considerable anxieties about the implications of environment legislation as regards employment. The prospect of closing firms down was certainly a terror for them. I remind your Lordships that we are talking of communities where unemployment was virtually unknown until the fall of the wall.

The position has become further compounded by the fact that the PHARE programme has been extended to include six more countries: Albania, Estonia, Latvia, Lithuania and Slovenia, and in June of this year, Croatia. It is important to recognise that the PHARE programme covers many sectors other than purely the environment.

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In the period 1990 to 1993 approximately 10 per cent. of the total budget, which amounted to about 250 million ecu, was allocated to the environment. The programme has been seen to operate on a partnership basis but that was criticised in the early stages because the control and approval procedures were found to be complex and time consuming. I am sure that anyone who has had dealings with the European Union may feel a certain sympathy with that. As a result, of the 250 million ecu, no more than approximately half has been utilised in that period of time. Difficulties were encountered, but not just on one side. It is important to recognise that they arose from problems on both sides.

The staffing of PHARE in Brussels is inadequate. We held discussions there and saw the situation. I know that the noble Baroness, Lady Hilton of Eggardon, will discuss that problem and I shall therefore not pursue it. We also encountered problems as regards the delegations of the European Union in the various countries. The delegations in principle provide the direct contact with the European Union. They are the window through which the countries can observe how the European Union works. The staffing is different in each country. And certainly the attitude of the countries to the PHARE programme staffing is varied. The delegations are there primarily to suggest the approach to a "market free" economy. That is not fully understood. Perhaps not surprisingly the delegations have had some difficulty trying to explain. The Polish Government hired external consultants to advise them on how to deal with the PHARE programmes.

In the initial stages PHARE was viewed as a solution to environmental problems in the six countries. It rapidly came to be recognised, however, that the programmes would allow only for assessment of the problems. As I stated, in the case of East Germany the real solution involves investing large amounts of money. The NGOs, which are embryonic in that part of the world but a feature we would like to see encouraged—I know that some noble Lords will talk about that aspect—have pointed out that some inconsistencies occur. For example, some of the agricultural parts of the PHARE programme have produced environmental pollution problems. And one set of environmental pollution problems—as is often the case—produces another type of environmental pollution. The "cradle to grave" analysis which is now the conventional approach applied to environmental problems in this country has yet to reach the part of the world we are discussing. There must be careful monitoring.

An important step in the programme was the Dobris conference held in June 1991. This was the first pan-European conference of environment ministers to emphasise the difference in approach of the central and eastern European countries and the donor western group. The conference called for the production of an environmental action plan to provide a strategic framework for the management of the environment with the formation of a task force to develop the plan. That was endorsed two years later at the Lucerne conference and must be one of the primary features of the Sofia

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conference. I hope that the Minister will be able to report the outcome. The conference, I believe ends today.

The problems of pollution are vast. They are an inheritance of the manufacturing industrial policy of the Eastern bloc at a time when little attention was paid to environmental issues and the main emphasis was on production figures.

We saw many examples of major pollution of land, air and water. In Poland, for instance, 80 per cent. of the country's energy is obtained from a complex covering no more than 2 per cent. of the country. Yet that complex produces 60 per cent. of the solid waste within that country. Most of the rivers in the area are so polluted as to be unclassified under either EU or Polish standards.

In the black triangle, an area including eastern Germany, Poland and the Czech Republic, lies one of the major manufacturing areas of that part of Europe. There are large quantities of brown coal. This is mined on the surface and can be extracted down to a depth of 300 metres. We saw vast tracts of land which had been mined in that way. The problem is that brown coal contains large amounts of sulphur. In that area 30 per cent. of European emissions of SO 2 occur. At certain times the sulphur dioxide concentration in the air is 10 times the EU maximum.

In Romania we saw pollution of thousands of hectares of land as a result of fractured pipelines from nearby petrochemical refineries. We were shown holes which had been dug in the ground. They immediately filled with oil which was seeping from the soil. The oil was put in barrels and sold. That is a tragic feature of what we see in that part of the world.

One of the basic concerns in dealing with these pollution problems is the financing of the remedial projects. I remind the House that we are dealing with an area which has a very low GNP per capita. Interest rates are several times higher than in western Europe. Pay-back periods are frequently so long that they affect the potential for development in the private sector and local government. Local government is a tender plant in that part of the world. I remind the House that government was very much centralised. Local government must be, and is being, encouraged. PHARE is working with international financial institutions to find some way of reducing the problem. I believe that discussions are taking place in Sofia. I hope that we shall be able to hear what progress is being made.

The general view of the strength of the programme is that, first, it is the largest aid programme in central and eastern Europe. Secondly, it is viewed as mainly a grant programme. Thirdly, there is an attraction in that part of the world for open tendering. I must admit that in discussion with some ministers it emerged that "tendering" was a strange word in their vocabulary and that they were not aware of its full implications. The open tendering required by the PHARE programme avoids the tied aid relationship. Much of the aid to countries in that part of the world involves the use of agencies within the individual countries concerned.

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The weaknesses were perceived as the administrative restrictions involved and the long delay in obtaining approvals. It was also felt that there was too short a period between the allocation and disbursement of funds which under the present arrangements can take years rather than months. I believe that that may have been due initially to lack of understanding of how the European Union works. There is no doubt that some of these countries have adapted to dealing with the programme. I am optimistic that in some cases that may be a solution.

I should like to conclude by thanking the Government for their prompt reply to the report and to note the general agreement with much of what has been discussed. However, I should like to press for the Government's views on three points. The first relates to recruitment and staffing for the PHARE programme in the Commission. Associated with that point is the rather difficult position which British civil servants face when they go to Brussels in not having that time acknowledged, compared with the situation in many other member states.

The second point is the possibility of delegation of more responsibility for the running of the PHARE programme to the six countries. In saying that, I recognise that there is diversity in their management potential. Nevertheless, it is important that we direct far more responsibility to the individual countries. The third point is help with the raising of capital for projects. That may well be an outcome of the Sofia conference.

Finally, I should like to thank the embassies, which were very kind to us and organised our visits most efficiently. At times I felt that the enthusiasm exceeded the physical abilities of the committee. I should also like to thank the members of Sub-Committee C. This is the last opportunity I shall have to do so as chairman. I have enjoyed my time with the committee. The members are an enthusiastic group of people, and I am sure that they will go on to consider greater things.

I should like to acknowledge the great help of our clerk, Mr. John Goddard. He was incredibly effective, and his enthusiasm and the efficiency with which he dealt with many of the problems which faced us was remarkable. He is an extremely able man. I acknowledge too the considerable help provided by our specialist adviser, Dr. David G. Smith. He knows how PHARE works; he knows that part of the world. He was able to lead us through a labyrinth of difficulties and to point the way. I take this opportunity to thank him. I beg to move.

Moved, That this House take note of the Report of the European Communities Committee on Environmental Issues in Central and Eastern Europe: the PHARE programme (16th Report, HL Paper 86).—(Lord Lewis of Newnham.)

5.26 p.m.

Viscount Bridgeman: My Lords, I should like to begin by thanking the noble Lord, Lord Lewis, for the wisdom, leadership and light touch with which he chaired the sub-committee over the past three years, and to welcome the noble Baroness, Lady Hilton, who will take over in the next Session.

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I took part in the tour with the noble Lord, Lord Lewis. On more than one occasion we were faced with a meeting of Ministers and officials. The proceedings would be started by a fairly elderly Minister who wore a Communist suit, talked with a Communist monotone and, not least, at Communist length. He was then followed by one of the young Turks, who was impressive, had a very good knowledge of the West and of Brussels, spoke very good English and was articulate. It was difficult to believe that only six years ago these people were living in a Communist environment. It is important that institutions like PHARE help these people.

PHARE terms that institution building. It is really the establishment of democratic infrastructures, which are so familiar to us here but are very new to most of the countries of the CEE.

We very much approve of the PHARE initiative in training project managers, law makers and civil servants and encouraging travel and study in the West. I should like to make a plea for the abolition of travel restrictions and visas as soon as possible.

The role of the non-governmental organisations to which the noble Lord, Lord Lewis, referred is crucial. These are by their nature less cumbersome and probably less doctrinaire. They have a crucial place in the establishment of the institutions. Here PHARE can play a key role, first, in reassuring the governments of the countries that they have nothing to fear from these NGOs. They are regarded with a great deal of suspicion, not unnaturally. The NGO was a virtually unknown phenomenon during the Communist era. It is important that the NGOs are assisted by PHARE officials to find their way around governments. In Budapest we found a particularly unfortunate situation. A congress of non-governmental organisations had no contact with and no understanding of government. At that meeting we realised just how far we have to go.

Most of the non-governmental organisations are national organisations. However, there was an important exception. The Regional Environment Centre in Budapest is internationally staffed. When we were there it had a Polish director. We found that organisation imaginative and flexible and, importantly, it helped small projects which are not of interest to the larger organisations. We found a slightly lukewarm approach by PHARE to those multinational non-governmental organisations; and we should like to see such organisations form a greater part of the NGOs' structure.

It is the committee's strong recommendation that non-governmental organisation senior officials and managers are included in the training programme provided for the officials of those countries. We are also pleased that they have equal opportunity for tendering.

Finally, perhaps I may mention the UK know-how fund, which applies to all six countries of the CEE. It is staffed by British personnel and British firms. Everywhere we went we found admiration and compliments for the work that it is doing. In profile, the fund lies somewhere between the non-governmental organisations and the more structured bodies such as PHARE. It is characterised by a responsive, hands on,

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at the coal face approach to its work. In Romania two non-governmental organisations had been entirely set up, helped and guided in their relations with that government by a know-how team. In her evidence to us the Minister said that the organisation was unique within the European Union. It is something of which this country can be very proud.

The PHARE programme brings together the non-governmental organisations and the know-how fund. I am hopeful that the programme is moving in the right direction to help those countries to acquire the knowledge and infrastructure which they not only need but which, by their example over the past six years, for the major part they wholly deserve.

5.33 p.m.

Baroness Gould of Potternewton: My Lords, much as the noble Viscount, Lord Bridgeman, has done, I wish to concentrate my remarks on the NGOs and the problems that they face in central and eastern Europe. Before doing so, I wish to add my appreciation to the chairman, the noble Lord, Lord Lewis, for his patience and learned appraisal of our deliberations. Sometimes in committee that has not always been easy. He has acted with great tolerance and patience. I should like, too, to add my thanks to our clerk, John Goddard, and to Dr. David Smith, for their assistance in this project.

The revolutions of 1989 in eastern and central Europe provided the citizens of those countries with the democratic right to vote. But for real democracy to be seen to be achieved requires that those citizens understand the importance of playing a greater part in the decision-making processes affecting their lives and their futures—and none more so than those relating to the environment—by the development of a civic society and responsible non-governmental organisations.

However, in the context of the report, not only did the previous regime have no regard for the historical traditions of civic participation, but it also had a complete disregard for the environment. As the noble Lord, Lord Lewis, indicated, it left in its wake some of the largest concentrations of sulphur dioxide and nitrogen oxides in Europe; heavy industrial areas with the resultant health problems; extensive damage to vast forest areas; and ground water and arable lands polluted by the over-use of chemicals.

Unfortunately, I was unable to accompany the members of the committee who were able to visit four out of the six countries on which the report is based. However, two years ago I was involved in a project to develop civic participation in the Czech and Slovak Republics. We focused our work at that time on NGOs which were concerned with environmental issues. With no government support, a few enthusiastic individuals had determined to establish such NGOs. For instance, the mayor of Trencin, an area of heavy industry, founded the Regional Association for the Middle Vah Valley, bringing together people of like mind to seek to lobby government. But those enthusiasts were very much the exception. The majority of the electorate continued to rely on government to regulate most social, economic and environmental problems.

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There have been some improvements since that time, varying in degree from country to country. Some international NGOs have established themselves in those countries, but they have done so without the support and encouragement of the governments concerned. It seems rather that politicians and officials see their presence as an interference in the political process. That opinion is reinforced in paragraphs 64 to 70 of the report which outline the views of each of the six countries regarding their environmental awareness and NGOs. It is clear from all their responses that the need for public awareness has to be, in the words of the Polish Government,

    "strengthened and deepened to make the full impact required".

PHARE funds and the know-how fund are being used to assist in that development either through the establishment of specific projects such as the Regional Environment Centre in Budapest, mentioned by the noble Viscount, Lord Bridgeman—an umbrella NGO—or through the provision of information on the environment as in Bulgaria.

What was clear, however, was continuing frustration over the obstructive attitude of the bureaucracy towards funding from abroad and the imposition of tax burdens, such as the taxing of membership subscriptions, on the NGOs. The Globe Europe Network report on environmental reform in east and central Europe, published in May of this year, came to the same conclusions and called for NGOs to be viewed as important cost-effective partners but requiring funds from both domestic and foreign sources. Partners who can advise, monitor and draw the attention of funding bodies and governments to the effect of their actions are absolutely crucial, especially in a newly developing society.

It was, therefore, encouraging for the committee, when the Minister attended the meeting, to hear that she was clearly committed to the strengthening of NGOs as a way of stimulating environmental concern and,

    "fostering 'good government' generally".

As she said, there is no doubt that PHARE should do more to promote NGOs and to encourage them to take up their concerns with government. But that action will be truly effective only when the governments of the six cease to see NGOs as a threat to their own authority.

The Summary of Conclusions and Recommendations makes clear in paragraph 147 that there is a need for cultural shifts and the shedding of habits bred in the communist era. Only then will PHARE be able to put in place the policies, institutions and capital investments required to improve the environment and public health. That shedding of old habits, as the report says, needs to be nurtured by PHARE's "institution building" programmes and by the training of law makers, managers and the leaders of NGOs—training designed to break down the mentality of central control; to develop initiative, and to show how dialogue and discussion are the basis for sound policy formulation and better management.

In their response, while supporting the need for "institution building", the Government specifically draw attention to the close involvement of the NGOs in the PHARE/TACIS democracy programmes, set up to give

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special support to non-governmental bodies, and the LIEN programme, designed to promote cross-country boundary activity. Hopefully, this process of learning will be assisted by the reported development of the LIEN programme, the increased funding for the PHARE democracy programme and the extension to the six countries of the EU schemes, such as Leonardo and Socrates; and now there will be greater opportunities for broadening European awareness across country boundaries.

In conclusion, I should like to say a brief word on staffing. I know that my noble friend Lady Hilton will refer to this in more detail. The Select Committee points out the danger of creeping paralysis arising, not through any fault of the staff—it is important that that is stressed—but because of their small numbers and the nature of their work. The PHARE programme has been criticised for being over-bureaucratic and slow to the point of being stationary. For its job to be carried out effectively, the staffing needs to be strengthened as a matter of urgency, the temporary nature of the employment re-examined and staff work patterns reviewed.

The PHARE environmental programme, limited as it is, is crucial to the beneficiaries and must be well handled and well managed. Its importance to those countries that benefit is summed up in the response from Hungary on the perceptions and advantages of PHARE which states:

    "In Hungary Phare was seen by the government as very useful not only because it was the only multi-lateral funding mechanism for the environment but also because Phare contributed to strengthening democratic institutions. This made it difficult to quantify Phare's benefits or to put a cash value on them".

While we have to accept that progress towards high levels of environmental protection will be gradual, equally we have to accept that in the long term environmental standards are not negotiable. This is an important report as part of that process. I look forward to the Minister's response, particularly on questions relating to the lack of material resources and the fragility of the democratic institutions, which create constraints to solving the environmental problems within these newly democratic countries.

5.42 p.m.

Lord Butterfield: My Lords, I am just coming to the end of my period of service on Sub-Committee C under the chairmanship of the noble Lord, Lord Lewis. Perhaps I may take a few seconds to talk about my overall impressions as a new Peer of the work of the sub-committee, and indeed of the Select Committees generally.

I was most impressed by the contribution of your Lordships' committees in which I was involved and the contribution that they can make to the country as a whole. Indeed, I confess that I admit to my children and my closer friends at table (it may be impudent of me to say this) that the contribution of our committees, based on well-informed inquiry and subjected to the scrutiny of people who have knowledge of the various situations, is a feature that must be recognised and protected in the future of this House. During the course of the afternoon

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we heard one reference to possible changes in the House in the future. It is my hope and prayer that the work of these committees will not be swept aside. I am sure that it will not be.

Obviously, the sub-committee scrutinising European Community affairs deals with important matters. When I look back on my period of service with the committee I am astonished at the range of matters upon which I have been educated. I did not know that I was to have a profound late-life educational course. It has covered matters from poverty to drinking water. Regarding poverty, let me say as an aside that it has become clear to me—and perhaps I may direct this to the Bishops' Benches—that perhaps the most dreadful sin that I, and indeed all of us, can commit socially towards other people is to involve them in social exclusion. We were told by the poor groups, as the chairman will remember, when in Portugal and other places that the one thing that bruised them about being poor was being excluded. I have tried to make my children agree that they will remember that and will not be snobby. I hope that I succeed.

I am anxious to pay tribute not only to the chairman himself, but, as he did, to the Clerk and to our specialist adviser on this topic, and of course to my colleagues. I can tell the House that Sub-Committee C has become a little club. We are not excluding anyone. To anyone who wants to come along and listen to our affairs, I am sure the door will always be open, and that that applies under the new chairman.

It is also very important to convey that many of the matters with which the committee has been involved over the past three years are relevant to this important PHARE—or "far"—programme. I joke about its being concerned with far-away places; noble Lords must forgive me. We watched over, and indeed interviewed, people who were concerned with this incredibly important European Environmental Agency. If we are to get what we want in Europe it is essential that the methods and standards applied to pollution and other aspects are standardised. I believe that when the Lord Chairman looks back not only will he be pleased with the PHARE programme efforts but he will feel that the investment made in interviewing people who will take a leading role in the European Environmental Agency might have the most important long-term effects.

Noble Lords have heard that PHARE aims to help eastern european countries prepare for entrance into the European Union. It is very important that the House realises that its financial authority is very small compared to what would be asked for in order to bring about a transformation. I have no doubt that the seeds being sown through this organisation are taking root and growing and that harvests will follow.

Noble Lords should also remember, as the chairman pointed out—and it needs to be remembered, especially by people who say, "Well, you are not getting on very well in eastern Europe"—that PHARE covers banking, transport and the production of energy. It is important that we do not see it as having only to do with pollution of the soil.

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We visited Europe in regard to pollution. I echo the remarks of previous speakers. We were very impressed and proud to find UK citizens working all through these countries. I hear it said, as no doubt do other noble Lords, "Oh, well, the trouble is, can we get into the core of Europe?". Indeed, we are already there. So far as I am concerned—I am sure the Minister will agree—I hope that we can stay there. Of course, the know-how fund has been terribly important in achieving what we have got out of it all and in producing the people with the money to get things going.

Perhaps I may mention one point from the report. It is unkind of the examiner—that is me—to look at the students of the document of which we speak and steal out a sentence or two. In the report at paragraph 19 the committee said:

    "High priority should be given to broadening the experience within the Six of life outside",

especially after the years of intellectual deprivation in the past. The Minister's response was:

    "The Government agrees with the Committee that opportunities for foreign study, training and travel are important elements".

To that extent, the seeds have been planted and they will produce fruit in due course.

In the last country that we visited, the Czech Republic, I saw things which gladdened my heart. We all know that the Czech Republic has been a big mark in recent media reports about what they are doing to the Lada motor car, which many people regard as a rather pedestrian vehicle. It is to be modernised and it will be extremely interesting to see whether it captures part of our market. I believe that the Czechs are such good engineers that it will do so; it will make an inroad.

I want to say—I am sure the noble Viscount, Lord Bridgeman, will agree with me—that we were very impressed by the work taking place in developing their health service. Sadly—or perhaps not so sadly—we had an opportunity to test the system when one of the visiting team became unwell one morning. I, as general practitioner to the team, had the privilege of going to the university hospital in Prague to see how our colleague was being taken care of. I want your Lordships to know that he was taken care of by Professor Kolbel, who has a doctorate of science as well as a medical degree and had been trained in America. He rendered to us, I think I can say, exemplary emergency service. The noble Viscount and I both noticed, as the food was brought in for us to see, that it held certain resemblances to the food served on Sunday evening in the NHS. Lunch tended to be sandwiches. But never mind; it is the medicine that matters.

I also want to say how much I agree with those members of the Committee who made the point that young people are becoming involved in the NGOs. They are the people on whom we must fix our hopes and prospects for the future. They are dynamic and energetic young people. They are unbiased about their resolve to pursue a clear, clean environmental programme. They will not be bullied by the past.

Lastly, let me refer to the excellent work of a retired professor of the Czech technicological university whom I met in Prague and to whom I wrote later. Many of us wrote letters to the people whom we met as we felt that

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we should do our best to encourage them. Professor Vegh is a retired emeritus professor in the technicological university. He is a man of immense energy and drive. He has put his back into organising environmental information conferences. As well as conferences, he has also been organising exhibitions, to which more and more British firms are able to go. Those are the firms producing environmental apparatus to clean up soil or water, or whatever it may be. I was told that a firm in this country called TBV (but at that time called Rendell Science), W. S. Atkins (Civil Engineers) and Biotechnica Graessa of London—all firms which make environmental apparatus—will be invited to the conference and exhibition next year that Dr. Vegh is organising in association with Dr. Singer at the Hertfordshire University. That is where they can show their wares and win orders. It will encourage some competition in the technology of environmental affairs.

As I said, I have no doubt, as I step down from this Committee, that the new chairman will have great opportunities. She has all our good wishes. I support the Motion of the noble Lord, Lord Lewis.

5.55 p.m.

Baroness Rawlings: My Lords, I speak in this debate with certain reservations, not having sat on the committee that produced this excellent report. I commend the committee for choosing today to debate this very important subject. It is the week of the third European Environmental Conference, which is taking place in Sofia. Ministers and activists from 49 countries are attending. One of their tasks is to consider how to pay for the expensive clean-up of the environment of central and eastern Europe.

On Monday, the European Union offered 60 million dollars for investment in environmental projects. The Swiss agreed to write off some of Bulgaria's debt if money was spent on the environment. I should like to concentrate on Bulgaria, even though the report covers a much larger area. I do so not because of the conference taking place there and not because Bulgaria's situation may be more serious than that in any of the other new democracies of Europe. I do so because I wrote the report for the European Parliament on the Europe Agreement with Bulgaria. I was also vice-president on the Bulgarian delegation and took a great interest in the country.

Bulgaria is one of the most beautiful and unspoiled countries in Europe. It still has a predominantly rural economy. It has great tourism potential with its Black Sea resorts, the Rodopi mountains, many forests, its mass of wildlife and its famous wine and attar roses. But it has an economy which for many years has had to rely mainly on shoddy Soviet factories for its development. That has had shattering effects. Factories not only marred and scarred the picturesque countryside; they also seriously polluted many of the rural areas, making them awful places in which to live.

On a recent visit, I heard a story from an inhabitant of one of the villages. She had done her washing and hung up a pair of lady's tights on the line to dry. Some of your Lordships' may not appreciate those daily needs. Only a few hours later to her horror she discovered that

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those tights had totally disintegrated. They had been destroyed by the pollution. That is just one of many stories.

Bulgaria is a country which has suffered under 400 years of Turkish domination and spent years under a Soviet régime that terrorised the people and drove them into poverty. Since the Berlin wall came down, those people look towards the West for their future.

The PHARE programme has played an important role during that transition period. It is still vitally important, as is our Overseas Development Administration and the British Council. Perhaps I may put in a small plea to the Minister: these budgets should not be cut.

There is also support from the G7, the EIB, the EBRD, the IMF and the know-how fund. But think of the enormous amount of money that West Germany paid into East Germany to improve its environment. I am afraid that all that support is but a drop in the ocean when we talk about eastern and central Europe and especially Bulgaria.

One of the long-standing worries—this is my main point—is the safety of the nuclear plant at Kozlodui on the Danube River. The PHARE programme has provided about 60 million ecus to improve it. The Bulgarian Government have committed themselves to closing down the first reactor of the nuclear power plant in three years' time. However, Russian and Bulgarian experts believe that currently the first reactor is safe enough and can function. Consequently, a week ago the Bulgarian Government decided to put the reactor on stream. Two weeks ago the G7 had asked Bulgaria not to put the reactor into operation because Western experts believed that additional expertise on the reactor's safety was needed. The European Parliament has voted a Motion insisting on the closure of the reactor. Neighbouring countries such as Greece and Romania have also insisted on the closure of the reactor.

The main objection of the Bulgarian Government against the closure is that it provides something like 10 per cent. of the electricity produced in Bulgaria and the closure of the reactor would cause shortages of power supplies during the winter, and the winters are very cold. The critical point is whether the European Union, through the EBRD, can fulfill its promises to compensate Bulgaria for the closure of the reactor, not only for the duration of the additional expertise required by the western experts—six to nine months—but also in case the latter concludes that the reactor has to be closed down definitely. We are all aware of the potential disaster should there be an accident. I wonder whether the Welsh farmers have yet recovered from the Chernobyl effects. I would be most interested to hear from my noble friend Lord Kimball as to whether they have recovered.

Bulgaria has suffered badly through the war in the former Yugoslavia by the blocking of major routes to western Europe. Environmental problems do transcend national barriers. Finally, I would support the noble Lord, Lord Lewis of Newnham, when he says that these new democracies need aid, especially for the environment. However, we must not forget that trade is vitally important for their future development. I support the Motion.

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6.1 p.m.

Lord Mackie of Benshie: My Lords, I was in Bucharest at the IPU conference along with the noble Baroness, Lady Hilton, who is to speak after me. Every day we went up to the venue, which was a monstrous marble creation which the monstrous Ceausescu spent so much money on, and we looked down the great avenue which he had created and which may be a monument to him. There was only one day on which I could actually see the end of the avenue, and then it was hazy. However, I should think that that was one of the lesser trouble spots.

Like everyone else, I would like to praise the report and the chairman. It must have been a terrible job to pursue, with the bureaucracy of Brussels and of the Six, and it was a great achievement eventually to track down the fact that in the environmental sector of PHARE there were four jobs, three of them manned by people who were not very enthusiastic about their work, as I understand it, and the other job was not manned at all. I should think that the work done must be of great value to the Minister in trying to improve the administration. There is no question but that PHARE is of great importance overall but particularly in its work for the regeneration of industry. Of course it ties in all the time with the environment. The noble Baroness, Lady Rawlings, has already mentioned that the output from this doubtful reactor is highly important. Poland got 80 per cent. from brown coal or lignite, which gives off enormous fumes.

The report was meticulous in laying out that all these aspects go together and will be successful only so far as the local people understand what is needed and as far as the economy's needs are taken into account for the well-being of the people. It was interesting to learn about the staffing of the department and the fact that the commission was actually frightened to start the work properly because of the propaganda of various Eurosceptics and everything else. I hope that this aspect will give fuel to those who want to see good people doing good jobs in the Commission in connection with this very important work.

The section on grants rather than loans is obviously very important. It is difficult for people to have loans at a very high interest rate. It is also important to show people where they can get good loans at lower interest rates. In short, this is an extremely practical report and one of the more valuable of the many reports which have been produced by the committees of your Lordships' House.

I now move on to my favourite subject, which is of course the countryside and rural development. Here the environment, as was said during the last debate, is extremely important, and of course the environment includes people. The economies of the countries I have been to have been largely dependent, at least at the moment, on a large number of people being settled in agriculture on the land in small units, many of them not really economic. However, socially they give the stability which these countries badly need at a time of change.

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This is a part of the environment which needs to be handled with great care because it involves, as has been said already, communist thinking. All of us who have had experience of it will know what can happen. I was in Albania at one point and there we were told to drink only bottled water. I went to the lady in the hotel who dispensed the bottled water and asked for two bottles of water. She said, "Finish". I asked, "Can't you get more?", and she repeated, "Finish", and turned away. She was simply indicating that there was no point in questioning any edicts: if a thing was finished it was finished.

That of course is entirely the opposite to the sort of thing that many of our people are showing to industry in general on many other aspects. For example, a couple of young friends of mine have set up a farming company in Poland. They could not get fertiliser and the machinery was not there to produce the fertiliser at the right time. So they hired a lorry, drove 200 miles to Germany and bought the fertiliser, to the amazement of their neighbours who would never have thought of such a thing. It is that sort of thinking which has to permeate the whole of the economy and the thinking about the environment.

We in the Council of Europe on the Agriculture and Rural Development Committee are looking at a rural charter for the development of rural areas. When I say "development" I mean of course sustainable development—call it what you will—in the rural areas. As we all know, they suffer from too many people wanting to live in them, thus putting up the price of houses, and too many people are not able to find a job and go into the towns. There are also the masses of tourists who come in, destroying, for example, the heights of Lochnagar. There is a whole environmental area in the countryside that needs planning, direction and a great deal of thought. I hope that the glorious areas of the Carpathians—for example, in Romania—will not be destroyed by a badly designed free enterprise tourist system which has involved no planning whatsoever. There is no question about the enormous harm done by the central planning of the communists. That has already been spoken about. We have now to see that free enterprise does not destroy many of the beautiful places on the Continent which are so necessary.

I have said enough. This is a very good report and we have a very good Minister who is to reply to the debate. I trust and hope that we shall hear of the advances that she is going to make.

6.7 p.m.

Baroness Hilton of Eggardon: My Lords, as previous speakers have said, this was a particularly fascinating study and it provided an opportunity to gain some understanding of the problems of eastern Europe as well as of the administrative strengths and weaknesses of the European Commission. I am personally indebted to our chairman the noble Lord, Lord Lewis, for his leadership and imagination in guiding us safely through many complex and, at first, ill-understood issues. I hope that I shall prove a worthy successor to him.

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I intend particularly to concentrate on two aspects of our study: firstly, the staffing problem of the European Commission and then because, like the noble Lord, Lord Mackie, I visited Romania again recently, the particular environmental problems of Romania as an example of those difficulties faced more generally throughout eastern Europe.

To deal first with the staffing of the European Commission, which was picked up by the noble Lord, Lord Mackie, as being one of the salient points that we wished to make in our report, the tabloid press in this country and Europhobes or Eurosceptics have spread many myths about Brussels' bloated bureaucracy, but in fact many of the difficulties of Brussels are occasioned by lack of staff rather than by excessive numbers. Matters are therefore dealt with at too low a level by junior staff with no overall or strategic view of Europe.

Delays result not from an excess of bureaucratic layers but because young and inexperienced staff are overloaded with paperwork and lack the power to delegate. The total permanent staff of the European Commission is under 18,000. That compares favourably, noble Lords may think, with the 15,000 civil staff who help to run the Metropolitan Police or the 12,000 staff in the Department of Transport, both of which organisations have much narrower ranges of responsibilities.

To our surprise, therefore, the number of staff employed in Brussels to administer the environmental section of the PHARE programme is only four. The noble Lord, Lord Mackie, said that they were unenthusiastic, but I do not think that that is true. Their problems arise from their conditions of employment. Only one of the four staff is permanent. The other three are there on temporary three-year contracts which cannot be renewed. The inevitable consequence is a regular loss of expertise and commitment as staff changes occur. These four Brussels staff have between them been responsible for the disbursement of more than 250 million ecu to the East European countries since 1990 for environmental projects and therefore have had no mean demands upon their ability as administrators. It is not surprising if sometimes there are blockages at the Brussels end.

In our report we make a number of recommendations about staffing which we believe would improve the stability and commitment of the Brussels staff. We have, indeed, been heartened by the Government's positive response to our recommendations on these points, but I should like particularly to emphasise the following recommendations about the administration of the PHARE programme. The procedures need to be more transparent and streamlined. In their response the UK Government have undertaken to get the Commission to establish a clear timetable for each step of the programming process, with responsibilities between Brussels, the European missions and the recipient governments clearly delineated. I hope that that will occur. We intend to monitor whether it does occur.

As the noble Lord, Lord Lewis, said, the PHARE staff in Brussels need to be strengthened. The United Kingdom Government have offered a detached national expert. I regret to say this but we have met one or two

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of our national experts who have not greatly impressed us. I believe that more could be done to make a posting to Brussels an important part of the career development of our civil servants in this country. At the moment it is seen as, "Time out of sight, out of mind", an interruption to the career of the brightest and best, whereas in fact it should be seen as a feather in the cap of those who wish to get to the top of our Civil Service. The best of our civil servants ought to see a posting to Brussels as being an important part of their career development and not something which will interrupt their progress up the ladder.

The second part of what I wish to say concerns our visit to Romania. Romania is a country with great environmental problems, some of which have already been described by the noble Lord, Lord, Lewis. Most of its energy is derived from worn-out coal-fired power stations which blacken the countryside around to the extent that some villages have had to be evacuated with the workers being bussed in to work in the power stations. Romania has one new nuclear power station. As the noble Lord, Lord Lewis, said, the oil industry has so saturated the ground around the refineries that people can effectively dig oil out of the ground and sell it. He did not describe the other thing which we saw very vividly—the totally inadequate sewage works for Ploiesti, a large town of some 500,000 people. The town has water for only two hours a day. That is an example of the kind of conditions under which many Romanians are living. Life expectancy in Romania has declined in the past five years and infant mortality is extremely high, to say nothing of some of the direct consequences of Ceausescu's policies, such as the number of children in orphanages who are afflicted with AIDS.

However, there were brighter aspects to Romania. Other members of the group have described the young and enthusiastic members of the NGO, whose conference was funded under the know-how fund. They spoke excellent English, they had good knowledge of the West and they understood the environmental problems of their country. But they were desperately strapped for cash. There is no basis for mass membership of NGOs in countries like Romania. People cannot afford subscriptions. People cannot afford to produce the necessary literature to inform people who might wish to be members. They cannot circulate students or universities with information about environmental problems. Although some dedicated people belong to NGOs—we were impressed by their intelligence, brightness and enthusiasm—they suffer enormous handicaps. At the other end of the scale were the traditional communist bloc bureaucrats, to whom the noble Viscount, Lord Bridgeman, referred. The worst one we met was in Romania where we were subjected to a half-hour lecture. He had to be reminded that we were entitled to ask questions at the end of it, so in no way was it a discussion.

On my return to Romania a fortnight ago to the IPU conference, to which the noble Lord, Lord Mackie, referred, I took the opportunity to try to pick up on some of the threads of the things we had seen in April. I saw the head of the European delegation there and was given a good briefing on how things were going. There was

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one disappointment. An environment Bill has been passing rather slowly through the Romanian Parliament. The Bill originally included a clause providing for an environment fund, which in all the other East European countries, particularly in Poland, has begun to provide some means for cleaning up rivers and so on. Unfortunately, the Upper House of the Romanian Parliament has dropped the clause setting up an environment fund because it could not agree whether it should be administered by the central government or by the Environment Ministry. The British Ambassador arranged for me to see the Speaker of the Upper House to discuss the matter with him. His only idea about improving the environment in Romania was to say that he would like Western funds to build more nuclear power stations so that they could get rid of the coal-fired power stations, but he was not interested in doing anything about an environment fund or anything that would help at the margins. We realise that very small things can be done with an environment fund but it is a way of attracting capital from the World Bank, the European Union and so on. It is a way of capitalising some attempts to clean up the environment. So that was very disappointing.

My only bright encounter in Romania this time was with a joint venture setting up a water purification plant which was run by a man who is actually American but operates from this country. He said that the quality of the Romanian engineers is excellent and that by employing young Romanians again he was getting good quality work from them. So perhaps there is some hope at the bottom levels of Romania, as we saw with the NGOs, rather than with the bureaucracy or what is happening in the government there.

My impression is that, unlike Poland, Hungary and the Czech Republic, which on the whole we thought showed some realism about their situations and some indication of steady progress, the Romanian Government still do not understand their own problems or what might be done to address them. Overall, as was said by earlier speakers, the PHARE programme has only contributed one-fiftieth of the amount that Western Germany has poured into East Germany. Germany is also investing heavily in the Czech Republic. But if the other East European economies are going to recover and become part of a stable Europe, and if they are to provide a wider market for our goods and deal with their environmental problems, they will need even more help not only with money but also with management expertise. They will need a model of streamlined and efficient administration that could be provided by Brussels if it were better staffed and managed.

I should like finally to emphasise the points that were made by the noble Lord, Lord Lewis. The critical issues are the staffing of the Commission, the funding of PHARE and also, as was mentioned by the noble Baroness, Lady Rawlings, the outcome of the Sofia conference, which should provide a strategy for the whole of Europe's environment and a very important framework for the future of Europe.

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6.20 p.m.

Baroness Chalker of Wallasey: My Lords, perhaps I may begin my response to this short debate by thanking your Lordships and especially the noble Lord, Lord Lewis of Newnham, for an excellent report and for all the practical matters that noble Lords are stimulating, not only by their questions when taking evidence but by their questions when they were away looking at the four countries. They really have put some impetus behind what we have been trying to do as one of 15 member states contributing to the PHARE programme.

This has been an informative debate and I have listened carefully. I would love to be able to reply to your Lordships on what has been going on in Sofia over the past few days, but with the conclusion of the conference only today I am a little light on final information. I believe that it would be useful if I were to write to all those who have participated in this debate, and those who were Members of the Committee, when I have Mr. Gummer's report.

Since its creation in 1989 the PHARE programme has evolved pretty rapidly over what is a relatively short period. It has grown in coverage from two countries—Hungary and Poland which, as your Lordships have often said, are doing fairly well, and the Czech Republic which is doing extremely well—to 11 countries in total. The PHARE programme really has developed from what I would term a standing start into the largest technical assistance programme in the region. While I would be the first to agree—and did so in evidence on 5th July to your Lordships' Committee—that it has a long way to go, it is a body which is now giving a pretty material contribution. The PHARE programme has committed over £3.3 billion of funds to support the process of social and economic reform in the countries of central and eastern Europe.

I thought that one of the remarks made by my noble friend Lady Rawlings was absolutely right; namely, that some of these problems will never be solved by outside investment, but from changes within the countries themselves with the realisation that their own economies and manufacturing processes must be such that they do not contribute further to pollution and that they themselves start to clear up the pollution of the past. There is no question that members of the European Union will help and other countries too, because it is also a job for the international financial institutions. There is certainly a job for the industries of these new countries to participate in as well.

We all know that the environmental challenge is huge. Perhaps it is the most visible of the dismal legacies of the communist era. But it still is only one of the many challenges facing the central and eastern European countries. A number of your Lordships have remarked on the very out-of-date ideas of some of those whom noble Lords met in those countries. Of course, for each one of those whom we have met in those countries there are probably many thousands who cannot see why they need to change. They are not reformers and have very little conception of the sorts of reforms that younger members of their societies are demanding for the future.

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So the PHARE programme has an important role to play in helping central and eastern European countries to put in place the policies and institutions necessary for environmental improvement. They must also create the incentives for the capital investment required. The PHARE programme remit goes well beyond the environmental sector. As I mentioned, of the £3.3 billion from the PHARE programme in general, over £300 million has been committed for environmental activities. The Commission in Brussels has said that the environment will continue to be a priority sector of PHARE. So far the environment has received about 11 per cent. of the total spent. It is expected to receive between 10 per cent. and 11 per cent. of PHARE resources over the next five years.

It is quite clear from those figures and from the information that your Lordships gave, that the PHARE programme is not going to meet the environmental needs of all these countries. It can begin to help but it cannot do everything for them. Therefore, there is something more that we all have to do and that is to stimulate the interest and enthusiasm of those countries to start making changes themselves. At least we do a very thorough job by providing a major source of technical assistance and training in the transfer of know-how. We shall continue, as the European Union, to have an important role in helping to mobilise the essential investment from the international financial institutions and from the private sector. So I see PHARE as an enabler, but it must be a more effective enabler, as the noble Baroness, Lady Hilton, and others have said in this debate.

I should like to say how much the Government welcome the report from the Committee. It is a critically important subject. The Committee has done a very thorough piece of work. It has given us a balanced assessment of the environmental problems facing the countries of central and eastern Europe and the important role of the PHARE programme. I may differ a little in emphasis here and there, but the conclusions of the report overall are very much in line with government thinking. Therefore, the work we are doing through the know-how funds, which has kindly been praised by my noble friend Lord Bridgeman, the noble Lord, Lord Butterfield, and others, has also helped to stimulate the PHARE programme.

The know-how funds have always been recognised as quick to disburse and in bringing a great deal of know-how to a problem early on. In my inquiries before this debate it was interesting to be told by some of my officials that occasionally when a job needed doing people came to the know-how fund in order to get it started and then let the PHARE programme take over afterwards. The reason for that is that the know-how fund made decisions about what to do in two weeks and the PHARE programme took six months. I am very happy for the know-how funds, which are run jointly by my department, the ODA and the diplomatic wing of the Foreign Office, to be in the lead. All I wish to do is to cut down the six months which the PHARE programme takes to get its much larger projects under way.

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Perhaps I may just say one or two things about the PHARE programme itself on which your Lordships' debate has concentrated. It is right that it should provide grant-funded technical assistance. I hope that will continue to be so. It is perfectly reasonable that if a country can repay its loan without adding unreasonably to its debt burden it may also be engaged in some loan arrangements. But PHARE should be a grant programme which can focus on training and building the capacity of the local environmental institutions to draw up effective policies, workable regulatory frameworks, to help educate the public as well as the politicians and to improve the monitoring systems for that.

I noted particularly what my noble friend Lady Rawlings said about Bulgaria. It is interesting that that country particularly asked PHARE for help with the upgrading and renovating of national monitoring systems for air, water and radioactivity. About £32 million has been spent on that. What we hope that is leading to is better control of the situation for the future; but as my noble friend rightly said, there is a very long way to go.

It is interesting to see how the money has been used in different countries. The key job to be done is to encourage PHARE to make use of local experts and local capacity by giving technical assistance. They can do that, of course, by using local consultants. Local consultancy markets are developing as a result of that. I hope that that will continue. The second way in which that can be done is by giving more help with day-to-day project management. The implementation of the larger PHARE programmes in the Six has now by and large been decentralised to 130 programme management units in government ministries staffed by local civil servants. Some 75 per cent. of the contracts have been let under that new programme management unit, which is a great improvement on the earlier years of the operation of PHARE. Thirdly, recipient governments have now been given proper oversight of the programme management unit system, which is educating them in setting up their own systems for the future.

It is interesting to note that PHARE is required to let contracts of more than 50,000 ecu through competitive tendering. While I noted the remarks of the noble Lord, Lord Lewis, on that point, it is right that competitive tendering should be encouraged and indeed that those countries should be helped to understand how they can have a proper system of their own. What it has meant for the UK is some pretty good success with UK companies winning those contracts and so playing an important role in implementing the programmes. I understand that 21 per cent. of all contracts awarded to EU-based organisations have been won by British companies. That is the largest percentage obtained by any EU member state. I suspect that in the environmental field the percentage is much higher because the environmental management capacity of British companies is second to none.

We encourage the PHARE programme to co-ordinate not merely with our know-how environment funds but with other funds so that there is far better co-ordination overall with the governments of the countries concerned in developing the whole educative process.

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A number of noble Lords, referring to the programmes, asked why they are so slow, and also asked about the problems of staffing. We all know the reasons which were clearly spelled out by the noble Baroness, Lady Hilton, and with which I do not disagree. Indeed, it was in part of my evidence to the committee. I am convinced that the Commission is trying to do better with that. It is something which needs to be taken up again with the Commission and I shall do so as a result of this debate, the committee's report, and the Government's response to it.

PHARE documentation has become easier to use. There is a better understanding now among recipient governments of PHARE procedures, but we must introduce some more improvements, such as multi-annual programming, the increased decentralisation—something to which I referred some moments ago when I spoke about the programme management units—the increased use of drawdown contracts and financial intermediaries for product implementation, standardised reporting requirements which will give a better flow of information and streamlining the administrative procedures.

I believe there to be a large role for EU delegations to provide better co-ordination in-country. One of the things I would like to encourage is more co-ordination between the EU delegation in-country and the national missions of the EU countries because, just as in other parts of the world, we encourage donor co-ordination meetings. That is highly necessary in this specialised field of environmental management and is a further point that I shall take up after the debate.

I hope that we shall persuade DG I in Brussels to have an internal reorganisation of PHARE which should be on a geographic rather than sectoral basis because there is no doubt that although there needs to be cross-fertilisation between the sectors if it is not on a geographic basis the work will not get done as efficiently. Finally, there need to be improved monitoring systems, and the PHARE programme must have an evaluation unit.

The PHARE staffing problems were dealt with in a number of speeches: not enough experienced staff; staff recruited on the wrong terms; too many people on non-renewable short-term contracts. That is something with which the Commission must deal. It needs to appoint more career staff or renewable fixed-term appointees into key programming positions in PHARE. We are already encouraging it to do that.

As the noble Baroness said, we are not talking about more Brussels bureaucrats. We are talking about having the right people in the right places. The PHARE headquarters' staff in total was only about 127 a year ago in relation to a programme which will amount to £720 million this year. Although day-to-day management may be handled now by the programme management units in the recipient countries, we are talking about controlling finances and ensuring that the very best value is obtained from this programme.

As the noble Baroness said, Britain has offered the use of a detached national expert. Although she hinted that she had not been terribly impressed by some

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"experts" whom she had met, the terms upon which one can attract people to do the work and the future security of working in this field make a difference. We are ready to consider assisting the PHARE programme with further British experts if so requested by the Commission. We want to improve the quality of what is being done.

The noble Lord, Lord Lewis of Newnham, the noble Baroness, Lady Gould of Potternewton, the noble Lord, Lord Butterfield, and the noble Viscount, Lord Bridgeman, all spoke about the NGOs. Your Lordships will remember that in giving evidence I made clear (paragraph 163) how important I thought the participation of the NGOs and the stimulation of the NGOs in those countries would be.

PHARE is providing support to some local environmental NGOs in the associates via its national programmes and the regional environmental centre in Budapest, but we think that PHARE must do much more in that area because the NGOs have a vital role to play in educating government, public and business about environmental issues.

If the NGOs can be stimulated to raise environmental awareness, then some of the people who were less willing to think anew in those countries will start to take up the advice of younger and more far-sighted people who want to change the atmosphere for the future. So we will urge the Commission to make much greater use of the NGOs in the PHARE programme. We have two British environmental NGOs which already have PHARE contracts. One is the Living Earth and the second is the Field Studies Council. They are both working with a Hungarian NGO, the Goncol Foundation, on a programme funded under the partnership and institution-building programme, but that is just one of the many necessary pieces of work which needs to be stimulated. There are others of which I have heard, and other NGOs wishing to take up such action, particularly in the Czech Republic and Poland.

My noble friend Lady Rawlings referred to the Kozlodui nuclear plant in Bulgaria. She said that it had now been put back into operation. The Government share all the international concern about putting Unit 1 of Kozlodui back into service before completing the tests aimed at verifying the safety status of the reactor pressure vessel. The EU has offered some joint technical assistance which has now been accepted by the Bulgarian government, and I hope that that is something my colleagues discussed in Sofia this very week.

Perhaps I may turn finally to the conference which followed the Environment for Europe (the Dobris process). The third conference has just taken place and we now know that the fourth conference will be hosted by the Danish Government in 1998. It was good that the Canadians, the Australians, the Japanese and the United States were also at the conference because the burden of improving the environment of central and eastern Europe needs to be spread beyond the European Union, otherwise the progress will be exceptionally slow.

I believe that the conference was important. Fifty-five countries were present to continue the process. Business, industry and the environment were discussed as well as the financing of environmental improvements. At long

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last, a good attempt has been made to define the long-term environmental priorities at a pan-European level, which is vitally necessary. The efforts which our Secretary of State for the Environment, Mr. John Gummer, has been making in this regard are second to none. I hope that following on from the conference we will see real, practical efforts to deliver the improvements which are so badly needed. Certainly, the ministerial declaration of the whole Dobris process and the Sofia conference recognises the polluter-pays principle. It also means that domestic financing has a decisive role to play in bringing about the environmental improvement. We will continue to commit external resources as a catalyst, but so much of the change will come from the change of will of the countries involved and which we are seeking to help.

It would be right for me to conclude by saying that there has been some real progress, however slow it may seem to us in the West. What is sometimes not realised is just how much there is to be done. The noble Lord, Lord Mackie of Benshie, described the effects of burning the brown coal and not being able to see. He was describing something which everyone in eastern Europe lives with all the time. Therefore, the task before us is enormous.

As a result of the PHARE programme we have at least changed the focus of these countries by providing advice and assistance in a way that no one has done previously. As I mentioned earlier, we are doing so through the know-how funds, which were referred to by the noble Lord, Lord Butterfield, my noble friend Lord Bridgeman and other noble Lords. However, one of the things that we must do is to motivate the governments, the universities and the embryo NGOs in those countries. If there is such a will in the country there will be demands for the kind of sensible advice that Britain can give through the know-how funds and that the European Union can give through the PHARE programme. We will then begin to see a real change.

Again, I thank the noble Lord, Lord Lewis of Newnham, and his committee for all the work that has been done. I wish the noble Baroness, Lady Hilton, well when she takes over the chairmanship of this important sub-committee. We welcome so much what has been done. We are committed to continuing the work. We will heed the advice and I am sure that I am right in saying that we shall continue to get good and sound advice from this sub-committee, which the Government much welcome.

6.43 p.m.

Lord Lewis of Newnham: My Lords, I thank all noble Lords who have taken part in the debate, which has been an extremely useful experience. I wish to underline some of the points that have been made. First, the NGO situation is most important, as was said by the Minister. However, perhaps the most important feature is the fact that the real future lies with the young. Undoubtedly, one of our biggest problems is that when we talk with many of the Ministers over there they say exactly the same things as they could have been saying

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20 years ago. We must recognise that and our hope must be to educate and to try to convince in the appropriate way.

It is also important to recognise the problem that was raised by the noble Baroness, Lady Rawlings. It is a very important section of the Community. The whole of this part of the world is the bone that has been pulled between various communities for so long. History has not been kind, and one's reflections on this part of the world is a tenderness of approach that must be delicately placed. However, I believe that one of the major factors, which is by no means unique to Bulgaria, will be the problem relating to nuclear power. The approach there has certainly left a lot to be desired. I spoke to some people in Armenia who are once again in exactly the same situation of projecting into building our nuclear reactors. That is a terrifying prospect, having a potential outcome for vast parts of our community.

I also agree with the noble Lord, Lord Mackie of Benshie. I am most sensitive to the fact that one of the features of this part of the world is that it has some magnificent countryside and beauties which we must maintain. In many ways, they are just as important as rectifying some of the pollution. In many cases, biodiversity is unique to those aspects of that part of the world.

I thank the Minister for what she said. She was most helpful. Indeed, she was more than that; she was most consoling in a number of respects. I thank her for giving us the opportunity to discover what happened in Sofia and we look forward to receiving her communication. There is little doubt in my mind about much of what the Minister said about loans and local experts. In addressing ourselves to this part of the world, one of the dangers is that we look upon it as consisting of developing countries. They are not; in certain techniques they are far in advance of ours and to call upon local help can often be of greater service than bringing in so-called western expertise to deal with the problems.

Finally, I thank all noble Lords who have taken part in this useful debate. I wish my successor, the noble Baroness, Lady Hilton, every success. I have no doubt whatever about the future.

On Question, Motion agreed to.

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