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House of Lords

Monday, 29th January 2001.

The House met at half-past two of the clock: The LORD CHANCELLOR on the Woolsack.

Prayers--Read by the Lord Bishop of Southwark.

Combined Heat and Power

Lord Ezra asked Her Majesty's Government:

What are their latest estimates of the amount of combined heat and power to be installed by 2010.

The Parliamentary Under-Secretary of State, Department of the Environment, Transport and the Regions (Lord Whitty): My Lords, we have set a target of at least 10,000 megawatts of installed CHP by 2010. Recent government projections indicate that around 7,600 megawatts will be installed by that date. That projection includes exemption of good quality CHP from the climate change levy, subject to EU clearance, but not the eligibility for enhanced capital allowances and exemption from business rating of plant and machinery which we have announced. A comprehensive CHP strategy will be launched in the coming months to ensure that, with the help of these and other new measures, our 2010 target is achieved.

Lord Ezra: My Lords, I thank the Minister for that latest estimate. However, is he aware that other estimates, particularly one prepared by the European Commission, in which I believe the DETR participated, indicate that the figure will be no more than 6 gigawatts by the year 2010? Whether the figure is 7.5 or 6, it is of course less than the desirable objective of 10. As the Minister is no doubt aware, there are obstacles which stand in the way of further development of combined heat and power. Does he accept, for example, that under the climate change levy, although a certain amount of CHP is exempted, that which is exported into the network is not, which therefore acts as a disincentive. Furthermore, under the new electricity trading arrangements, the balancing arrangements militate against CHP. If the Government are really concerned to achieve their objective, should they not remove such anomalies?

Lord Whitty: My Lords, I am aware of other estimates, including that of the European Commission and that of the CHPA, which puts the figure at 6,600 rather than 7,600. There are differences of assumption behind that which relate to the future of gas and electricity prices and other movements. We believe that our estimates are reasonably robust on the basis of policies already announced, excluding those to which I referred in my Answer. Nevertheless, the noble Lord is right. Further measures and the enhancement of existing measures will be needed to reach the target of 10,000 megawatts.

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Export of electricity direct to customers is covered by the climate change levy provisions, whereas export to the grid in that sense is not. That is in line with other licence providers. We are considering further the way in which the new electricity trading arrangements (NETA) will impact on CHP and small providers of CHP. Before reaching a final regime under NETA, we shall take into account the kind of considerations to which the noble Lord referred.

Lord Taylor of Blackburn: My Lords, I declare an interest as director of two power companies. Is the Minister aware of the great reluctance to invest in the energy market at present; first, because of the additional restrictions placed on the industry by the regulator, and, secondly, because of the commercial price of gas?

Lord Whitty: My Lords, I recognise that because of the relative movement of gas and electricity prices, there are uncertainties. Nevertheless, I believe that in general the new system of regulation will enable the energy industry to meet not only its energy supply objectives, but also the environmental and social objectives which the new regime should impose.

Lord Ezra: My Lords, is the Minister aware that the Embedded Generation Working Group recently reported and made a number of recommendations for stimulating the generation of small-scale electricity which covers CHP and renewables? Can he indicate whether the Government will take serious note of the recommendations made in that report?

Lord Whitty: Yes, my Lords. The working group recommended that Ofgem should review the whole structure of the regulatory incentives in relation to CHP and that an implementations group should be established under government leadership to take that forward. We shall consider the recommendations, including those for CHP, both in that context and as regards renewables. I hope, therefore, that we can come up with further measures to meet our target of 10,000 megawatts.

Baroness Greengross: My Lords, I refer to the Minister's comments on social targets. I understand that only 35,000 of the poorest older people have benefited from the new HEES arrangements, HEES Plus, by having free central heating and insulation, and that the target figure is 280,000 by summer 2002. What plans do the Government have to ensure that that target is met?

Lord Whitty: My Lords, the new HEES programme is considerably more substantial than the old HEES programme in terms of the measures that can be introduced into the homes of the "fuel poor", with grants available of up to 2,000. There was a hiccup in introducing the new scheme as regards bringing onstream firms which were able to deliver the new provisions. We believe that that has now been resolved. Just before Christmas the number of

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installations was up to the level of the original objective. We therefore think that, to within a few thousand, we should meet the target. Our overall fuel poverty strategy will be announced within a few weeks. That should bring together the HEES programme and other measures to benefit those who suffer from cold homes and low income.

Mercenary Activity

2.42 p.m.

Lord Avebury asked Her Majesty's Government:

Why they did not fulfil their commitment to publish by November 2000 a Green Paper on mercenary activity.

Baroness Ramsay of Cartvale: My Lords, unfortunately, it did not prove possible to meet the target for publishing the Green Paper which was suggested by the Foreign Affairs Select Committee. But this is a complex and new issue. Whitehall consultations are continuing and it is important to have as good and effective a Green Paper as possible.

Lord Avebury: My Lords, would the Minister agree that the target of November 2000 was given not only by the Foreign Affairs Select Committee but by the then Minister, Mr Hain, in answer to my right honourable friend Menzies Campbell on 15th June 2000? Does she also agree that legislative measures against mercenaries in any one country are likely to be ineffective because such people will go off-shore? Will the Government suggest to the United Nations Secretary-General that he should convene a meeting of experts and NGOs with a view to drafting a new convention to replace that of 1989 to which the Government have felt unable to adhere because its definition is unsatisfactory?

Baroness Ramsay of Cartvale: My Lords, the deadline of November 2000 was the recommendation from the Foreign Affairs Select Committee. The Government accepted that recommendation and said that they would try to fulfil it. They have striven to produce the Green Paper by November 2000, as requested by the Foreign Affairs Select Committee. However, for the reasons I have given, that has not proved possible. It is a new and complex issue and many noble Lords will be aware of the problems of definition as regards mercenaries, private military companies and so forth. It is important that the Green Paper is as good and effective as possible.

As regards whether one country can deal with the problem, a great deal of cross-border consultation and co-operation will be required. However, that does not get away from the fact that each country should deal with the problem as it arises within its borders. As part of our preparations for the Green Paper we have examined how other countries have tried to deal with the problem.

Lord Haskel: My Lords, having listened to the noble Lord, Lord Avebury, it appears that the position

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relating to mercenaries is most complex. Can my noble friend tell us the legal position as regards mercenary activity?

Baroness Ramsay of Cartvale: My Lords, the only existing UK legislation on mercenaries is limited to the Foreign Enlistment Act 1870. That makes it an offence to enlist to serve or to recruit to serve in the army and navy of a foreign country at war with another country with which the UK is at peace. I am advised that a successful prosecution has never been brought under the Act. It is also widely considered to be inapplicable to modern means.

Lord Avebury: My Lords, I am grateful to the noble Baroness for agreeing that international co-operation is necessary to deal with the problem, in addition to any domestic legislation which may come into considerations. Will she therefore undertake to consider my proposal to ask the Secretary-General of the United Nations to convene an expert conference, including representatives of NGOs which are concerned with such issues, to see whether the 1989 convention can be redrafted so as to enable the United Kingdom to sign it?

Baroness Ramsay of Cartvale: My Lords, as the noble Lord said, the United Kingdom has not signed the 1989 UN convention. In the 11 years since 1989 only 20 countries have signed it and as 22 signatures are required in order for it to come into force it has not done so.

We have not signed it because we do not believe that it is enforceable in United Kingdom courts. The definition hinges on proving intent, specifically that a mercenary has been motivated essentially for private gain. Many believe that that would be difficult to prove beyond reasonable doubt. I must add that at present we see no possibility of obtaining international agreement to any meaningful amendment to the convention.


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