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Baroness Byford: My Lords, I thank the Minister for presenting this order today. Obviously, in principle, we support this scheme. As the Minister rightly explained, the scheme will be available to more farmers than so far—until last year, there was an uptake of only 58. Certainly the problem of slurry storage is becoming acute with the new regulations coming in.

I am grateful to the Minister for explaining that grants will be available—up to a total of 3 million. On reading yesterday's debate in another place, I understand that the average likely grant would be about 7,000. That is what was anticipated. The issue

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has also been raised as to whether any additional funds would be made available in case more people applied than money available. Again, I understand that yesterday the clarity was that that would not be the case.

The Minister referred to the question of the new machinery available. Obviously, she and many Members here today have been dealing with the Water Bill this week. So, in fact, it is very dear to our hearts. I should have thought that the Government would welcome the development of new technology which it is to be hoped will reduce the risk of pollution into our rivers. But perhaps I may return that.

I understand from the order that the proposals are first come, first served. Presumably those who have already got their applications in will continue to be dealt with. New ones will be on a first-come first-served basis.

The Minister explained that 40 per cent of eligible costs will be permitted. Obviously, that means that the industry must find 60 per cent. Therefore, she will not be too surprised that I caution that for some farmers, who have been going through a very difficult time, even 60 per cent of these costs is quite an additional burden for them to carry. Farm incomes have been dire. The fact that the Government are willing to give 40 per cent towards the cost is helpful, but that still leaves 60 per cent outstanding.

The Minister referred to the use of contractors. Indeed, more contractors are being used. When she said that, I was reflecting on my days at agricultural college when so many farms were mixed farms—everything happened on one farm. Obviously, that is not so today. But we shall need to ensure that there are enough available contractors to do the work at the time that it needs to be done. It may be that certain farmers decide to invest in machinery of their own.

I hope that the Government will look to the new technology known as "trailing hose", "trailing shoe" and "shallow injection" as being of greater environmental benefit than the collection of slurry in slurry pits, and its spreading. That could be reduced if some of the new technology were used.

I welcome the order and thank the Minister for bringing it forward. I wish that we could be more successful in persuading the Government of the advantages as regards the eligible costs, the trailing shoe and shallow injection issues. Perhaps more farmers need to take up the grants—500 to 600 of them may do so. I think that the Minister will be thankful that the debate on this order has been shorter than that on the previous order.

1 p.m.

Baroness Miller of Chilthorne Domer: My Lords, we welcome the order. It is no surprise that there has been such a low take-up; farmers' lack of income has meant that they cannot afford to invest. Therefore, I accept that the level the Government have set is probably adequate.

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I want to question two issues. First, the grant is available for facilities, other than roofing, for the separation of clean or dirty water. I wonder why that is. On any farm where slurry is being stored, the effect of heavy rain falling on it will produce a great deal more dirty water. As was said during debates on the Water Bill, that rain, if caught on a roof, can be recycled and used elsewhere on the farm. Therefore, the exclusion of roofing seems to be curious.

Secondly, machinery cannot be funded by the scheme. I can understand why the provisions of machinery to individual farmers may not be funded—perhaps that would take up too much of the scheme's money—but the Curry commission, whose findings are now being implemented, suggested that farmers would increase co-operation and establish machinery rings. I would have thought that in nitrate vulnerable zones, where this is an issue, machinery shared on a co-operative basis would be suitable for funding from the scheme. I would welcome the Minister's comments on that.

Baroness Farrington of Ribbleton: My Lords, I thank both noble Baronesses. In case I was not clear about the matter, perhaps I may make it absolutely clear that the sum is 3.8 million for three years.

The noble Baronesses, Lady Byford and Lady Miller, raised issues relating to grant availability for machinery. It simply cannot be accommodated within the budget. The prime aim of the scheme is to assist farmers wishing to upgrade manure storage facilities in order to cope with restrictions on manure applications. Improved application equipment, while capable of providing environmental benefits, does not provide a solution to the restrictions in the action programme.

I note the point raised by the noble Baroness, Lady Miller. We grant-aid new farmstead draining to separate clean roof water from dirty water. Roofing over yard areas is excluded. She may want to come back to me on that, but I am afraid that I cannot offer more information at present. It would be wise if I were to write to her with the details on that issue, because no doubt farming friends will ask her exactly what is available. At the same time, I could deal with the question of whether co-operative rings were available. I commend the order to the House.

On Question, Motion agreed to.

Electricity and Gas (Energy Efficiency Obligations) (Amendment) Order 2003

1.5 p.m.

Baroness Farrington of Ribbleton rose to move, That the draft order laid before the House on 13th March be approved [14th Report from the Joint Committee].

The noble Baroness said: My Lords, the order will amend the Electricity and Gas (Energy Efficiency Obligations) Order 2001, which placed an obligation

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on electricity and gas suppliers to achieve targets for the promotion of improvements in domestic energy efficiency.

The 2001 order requires each electricity and gas supplier to direct at least 50 per cent of energy savings to those in receipt of at least one of the benefits or tax credits described in Schedule 2 to the order—a priority group of low-income consumers. From 6th April 2003, we are introducing two new tax credits—child tax credit and working tax credit— which will replace working families' tax credit, disabled person's tax credit and children's tax credit. In October 2003, we are introducing pension credit, which will replace the minimum income guarantee. The draft order gives effect to these changes by adding child tax credit, working tax credit and pension credit to the list of benefits in the 2001 order.

In the case of child tax credit and working tax credit, there will be an income cut-off of 14,200. Families in receipt of those credits who earn less than 14,200 a year will be included in the priority group. We have chosen an income level of 14,200 because that is an uprating of the low-income cut-off used for tax credits now, of around 11,470. That level is generally recognised as being an indicator of low income.

In conclusion, this order reflects the forthcoming changes to the tax credits system and the introduction of pension credit. We have sought to do this in a way that will maintain the focus of the priority group on low-income consumers. With that in mind, I hope that the House will approve this necessary order. I beg to move.

Moved, That the draft order laid before the House on 13th March be approved [14th Report from the Joint Committee].—(Baroness Farrington of Ribbleton.)

Baroness Byford: My Lords, I thank the noble Baroness, Lady Farrington, for presenting the order. We support it. I want to make a couple of comments.

First, the Explanatory Notes indicate that one requirement of the 2001 order is for each supplier to direct at least 50 per cent of energy savings to those in receipt of at least one of the benefits or tax credits described in Schedule 2 to the order—the priority group of low-income consumers. If the noble Baroness cannot answer my question, I am happy for her to write to me. Can she tell the House how many people that will affect and how the companies anticipate targeting them?

Secondly, I turn to the tax credits system. The Minister will not be surprised to know that there is widespread concern about the take-up of these new measures. The Conservative Party has highlighted that on many occasions, as have many other organisations such as Help the Aged, Age Concern and the Child Poverty Action Group. The success of the new measures depends on a decent take-up rate, but the omens so far have not been good. Take-up of existing tax credits is very low—just 17 per cent for the baby tax credit and 64 per cent for the working families' tax credit, including just 51 per cent of eligible couples.

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And the new tax credits are even more complicated than the existing ones, which is why the 12-page application form comes with 47 pages of instruction. That may be a good reason why there has not been much take-up of some of the good schemes that are being introduced.

When asked about using tax credits in the education formulae of the local government grant, the Minister, Nick Raynsford, recently admitted that:

    "Ministers are aware of the difficulties caused by the different take-up rates and that, as a new scheme, working families tax credit might be particularly affected.—[Official Report, Commons, 31/1/03; col. 1082W.]

New figures published last week show that up to 6,700 eligible pensioners are losing out on 820 million per year because they do not receive the minimum income guarantee, the precursor to the pensions credit. Since 1998–99 take-up of all the main means-tested benefits—income support, housing benefit, council tax benefit and income-based jobseeker's allowance—has fallen.

These are real concerns. While I am sure that they are not the direct responsibility of the noble Baroness, she is in the Chamber to answer on behalf of the Government. I am happy for her not to respond in detail today, but I wish to put on the record the point that, while some of these new schemes—the energy efficiency order is a good example—are good ideas and could benefit many people, because the system is so complex, many people are not taking advantage of the opportunities being offered to them. Having said that, I support the order.

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