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12 July 2011 : Column GC241

12 July 2011 : Column GC241

Grand Committee

Tuesday, 12 July 2011.

Arrangement of Business


3.30 pm

The Deputy Chairman of Committees (The Countess of Mar): My Lords, before the Minister moves the first statutory instrument to be considered, could I remind noble Lords that in the case of each statutory instrument the Motion before the Committee will be that the Committee do consider the statutory instrument in question? I should perhaps make it clear that the Motions to approve the statutory instruments will be subsequently moved in the Chamber in the usual way. If there is a Division in the House the Committee will adjourn for 10 minutes.

Nationality, Immigration and Asylum Act 2002 (Juxtaposed Controls) (Amendment) Order 2011

Copy of the SI
Copy of the Report

Considered in Grand Committee

3.30 pm

Moved By Lord De Mauley

Lord De Mauley: My Lords, I shall also speak to the Immigration (Provision of Physical Data) (Amendment) Regulations 2011.

We are committed to delivering a safe and secure set of Olympic and Paralympic Games in 2012. As part of this pledge the UK Border Agency will operate a proportionate level of its usual security checks on those taking part, supporting and helping to deliver the Olympic and Paralympic Games, who are commonly collectively referred to as Games family members. Games family members are athletes, coaches, support staff, umpires, technical staff, media personnel and other individuals associated with the Games. The regulations and order ensure that the UK Border Agency can indeed operate a proportionate level of its usual security checks on Games family members by amending respectively the Immigration (Provision of Physical Data) Regulations 2006 and the Nationality, Immigration and Asylum Act 2002 (Juxtaposed Controls) Order 2003.

Before I set out why amendments to the 2006 regulations and 2003 order are required, perhaps I may provide your Lordships with some information about the UK Border Agency's current use of fingerprints and facial images and the UK's juxtaposed controls,

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and also perhaps ask for your Lordships' patience, because what I have to say is quite detailed and of necessity rather lengthy.

Since 2008, aside from minor exceptions visa nationals have been obliged to provide their fingerprints and facial images when applying for a visa. The collected fingerprints are checked against government databases. Since November 2009 the UK Border Agency has checked the fingerprints of holders of UK-issued biometric visas, entry clearances and biometric residence permits at the UK border to be sure that the passenger seeking entry is the same person who made the application for which the biometrics were collected. The UK Border Agency also uses facial images to facilitate the secure entry of low-risk categories of passengers in to the UK via automated gates, easing their passage through the UK border and allowing agency staff to concentrate on higher-risk categories of passengers.

The agency also collects the fingerprints and facial images of persons already in the UK when they apply for leave to remain in certain categories, where required issuing biometric residence permits and application registration cards. The agency also collects the fingerprints and facial images of persons identified as being illegally present in the country.

By February 2011 the UK Border Agency and its partners have enrolled 8.5 million fingerprints, allowing the agency to match 50,000 people to previous immigration and asylum applications made in the UK and identify more than 6,500 people swapping their biographical details. The UK Border Agency's use of fingerprints and facial images is therefore vital to assuring individuals' identities, identifying fraud and securing the UK border.

Now, perhaps I may give some background on the UK's juxtaposed immigration controls and why they are essential. The juxtaposed controls were first set up in respect of Eurotunnel for shuttle trains operating between Coquelles and Cheriton in 1994. They were then extended to Eurostar terminals in France and Belgium, in June 2001 and October 2004 respectively, to reduce the number of people arriving at Waterloo with inadequate travel documents. Then, in 2004, as part of the agreement to close the Sangatte Red Cross Centre, France agreed to allow the controls to be extended to cover Calais and other French sea ports serving Dover. These arrangements have allowed the UK to shift immigration controls that were historically operated in south-east England to France and Belgium. They have also permitted France and Belgium to operate reciprocal controls in the UK, although the Belgians have not sought to implement any. The French currently operate immigration controls at St Pancras, Ebbsfleet, Ashford, Cheriton and Dover.

The UK's immigration procedures at the juxtaposed controls complement the immigration procedures of France and Belgium-both part of the Schengen area-and occur just before the passengers depart on the final stage of their journey to the UK. Individuals travelling to the UK via our juxtaposed controls have to seek permission to enter the UK at those juxtaposed controls rather than on arrival in the UK; those requiring leave to enter the UK, such as visa nationals, make their applications to UK Border Agency officers within the control zones of the ports.

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The UK currently operates immigration controls in the French channel ports of Calais, Coquelles, Dunkirk and at Eurostar terminals at Calais-Fréthun, Paris-Gare du Nord, Lille and Brussels-Gare du Midi. We are able to exercise full examination powers at all the juxtaposed controls. Additionally, in Coquelles, UK authorities may undertake frontier controls, including customs, health, veterinary and other checks. The juxtaposed controls are vital to UK immigration procedures by allowing us to prevent inadmissible individuals arriving in the UK.

Now let me explain why the 2011 regulations and 2003 order are necessary. Games family members will be required to obtain accreditation for the Olympic or Paralympic Games before participating and will undergo a series of biographical security checks undertaken by the Home Office prior to being granted accreditation and receiving an Olympic or Paralympic identity and accreditation card. Due to commitments given as part of the host city contract for the Games, approximately 20,000 visa national Games family members who would normally require a visa to enter the UK and be required to supply their fingerprints and facial image as part of the visa application process will be able to use their Olympic or Paralympic identity and accreditation card in lieu of a visa during the accreditation period of the Games from 30 March 2012 to 8 November 2012. They will therefore not need to apply for a visa or provide their fingerprints and facial images to the UK Border Agency prior to travelling to the UK, thereby bypassing the fingerprint checks of the visa application process. The UK Border Agency therefore needs to be able to collect and check visa national Games family members' fingerprints and facial images in the UK and at its juxtaposed controls to operate a proportionate level of its usual security checks on this group of people during the Games.

The UK Border Agency's current powers to collect fingerprints and facial images in the UK and at our juxtaposed controls are limited and insufficient to collect such biometrics. The agency therefore requires a new power to enable their collection. The 2011 regulations provide this power by providing for the collection of a visa national Games family member's fingerprints and facial image when they make an application for leave to enter or remain in the UK during the accreditation period of the Games. The 2011 order provides for the collection when a visa national Games family member makes a leave to enter application, as described by Regulation 2(c) of the 2011 regulations, at our juxtaposed controls in the ports of Calais, Boulogne and Dunkirk.

A similar amendment will be made in autumn 2011 to the Channel Tunnel (International Arrangements) Order 1993 and Channel Tunnel (Miscellaneous Provisions) Order 1994 allowing for the same type of collection at our juxtaposed controls at the Channel Tunnel terminal at Coquelles and at Eurostar terminals in Calais-Fréthun, Lille, Paris-Gare du Nord and Brussels-Gare du Midi. All nationals except British citizens, nationals of other European Economic Area countries, those with a right of abode or who are otherwise exempt from immigration control, are required

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to apply for leave lawfully to enter or stay in the UK. They seek such leave by either applying for leave to enter on arrival to a UK Border Agency officer at the border controls of UK ports, in the UK control zones of the UK's juxtaposed controls, or if they are already in the UK by making an application for leave to remain.

Linking the collection to an application for leave to enter or remain is therefore the most effective way for the UK Border Agency to collect visa national Games family members' fingerprints and facial images. In reality the UK Border Agency will only use the 2011 regulations and 2011 order to collect the fingerprints and facial images of visa national Games family members that it does not already hold. Those who are identified as having previously provided their fingerprints and facial images to the UK Border Agency will not have them collected again on arrival in the UK or at the UK's juxtaposed controls. I hope that noble Lords will unite with me to support these provisions, which will help to deliver a safe and secure set of Olympic and Paralympic Games.

Lord Avebury: My Lords, we are very grateful to the Minister for his careful explanation of the provisions of these statutory instruments, which deal with the immigration arrangements for the 22,000 expected Olympic and Paralympic accredited contestants and their so-called family members, the categories of which he has enumerated, who will be arriving in the UK during the period from March to November 2012. I just want to be absolutely clear that Games family members actually include the family of the contestants. I should be grateful if the Minister will say when he replies that that is so, and that contestants can bring a spouse and children under these arrangements.

As the Minister has explained, the accreditation is by means of a card issued by the International Olympic Committee and the International Paralympic Committee through their contractor ATOS, but the necessary security and immigration checks are to be conducted by UKBA. They will know whether an applicant is recorded on their system as having ever been in breach of our immigration rules, and I ask my noble friend what they will do if a GFM-or, even more sensitive, an athlete-is flagged up by this check. What other checks will the UKBA undertake to confirm that an applicant for accreditation is not a threat to security or a person whose presence in the country would not be conducive to the public good?

Athletes and GFMs who are visa nationals and in possession of an accreditation card will not generally need a visa to enter the UK, as the Minister has explained; but according to the Explanatory Memorandum, there are 2,000 who will still have to apply for a visa in their countries of origin. Will the Minister explain who are these people, and is the position absolutely clear to them, so that we do not get them turning up at a port of entry thinking that they can get in with just the accreditation card? For the remaining 20,000 visa national athletes and GFMs, the accreditation card allows the holder to enter the UK without a visa but these statutory instruments, as the Minister has explained, permit the UKBA to take

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their biometrics at the port of entry instead of in the country of origin as would normally be the case. That comes into operation at the beginning of the period on 12 March next year.

There may still be some customer resistance to giving biometrics at the port of entry when the Government say that they are facilitating the entry of Olympians and their entourages, even though LOCOG says that it does not object to the process provided that it is communicated very clearly to the applicants in advance. I respectfully suggest that LOCOG cannot be certain that people will not still complain, but there might be one way of reducing the numbers affected. There is a special visa to be created which allows for a longer stay, enabling the contestants and GFMs to come here in advance for training and acclimatisation. Applicants will then be asked to give their biometrics overseas, as non-Olympian visa nationals already have to do. The Immigration Law Practitioners' Association has suggested that the uptake would be increased if the special visas were free, but the UKBA has not taken up the idea. What is being charged for the extended visas, and has any estimate been made of the extra spending that would be generated in the UK by making the visas free, to offset the loss of revenue that would arise from waiving the fees?

3.45 pm

Next, what will the procedure be if a visa national contestant or other GFM who does not obtain a concession visa shows up on the biometric checks at the port of entry, for example as a person who has overstayed in the past? There should not be many of those because checks will have been undertaken in advance when they received their accreditation. However, if some do slip through and are only detected at the port of entry, are they detained or removed, or is action suspended until after they have finished competing in the Games? Will there be any difference in the treatment of an actual competitor and a member of a competitor's family or entourage? When a person applies for a visa they know if they are accepted or refused before they travel, but there could be an unpleasant surprise awaiting a few people upon arrival at Heathrow.

Speaking of Heathrow, I wonder if the UKBA thought it necessary to designate that airport as the main Olympic entry point? It is already the busiest of the UK's airports and can be a real nightmare for travellers from time to time. The Piccadilly line into central London is grossly overcrowded and if Olympians are forced onto the more expensive Heathrow Express, they may suffer problems if it does not have any special arrangements to offer concessions to Olympians or to cope with the extra traffic.

Why does this order not contain all the juxtaposed controls? Why is it necessary to have this order presented now, and another in the autumn dealing with some of the other juxtaposed controls?

The Explanatory Memorandum states in paragraph 7.6 that if a visa national GFM was not required to provide biometrics on arrival, they would have to do so when applying for leave to remain within the Olympic period. What are the categories of people to whom this would apply, and if it is intended for those who

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originally entered before the biometric capture scheme came into operation, why do we not have one rule for all visa nationals asking for leave to remain after such a long period? I believe the Minister implied as much during his introductory speech.

Lord Stevenson of Balmacara: My Lords, I too would like to thank the Minister for the detailed introduction he gave to the regulations. It was interesting to hear the full explanation, particularly regarding juxtaposed controls-touching places I had never heard of, but that I am sure will feature in future discussions now that we know about them.

I understand why this order is necessary, and the noble Lord, Lord Avebury, has covered some of the ground on this. However, I also have some questions about the way in which this was actually brought into being and some of the points raised within the document. I found the document very difficult to read and the definitions a little confusing and elastic-they seem to slip around a little. For example, the Explanatory Memorandum talks about 20,000 people being involved when in fact the impact assessment gives a range of 20,000 to 25,000, with a median point of 22,500. If we are talking about 25,000 people all the proportions and timings will be changed substantially.

The first point I was confused about-the noble Lord, Lord Avebury, also raised this-is that in paragraph 4.2 of the memorandum there is a statement that persons "would usually" have,

However, it does not explain why the GFM personnel get ID cards. Did I hear the Minister say that they would also have Home Office involvement at that stage, in terms of taking some of the demographic details which are being talked about? What exactly is the meaning of "usually" in that circumstance? Are there situations when visas would not be so required or, indeed, when the visa would be required but the biometrics would not be taken? "Usually" has no definitional point attached to it and it is not clear who exactly is being talked about there. The noble Lord, Lord Avebury, also asked about charges and it is also not at all clear whether charges are being made in any or all of these circumstances. I would be grateful if the Minister could give some more information about that.

My next point is also on paragraph 4.2. The wording in the documentation suggests that Her Majesty's Government signed an agreement so that,

ID cards,

That seemed a very straightforward statement. Yet we now understand that it is a bit of a catch because although anybody with a GFM does not need to apply for a visa before travelling to the UK, that does not mean that they will not be required to provide the usual demographic data that are being talked about-the fingerprints and the photographic information. What are these specified circumstances that Her Majesty's Government are using for this? It seems that we have signed one thing but are doing another. I would be interested to hear comments on that.

12 July 2011 : Column GC247

The process under which the regulations were consulted upon also seems rather odd. The statement we have been given is that it was thought necessary only to consult LOCOG. As the noble Lord, Lord Avebury, said, it has not objected provided that everybody involved in this knows about it. It seems extraordinary to introduce such a wide-ranging requirement on what might be 25,000 people without having some sense of whether they are going to object to it. Also, although LOCOG obviously has a key part to play in this, it is not the only body involved. There might have been some attempt made by the Home Office to consult more widely, particularly with the Olympic organisations in the various countries concerned.

Another point I want to make is, again, about the process. The documentation that we have been given suggests that the choices before Ministers when they decided to go ahead on this was either to do nothing- in a sense, to rely on such processes as are currently in place for awarding the GFM and not to do anything for those who had been promised by Her Majesty's Government that there would be no requirement for ID card holders to apply for a visa before travelling to the UK-or to amend the legislation. That rather stark choice does not seem to involve the many other possibilities that could have been taken into account at that stage, including working more closely with LOCOG in making sure that these things are done more properly.

My final point on this issue is that there is mention in the documentation about a possible review but no specification seems to be given about whether a review will in fact be taken. Given that we have the Commonwealth Games coming up very shortly, there would be lessons to be learnt about this process and it might be sensible for the Home Office to carry out a review. Again, it would be helpful if the Minister could explain what is involved in that. In concluding, I thank the Minister very much for his initial comments and look forward to hearing his response. We will of course be back in the autumn to discuss this again, when we do the Channel Tunnel orders.

Lord De Mauley: My Lords, I thank both my noble friend Lord Avebury and the noble Lord, Lord Stevenson of Balmacara, for their questions, which I will now do my best to respond to. First, my noble friend asked whether Games family members will be able to bring members of their families. Certain Games family members will be eligible to bring an accompanying guest as a result of their accreditation, and that guest can be a family relative. The guest will receive his or her own accreditation card and will need to meet the requirements of the Immigration Rules in order to enter the country.

My noble friend asked how accreditation applications will be assessed. Proposals for the policy and process to decide accreditation applications for both Games have been signed off by the Home Secretary. A detailed refusals policy, including criminality thresholds, has been agreed by the Olympic accreditation decision board following consultation with the police, security and intelligence agencies, the Foreign and Commonwealth Office and the Government Olympic Executive. Each application will be determined on its own merits. Particularly complex or sensitive cases will be reviewed

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at the Olympic accreditation decision board. Police, immigration and counterterrorism databases will be checked.

My noble friend and the noble Lord, Lord Stevenson, asked about only certain Games family members being able to use their accreditation card in lieu of a visa, and who will and who will not. Each Games family member will be accredited under a specific accreditation category code. The International Olympic Committee advises for each Games on which of these codes the host-city country must confer visa-free access to and on which it is not so obliged. The UKBA is keeping under review the codes that do not confer visa-free access. The types of persons to whom the UK Border Agency is not obliged to grant visa-free access include: additional security personnel, such as fire, police and ambulance services; additional members of the entourages and alternate or reservist athletes; and individuals invited by LOCOG, such as domestic dignitaries or national partners. These people will be told by LOCOG that they need to get a visa before they travel to the United Kingdom.

My noble friend asked about delays at the border, which certainly is a valid concern. We are mitigating the risk of delays by reducing the amount of fingerprints and facial images we need to collect at the UK border by offering a special Olympic visit visa to Games family members, which is currently available, and by seeking to collect visa national Games family members' fingerprints and facial images on a voluntary basis overseas and in the UK prior to the Games. We are also considering the issue he raised about the visa being issued for free.

My noble friend asked what happens if a GFM refuses to give his fingerprints and facial image. If a visa national GFM refuses to provide fingerprints and a facial image we will make every effort to satisfy ourselves about their identity. If, despite these efforts, we are unable to satisfy ourselves about their identities, we will have to refuse their application for leave to enter the UK. Clearly, if it is a very well-known athlete the process will be made a lot easier. My noble friend also asked what criteria we will use to judge each case on its merits, and the answer is whether we are satisfied of the identity. That is the critical thing. If an individual refuses to provide fingerprints or a facial image it gives rise to the question: what are they trying to hide? I think that my earlier answer goes to that point as well.

My noble friend also asked why we are not dealing with the Channel Tunnel orders now alongside the statutory instruments. We are in the process of consultation with the relevant Belgian authorities about collection at Brussels-Gare du Midi and wish to amend both Channel Tunnel orders via a single amendment order as opposed to two orders to reduce the amount of legislation, and to save preparatory work and parliamentary time. The 2011 regulations are being taken forward now because we need to have secured the legal power to collect the fingerprints and facial images in the UK before procuring the collection equipment and to allow sufficient time to test that equipment.

My noble friend asked about in-country collection circumstances. Visa national GFMs will be advised to use one of the UK's major ports to enter the UK so

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that their fingerprints and facial images can be collected when they first arrive here. A visa national GFM who has not already provided fingerprints and a facial image to the UK Border Agency may arrive at a small airfield. If the UKBA is unable to deploy to meet the arriving person, officers will grant the GFM 48 hours' leave to enter and inform them that they are required to apply for leave to remain within 48 hours at a specific UKBA office.

4 pm

My noble friend asked about the use of Heathrow. Heathrow Airport has the infrastructure to deal with and process the large volume of Games family members. Therefore, it is best equipped to cope with the Games family members when they arrive.

The noble Lord, Lord Stevenson, asked about the requirements for biometric data now that we have signed an agreement not to request visas. Waiving the visa requirement did not waive the UKBA's right to legislate to take fingerprints and facial images. The waiving of the visa requirement was agreed to facilitate Games family members' entry into the UK, by removing the requirement from them to obtain permission to enter the UK prior to travelling. LOCOG and the International Olympic Committee are aware of our policy to collect visa national Games family members' fingerprints and facial images and are content with it so long as the collection process is clearly communicated in advance.

Our overall aim is to deliver a safe and secure Olympic and Paralympic Games. These statutory instruments will help us to do this by enabling the UK Border Agency to maintain a proportionate level of its usual security checks.

Lord Moynihan: First, I apologise that I was working on other matters Olympic in Stratford and therefore missed the opening remarks. I will place on record, as chairman of the British Olympic Association and as a member of the European Olympic Committee executive, the thanks of many national Olympic committees-205 committees will be coming here-for the professional and courteous way in which the Government, in particular my colleagues in the Home Office, have been receptive to the many concerns that have been raised, particularly about access for Olympic family members to the Games. I will place on record the thanks of all sides of the House and Committee for the hard work that has gone into this. It is of enormous importance that there is smooth entry, in particular for the athletes and their immediate entourage, to ensure a successful Games.

Lord De Mauley: My Lords, I am grateful to my noble friend for raising that point. I share his gratitude to a lot of people who are working very hard to make these Games a success. These statutory instruments will help us to deliver a safe and secure Games by enabling the UK Border Agency to maintain a proportionate level of its usual security checks on visa national Games family members seeking to enter the UK. I commend the order.

Motion agreed.

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Immigration (Provision of Physical Data) (Amendment) Regulations 2011

Copy of the SI
Copy of the Report

Considered in Grand Committee

4.03 pm

Moved By Lord De Mauley

Motion agreed.

Legislative Reform (Epping Forest) Order 2011

Copy of the SI
Copy of the Report

Considered in Grand Committee

4.03 pm

Moved By Lord De Mauley

Lord De Mauley: My Lords, it is now almost exactly one year until the start of the 2012 Olympics, and there is a palpable sense of excitement at the prospect. All of us want the Games to be a huge sporting success. In order for that to happen, there needs to be a well planned and executed security operation. Today, I am asking your Lordships to endorse a legislative reform order that is a crucial element in that.

I acknowledge straightaway that there have been complaints about the way in which this has been handled, not least from your Lordships' Delegated Powers and Regulatory Reform Committee. I apologise on behalf of the Government for the deficiencies and for the error that was made. I will address specific points in a moment, but perhaps noble Lords will allow me briefly to set the context.

A tried and tested approach to ensuring the security of major events is the use of muster, briefing and deployment centres. These are places where large numbers of police officers can be gathered and given a collective briefing before being dispersed for their duties. In London next summer there will be three such muster centres. The most important will be the one in north-east London, which will support the main Olympic park area.

After extensive scrutiny of many possible options, the Metropolitan Police are convinced that the fairground site of Wanstead Flats on Epping Forest is the only real option for this deployment centre. The site in question constitutes just 2 per cent of the total land area of Wanstead Flats. The Metropolitan Police will pay £170,000 in lieu of rent, in addition to all of the costs of making good the site, which will help to create lasting legacy benefits for Epping Forest.

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The Government recognise that there will be some disruption for a brief period next summer for those people who use that particular part of Wanstead Flats. However, we believe, and we ask those people to accept, that this is both necessary to the security of the Games and proportionate. I am pleased to say that, despite its criticisms, that view was endorsed by the Delegated Powers and Regulatory Reform Committee.

The City of London, which is the conservator of Epping Forest, is happy to endorse what is proposed, as is the London Borough of Redbridge which granted planning consent earlier this year.

The issue which arises is that the Epping Forest Act 1878 prohibits the enclosure of any part of the forest, even on a temporary basis, hence the need for a legislative reform order to make a temporary amendment to the 1878 Act. The order was recently endorsed in another place without a Division.

The Government have no wish to see any change to the status of Epping Forest nor to the legal protections that ensure that it can be enjoyed in perpetuity. The order is therefore strictly time limited. It disapplies the protections of the 1878 Act only for a specified period of three months next summer. After the Games, the muster, briefing and deployment centre will be removed, the land restored to its former status and the full protections of the 1878 Act will remain intact. No lasting change to the law will be made.

I quote from the Delegated Powers and Regulatory Reform Committee:

"The Olympic and Paralympic Games is a special and unusual event requiring special and unusual policing. We agree with the Government's view that members of the public cannot reasonably expect to exercise their freedoms over the Centre's site for the limited period for which the Centre is considered necessary".

The committee was satisfied that the order meets all the tests in the legislation and is not otherwise inappropriate to proceed.

The order was declared hybrid by the Chairman of Committees the day after being laid. The Hybrid Instruments Committee, having considered eight petitions against the order, concluded:

"Many of the matters complained of in the petitions have been so dealt with, in particular by the normal planning process or in the report to the House by the Delegated Powers and Regulatory Reform Committee ... that no further inquiry into them is necessary ... there ought not to be a further inquiry by a select committee into any of the matters complained of".

Perhaps I may now turn to the criticism of the Government's consultation process made by the Delegated Powers and Regulatory Reform Committee. The overall proposal has been subject to three separate consultation processes, covering the police proposals to use the site, the specifics of the LRO itself, and the planning permission from Redbridge Council. Every effort was made to involve and consult local people. This included leafleting the streets most directly affected and public meetings in the area.

One of the criticisms of the Government's consultation is that it did not offer respondents a choice of possible sites, or even details of the sites which had been

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considered by the police other than Wanstead Flats. The latter was clearly an error, which was remedied during the consultation.

On the former point, let me explain the Government's stance. The Metropolitan Police considered 29 possible sites for the muster, briefing and deployment centre. Applying objective criteria, they concluded that Wanstead Flats was the only suitable site. That was the clear professional, operational advice from the police. It would have been very difficult and even potentially dangerous for the Government to try to override that advice. The effectiveness and the clarity of the consultation process would not have been enhanced had we sought views on alternative sites which had already been ruled out as unsuitable; indeed, to have done so might have unnecessarily alarmed residents living near those sites.

I absolutely stand by the principle that good consultation requires allowing people to be involved at the earliest possible stage and to be able to influence the eventual outcome. However, I do not believe that it would be practical or desirable to ask people for their views on the details of how something like the Olympics should be policed, so the question of whether or not a muster, briefing and deployment centre is necessary had to be off limits, nor could we reasonably have asked people to substitute their own judgment for that of the police when it came to assessing suitability of the alternative sites.

Another issue raised by the Delegated Powers and Regulatory Reform Committee was the error in the Home Office's original consultation document, in consulting on removing the burden of Section 34 of the 1878 Act rather than Section 36, as it should have done. The committee said that it was surprised that the Home Office did not engage in further consultation.

If noble Lords look at the responses to the consultation, all of which were placed on the Home Office website, they will see that those who responded were either for or against the principle of what this order seeks to do. I do not believe that the positions which local people took on this issue were affected by the fact that there was an error relating to the 1878 Act in the consultation document. Nor do I believe that the error meant that anyone who feels strongly about the issue was deterred from submitting a response.

I do not believe that had we aborted the consultation at any point and started again or even if we were to rerun the whole thing again today, the results would be any different. The Government are well aware that a small number of people in the immediate area of Wanstead Flats are deeply concerned about what is being proposed and we accept that their concerns are legitimate. They were certainly not prevented from expressing their views by the consultation process and, indeed, were able to petition Parliament direct through the hybridity process.

I am pleased to be able to report that, despite its misgivings, the Delegated Powers and Regulatory Reform Committee concluded on this matter:

"On balance we consider that the information given to those required to be consulted was just about sufficient to enable them to respond coherently to the proposal for the legislative change".

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I confirm for the record that what we are doing does not in any way set a precedent for future development on Wanstead Flats. I hope noble Lords will agree that the Olympics are unique in terms of scale and the policing challenge they present. I can think of nothing else that would require similar arrangements. As we have gone for a time-limited legislative reform order, even if a future Government were minded to put buildings on Wanstead Flats, even temporarily, they would have to replicate these procedures and secure fresh parliamentary approval.

Restoration of the site was, rightly, a point of considerable interest in another place. One of the conditions of planning consent imposed by the London Borough of Redbridge was that the Metropolitan Police should agree a scheme of restoration with both the corporation and Redbridge Council in writing before work begins. I am sure that both those bodies will be vigilant in ensuring that the restoration scheme is comprehensive and that its provisions are properly adhered to. My honourable friend in another place, Lynne Featherstone, is writing to MPs whose constituents will be most directly affected to set out how the restoration scheme will be drawn up.

I respectfully suggest that what we are seeking to do is a sensible, proportionate measure. It will be a vital component in next year's Olympic and Paralympic safety and security operation while ensuring that those who cherish Epping Forest can have the confidence that the Act that protects it remains fully in force.

I apologise again for the error and deficiencies identified by your Lordships' Delegated Powers and Regulatory Reform Committee. It concluded:

"The Committee considers that the proposal in the draft Order meets the tests set out for LROs in the Legislative and Regulatory Reform Act 2006; and is not otherwise inappropriate to proceed".

I ask your Lordships to support this measure.

4.15 pm

Baroness Doocey: My Lords, first I declare an interest as a member of the Metropolitan Police Authority and the Home Office Olympic Security Board. For the past three years I have chaired the Metropolitan Police Authority Olympic and Paralympic Committee, and one of our key terms of reference is specifically to examine the security preparations for the Olympic and Paralympic Games.

The issue before us is one in which the committee has been heavily involved. Most of the committee's work is done through examining all the Met's business cases for the various elements of the Games. Committee members are very diligent as some of those business cases run to about 200 pages with lots of annexes, but despite that we spend a huge amount of time, and have done over the past three years, looking in great detail at what is proposed and challenging assumptions when necessary.

On this one, members of the committee had lots of representations, as the Minister mentioned, from various groups who had some genuine concerns. Speaking personally and, I think, for most of my colleagues, I would say that many of the concerns arose because people did not fully understand the proposals. One of

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the difficulties is that when people talk about consultation they are not always entirely clear about the difference between consultation and public information. Like every other noble Lord I am a great believer in consultation, but there comes a time when you have to separate that from public information. Some issues must be put into the public domain to inform the public about what will happen and why and to give all the reasons, whereas others are for consultation. Sometimes the impression is given that when an announcement is made-this happens a lot with the Metropolitan Police Authority in particular because it is such a large organisation-people will be consulted with a view that if they are not happy with the consultation they will be able to get something else done, whereas in fact, as with some of the issues we are discussing here, it is a matter of, "This is what has to be done because ...". You cannot possibly have the public saying, "No, we don't like site A. We think that you should move to site B".

Some of the concerns are around the fact that so much will be put on the site. I am sure that many noble Lords have had letters from people about the Metropolitan Police saying that they just need one big major briefing centre. That is not correct because plans for the site clearly show that there is more than one building. So many things will be on the site that it is just not possible not to have more than one building. We are talking about accommodating 3,500 officers every day, so it has to be large enough not just for briefings. There will be armouries because we will have to keep weapons. There will be stables, parking, secure parking, kennels, refreshments, and obviously there will have to be showers, toilet facilities and so on. It was very difficult to find a site that came anywhere near the sort of requirements needed. This site was sourced after a very extensive search. The committee considered all the proposals and the information that the Met provided-they provided everything that we asked for-and we were happy to confirm that their option was the best possible one.

The committee is entirely satisfied that Wanstead Flats in Epping Forest is not just the best way forward but is probably the only area that can provide the range of facilities for the sort of secure location required. It is near enough to the park so that officers can go backwards and forwards not just to the Olympic park but to Victoria Park, Westfield shopping centre, Stratford and to the ExCel centre. We were very happy with that option and I hope that noble Lords will be, too.

Lord Brooke of Sutton Mandeville: My Lords, when I represented the City of London and Westminster as a Member in the other place for well nigh quarter of a century, I worked with the City of London in its capacity as an owner and guardian of many green spaces around the metropolis. Although Epping Forest was outside my geographical remit, I remain interested in the City's role as conservator of the forest and in its work to safeguard this vital green space for the benefit of all Londoners, at no cost to the public purse.

Last month's debate in the other place on this legislative reform order raised some questions about the City of London's custodianship of the forest in collaboration with the local residents. I speak only for

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the consultation exercise with which the City was concerned, not for the subsequent exercises that were undertaken by the Metropolitan Police and the Home Office and examined by parliamentary committees.

The local consultation carried out last summer by the City, working with the Metropolitan Police, involved canvassing local residents, 22 resident and community groups, local councillors and MPs. Some 6,400 fliers were distributed in the local area, outlining ways in which the public could engage with the consultation. Five public exhibitions were staged and a public meeting was held in October. Representatives of the City were present at all of these events to listen and to answer questions. The City also engaged activity with a minority of the public who raised concerns about the proposal, by responding to letters and publishing answers to "frequently asked questions" on its website.

During the debate in the Commons, there were calls for a consultation by the City on the possible uses for the £170,000 "rent/fee" that will be available for the improvement of Wanstead Flats following the use of the flats by the police. I am happy to inform your Lordships that the concerns expressed are groundless. Consultation on the issue started last summer, when the City invited local residents to comment on three possible projects to be funded: improvements to the adjacent Jubilee Ponds; landscaping the area south of Bushwood; and improvements to Alexandra Lake. The Jubilee Pond improvements received the greatest support, and the City is committed to consulting local residents again when plans for possible improvements have been developed further, and when it is certain that the muster centre will be located on the flats and that the funds will be available.

Finally, concerns were expressed that the site might not be fully and properly reinstated following the police's departure. The site will have to be reinstated, at the police's expense, in compliance with a restoration plan to be approved by both the London Borough of Redbridge and the conservators, and to the satisfaction of the acknowledged experts employed by the City. The City is-rightly-highly regarded for its husbandry of open spaces all around London, such as Epping Forest, Hampstead Heath, Burnham Beeches and several commons to the south of the City. This should provide the assurance required that Wanstead Flats, that greatly valued green lung for the City, will be restored to its former state once it has played a vital role in delivering a secure 2012 Olympic Games.

I will add a personal footnote. At the end of the second 1974 Parliament, I took a Private Member's Bill through the House of Commons on behalf of the Corporation of London on the subject of the consequences of the construction of the M25 as they related to Epping Forest. In that capacity, I paid a visit to, and inspected, the forest, which of course lay outside my constituency. It was an era when the proposition that "George Davis is innocent" was being carved or painted in many places, including on a test match cricket ground and likewise at a cricket ground in Epping Forest, beneath which the M25 now thunders. More than three decades later, I believe that I am right in saying that Mr Davis's innocence has been confirmed.

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If that is so, this sporting vignette may be a good omen for the Games next year, which of course I wish well.

Lord Moynihan: My Lords, I rise again and in so doing I declare the interests not just of chairing the British Olympic Association but also of having the honour of sitting on the London Organising Committee of the Olympic Games as a director of the board. I again thank the Minister, in particular, and his colleagues for their comments today. I recognise that nothing is more central to the success of both the Olympic and the Paralympic Games than effective security. Here we are talking about effective security which will be provided by a maximum-if the Minister is correct-of 3,500 police officers on this site. But of course security goes far wider. Although this order is not relevant to that wider security, it is important to recognise that before this measure comes into place we will have many of the 205 national Olympic committees here for pre-Games training camps. Their security around the country is of high importance. I have raised the issue on many occasions outside your Lordships' House but I hope that the Minister will echo it as critical to the success of the security operation. In his opening remarks my noble friend the Minister said that this was relevant to the Games. In that context, I would be grateful if he could clarify, for the avoidance of doubt, that we are talking about both the Olympic Games and the Paralympic Games and that the order is effective from 23 June to 20 September.

On the restoration scheme, I would be grateful if the Minister would let the Committee know over what estimated period of time the restoration process is likely to take place and whether there is any visibility at this stage on the cost of that restoration scheme.

In closing, I again thank my noble friend the Minister for his introduction to this order and for the comments made by my noble friend. In particular, perhaps I may echo the latter comments relating to the sporting success of the Games. I have every confidence that Team GB will be outstandingly successful at these Games. I hope that it will match our aspirational target of fourth place, as we did in Beijing, with a remarkable level of success in more sports with more medals than we have seen in many a decade. That would be very much due to the support services provided by the Government and, above all, to their ensuring the security of the Games and the athletes who will, I hope, have the experience of a lifetime when they come to London in 2012.

Lord Teverson: My Lords, I am here to talk about the renewable heat initiative but I grew up in Wanstead and could never understand why it was called Epping Forest when on Wanstead Flats I could see no trees. In fact it seemed to be part of the western European plain as it stretched out into the distance. As a schoolboy I used to visit the fairs in Wanstead Flats, which was a great experience. One of the few complaints that I can remember about the area and the police was that there was never enough of them. Now, at last, 3,500 have turned up at one time, which is probably good news.

I know that this is not, nor is it meant to be, an amusing subject. However, I was slightly amused at the restoration of Wanstead Flats. When I knew it

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four or five decades ago, restoration would probably have meant taking it down and making sure that it looked worse than it had before. It was in a very bad state at that time. I know that it is a lot better now and I am absolutely delighted that this restoration will be taken seriously, which I am sure is most important. I am delighted to see Wanstead Flats in the centre of the Olympic Games and how it will be organised. I hope very much that despite some of the mistakes made in this process, Wanstead will play its part in a successful Games.

Lord Stevenson of Balmacara: My Lords, I am very grateful to the Minister for introducing this further legislation and for his explanations. He has certainly tried very hard to give a good account of what has happened. I may have to return to one or two of the points because there are issues here on which we should perhaps dwell before we leave this order. It was also useful to have in front of the Committee the words of the noble Baroness, Lady Doocey, who helped to explain some of the context of the police decision, which is absent from any of the documentation that I have seen. It was also useful to have the background from the noble Lord, Lord Brooke of Sutton Mandeville, who was entertaining as always in his recollections of his times. When will we see the book? Why do we not have it all down at one time? Every time the noble Lord speaks, he seems to have a little vignette of life either as an MP or as a member of the City corporation, which has informed the House, made us laugh and has lightened the tone on many occasions.

4.30 pm

Two things seem to be happening here-the noble Baroness, Lady Doocey, is absolutely right that there are two halves to this. The first is the police's decision-for all the right reasons, and probably correctly-regarding a place which they must have to secure the Games and the Paralympic Games. I do not think that we should confuse that in any sense with the processes then necessary to allow the legislation to permit us to establish the muster centre in the area that we are talking about. There is a decision properly arrived at by the police and in consultation with the appropriate authorities, which is that Wanstead Flats is the place where operational efficiency can best be achieved for the muster centre-and, for the limited period involved, that has to be the right decision. Conversely, I can imagine the impact that that decision had in the Home Office when it was realised that this was an area that is heavily constrained by legislation which has lasted for a very long time-indeed so long that they probably did not manage to read it correctly and, as has been explained, tried to consult on a provision that was introduced in 1878 but lapsed in 1882, so that the actual consultation itself was not in any sense to do with the legislation that we are dealing with.

I suspect, although I have no evidence to support this, that the downward spiral started at that point and that, the panic having set in, they decided to do all they could to cover every possible area, as a result of which we ended up with the poor people living in the area having three separate consultations over two years

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to deal with issues that probably should not have been consulted on, in order to give a bolstering to the process.

So we have a planning application which by all accounts seems to have gone well. I do not think that any issues arise from that. It would of course be necessary for there to be a planning process. I am glad that, until such time as the Localism Bill strikes us, these planning processes seem to work well and involve the local people. It received a proper level of response and went through.

The reasons for the police consultation have been explained-although it was not really a consultation in that sense but a public information exercise. However, this consultation was rather difficult to engage with because it was only online; it was done in a relatively short time, and they had a set of preset questions that people had to respond to. It was not possible, as it often is not in electronic communications of this type, to write in your views or explain. I think that the local people could have been quite upset about that, and it is right to recognise that. Perhaps the Minister will comment on that when he replies.

The consultation was described in another place as being potentially deficient mainly because of that. To describe, as they did in that process, the flats as,

was, as has been said, a little bit of an overstatement. I suggest that the Government have rather overegged this.

As for the Home Office consultation, as we have said, it set out on the wrong track, concentrating on Section 34, which lapsed, and not Section 36. I think that there were several factual errors as well as a rather limited approach to that. The impression, as far as I can tell from the responses that were received, was that the deal had been done and that the process that was being used was chosen simply as the best way of achieving that. That raises the one point that I would like to invite the Minister to respond on. It has been alleged in a number of places that in using the LRO procedure, the process was flawed from the start because the powers necessary to achieve the objective that the Home Office wished were already in the legislation, if it had looked in the right place; and, indeed, that this could have been done through by-laws introduced by the corporation as conservator. In that sense, a lot of this stuff would have come down a complete notch and would not have caused the subsequent difficulties.

Consultations-a word, as I have hinted, which should be used carefully-are always difficult. However, to the extent that consultations were carried out in the process that we talked about, 31 responses were received. There were also responses to the hybrid petitions, which should be counted in that. Therefore, to that extent, views have been expressed. In the debate in another place, the local Member, John Cryer, suggested that there were issues that had not been properly discussed, including the impact of this whole arrangement on traffic, although that would certainly be part of the planning proposals, but mainly in relation to traffic for commuters and others who live locally and the

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impact of the Games. But I suspect that that has probably not been looked at. Security might be adversely affected in the area because the location of the police centre there will bring focus to that area which otherwise would not have happened.

Although the compensation figure of £170,000 sounds very reasonable, nobody really seems to know where it came from, and although we are notionally talking about a three-month period during which the police will be in occupation of the site, there will clearly be periods before and afterwards when the site is prepared and restored during which it will not be appropriate for it to be used by local residents, so there are issues about that.

We would be grateful if the Minister will reassure us in his response, as he has done already, that the Government recognise the mistakes that were made in this; indeed, he has apologised for them, which was good to hear. However, the main consideration is that the use of the LRO in the Act that has been selected for this does not set a precedent. Can he reassure us that we can be confident that in any future arrangements of this type-it may be that there will not be so many-we will not find that this process, which was definitely flawed and possibly defective, will not be prayed in aid in order to achieve an easy win in an area that should be subject to proper consultation and discussion that gives local residents a chance to make their points?

Lord De Mauley: I thank all noble Lords for their comments and questions today. I shall do my best to address them. First, I thank my noble friend Lady Doocey for her helpful comments on the need for a distinction between consultation and public information; on the complexity of the buildings required, with which I entirely agree; and for her other helpful comments.

My noble friend Lord Brooke of Sutton Mandeville made some helpful comments, expanding upon mine, on the consultation process and on reinstatement. My noble friend Lord Moynihan commented on the importance of security. This order applies to both Games. He asked how long the restoration process will take and what it will cost. It will take several months for the site to return to its original state, and I say in all seriousness that it will depend to some extent on the weather because the grass will grow better if it rains. The cost is not yet known and will not be known until the centre has been removed and the state of the site is known. The £170,000 is above the cost of returning the site. I thank my noble friend Lord Teverson for his support.

Turning to the comments and questions from the noble Lord, Lord Stevenson of Balmacara, I hope that I have addressed most of the issues that he raised, but I am delighted to return to some of them. He particularly commented on the deficiency of the police consultation. I reiterate that the police leafleted local properties and held five public meetings in the area, so they did everything they could to consult local people. I have apologised. We recognise the mistakes. We will certainly do our best to prevent them happening again, and I apologise again.

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The noble Lord asked about traffic. I can confirm that traffic issues were considered as part of the planning process and that Transport for London is satisfied that this is manageable, not least because it is during the school summer holidays.

Lord Stevenson of Balmacara: The point I wanted to make about traffic was not so much on the planning application, as that would be about the site-specific activity, but more about the impact that it would have on patterns to and from the Olympic Games themselves and on those who are commuting, so it is wider than planning.

Lord De Mauley: I am satisfied that that has been taken into account in the process. The noble Lord is right that it will be critical. After all, how will the police react to an incident? However, it has been part of a very comprehensive planning process. I think that the noble Lord asked whether this could have been done through by-laws. I confirm that we could not have achieved the result by amending the by-laws. I think that he also asked about the sufficiency of the £170,000 figure, which I hope I have already addressed adequately.

I am grateful to all noble Lords for their supportive comments today. I appreciate that, despite those comments, what is proposed raises strong feelings in the immediate locality. I remind your Lordships that what is being proposed affects only 2 per cent of the total area of the Wanstead Flats and is entirely temporary in nature. After 90 days next summer, the full provisions and protections of the Epping Forest Act 1878 remain in force. I take note of the points that the noble Lord, Lord Stevenson, made about the consultation exercise; and I reiterate that whatever deficiencies there were, I do not believe that those who have strong views about this matter, particularly those opposed to the proposal, felt inhibited or unable to make their views known. We are satisfied that what is being proposed is proportionate and necessary to ensure the safety of the world's greatest sporting event and I commend the order to your Lordships.

Motion agreed.

Renewable Heat Incentive (Amendment to the Energy Act 2008) Regulations 2011

Copy of the SI
Copy of the Report

Considered in Grand Committee

4.42 pm

Moved By Lord Marland

The Parliamentary Under-Secretary of State, Department of Energy and Climate Change (Lord Marland): My Lords, there are two sets of regulations before you. The first sets out the details of the renewable heat incentive, which will allow the scheme to start operating.

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The second enables an amendment to Section 100 of the Energy Act, the primary legislation which underpins the renewable heat incentive. This change relates to our treatment of bioenergy, which I will speak about in more detail later. As with similar financial support schemes the RHI is subject to state aid clearance, which we hope to receive in the next few weeks.

The RHI regulations set out our commitment to provide 20 years' financial support to eligible renewable generators of heat. This means support for technologies such as solar thermal, biomass boilers, ground-source heat pumps and geothermal, to name a few. The full list of technologies supported and the levels of support are set out in the regulations. These are calculated to bridge the financial gap between the cost of conventional and renewable heat systems. Once in the scheme the level of support for participants will be fixed, changing each year only with inflation. Support under the RHI will be available for renewable heat installations in England, Wales and Scotland through these regulations. However, I am pleased that provisions in the Energy Bill will now allow the Northern Ireland Executive to introduce their own RHI in future.

The RHI represents a serious investment in our future. It will provide financial support to a wide range of technologies and set us on a path towards rapid change. By the end of the decade, we will see 500,000 jobs created in the renewables industry with the RHI stimulating £7.5 billion of capital investment. Once introduced, the RHI will be available to renewable heat generators in the industrial, commercial, public, not-for-profit and community sectors. We want to see a broad range of businesses and organisations take the opportunity that the RHI offers to change the way they generate heat-for example, with businesses such as restaurants or supermarkets using food waste to generate biogas.

Ofgem will deliver the RHI on behalf of DECC. It has significant experience in delivering schemes which provide financial support to renewable energy generators already delivering the renewables obligation and feed-in tariffs. Generators will need to apply to Ofgem to be accredited under the scheme, and the processes they need to undertake are set out in guidance recently published for consultation on their website.

Because Ofgem has experience in delivering similar schemes, it will build on experience and existing structures, such as IT systems, to ensure that the RHI operates as effectively as possible. I am pleased that, subject to parliamentary approval of these regulations, Ofgem will be ready to receive applications for the scheme from 30 September this year.

To receive a payment under the scheme generators will need to commit to undertake certain ongoing obligations-for example, providing meter readings in order to receive their quarterly RHI payments, maintaining equipment and, in the case of biomass installations, providing information on a number of sustainability issues. This is part of a range of measures to ensure the integrity of the scheme. In addition, for small and medium-sized plants, both installers and the equipment to be installed will need to be certified under the microgeneration certification scheme or an equivalent.

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I would now like to turn to bioenergy. The second set of regulations amends Section 100 of the Energy Act 2008. This amendment does three things. First, it amends the definition of biogas so that, as well as including anaerobic digestion, it will now also include advanced conversion technologies such as gasification and pyrolysis. The second change prevents the use of peat as biomass fuel. The third corrects a previous omission by adding biogas to the list of eligible sources of energy. These are important changes, as we believe that bioenergy is critical to meeting our renewable energy targets. We expect it to contribute over half of the over sevenfold predicted increase in renewable heat by 2020.

However, we are also aware of concerns that the increasing use of biomass raises, particularly with regard to issues around sustainability and air quality. In the RHI regulations we have addressed these concerns by including sustainability reporting criteria from the outset of the RHI, and will use existing legislation to cover restrictions on air quality for large-scale biomass. For installations below 20 MWth we will introduce emission limits in our RHI legislation when phase 2 of the scheme is implemented.

Finally, I would like to set out our position on the funding of this scheme. Last October, as part of the coalition Government's spending review, we announced £860 million of funding for the RHI scheme to 2014. We have listened to feedback that previous proposals to fund the scheme through a levy on fossil-fuel suppliers would be unworkable, so instead the scheme will be funded through general taxation.

Therefore I commend these regulations to the Committee.

Lord Teverson: I naturally welcome these regulations. The renewable heat initiative is pretty unique worldwide. The concept was introduced by the previous Government and has been taken on wholeheartedly by the present Government. It is an excellent example of decarbonising the economy. We think that most carbon emissions are around electricity generation, but that only constitutes around half of emissions. That means that our targets for 2020, of 15 per cent of energy being renewable, are tough to meet. That is well illustrated in the Explanatory Memorandum by the fact that the proportion of renewable heat, currently estimated at 1.5 per cent, must rise to 12 per cent by 2020. Given the fact that part of the scheme will be implemented only next year, this is a tall order-but I am sure that it can be met.

I also congratulate DECC on its negotiations with the Treasury, in which it managed to get £860 million-worth of direct taxation at a time when the public accounts are very tight and difficult. I am sure that those of us who argue on green issues would wish for even more, but it is a large and realistic figure and I am very pleased to see it.

I was slightly disappointed by the fact that a domestic RHI scheme will not come in until 2012. I understand that a pilot scheme for domestic RHI starts this year. I would be interested to understand more about how it will help the successful introduction of the full domestic scheme next year.

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Finally, my one area of slight regret, inevitably, is characteristic of a market intervention such as this, great though it is. The fact that we have not been able to implement it earlier-I see all the obstacles and why it has not been possible-means that we face the irony of a number of ground heat pump businesses, for example, going out of business while people put off decisions to invest in renewable energy until the incentives come through. Regrettably, there is a generic inevitability about these schemes when people realise that there will be a subsidy but not yet. I very much welcome the RHI and hope that it will have a very successful career not just up to 2020 but well beyond.

The Duke of Montrose: My Lords, after the description given by the Minister I almost think that I need to declare an interest, if for no other reason than that I have a livestock production business. I thought that the present measures were largely to do with commercial production. I also have a small restaurant which, as he said, is possibly in line for a renewable heat incentive grant.

I was reassured by what the Minister said about peat. When I saw that peat was mentioned in the second instrument, I thought that the Government were going to bring it into the definition of biomass. However, it is excluded, which fits in with the other measures that people have taken regarding peat.

Noble Lords will be aware that renewable energy was the subject of a statutory instrument early on in the sequence of devolution legislation for Scotland. The term at that point largely meant wind, solar and marine energy. The Minister described all the other forms of renewable energy that this measure covers. One can presume only that we are now into a further application of renewable energy. Taking the definition used of necessity, renewable heat is now part of the devolution arrangements. All the production systems benefit from financial subsidy. I hope that the Minister will confirm that renewable heat will also receive incentives from Her Majesty's Treasury, even when it is north of the border. This will be a great help to the Scottish Administration's ambition to replace all their atomic power generation with renewable energy sources.

Further to that, and in parallel with the regulation that brings the construction of plants and facilities for coal production within the powers of the planning regulations of the Scottish Government, even though coal is not a devolved matter, I presume that the construction and provision of plant for the production of renewable heat will be subject to Scottish control, even though the measures in the Bill are retained within the United Kingdom.

Baroness Smith of Basildon: My Lords, I was relieved when the Minister came into the Room. Noble Lords of my age may recall a private detective on television called Eddie Shoestring, played by Trevor Eve. Just before he retreated to his programme, he slunk into his chair just in time. I congratulate the Minister on slinking into his chair just in time, given that we have some interesting business for his department before us today. I see that nobody remembers Eddie Shoestring except me.

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I was encouraged by the Minister's enthusiasm for these regulations. We share that support. I will raise three issues of which I have already given him notice. I have some questions and queries on which he may be able to satisfy me. First, on cost control, the Minister mentioned the level of budget. That is subdivided over four years: namely, £56 million in 2011-12, the first year, of which £15 million is, I understand, through renewable premium payments; then £133 million; then £251 million, rising to £424 million in the fourth and final year of 2014-15. Given that the renewable heat incentive is the policy to deliver 12 per cent of heat in the UK being renewable by 2010, will the Minister give an assurance that he considers that this budget is adequate to meet the target?

My main point is the lack of flexibility between those years. Am I correct in thinking that any money unspent or unallocated in one year cannot be rolled over into the next year but will be lost to the programme? It is quite a tall order, particularly for a programme of this kind, for any department to hit the exact budget year on year. Do the Government intend to install some kind of capped grant scheme with all the stop-go inability that that brings with it to plan ahead for a growing industry which the RHI was trying to avoid in the first place?

My worry is that not allowing some flexibility between the years will increase the difficulty of implementing a cost-control mechanism for the programme. It also creates considerable pressures regarding the accuracy of DECC's modelling of the programme. We have seen already how the modelling on feed-in tariffs was said not to be accurate, and the same could occur in relation to this order. My biggest worry is that it would undermine industry confidence in the scheme. I have two requests for the Minister. First, will he consider allowing full flexibility between the years, although I appreciate that he may not get Treasury support in that? Or perhaps he could allow flexibility in terms of a percentage by which the budget has been underspent or overspent in one year. The budget could vary from year to year while keeping to the overall four-year budget.

Secondly, will he look at amalgamating the budget for the first two years into a single spending period? There is a strong case for that. When the CSR was published in October 2010, the renewable heat incentive was intended to start in June 2011. That start date has already slipped three months. It would be helpful if, alongside the Treasury, DECC could look again at how that money has been allocated between the financial years. The renewable heat premium payments that I mentioned-the interim payments keeping things going until the RHI is in place-are also included in that year one budget. So we can take out £15 million from that £56 million.

An announcement on that was due in May, which we still have not had, so there is less time available to spend the money. In his opening comments the Minister confirmed that the scheme will not start until 30 September-so it will not be for 12 months, but for six. Payments are made quarterly in arrears, which means that only projects that have been accredited by

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Ofgem by Christmas 2011 will be paid out of the year one budget-so we are now down to three months of the year one budget.

In addition, on a point that might not be quite so serious, and given that it will be the first application, where an application for accreditation to Ofgem does not have all the required information and has to go back again, the start date for the project will be the day on which the further details, not the initial details, were submitted. Projects of any complexity may not complete the process in time even if their first application is made before the end of December. If there is any minor error or mistake or information is left out, it will have to go through again. I think that the Minister will appreciate the problem and agree that that is not an unreasonable request if the scheme is to succeed and achieve its objectives. I have given the Minister notice but, if he wants to consider it further, I would be more than happy for him to come back to me in writing, rather than to rule it out now.

On a further matter, if I understand this issue correctly, the restriction is that the eligible waste is municipal waste only. Page 35 of the March 2011 policy document refers to using municipal waste, but it does not explain why it does not include commercial or industrial waste. I am aware of the balances between higher biomass-I am talking about waste with a biomass content of between 50 per cent and 89 per cent-but can he give me a reason for that exclusion? It would be helpful because Regulation 28(9) states:

"The participant may not generate heat using solid biomass contained in any waste other than municipal waste".

5 pm

I am sure that it is not the intention that a tiny amount of non-municipal waste should require Ofgem to throw an installation off the scheme permanently or without payment for the entire quarter. I do not understand why operators should be banned from using non-municipal or other forms of waste even if they are entitled to claim RHI for municipal waste only. It may be that the operator will have to persuade Ofgem about the way in which it was measured, but I do not understand why it is excluded on principle. I hope that the Minister and his officials understood that. The issue is that even if it is only a fraction of the waste used, the operator would not be able to claim RHI for the entire amount of waste that was used. That is quite a serious problem for project developers and plant operators because they need to process a range of different wastes.

I know that the regulations before us today are unamendable, but if the Minister could say something and at least give further consideration to the point and perhaps issue further guidance, it would be very helpful and give reassurance to the industry. It would also give Ofgem some discretion to be pragmatic in its approach to this because the regulations as they are worded could have unintended consequences.

My final point is about another unintended consequence. Regulation 3(2) specifies that eligible purposes are space, water or process heating where the heat is used in a building. In Regulation 2, the definition of a building is,

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The previous draft had just "an enclosed structure" in Regulation 3 and did not have that definition in Regulation 2. This is where I think the unintended consequence arises. Chemical plants would not normally be considered to be a building. Even though individual parts of the equipment are fully enclosed, and are generally enclosed to a very high degree of efficiency, the structure as a whole would be in the open air, often for safety reasons. The definition now included would appear to rule those uses out of the RHI. It would be helpful if the Minister could put on record that it is not the intention to exclude industrial plant, especially chemical plants, through the drafting. I think that the Government are seeking to rule outdoor swimming pools and patio heaters out of the RHI, which is perfectly understandable, but it would be perverse if they also excluded industrial processes, particularly as that is going to be at the lower tariff. Two of those cases are clearly cases of the law of unintended consequences and I hope that the Minister can redress them today. If he can give some reassurance on those issues, or will even say that he will take them away and come back to us and issue guidance later, it will be extremely helpful and offer reassurance to the industry.

Lord Marland: As always with the excellent merry band that we have debating this subject of energy and climate change, we have had some very valuable comments. I am always grateful to my noble friend Lord Teverson for his representation of the landscape and for the compliments that he has made. It is a great boost to have him so supportive. He raised one specific issue in regard to the pilot scheme for domestic. That is happening this summer. If he will forgive me, I will not go into the details of it right now but, as always, I will make officials available to explain what is happening and to keep noble Lords in touch with the process as it goes on.

My noble friend the Duke of Montrose, as a true Scotsman, was very keen to check that, as a Scotsman, he was not having to pay the bill but that the English were, and, reluctantly, I have to tell him that HM Treasury is paying the bill.

The Duke of Montrose: I hope it is the United Kingdom that is paying the Bill. I cannot see why it should be England.

Lord Marland: That is a debate for later. I think that the noble Duke roughly knew the direction of travel that I was coming from. However, we were interested to hear about his great estates and restaurant business. When I am up in that part of Scotland, I may pop in to sample the fare. The restaurant probably serves his beef. That would be excellent. We know that he is not involved in the peat business because he was very pleased that peat was excluded. I confirm that and thank him, as always, for his contribution.

I say to the noble Baroness, Lady Smith of Basildon, who described me as slinky, that it takes one to know one. As I have admired her slinky movements round

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the House, I am delighted to see that she is no longer impeded by having a foot in plaster and has her dancing shoes well and truly on. I thank her for giving me advance warning of some of her questions and for the great support on this subject. That is not surprising as the renewal heat incentive was kick-started by the previous Government and we are happy to take action on it.

The noble Baroness makes a very good point about the budget. She knows as well as I do that dealing with the Treasury is not always the easiest thing on earth. I am grateful to the noble Lord, Lord Teverson, for congratulating us on getting the money from the Treasury. We cannot push our luck too far with the Treasury, but I totally understand where the noble Baroness is coming from. Despite the fact that each year is a cut-off point, people who started after 1 July 2009 will now be able to apply for RHI-we are going back further. There is effectively a six-month period when we can backdate RHI into another financial year, provided that the relevant person has completed his accreditation. It may well have taken five or six months to process but we can backdate the funding to the date of accreditation which, of course, may go back to a previous year. I hope that that gives the noble Baroness hope that there is an element of flexibility, although not perhaps as much as she would like. Reluctantly, I occasionally have to say no to her-I know that she is not used to it-but that is as far as we can go. I wipe the sweat off my brow in relief at not having to go back and challenge the Treasury again on this difficult subject.

Baroness Smith of Basildon: I am sorry to interrupt but I seek clarification. My understanding is that it is the point at which all the information is submitted and accepted-if there were mistakes, it would have had to be resubmitted-that is the date of acceptance. Is the noble Lord now telling me that that is not the case and that the provision would be backdated to when a person first applied?

Lord Marland: No, I am merely saying that it can be backdated. Obviously, it may take time to process a person's accreditation, and that accreditation may go into a subsequent year. If you complete your accreditation, and then it takes a while to process it, the backdating could go back to the year when the accreditation was first accepted.

I am, as always, happy to pick up comments later but I wish to move on to the subject of waste. We are slightly in the hands of Defra as regards its definition of "waste". I am glad to say that Defra has recently extended the definition of "waste" to include a number of other types of waste. As was said earlier, the RHI supports some commercial waste. There are doubtless one or two that it does not but we have instructed Ofgem to look at this and to provide a pragmatic solution as regards other waste. Ofgem will be the arbiter of that. I hope that through this process we will embrace as much as possible because, after all, that is our intention. It is not our intention to exclude waste, it is our intention to make it available to as many as possible, and this is a clear way of doing that.

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The noble Baroness mentioned Regulation 3(2). I confirm that it is not our intention to exclude chemical plants. The intention is to show that we will not support RHI for open-sided warehouses and similar locations, where it is like trying to heat fresh air. Again, we have instructed Ofgem to clarify this issue through the process. We hope that as we proceed, with further advice from the noble Baroness and her team, in the spirit of co-operation we will come up with a good proposal for the RHI. It is an excellent endeavour started by the previous Government, which we have happily brought into legislation. I therefore commend these regulations to the Committee.

Motion agreed.

Renewable Heat Incentive Regulations 2011

Copy of the SI
Copy of the Report

Considered in Grand Committee

5.11 pm

Moved By Lord Marland

Motion agreed.

Storage of Carbon Dioxide (Access to Infrastructure) Regulations 2011

Copy of the SI
Copy of the Report

Considered in Grand Committee

5.11 pm

Moved By Lord Marland

The Parliamentary Under-Secretary of State, Department of Energy and Climate Change (Lord Marland): My Lords, the regulations apply in Scotland as well as England and Wales, and are being made with the agreement of Scottish Ministers. I am sure that my noble friend the Duke of Montrose will be pleased with that.

The regulations transpose into UK law requirements that are part of the EU directive on geological storage of carbon dioxide. The directive requires member states to introduce arrangements that enable third parties to access pipelines and storage sites on a fair and transparent basis. Those arrangements must meet certain criteria. So, for example, we must set up independent arrangements to resolve disputes about access, should they arise. We must also ensure that if access is refused on grounds of lack of capacity or

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lack of connection, the operator makes the necessary enhancements when a potential customer is willing to pay for them-providing that this does not have a detrimental impact on safety or the environment. The directive also provides for access to be refused where there is incompatibility in technical specifications which cannot reasonably be overcome, or where there is insufficient current or likely future capacity.

We consulted on drafts of these regulations in December 2010. The majority of those responding to the consultation agreed that the regulations represented a sensible approach to implementing the directive's requirements. However, there was concern about how our approach would apply to storage sites. As a result, we modified the draft regulations to recognise the constraints imposed by the natural characteristics and the environmental permitting arrangements for storage sites.

The approach in these regulations is based on the principle of negotiated access, with the ability to appeal to an independent authority if it is not possible for the parties to reach agreement voluntarily. That authority is either the Secretary of State, or Scottish Ministers where the infrastructure is located in Scotland. This approach has many advantages for carbon capture and storage, not least that it is relatively hands-off and therefore the least burdensome for what is currently an immature industry. It already applies to pipelines conveying carbon dioxide and is the basis on which the development of offshore oil and gas pipelines has taken place for many years. It is therefore familiar to many companies interested in participating in carbon dioxide transportation and storage in the future.

The regulations take as their starting point arrangements that already apply to carbon dioxide pipelines, adapt them slightly for consistency with the requirements of the directive and extend them to cover storage sites. They have effect on the construction of a new pipeline or a storage site, and where a third party seeks to secure access to existing infrastructure. Where infrastructure is being newly created, the regulations enable the authority to impose conditions when granting consents. Those conditions may, for example, require the pipeline or storage site to be constructed or permitted to a greater capacity, or in the case of a pipeline, to follow a modified route. However, those powers can be exercised only where there is evidence of demand and where the parties cannot reach agreement. The authority must be satisfied that the conditions it imposes will not compromise the safety and environmental integrity of the infrastructure or its efficient operation.

The regulations also provide for access and modification to existing transport and storage infrastructure. Again, the parties must first seek to negotiate an agreement. If they cannot do so, the party seeking access can apply to the authority for a notice granting access rights. In reaching a determination, the authority is required to consider a number of factors intended to ensure that the legitimate interests of the owner and users of the infrastructure are taken into account and to avoid a negative impact on safety or the environment. Where the authority grants access rights or requires modifications, it also has the power to determine the charges to be made. We are in the process of developing

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guidance, on which we will consult extensively before it is finalised, on the principles that the authority will use in coming to such a decision on this and on other powers available to the authority in regulations.

The regulations create an offence of providing false information to the authority in discharging its functions under the legislation. A determination made by the authority will be enforceable through the civil courts, in the same way as if the parties had entered into a contract that had subsequently not been honoured. The directive also requires our third-party access regime to be transparent. The regulations achieve this by requiring information about available spare capacity to be published. In determining this available capacity, the infrastructure owner is able to take account of reasonably foreseeable needs and, in the case of a storage site, against a baseline of the permitted storage capacity of the site. I hope that these regulations will find favour with noble Lords and I commend them to the Committee.

Lord Teverson: My Lords, again I do not know what else one could do. There seems to be an outbreak of common sense; we are implementing a European directive, which I see this as primarily, to ensure that pipeline and CCS companies do as we scold our children to do-to share, rather than keep things to themselves.

I have two questions for the Minister. First, he mentioned a long track record of facility sharing in the oil and gas industries, which there clearly already is, but I suspect that those provisions did not perhaps come in until a lot of the structures in those industries had got going. In this case, it is a new industry and I presume that we do not have any carbon dioxide pipelines going extensive distances. Clearly, they do within existing industrial plants but I wonder whether we might get into a sort of games theory where no one builds the first one because the first mover, in this instance, is the one who has to find all the finance and raise all the money, which is not inconsiderable. All the businesses coming afterwards will have to do is show that independent authority that it would make sense to share, so they miss the whole hurdle that the first people had to get over. I wonder whether that distorts the market somehow, but I am sure that the Minister will have an eloquent reply on that. Otherwise, this is good legislation.

Finally, I take this opportunity to ask the Minister where we are in terms of CCS and when we might see the network of carbon dioxide pipelines under-I was going to say across-our countryside. Where are we on the four schemes that the Government are promoting?

The Lord Bishop of Chester: My Lords, I, too, will ask the Minister one or two questions, perhaps going a bit beyond the immediate area covered by the statutory instrument. However, I will start with that. Do the Government anticipate that the transport of carbon dioxide will be through an entirely new set of pipelines, or will existing pipelines, in particular those used for natural gas, be used when fields dry up? Is it also possible that a given pipeline might have some form of dual use? Are we talking about an entirely separate infrastructure or about an infrastructure that will be available for both uses?

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Can the Minister confirm where the expected storage sites will be, and what state of provenance they have? Are we talking simply of oil and gas fields under the North Sea, or are there other geological structures in which it is anticipated that carbon dioxide might be stored? Given that we are talking about a very long timescale for storage, what evidence exists that the carbon dioxide will not escape, through cracks or whatever?

The impact assessment states, on page 8:

"As the main method of de-carbonising fossil fuel power generation, it will be important that CCS, should it prove viable at a commercial scale".

That is phrased in the subjunctive conditional. It raises the question: what happens if it is proved that CCS is not viable on a commercial scale? On the previous page, the assessment states:

"CCS is not currently commercial without subsidy".

It would be helpful to have some idea of what level of subsidy the Government consider may be needed to provide CCS. This is important because, if the Government stick with their position of having no more coal-fired power stations without CCS, and if CCS adds so much to the cost that we do not have coal-fired power stations, we then have to ask what form of electricity generation we will use.

I understand that over the past year our coal-fired power stations have been used more than was expected because they proved cheaper, with the price of gas going up. This has shortened the permitted life of some of our existing coal-fired stations. If we cannot go forward with any coal-fired stations because CCS does not prove to be commercially viable, does this not contain a hidden further increase in electricity prices if we cannot rely on any use of coal generation? Perhaps the Minister could put on the record some comments in response to those questions.

Baroness Smith of Basildon: My Lords, first, we welcome these regulations and the new clauses on this issue added in the other place to the Energy Bill. They all lead towards ensuring that we have the available infrastructure in place and that necessary powers will be available. The noble Lord knows that we fully support CCS, and indeed that we made a commitment in government to fully fund the first CCS project. The regulations pave the way to that. However, as the comments from other noble Lords have highlighted, they do not remove the uncertainties that remain. Perhaps, in the light of the regulations before us, the Minister will be able to offer some reassurance on when the investment for the schemes will be available, because we have had no information on that yet. The CCS levy has been scrapped, the Government's argument being that the burden on business was unfair. Instead, the taxpayer is now to be funding the scheme through the Treasury but we do not know when that is going to happen, so any clarification from the Minister would be welcome.

I want to ask two specific questions on the order. I understand what the Government are seeking to do here and I support that. I will talk through this and see if the Minister can follow, as I have not given him notification of this question. My understanding is

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that an applicant seeking access to or modification of a pipeline can seek the approval of the Secretary of State or another consenting authority-it need not be the Secretary of State-if negotiations fail to secure such access or modifications as are required. The legislation before us allows an appeal to be made if the consenting authority, which will mainly be the Secretary of State, thinks that there has been a reasonable time in which to reach that agreement. I hope that would only be in exceptional circumstances as it seems to me that, more often than not, the problems in reaching agreement will be not on technical issues but on the commercial aspects.

The evidence base for decisions determines the criteria on which the consenting authority will make decisions, and it does not include commercial considerations. What if the stumbling block to agreement is not technical in any way but commercial? What if it is about price? It seems very difficult for the Government or any consenting authorities to intervene, as stated in the order. As I read it, the Government would not have the power to intervene.

There may be an intention that there should be a regulator to ensure that the pricing mechanisms are fair but, unless I am misreading something in the order before us or its Explanatory Memorandum, I do not see that. Indeed, if we look at the evidence base for option 2, which is on page 10, the impact assessment says on these issues:

"If the consenting authority is required to determine the financial terms for access or modification for ... pipelines and storage sites ... they would be guided by principles similar to those already used in other sectors".

That implies that there is a role for the consenting authority and the Secretary of State to intervene on financial or commercial matters. It would be helpful to have some clarification because I am not sure I really welcome a Secretary of State intervening in commercial decisions. There could be a potential difficulty or a minefield if they are required to do that without sufficient guidance about which criteria they should take into account and how that should be conducted.

My only other question is: in terms of the time allowed for negotiations before the applicant can make an appeal to the consenting authority, will there be any guidance on what is reasonable? It seems that different kinds of applications could take different amounts of time, as some will be more complex than others. If the negotiation is around price, that could make it even more complex as it could be that company A is trying to preserve a position that it may want to take in the future. While I certainly support the principle, I would like some further information on those points if possible.

Lord Marland: I am grateful to noble Lords. It is a very opportune moment because, as of this morning, I am in the middle of a two-week lock-in negotiation on the first demonstration project. This morning was spent banging heads together to try and make it work further, but I will explain a bit more about that in a moment.

On the specific points raised by my noble friend Lord Teverson and by the right reverend prelate the Bishop of Chester, whom we welcome as always, the

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first demonstration project will be using existing pipelines owned by National Grid and Shell. They have great expertise and technology and are very comfortable that they can work. In fact, they have exploratory machines working on them at the moment. One has to rely on great companies to come up with the technology, so the likelihood is that a number of the CCS projects will be able to use existing infrastructure. Of course, that will not always be the case and some new pipelines may have to be built to create junctions or things like that.

The plan for the first demonstrator is to force the carbon dioxide, which becomes more liquefied, into the Goldeneye oil well, located in the North Sea. It is a largely Shell-owned platform. The ownership of it has become a bit more complicated but Shell is operating that end of it. On how we know of its ability to keep the captured carbon in storage, the answer is-

5.30 pm

The Lord Bishop of Chester: In a previous incarnation, I was a chemist. In all my previous experience of carbon dioxide, it never had a liquid state. It went straight from gas to solid; hence you can buy solid carbon dioxide to keep your ice-cream cold, and so on. Under what conditions do you get liquid carbon dioxide? I have not come across it.

Lord Marland: I did not actually say it was liquid. I said it was more liquid than gas. Denser carbon dioxide will be moved down the pipes. It is readily identifiable as a subject because, as the right reverend Prelate will know as a great scientist, you cannot touch carbon dioxide.

The right reverend Prelate made another point about storage. We are reliably informed that there will not be leakage. We have to take every precaution to make sure that there will not be leakage and must make sure that all adequate precautions are taken. Of course, this is a demonstration project. We are moving into unfounded territory and who knows what the outcome will be. It is very important that we have rigorously tested the programme, but it is a demonstration project. I will not comment on the outcome of the demonstration project at the moment because the intense negotiations finish on Friday. We remain optimistic.

The Duke of Montrose: While my noble friend is on the subject of the demonstration project, I know that oil companies in the United States purchase carbon dioxide to increase the output of their oil wells. Are Shell and other firms gaining a financial benefit from this operation by taking the carbon dioxide in this demonstration project and putting it into an oil field? Is it a win-win situation so far as they are concerned?

Lord Marland: That is certainly not the intention. There may be residual oil in an empty oil well, but it is not the driver for them carrying out this process. However, I am grateful to the noble Duke for informing us of that.

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The right reverend Prelate asked whether we know whether CCS will be commercially viable. Until we have done the first demonstration, we do not know whether we can do it on a large scale. If we achieve it on a large scale, economies of scale will come into play, and we hope it will become commercially viable. In answer to his subsidy question, that is why the Government have committed £1 billion of capital expenditure to try to make the first demonstrator work. The right reverend Prelate made a very good point about the future of coal. As he said, we are reliant on coal. It is not our intention to rid ourselves of coal but to make it cleaner within a low-carbon economy. As a scientist, he will know that they will have to put in NOx cleaning systems in 2016 and 2017 to make coal cleaner. He is probably the only person in this Room who knows what the effect is, and I will not pretend to go into detail with him on it.

The noble Baroness, Lady Smith of Basildon, kindly gave me some prior notice of her questions. She made two very good points and, if I am honest, I am not completely satisfied in my mind that I have the right answers to them. At what point does a Minister intervene? Should a Minister intervene? What is the reasonable time that should be allowed? In her own words, let us hope that it does not come to that. However, at some point you have to have an ultimate arbiter. At some point it is reasonable to think that the ultimate arbiter should be the Minister, in which case it is reasonable that at some point the Minister would intervene. Should we put a time limit on a dispute? I tend to agree that we should, but if we are too prescriptive about it, we may force the thing in the wrong direction. I will take away those points to consider in the department to see whether there is a straighter edge to put on those two excellent suggestions.

The Lord Bishop of Chester: On that point, page 8 of the notes states that there should be,

for perfectly good reasons. I entirely accept that. Is the Minister happy with the description "an independent party"? It seems to me that he will have a vested interest in being the arbiter if in a commercial situation there is no agreement. It would be normal for the Minister to be regarded as independent for those purposes, as described on page 8.

Lord Marland: Where does it stop? At what point is someone independent if the word means that they are able to take an objective and independent view of the problem? I do not disagree with the right reverend Prelate on the conclusion that we are trying to achieve. As I referenced earlier, I think that it needs further thought and a straighter edge. I readily said that we should perhaps try to get a little more detail on it. I do not have a prescription now. I am not necessarily sure that we should have a prescription now, but I am happy to carry on the discussion outside the Committee because it is at the margin of the reality and focus of the issue of CCS. To use the words of the noble Baroness, let us hope that it does not get to the point where we have to.

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Baroness Smith of Basildon: I am grateful to the noble Lord and thank him for being very candid about his own uncertainties on this statutory instrument. I do not think that it is unreasonable to say that he does not have an exact time limit in mind for when a Minister or consenting authority should intervene. "Reasonable time" is a matter of judgment. I apologise if I am missing the Minister's comments, but I am still not clear about the financial side and when it would be appropriate for a Minister to intervene in a pricing or commercial decision. It seems to me that a significant part of the regulations concerns the ability to intervene if things are not going as we would like, and agreement cannot be reached. I would appreciate it if the Minister would give me more detail or write to me, as it is crucial to the statutory instrument.

Lord Marland: With due respect to the noble Baroness, I think that most decisions in which people have to intervene are commercial, so ultimately a commercial decision will have to be intervened on. I can say that it will be a commercial decision. I quite understand that there may be a case for putting a time limit on when the commercial decision is reviewed. Consideration may need to be given as to whether it is an independent authority and when the Secretary of State appoints the independent authority, but these challenges or disagreements always come about through failure to reach a commercial agreement. We are suggesting that the Secretary of State can intervene and bang heads together to make sure that the agreement is sorted out. I am not sure that one can say more than that.

Baroness Smith of Basildon: I know that the Minister is trying to be helpful, but there are four criteria in the regulations on which the consenting authority can make the decision if there is a dispute. None of those is commercial or financial, although it does say in the notes in option 2 that it is financial. I am happy for the Minister to take this away and come back to me. I am still not clear, if the regulations do not state that one of the criteria on which the Secretary of State or consenting authority can intervene is financial or commercial, where the authority to do so will come from, when rather than a technical issue it could be the basis on which the Secretary of State will need to bang heads together, to use the Minister's words.

Lord Marland: I am very happy to carry on this conversation with the noble Baroness outside the Committee, but the point I am making is that whether this is technical or financial, it is all commercial. That is the reality. Everything is commercial when it comes to negotiating these things. The noble Baroness is in danger of taking things at face value without looking at the realpolitik. As I say, I do not think that we want to get into the nuts and bolts of the definition of commerciality. I am very happy to carry on this conversation with the noble Baroness through officials, as always.

Baroness Smith of Basildon: That would be helpful.

Motion agreed.

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Disclosure of State Pension Credit Information (Warm Home Discount) Regulations 2011

Copy of the SI
Copy of the Report

Considered in Grand Committee

5.41 pm

Moved By Lord Marland

The Parliamentary Under-Secretary of State, Department of Energy and Climate Change (Lord Marland): I feel slightly like something on a treadmill. There is only one more measure after this, noble Lords will be pleased to know. I will try to keep them entertained for as long I can, then we will rush off for a Statement.

I shall speak to the draft Disclosure of State Pension Credit Information (Warm Home Discount) Regulations 2011 for Great Britain. Noble Lords will recall considering the Warm Home Discount Regulations 2011 on Tuesday 29 March. That instrument enabled the warm home discount scheme to take effect on 1 April this year. The regulations to be discussed today allow for rebates to be targeted at the core group of low-income pensioners that I mentioned in March by allowing information to be lawfully shared between energy supply companies and government. The Warm Home Discount Scheme Regulations 2011 require that these pensioners are provided with a rebate off their electricity bill from their energy supply company. This rebate will be worth £120 this winter, rising to £140 by winter 2014-15.

This winter, we estimate that about 800,000 pensioners will receive this rebate. We estimate that this figure will rise to more than 1 million pensioners for the subsequent three years. In total, rebates worth more than £580 million are expected to be provided to this group over the four years of the scheme. To help energy suppliers to identify which of their customers is a low-income pensioner and to provide them with this rebate, we need to allow the suppliers and the Government to share information. Sharing sensitive and personal information in this way, without seeking individual consent first, requires a legal gateway. The instrument the Committee is considering today is made under Section 142 of the Pensions Act 2008, which confers power on the Secretary of State to make regulations allowing for such information sharing. These regulations also set out what data may be shared and what it may be used for, and put in place robust offences to protect the data and prevent their misuse.

I will explain each of these areas in more detail. In terms of information sharing, this instrument allows the Secretary of State to disclose name and address information of pension credit customers to participating electricity suppliers, and allows participating electricity suppliers to provide name, address and meter point administration number information about their domestic electricity customers to the Secretary of State. These records will then be compared-a process sometimes

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called data matching. Where there is a match, the Secretary of State will tell each supplier which of their customers to provide with a rebate. Where there is not a match, we will write to those pension credit recipients to ask them to contact a government call centre and confirm their eligibility. If they are eligible, the energy supplier will be required to provide them with a rebate. The key advantage of data matching is that most customers will get the rebate automatically, without claiming. This will help to ensure that the most vulnerable receive the support that they need.

5.45 pm

As to keeping this information safe and secure, before any data transfers take place, very stringent DWP security standards will have to be met. In addition, the regulations set out an offences regime for unlawful disclosure of information. If a person is found guilty of one of the offences, they will be liable to an unlimited fine or a prison sentence of up to two years.

The instrument also sets out whose information can be shared in any particular year and, from this, the eligibility for the core group. The eligibility criteria must be met by the DWP and energy company customers on a certain qualifying date. The date will be set annually and made public in advance. This year we expect the qualifying date to be 11 September 2011.

In year 1 of the scheme, only those in receipt of the guarantee credit element of the pension credit will be eligible. As I mentioned, we expect that about 800,000 poorer pensioners will receive this winter's rebate. In subsequent years, people in receipt of the savings credit element as well as the guarantee element of the pension credit will be gradually brought into the scheme, starting with the oldest first. By winter 2014-15 all those who receive the guarantee credit element of the pension credit will be included. The value of the rebate will increase annually, from £120 this year to £140 by winter 2014-15.

In all cases, the rebate will be available only where the pension credit recipient or their partner pays their own electricity bill and is with a participating energy supply company. The six major UK energy suppliers will participate, and other, smaller suppliers can also choose to be part of the core group and include their customers. The rebate will be provided on electricity bills to ensure those off the gas grid can benefit.

Finally, to make sure that this shared information is used only to help customers, the instrument sets very tight parameters to limit its use to the provision of the rebate and the offer to customers of advice and assistance, for example on energy efficiency or debt and disconnection, to help them with heating their home.

The instrument is vital to allow legal data-sharing to take place between energy companies and the Government, and to enable supplier-funded rebates worth £580 million to be provided to low-income pensioners over the next four years. On that basis, I commend it to the Committee.

Lord Teverson: My Lords, I remember many discussions in the Moses Room about rationalising this system, and frustration on all sides of the Committee that people in need of help with their energy bills were not

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being able to take it because it was impossible to share information. This was for good reasons, but we knew that because information was not being shared, a number of the most vulnerable people in our society were not able to take the benefits that they needed in such a vital area of their lives. Therefore, I welcome the regulations, because at last we seem to have a solution that gets around the problem.

That is good, although I think that all of us in this information age are concerned about the sharing of data. Data security is always an area of difficulty, and the fact that this information will be held according to government standards is some reassurance. However, the key issue is what happens in practice and who leaves which laptop or USB where. There are always risks in this area.

The one area where I pricked up my ears was that of data matching. I am lucky enough to be going on holiday to the United States this year, and I almost worry that I will be data matched with an Iranian terrorist and will be unable to come back for the October Session. My Whip would be particularly unhappy about that.

Noble Lords: September.

Lord Teverson: I am not going until October-but let us move away from my domestic arrangements to those of the more vulnerable in society. Could the Minister clarify that, once the data-matching process has occurred, if there are "leftovers" the Government will ensure that everyone who is entitled receives their entitlement? How are we going to check that the matchings that have occurred are correct? A number of people may receive these discounts when they are not entitled to them. They will thank their lucky stars that the discounts have arrived and that will be that. The issue is not one of following up the data that have not matched but of ensuring that the matching that has taken place is effective, given that those who do not receive their entitlement are not likely to follow this up for the old reason that they did not know that they were eligible in the first place. However, I welcome this measure as a breakthrough for the more vulnerable in our society.

Lord Whitty: My Lords, I welcome this for the same reason as the noble Lord, Lord Teverson. This has been a long-running saga, but I hope that we will get the ability to match data in the nicest possible sense in order to ensure that the benefit goes to those for whom it is intended and to whom the provision of the warm homes discount applies.

My query arises from a wider concern about the Government's strategy in relation to fuel poverty. There is no relationship between the warm homes discount and any improvement in the energy efficiency of the home itself. The Government have cut significantly the former direct payment through Warm Front and related schemes and are relying on a variation of the eco-mechanism to redirect money back into energy efficiency. This is distinct from the previous approach of a social tariff-which may have been flawed in many ways-in that there is no mechanism for ensuring

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that the bills next year, for those people who will benefit from the discount this year, will be any lower, because there has been no nudge in the direction of improving the energy efficiency of their homes.

However, the Minister encouraged me in his closing remarks when he referred to the possibility of using the data to identify those who may be targeted for advice on improving energy efficiency. As long as only a discount is provided, the problem of fuel poverty will continue, and the Government will have to continue to override the tariffs structure by providing discounts, rebates and special tariffs, with all the complexities and requirements to identify individuals that that implies. However, if the policy were linked to one of improving energy efficiency, perhaps through the same supply companies, that would be a more constructive way to go forward.

The question is: beyond the giving of advice, would it be possible to gear some of this discount-on the discretion of the recipient-to improvements through the Green Deal or other provisions fronted by the supply company, rather than providing a straight discount? If that is possible, could it be made apparent to the recipient that this is not just a cash saving this year, but a step towards reducing energy consumption and therefore towards reduced bills in future years? That would be a more coherent approach and would not require any greater disclosure of data or data matching than these regulations require.

Baroness Smith of Basildon: My Lords, we have previously discussed the Warm Home Discount Regulations in Committee at some length and the regulations before us follow from that. When we discussed them before, the Minister was generous enough to acknowledge that the Labour Government were very clear when they brought in the voluntary arrangements that should they be successful, they would bring in legislation for compulsory support. Today's regulations add to that compulsory support. What we did not envisage was that this would happen against the backdrop alluded to by my noble friend Lord Whitty: a drastic two-thirds cut in warm front grants. The Minister is very aware of our concerns and our opposition to those cuts. As welcome as these discounts are, my fear is that with the very substantial increases in bills for next year that have been announced, next winter's bills will be so much larger that the impact of the discount, which will be extremely welcome to those who receive it, will be less than envisaged when the level was first set.

I have two questions for the Minister, and I have given him notice of them. One is to seek confirmation on a point which my noble friend Lord Whitty also made. It is about the use for which companies can contact recipients of grants. I want to be assured that when the Secretary of State discloses information to an electricity supplier it can not be used for the purposes of sale or promotion by that company. Sub-paragraphs (b) and (c) of Regulation 5(1) state that the reasons for giving the information are,

which is entirely reasonable and welcome, and

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which is also entirely reasonable and welcome. However, in Regulation 5(3), there is a very broad definition of relevant assistance including:

and the list continues. Energy companies can contact the recipient on such a broad base, and they may use that to try to promote sales growth. I am not sure that that is what is intended, so if the Minister could be clear that the broad definition is not a sales pitch for energy companies, it would be helpful.

On the previous regulations, we discussed the reconciliation mechanism that will be in place to make sure that the information shared is accurate. I am not clear whether there will be further regulations on that. I understood that second and third statutory instruments will be coming through. If they will not, will the Minister tell us how that will be funded? When we discussed this before, I think there was an issue about who would be responsible for funding the reconciliation mechanism. If he can give us an answer on that today, it will be very helpful. However, we broadly support the regulations with those two caveats on which we would like answers.

Lord Marland: I thank noble Lords, as always. The noble Lord, Lord Teverson, was first in to bat. Funnily enough, Teverson is not a natural terrorist name, I feel. You do not think that with that name-a Cornish name, no doubt-he is going to be immediately arrested at the airport for some data matching. The data-matching issue is very important. There is no great science. Indeed, we have trialled it. We have trialled 340,000 people on the pension credit and, luckily, we hit the jackpot with about 205,000. There is a gap, and it is very important that we follow up the people who we could not access through the matching, but we have made substantial inroads into the number.

The noble Lord, Lord Whitty, has great expertise in this area, particularly on the subject of fuel poverty. We all know that both Governments, particularly our Government, are determined to attack this dreadful feature of our society which is exponentially going off the dial in terms of numbers, despite the best intentions of the previous Government and, indeed, the much better intentions of this Government to try and sort it out. In truth, the House is unified in dealing with this dreadful problem. It is fundamental that we get to grips with it and I know that we will carry it out. As your Lordships will know, we have instructed Professor Hills to carry out a fuel poverty review. It is an independent review and we are looking forward to seeing what suggestions he comes up with.

6 pm

The noble Lord, Lord Whitty, asked how we can connect this to energy efficiency measures in some form. Indeed, that joined-up thinking is no doubt the secret of his success. There is an element of joined-up thinking because we can use this data for targeting CERT, which is a temporary measure. It then may

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become a mechanism which we can make work with the Green Deal, as he rightly says. We have to recognise that the Green Deal is a big picture deal. We are trying to get into millions and millions of homes, not just those in this core group that we are representing, so as the Green Deal evolves we will doubtless be able to work in some joined-up thinking in that regard. However, there is indeed a gap until the Green Deal takes off, once the legislation passes through. Unfortunately, because there have been endless debates on alternative voting and reform of the House of Lords, we have not been able to get the legislation through which we perhaps required.

Baroness Smith of Basildon: My understanding is that the Energy Bill, which has completed its stages in this House, is being delayed in the other place, which has not been having debates on the alternative vote or the House of Lords. In fact, if he is able to enlighten us on why there is no date set for the final stages of the Energy Bill in the other place, that would be gratefully received because many of us in this House, who fully supported so much of that Bill, are very disappointed that it does not seem to be going any further.

Lord Marland: Indeed, no more disappointed than I am. Of course, one has to take into consideration all the legislation going into the other House. We genuinely tried to persuade the other place to allow it to come in, but it is so log-jammed with legislation. I am not sure whether it is entirely true that the other place has not debated Lords reform, or indeed alternative voting. However, I take the noble Baroness's point and no one is more disappointed than our department in not being able to get the Bill through.

The noble Baroness, Lady Smith, made a very good point, as always, about the parameters. Broadly speaking, this is not to be used as a method of mis-selling.

Baroness Smith of Basildon: Nor of any sales promotion.

Lord Marland: Yes, nor of any sales promotion, let alone mis-selling-a subject that we debated extensively on the Green Deal. We must be vigilant that that does not happen. Let me state this absolutely categorically; indeed, I will go through the notes because I do not want to have any doubt. This instrument sets very tight parameters around the use of information, limiting it to requiring electricity suppliers to give their customers an automatic rebate on their electricity bills-it is limited to that-and to being able to offer their customers advice and assistance in specified areas on energy and thermal efficiency. Any other reason, such as sales promotion, is not permitted and would be unlawful. I hope that that clarifies that issue in words of one syllable.

There is not going to be a further order on the subject of reconciliation. We accept that pensioners who will benefit may not be evenly distributed between the energy supply companies. As a result, we have put in place a reconciliation mechanism to allow the costs of the scheme to be distributed fairly between energy suppliers, based on their market share. Regulations to

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allow for this came into force on 1 July 2011. I hope, with that, I can commend these regulations to the Committee.

Motion agreed.

Environmental Permitting (England and Wales) (Amendment) Regulations 2011

Copy of the SI
Copy of the Report

Considered in Grand Committee

6.05 pm

Moved By Lord Marland

The Parliamentary Under-Secretary of State, Department of Energy and Climate Change (Lord Marland): My Lords, if I were in a football team I would have been substituted a long time ago, but I am still here and I am waiting for Alex Ferguson to send on a replacement but, sadly, that will not happen.

The regulations that we are debating today amend some of the provisions relating to the regulation of radioactive substances in the Environmental Permitting (England and Wales) Regulations 2010 in order to provide a more modern, transparent and user-friendly system for the regulation of radioactive substances, while at the same time strictly applying the best standards of radiation protection. They apply to England and Wales and will considerably simplify the often complex system of regulation, which has hardly changed over the past 50 years.

This will be particularly important for those users of radioactive substances which present a very low risk to people and the environment-for example, the holders of clocks, watches and smoke detectors -while at the same time maintaining the necessary level of protection. We estimate that several thousand users will benefit from these changes. This is a good example of the coalition's agenda to reduce the burden of regulation on business and I am pleased to say that it has received a green light from the Regulatory Policy Committee.

There has been substantial engagement with stakeholders during the development of the regulations. They believe that the need to clarify and modernise the system is long overdue. The Government have listened to the views of experts, industry, public services, regulators and other interested parties throughout this process and have received strong support for the new regime. Indeed, it has been clear throughout the stakeholder engagement process that there would be decreased confidence by users of the regulatory process if it was not modernised soon.

During the course of development, it became clear that a logical, comprehensive and modern regime could be delivered only if the definitions of radioactive material and radioactive waste were amended, and

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exemptions from the requirement for permits, which are contained in 18 different statutory instruments, were made more transparent and user-friendly. The main effect of the regulations is therefore to change the boundaries that define whether a particular substance or article is outside the scope of legislation-for example, and I specifically asked for this to be put in, a banana; capable of being exempt from full regulation-for instance, smoke detectors; or otherwise subject to normal permitting, such as radioactive waste from a nuclear site.

These changes, where they have been necessary, have been made for three reasons. The current boundaries are sometimes in the wrong place. The exact position of the boundary is currently vague-I knew that noble Lords were not listening, so that banana came as a bit of a surprise. There are gaps in the boundaries because the current exemption orders are up to 50 years old and technology in this field continually advances. These changes will provide a modern, simplified and proportionate-that is, risk-informed-regulatory regime which will result in efficiencies for users and regulators. The net savings for users and regulators across the UK are estimated to be in the region of £11 million over the next 10 years.

Because we have now more explicitly implemented the levels for exemption from regulation in the relevant EU directive, some exemption levels are more restrictive than in our current system and some are less so. This will not lead to any significant change to disposal practices in the nuclear industry sector, but will be of benefit to the users of radioactive substances outside the sector. For example, there are additional exemption provisions for medical establishments to manage and dispose of their aqueous radioactive waste more efficiently and without unnecessary paperwork.

Radioactive waste is a devolved matter. The necessary legislation to achieve the equivalent changes in Scotland is ready to come into force in October, and Northern Ireland is already in the process of amending its legislation with the intention that this, too, will come into force in October. Consistent regulation across the UK will therefore be maintained, which is very important for operators who work across UK borders.

I turn to another matter addressed in the regulations. My department is working to transpose the EU directive on geological storage of carbon dioxide. Two provisions that remain to be addressed are Articles 32 and 37 of the directive. Amendments to the 2010 regulations to transpose these articles are being made in these regulations. I hope that noble Lords will agree that they provide much needed modernisation and I commend them to the Committee.

Lord Teverson: I was hoping that one of the noble and right reverend Prelate's colleagues who has a degree in history and physics might be here. We have already dealt with chemistry and we have some very interesting substances listed here such as cosmic nuclides or whatever. In my electoral division in Cornwall, I have a NORM depot for the china clay industry, operated by Imerys, which is about to be replaced. I got involved in some of the issues concerning the oil industry and other areas where there is a small radioactive

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residue that comes from processing these minerals. I am delighted to say that I have received no lobbying from the Cornish china clay industry on the regulations, and therefore assume that they are a good improvement. Therefore, I congratulate the Minister on this change.

I have never seen an Explanatory Memorandum that has been more complicated and of which I have understood less. However, I am sure that the Department of Energy and Climate Change has our interests at heart.

Baroness Smith of Basildon: My Lords, I am very grateful for the Minister's explanation. I am still thinking about the banana reference, which I did not quite get. If he would elucidate further on that, it would be an enormous help. He made clear the reasons behind the regulations. They are intended to be simpler and more user-friendly, while maintaining standards for the regulation of low-level radioactive substances and complying with EU directives.

As he knows, the regulations were first consulted on by the Labour Government in 2009. As a result of the consultation, a fair number of changes were made. Normally, I would raise concerns about an order coming into force so quickly following its discussion-I understand that it will be the day after it has been signed. However, in this case there should be widespread knowledge and understanding among those groups that are affected by the regulations. For the reassurance of the Committee, it would be helpful if the Minister would state whether he is entirely satisfied that all those who need to know about the regulations do so, and, if there are any gaps, what efforts are being made to ensure that we pick up those who may have missed some part of the consultation process since 2009.

These are very technical regulations. I, too, regret that the noble and right reverend Prelate is no longer with us, because he would be helpful. Few noble Lords will understand Part 3 of the regulations. Table 2, headed "Concentration of radionuclides", lists various concentrations in becquerels per gram. I confess that I have no understanding of what that means and so in many ways feel inadequate to the task of effective scrutiny. I therefore seek reassurance from the Minister. Can he say whether any concerns were raised through the consultation that the regulations would in any way compromise public safety? I gave notice that I would ask that question. If those concerns were raised, how were they addressed? Those who were consulted would have greater knowledge than I or other Members of your Lordships' House would have.

6.15 pm

Jamie Reid, the shadow Minister for Defra, who represents the constituency in which Sellafield lies, and who is an expert and supporter of the nuclear power industry, raised a number of specific questions in the other place about the impact of the changes on the nuclear decommissioning programmes on the different sites and the costs involved. Given the detail of the questions that were raised, I do not propose to go into those areas today. Support for the statutory instrument is not dependent on answers to those questions but I thought that the information should be made available.

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The Minister in the other place agreed to write to Jamie Reid and it would be helpful to have a copy of that letter and for a copy to be placed in the Library.

Lord Marland: This is hopefully the last statutory instrument before we break-oh no, there is another one. I am always happy to hear the tales of Cornwall from the noble Lord, Lord Teverson, and all about English china clay. It is fantastic. The noble Baroness asked some very good questions, some of which she has given me notice of.

Baroness Smith of Basildon: All of them.

Lord Marland: The noble Baroness did not give me notice of the banana-I had to slip that in.

Baroness Smith of Basildon: I did not expect the noble Lord to mention bananas in today's debate, so I think that I can be forgiven for that.

Lord Marland: The point of the banana was to illustrate that everything is radioactive. We need to consider that as we embark on anything to do with radioactivity.

There has been extensive shareholder consultation and engagement on this, as you would expect. Naturally, it is fundamental that public safety concerns on anything to do with nuclear radioactivity are given priority. I think the general public believe that, which is why reaction to events in Fukushima has been relatively benign. We are not being complacent but I think that the public understand that we put public safety first. The Health Protection Agency has been consulted and is happy with it. A lot of it is based on International Commission of Radiological Protection recommendations, which underpin the EU basic safety standards directive. Of course, any concerns that are raised in these discussions are taken most seriously and responded to. It is fundamental to our nuclear endeavour that we do so.

Finally, I am in regular touch with Mr Jamie Reid, as I am a regular visitor to Sellafield. I hope that the noble Baroness will join me there at some point. West Cumbria is a fantastic place and we will put in the Library a copy of the response to his very detailed and extensive questions and naturally will furnish the noble Baroness with a copy as well. I commend these regulations to the Committee.

Motion agreed.

National Minimum Wage (Amendment) Regulations 2011

Copy of the SI
Copy of the Report

Considered in Grand Committee

6.19 pm

Moved By Lord De Mauley

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Lord De Mauley: My Lords, I am pleased to present the regulations and to speak to the National Minimum Wage (Amendment) (No. 2) Regulations 2011.

Before discussing these regulations it is important that I confirm the coalition Government's commitment to the national minimum wage. There has been a certain amount of controversy following the recent debate in the other place on the Private Member's Employment Opportunities Bill, in which it was suggested that people with disabilities should be able to offer themselves for work at below the minimum wage. As noble Lords know, the aim of the national minimum wage is to establish fairness in the workplace and one of its key principles is to protect the most vulnerable workers. The Government support the minimum wage, and we reject any suggestion that disabled people should be able to opt out of it.

I turn now to the two sets of regulations before us. The first regulations-the National Minimum Wage (Amendment) Regulations-do three things. First, they increase the hourly rate of the minimum wage for adults, younger workers and apprentices and increase the maximum amount for living accommodation that is allowed to count towards pay for minimum wage purposes. Secondly, they clarify the circumstances in which individuals taking part in certain government employment programmes are exempt from the minimum wage. Thirdly, they reflect the changes that have been made to the names of certain pre-apprenticeship programmes in Wales. The second set of regulations- the National Minimum Wage (Amendment) (No. 2) Regulations-exempts higher and further education institutions from the accommodation offset rules for full-time students who are employed by that institution.

I shall start with the provisions in the National Minimum Wage (Amendment) Regulations. In April, the Government announced that we had accepted the recommendations of the Low Pay Commission in its 2011 report on the minimum wage rates to come into force on 1 October 2011. These regulations implement that decision. They increase the adult minimum wage rate by 2.5 per cent from £5.93 to £6.08. We believe that this increase is appropriate in the light of the continuing economic uncertainty, while at the same time protecting the lowest-paid workers from falling further behind the average. Both the Government and the Low Pay Commission are concerned about the position of young workers in the labour market. I am sure noble Lords share that concern.

Young people are more vulnerable than they have been previously as they have been hit harder by the recession. That is why the Low Pay Commission's remit last year specifically referred to the need to consider the position of young people in the labour market. Their position has continued to be difficult and there is evidence that in difficult economic circumstances the minimum wage level may have an impact on their ability to find employment. The commission therefore recommended lower increases for the youth rates than for the adult rate. This is because the youth minimum wage rates have increased faster than young people's earnings generally since 2007. As a result, the minimum wage as a percentage of median earnings for young workers has increased while the adult rate has remained stable. The commission

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concluded that it would be imprudent for this to continue and therefore recommended lower increases than for the adult rate. We accept that conclusion. We believe that the increases in the youth minimum wage regulations are sensible and appropriate to protect the labour market position of young people.

The Low Pay Commission has also reviewed the new apprentice minimum wage that we introduced in October last year. It has found that the initial rate was cautious and recommended a higher increase in the apprentice minimum wage of 4 per cent. This will apply only to employed apprentices who are either aged under 19 or who are over 19 and in the first year of their apprenticeship. Other apprentices are eligible for the minimum wage rate according to their age.

There is currently an exemption from the national minimum wage for workers participating in certain government schemes to provide training, work experience or temporary work. At present, workers participating in government schemes provided under the Employment and Training Act 1973 are exempt from the minimum wage. However, there is no such exemption for workers participating in government schemes provided under the Jobseekers Act 1995, such as the Work Programme. Regulation 2 corrects this anomaly so that the exemption applies to all such workers.

I turn now to the third element of the regulations which is in Regulation 4. There is an exemption from the national minimum wage for a small proportion of apprentices on specified schemes who are not employed but who usually receive an allowance paid by the state instead of a wage. On 1 August, the Welsh Assembly Government will be starting two successor programmes to the Skill Build scheme that is currently specified in the regulations. We are therefore making consequential changes to reflect this.

The second set of regulations before us concerns the application of minimum wage rules on accommodation in relation to educational institutions. It is a general principle of the minimum wage that workers should be remunerated in money and not in benefits in kind. The only exception to this general principle is accommodation. However, as a safeguard to protect workers from unreasonable charges, the regulations set a maximum daily amount that an employer can deduct for the cost of accommodation, which is known as the accommodation offset.

Last year, the Government became aware that there was a potential problem with the accommodation offset where a higher education institution provides accommodation to a student who it employs, for example, as a student mentor. The problem arises because the relationship between an educational institution and its students is primarily educational, and accommodation is provided on that basis. Where an institution employs a student part-time, this does not change the basis on which the accommodation is provided. It is not analogous to the circumstances which the accommodation offset was designed to cover; namely, the protection of vulnerable workers whose employers might have sought to avoid paying the minimum wage by levying excessive rent for their accommodation.

We conducted a full public consultation on this issue earlier this year. We received 38 responses from universities, their representative groups and student

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representatives. There was an overwhelming consensus supporting the principle that we should address this issue. The regulations therefore exempt higher and further education institutions from the accommodation offset rules where the accommodation is provided to a worker who is enrolled on a full-time course with that institution. The overall, consistent response to our consultation was that the test for exemption should be based on the educational relationship that a student has with an institution. We have therefore based the test on whether a worker is undertaking a course with the institution. We have limited the exemption to full-time students as we consider that this approach is in line with the principle behind the exemption.

In summary, the Low Pay Commission's minimum wage rate recommendations reflect the continued volatility of the economy, the state of the youth labour market and the uncertain prospects for the forthcoming year. I believe that the increases in the minimum wage in the first set of regulations before us balance the needs of low-paid workers against the challenges that remain for businesses. They reflect our commitment to the fair treatment of low-paid workers as well as to business. I believe it is important for the integrity of the minimum wage that the detailed rules are appropriate and, where this is not the case, that we take action to remedy the situation.

The second set of regulations addresses the unintended consequences of the accommodation offset rules as they apply to higher and further education institutions. I ask your Lordships to consider these regulations.

Lord Teverson: My Lords, I thank the Minister for his explanation of these regulations. The reason why I was eventually very much in favour of the minimum wage was not that given in the background papers to this. It was the fact that where we have quite a strong safety net in terms of the welfare state, it seemed to me that we were getting into a situation where companies were able to pay low wages and the state effectively subsidised the corporate sector in terms of its pay. Bringing in the minimum wage allowed us to stop that, at least to a degree. When I looked at the uprating in these areas in relation to inflation, which clearly they are well under, they probably reflect wages in the economy fairly accurately, so perhaps that is fine. I was particularly interested in some of the background notes. I learnt that almost 1 per cent of apprentices are 61 to 70 years old. I thought that was quite an interesting statistic. In fact, only 70 per cent-seven out of 10- apprentices are in the 16 to 20 year-old age group, so we learn something from the notes.

6.30 pm

On the exemption of educational establishments, I welcome the fundamental regulation around what can be charged as rent. I know that in the south-west of the United Kingdom, where I come from, one of the main areas of abuse of the minimum wage regulations has been with migrant labour in the agricultural industry. I can see that educational establishments are a justified exemption, given that people have to be enrolled on a proper, bona fide course. I welcome these adjustments to the regulations.

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I would like to ask the Minister about one of the areas of abuse of minimum wage legislation that has been highlighted recently, which is interns. Are the Government considering that area of non-employment at the moment? What might happen in that area? However, in general, I welcome these amending regulations.

Lord Young of Norwood Green: My Lords, I am pleased to support this important piece of legislation which makes the necessary amendments to ensure that the annual rises are made to the national minimum wage and that they will come into force on 1 October 2011, raising the wages of something like 900,000 workers.

The national minimum wage was introduced by the Labour Government in 1999 in spite of all manner of scaremongering, particularly from some sections of the right-wing press and, as I recall, it was opposed by the Conservative Party at the time. When it was introduced, it raised pay for more than 2 million people, and thereafter the Labour Government ensured that there were regular, above-inflation increases, so that in the first 10 years of its existence, the national minimum wage rose by 59 per cent. There is no doubt that those increases have raised the living standards of the lowest paid and have helped to close the gap between men and women's pay.

I agree with the noble Lord, Lord Teverson, that it did away with what was in effect a state subsidy for those parts of the corporate sector that paid significantly less than the minimum wage. As we know, when those investigations took place, a wage of £1 an hour was not uncommon in certain parts of industry. In 2004, some 50,000 low-paid teenagers received a boost in income when a minimum wage for 16 and 17-year-olds was introduced. When the Conservative Party was opposing the introduction of the minimum wage before 1999, there were claims that it would cost some 2 million jobs. In practice, 3 million extra jobs were created in the following 10 years.

Despite the initial and determined opposition to the national minimum wage, it appears that it is now accepted by the main political parties. I was pleased to hear the Minister state that the Government disagree very strongly with the remarks made by the honourable Member for Shipley two weeks ago when he suggested that disabled people should be required to work for less than the national minimum wage. I welcome that assurance.

During the first 10 years of the national minimum wage, the level of the annual increases in the national minimum wage meant that overall it rose above the level of inflation. In the past couple of years, it has risen more or less in line with average earnings. However, it worries me that we are now seeing some very rapid rises in the price of basic foodstuffs, domestic fuel bills and vehicle fuel, which has a knock-on effect on public transport and many other products. If you are on a low income, food and fuel make up a higher percentage of your expenditure, and therefore you are particularly hard hit by these rises. We have seen some very steep rises in food prices and fuel prices in the past few months, and we may well see further increases in the next few months between now and 1 October 2011, the

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date when the increases in the national minimum wage that we are discussing today will be implemented. If these trends continue, the additional 15p per hour on the adult minimum wage, bringing it up to £6.08 an hour, which amounts to a 2.5 per cent increase, will soon be eliminated by price rises.

Put another way, this increase of 15p per hour amounts to an increase of £6 per week for a 40-hour week, while we are seeing price rises which will soon invalidate that. If these trends continue, clearly the Low Pay Commission will be taking into account these additional costs as it does its complex analysis and consultation before making its next recommendation. Once it has made its recommendation, it will of course be up to the Government of the day to decide whether to accept it. I urge the Government to accept that proportionately high increases in the national minimum wage may well be needed to ensure that it keeps pace with inflation, given the costs faced by low-income families. If we are to make work pay, which I know is an objective of this Government, it is particularly important that the national minimum wage reflects the reality of price increases that people are encountering.

I very much hope that the coalition Government will continue the policy we had in government of increasing the national minimum wage at or above the level of inflation and that there is no intention on their part to allow its real purchasing value to be eroded by a failure to increase it in line with the actual prices people have to pay to meet their basic needs. I express those fears because we have already seen the coalition Government decide to use the consumer prices index instead of the RPI to calculate rises in pensions and benefits. I note the increase in the apprentice rate from £2.50 to £2.60. I also note the valid points the Minister made about the accommodation offset and the consultation that took place.

The success of the national minimum wage depends in part on the ability to ensure successful enforcement as a deterrent to those employers who attempt to flout the legislation. Can the Minister give us the latest statistics from the Revenue on enforcement and the number of national minimum wage enquiries raised on the employee rights helpline? I understand that since I did not give notice of those questions, the Minister or his team may not have those statistics to hand. I would be happy if he would let me have those answers in writing. They are important to give us an understanding of where we are going on the national minimum wage. That said, the work of today's Committee is to pass the statutory instruments before us, and I am pleased to support them.

Lord De Mauley: My Lords, this has been an interesting short debate and I thank noble Lords for their contributions. The regulations concern important issues that support the Government's commitment to delivering fairness and supporting business. I believe that the provisions are fair and appropriate.

A number of points have been raised, so let me attempt to address them. My noble friend Lord Teverson commented on the use of the national minimum wage to ensure in the past that employers did not use the welfare state to subsidise their business, and I accept that. He also asked about interns and the Government

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recognise concerns about the risks of their exploitation. We are working to improve our guidance to clarify when individuals performing work experience, including interns, are entitled to the minimum wage. We will ensure that enforcement of the national minimum wage continues to be effective and that resources are focused where they will have maximum impact. HM Revenue & Customs will conduct a targeted enforcement campaign this year in sectors where internships are commonplace. Work experience as an intern, paid or unpaid, can be a valuable way for young people to gain the experience, skills and confidence that they need to get started in a career, thus improving their prospects. We want as many internship opportunities as possible to be made available to talented young people from all backgrounds, but we are clear that those who are entitled to the national minimum wage should receive it.

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