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In order to address the areas that are experiencing the most significant challenges, the Department of Health recently established a transforming audiology services project. The team, working closely with the 18

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weeks intensive support team, are working directly with the most challenged local health services and spreading best practice and learning throughout the NHS. That approach will be supplemented by the introduction of a quality monitoring tool to enable audiology services to become self-improving. The impact of the project is already improving performance in these areas. My noble friend Lord Giddens referred to the example of Norfolk and Norwich using open-ear technology and the new model. We have seen overall waiting times fall because of the way in which that trust has moved to assessment and fitting in one appointment. However, it is still trying to get rid of a backlog that developed over a number of years, so there are still long waiting lists in Norwich, but they are dealing with the situation.

Many noble Lords referred to the need for us to work more closely with the independent sector. Critical to achieving sustainable audiology services is strengthening commissioning capability. The department has established a national audiology commissioners group to look for innovative ways of ensuring that there is appropriate local capacity to deliver. In some instances, that will require procurement from the independent sector working in partnership with local health economies to provide solutions that cater for local requirements. Like patients, we want services in the community, close to home, with effective and efficient follow up. I assure noble Lords that we have effective engagement with the independent sector, but at local rather than national level because we believe that PCTs are best able to identify local needs and capacity. Some PCTs engage with high-street providers, often to provide certain parts of the patient pathway, sometimes in much needed areas such as routine maintenance, which was mentioned by the noble Baroness, Lady Barker.

The most complex patients under the care of a consultant will be treated within 18 weeks by the end of 2008. The operating framework for the NHS has made clear the priority of delivering 18 weeks this year, and we have made it clear that no organisation will be able to claim credible success in delivery of the 18-weeks target without making excellent progress on reducing long waits, even those waits that are technically outside the target.

The noble Earl, Lord Howe, spoke about war veterans. While I understand his natural concern, they are not currently seen as a priority by audiology departments.

In response to the points made about the indicative tariff, specifically the points made about Charing Cross Hospital, the tariff can be agreed locally and cover all aspects of the patient pathway. The national commissioning group, which includes representatives from every SHA, will discuss whether amendments to the tariff are required prior to the publication of the national tariff. I hope that that will address some of the problems that Charing Cross Hospital is anticipating.

I have not dealt with the problem of prevention, and I will return to that in writing. While I hope that I have been able to outline some of the significant progress that has been made since the publication of the framework, there remains a real challenge if we

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are to continue to drive down waiting times for audiological assessments and ensure that the six-week milestone is delivered. I should assure the noble Earl that the figures for the assessment of six weeks do include reassessments. Is the target of six weeks by the end of March attainable? Every SHA has guaranteed that it will hit its target, and the Department of Health continues to support the most challenged organisations to do so. I am an optimist, and there is great determination in the department to try to ensure that the target is reached. I trust that this excellent short debate will have acted as a catalyst for those SHAs.

Climate Change Bill [HL]

8.40 pm

House again in Committee.

Clause 13 [Powers to carry amounts from one budgetary period to another]:

Earl Cathcart moved Amendment No. 77:

The noble Earl said: Amendments Nos. 77 and 78 propose to reduce the amount of carbon units that can be carried back from one period to the preceding budgetary period. That is, the latter period would be reduced so the previous period could be increased. We propose to reduce the amount we are allowed to borrow from the future from 1 per cent to 0.5 per cent.

As we have been saying all along, these are things for the scientists to decide. We have added the proviso in our amendment that this should be done subject to the approval of the climate change committee. Our reduction in the amount that can be used from a future budgetary period is a reflection of the scepticism felt on these Benches for allowing too much leeway in the budgets. Though we appreciate that there are external factors like the weather that might make this so-called banking and borrowing useful to a degree, we want to ensure that the budgets are robust and not pliable, especially under political pressure. I would be interested to hear how the Minister arrived at the figure of 1 per cent. Could he please explain?

Essentially, failure to meet the budgets will be hidden. This has been one of the motivating factors in many of our amendments. Our historical contributions to global warming could already be considered borrowing from the future. We want to make sure that this ends. I beg to move.

Lord Teverson: I disagree with the noble Earl’s amendment. On these Benches we think that we should just simplify the Bill and get rid of Clause 13. My motivation for that is to help the Government’s reputation and to save face in the international arena.

What is this clause about? It concerns small numbers that are there to fudge figures in retrospect. What is the point? By having both the borrowing and the banking mechanism in Clause 13, there are two

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ways in which targets which have not been met can in retrospect be made to have been met. In doing so, the Government and the UK open themselves to criticism of fixing figures—what is exactly what they would be doing. These mechanisms would be used only if borrowing targets were not met. Why bother to do this with a figure of 1 per cent? Clauses elsewhere in the Bill allow emissions trading and credits, so if there is a problem in this area the Government can buy international credits. We believe these should be restricted, but not excluded. Why then bother to go into this complication of borrowing and banking to fix the figures in retrospect? This area of the Bill can be criticised both within the UK and internationally. It will lead to all sorts of accusations if it is ever used. It is not particularly practical. If the target is missed by 1.1 per cent it cannot be used. Why 1 per cent and not 2 per cent? Why even 0.5 per cent? And if 0.5 per cent, why bother with this mechanism at all? International credits can be bought. That is the way out if there is a real problem with the margin, but it should be done as far ahead as possible.

On the banking facility, again I would ask what other business or organisation, when it gets ahead of its target, is allowed to carry that lead forward? The answer is that if there is momentum, keep it. These targets are difficult to meet as they are so let us move them forward rather than provide an excuse to backslide during the next budget period. I genuinely feel that the Government are creating a rod for their own back with Clause 13 and that it would be better purely to use international credits if they wish to do so. But at the least they should take out this clause because it leaves them open to the accusation of fudging the figures.

8.45 pm

Baroness Northover: I rise to support my noble friend Lord Teverson on this point. There is a real risk that if Governments are allowed to borrow from another year, the temptation will be to do just that; it will be irresistible. Subsequent Governments may then be able to argue that they have been given an impossible task and cannot make up the deficit. For that reason, difficult though greater tightness might be, there has to be that discipline here. I therefore support my noble friend.

Lord Jay of Ewelme: I take a slightly different view from that of the noble Lords who have spoken so far because I do see some advantage in having a degree of flexibility to borrow forward and to move on the budget from one year to another. On the point about international credibility, if the Government can act only after having consulted, and therefore effectively on the advice of the Committee on Climate Change—one can assume that they would not act against the advice of the committee—that particular problem is rather less acute than has been suggested by the noble Lord, Lord Teverson. I agree with him that half a per cent seems rather small, and I would be inclined to leave it as it is at 1 per cent in order to give the Government the flexibility to respond to unexpected developments such as, for example, those related to the weather.

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Lord Brooke of Sutton Mandeville: Again, my remarks will be very brief. I am not intervening on the subject of the difference between half a per cent and 1 per cent, but I recall that when I was the budget Minister in the European Union, we reached a situation where the Parliament would vote the money that was available to be distributed in a particular year absolutely up to the last euro. As a consequence, there was no way we could adjust because it had done deals on every single piece of expenditure. We the British invented the negative reserve, under which we knew perfectly well that not all the money would be spent. We therefore created a negative reserve that gave us enough leeway to be able to negotiate at the closing stage. Money in other parts of the budget would not be spent and it was simply put back into the negative reserve to fill it up so that it would come out flat at the end of the year. So I am all in favour of having an instrument of a modest kind at the margin in order to make such an adjustment—because of the way in which the world works.

Lord Rooker: Although we are dealing with small figures here, I shall kick off by saying that the figure of 1 per cent was not plucked out of thin air, and in the course of my remarks I shall seek to explain where it came from and why it is useful. I am dealing with Amendments Nos. 77 and 78, and thus effectively with Clause 13, as the noble Lord, Lord Teverson, remarked, so I shall be slightly longer than I was on previous debates.

The clause ensures that there are strong incentives to over-achieve against budgets and to reduce emissions by more than is necessary. Where this is the case, the surplus emissions may be, but do not have to be, banked for use in the next budget period. The benefits of banking to provide incentives for early action and over-achievement are recognised under the Kyoto Protocol, which also allows for unused emissions rights to be carried forward for future use. We think that this will encourage deeper emissions cuts to be made earlier, which would not be the case if we could not carry forward the savings made by early action. Banking is therefore a good thing in environmental terms because it rewards good behaviour, whether by government, business or other organisations.

Banking can also help to reduce the costs of mitigation, especially where abatement becomes more expensive over time, while still ensuring that emissions, over the period as a whole, are limited. In the context of the policies designed to establish a carbon price, banking reduces the risk of price spikes or crashes at the end of the budget period. There is some evidence, cited in the Stern review, that allowing banking between phases of the United States Acid Rain Program, for example, helped to deliver early reductions and improved participants’ efficiency. This evidence suggested that because of the ability to bank from the first phase into the second, the emissions reduced in phase 1 were twice that required to meet the cap.

Unlimited banking is allowed for companies operating under the EU Emissions Trading Scheme, which covers around half of the United Kingdom’s carbon dioxide emissions. Allowing banking under

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the Bill ensures that there is no inconsistency between the two systems. Without banking, the risk is that effort will be focused on trying to meet budgets exactly, rather than reducing emissions by more and going beyond the budget. Given the problems of the natural variability of emissions, and the uncertainties over what level of carbon savings will be achieved by many policies, removing banking will also increase the risk of not meeting the targets at all.

Clause 13 allows borrowing of emissions from the next budget, but only in strictly limited circumstances. This is to help deal with unexpected natural events, such as a particularly cold winter at the end of a budget period, that could otherwise mean a budget or target is missed. Amendment No. 77 would halve the limit on borrowing to 0.5 per cent of the following budget. As I said, the current limit of 1 per cent in the Bill is not a number plucked from thin air. It reflects the likely situation when an unexpected shock towards the end of a budget period would otherwise lead to a risk of missing the budget.

Analysis suggests that allowing up to 1 per cent of a future budget to be borrowed would be consistent with the rise in emissions that may result during an unexpectedly cold winter, or with the uncertainty around emissions data. There have been three large emission rises due to unexpectedly cold winters since 1990, the coldest of which led emissions in these years to be between 3 and 4 per cent higher than the year before. This effectively means that if 0.8 per cent—that is to say, 4 per cent divided by the five years of the budget period—of the subsequent budget were borrowed, the shock could be absorbed with a 1 per cent limit on borrowing, and the budget would still be met. This would not be the case with a limit set at 0.5 per cent, as Amendment No. 77 proposes.

Another important source of uncertainty is the time it takes to make sure that the UK emissions figures are completely accurate. Provisional figures for emissions in the final year of the budget period will be available shortly after the period ends. These figures are generally accurate to within a few percentage points, but the final confirmed emissions figures are not available until later. Again, if the emissions figures for the last year of the budget period were to be revised upwards by this amount, as the period had already ended, the Government’s options would be incredibly limited.

One option available to the Government following the end of a budget period is to buy international credits from the carbon market. As we discussed earlier, there are concerns within the House about this. The 1 per cent limit is therefore considered the most appropriate approach in providing a small degree of flexibility to smooth emissions across budget periods but, crucially, without undermining the clarity and certainty that the budget system as a whole provides. I have given an example of realistic figures from cold winters since 1990. We have an example where we can deploy the figures.

I turn to Amendment No. 78, which would require approval from the Committee on Climate Change.

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Lord Teverson: I do not think the Minister is correct. The EU ETS is a trading system not a target system. Article 13 of directive 2003/87/EC, which set up the EU ETS, specifically states under “Validity of allowances”:

that is, used—

which concerns trading—

You can over a one-year period use trading, but over a five-year period—and we are talking about five-year budget periods within this context—you cannot transfer certificates under the EU ETS from phase 1 to phase 2.

Lord Rooker: I hope I have got this right. I shall take advice if I have not. I was working within the five-year budget but I also mentioned that if you come to the end of that budget period and you do not receive the figures until long afterwards, the options are limited because the five-year budget period has ended. The 1 per cent is within the five-year period and, as I understand it, we are not planning to go from one budget period to another. But I shall take advice on that.

Lord Teverson: The supposition was that it was the equivalent of borrowing under the EU ETS and that certificates under that scheme remain valid. They do between individual years but they certainly do not between five-year periods, which are the different phases of the EU ETS. So they are cancelled; you cannot bank between phases of the EU ETS.

Lord Rooker: I am not saying that we are going to go over from one budget to another. We are in agreement with that. As I understand what I have put before the Committee, I was dealing with the five-year period of a budget but not going over from budget 1 to budget 2—that is, from the first five years to the second five years. That would be a problem. I promise to write because I am probably going to get the figures wrong but, as I understand it, there is no difference between us. That is why I made the point that if the emissions in the last year of a budget period—that is, a five-year period—were revised upwards by an amount because of an exceptionally cold winter, if the period had already ended the options would be incredibly limited for the Government because we would be in the next budget period. As I understand it, the implication is that we would not go over from one budget to another. Effectively, what you have got has to be contained within the budget period, which is exactly what the noble Lord is saying in regard to the trading system.

Amendment No. 78 requires approval from the Committee on Climate Change before either borrowing or banking and effectively confers powers on the committee which are beyond what we consider appropriate. We believe it is for the committee to advise and for the Government to take decisions—a theme which I have followed throughout the Bill—and

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Amendment No. 78 would change this relationship. Our view is that ultimately the decision as to whether to use the banking or borrowing provisions should rest with the Government of the day given the importance of the decisions on other factors within the Government’s gift, including economic competitiveness, fiscal policy and policy delivery. I therefore ask that the amendments be withdrawn and Clause 13 stand part of the Bill.

I have received a note which it will probably be helpful to explain before I write to the noble Lord. You cannot bank between phase 1 and phase 2—that is, between 2005-07 and 2008-12—because phase 1 is a preparatory phase. From phase 2 onwards you can bank between the periods. So there is a difference there but I will write and clarify that point.

Lord Teverson: As the noble Lord will be aware, the scheme post 2012 has not yet been agreed so we do not know what the situation is. There has not been a European decision over the scheme so I think that is probably unlikely.

Lord Rooker: I am not going to argue with the noble Lord—he knows more about this than I do—but my note says that from phase 2 onwards you can bank between periods. Presumably there have been some initial discussions within the EU on this.

9 pm

Lord Brooke of Sutton Mandeville: Am I right in assuming that everybody else will be covered with a copy of the Minister’s letter to the noble Lord, Lord Teverson?

Lord Rooker: It goes without saying; therefore, it is always best to say it. Yes, naturally, those who have participated in the debate will receive a copy of the letter.

Earl Cathcart: That was all very interesting. Amendment No. 77, which would have replaced “1%” with “0.5%”, was a probing amendment to see what the reasoning behind the figure was. That still needs some clarification when we receive the letter.

I was interested to hear the Minister speak of the benefits of the “banking and borrowing”. It was a useful debate. The Minister’s response regarding the committee in relation to Amendment No. 78 was not surprising. I beg leave to withdraw Amendment No. 77.

Amendment, by leave, withdrawn.

[Amendment No. 78 not moved.]

Clause 13 agreed to.

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