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That the Grand Committee do report to the House that it has considered the Designation of Features (Appeals) (England) Regulations 2012.
The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Lord Taylor of Holbeach): My Lords, the regulations are required to be made prior to the commencement of the substantive designation provisions under Section 30 of, and Schedule 1 to, the Flood and Water Management Act 2010.
The purpose of the appeal regulations is twofold. First, they will provide a safeguard for individuals whose property is affected by designation decisions and, secondly, they will ensure that risk management authorities are accountable for their decisions and will be open to transparent, legitimate challenge from individuals about their actions. These appeal regulations provide the owners of designated assets with the right of appeal to the First-tier Tribunal against the initial designation of a structure or feature, as well as against subsequent decisions relating to applications to alter, remove or replace a designated feature or to cancel a designation. A right of appeal is also provided against the issue of an enforcement notice for contravening a designation.
The appeal regulations provide that the First-tier Tribunal will hear all appeals under Schedule 1. In order to maintain the credibility of the Act and the efficacy of the designation regime, it is important that the appeals mechanism is independent, efficient and comprehensive, and is a fair and cost-effective way of adjudicating any disputes. The process for bringing an appeal is governed both by these regulations and by the Tribunal Procedure (First-tier Tribunal) (General Regulatory Chamber) Rules 2009.
Perhaps I can explain the nature of the provisions. Physical defences, such as walls, embankments and natural features, are relied upon to deliver much of
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In the Flood Water Management Act 2010, provision has been made in Section 30 and Schedule 1 to allow the Environment Agency, local authorities and internal drainage boards to designate third party structures or features which affect flood or coastal erosion risk. Designation requires the owner to seek consent from the appropriate risk management authority before altering, removing or replacing the structure or feature.
These provisions are required to prevent uncontrolled damage or removal of structures or natural or manmade features of the environment that perform a flood or coastal erosion risk management function. Further details on the designation process, including appeals, can be found in the public information leaflet and the guidance document produced by Defra and laid for information with these appeal regulations.
The requirement to provide a right of appeal by way of these regulations is contained in paragraph 15 of Schedule 1. Section 30 and Schedule 1 were commenced in April last year in so far as they provide the power to make the regulations. The substantive provisions relating to the regime for the designation of structures or features cannot be implemented without the appeals regulations. The designation regime provides protection for and restrictions on private assets in the public interest. The appeals regulations provide protection for private rights affected by designation and it is a necessary balance that they do so. These appeal regulations are a necessary and appropriate statutory obligation. I therefore commend the draft regulations to the Grand Committee.
Lord Greaves: I do not have a great deal to say about this on behalf of the Liberal Democrats. The regulations, which the Minister has explained very well, come from the Flood and Water Management Act. I suppose this little gathering today allows a certain amount of nostalgia from some of us who were involved in the passage of that Act, as often happens with these orders. These are sensible and welcome provisions. Does this mean that the designation of features can now go ahead or is there anything else standing in the way before this process takes place? As the Minister said, it is a process that was found lacking as a result of the experience in 2007. It is welcome that the recommendation from Sir Michael Pitt's mammoth report is now filtering its way-if that is the right word to use in connection with water-down the system and that we are now on the point of approving these regulations, which we certainly support.
Lord Knight of Weymouth: My Lords, as I discovered to my cost 10 days ago, I am a property owner in an area that gets flooded and there may be something on my property that at some point might get designated, so I declare that from the outset. Clearly the instrument
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I certainly know from where I live down in Dorset, where the River Wey and its tributaries got deluged 10 days ago and we had extensive flooding, that the complex arrangements of culverts and of different parts of the built environment in the Weymouth and Upwey area are interfered with at our risk. I know that the Environment Agency has done various bits of work over the last 20 years to mitigate the risk and I do not think there is much they could have done about it given the quantity of rainfall. However, I am certainly supportive of wanting to protect those assets as long as property owners get some advice from the Environment Agency, local authority or internal drainage board as to what they are dealing with. I think that this designation process will certainly help.
The regulations aim to strengthen the existing standard of protection for flood defences for third-party assets and to allow local authorities and drainage boards to extend protection of those assets, so we welcome the instrument. It is an important part of establishing a more transparent and accountable way of protecting those defences. However, it will do little to recover the losses the community will suffer from the cuts to flood defence spending, which concern me. There have been cuts of 27% despite the fact that we know how valuable such an investment is-every pound spent on flood defences reaps £8 in investment. I am increasingly concerned about our resilience to flooding as we move into the winter. Certainly, in my area the Environment Agency tells me that it looks as if we might go into the winter with winter levels of groundwater. That makes us extremely vulnerable as we would normally expect much higher quantities of rainfall then. That is then set against a backdrop that I see in the Defra business plan for 2012-14 of a 7.5% reduction in staffing costs across the Defra family.
I do not want to see the Environment Agency losing any more of its staff around flood resilience. I already know from the flooding incidents 10 days ago that it was wrong-footed by a Met Office forecast, which meant that the south-west people were flown up to Newcastle because they thought the flooding was going to be in the north-east and not in the south-west. The people we needed on the ground to provide proper warnings and safeguards to us were, by and large, not there. That suggests that we are already at the most extreme end of our resilience in terms of staffing, and I will be interested in the Minister's comments on that.
I welcome progress on the implementation of Sir Michael Pitt's recommendations, however slowly they may come into force, and I welcome the establishment of the First-tier Tribunal for the appeals. I do not oppose the structure, which seems sensible. I understand that the designation process will be risk-based as well
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In conclusion, we do not oppose the instrument establishing an appeals process but we would like the Minister to explain briefly the guidance that will be provided to authorities to ensure that decisions to delegate flood defences as such are made according to clear guidance to ensure the number of appeals to the tribunal is kept to a minimum.
Lord Taylor of Holbeach: I thank noble Lords for the welcome they have given to these regulations. Indeed, I think we in this House maintained near cross-party unanimity on the need for the Flood and Water Management Bill, which has become an Act. When we were discussing it, we recognised that it derived from adverse situations in 2007. I am sorry to hear of the noble Lord's experience. He is not alone in having experienced flooding but I recognise that it is not a very pleasant experience, having suffered it once myself. I join him in acknowledging the role that the Environment Agency has played during these past few weeks. I have not heard a word of criticism of the way that it has performed and I would like to put on the record the gratitude of Defra and the Government for the role that the Environment Agency has played.
The noble Lord, Lord Knight, challenged me on the staffing cuts that Defra has undertaken. He will know, as all noble Lords do, that the current economic situation has meant that the Government have had to look at ways of reducing cost. However, the key thing has been to try to maintain sharp-end capacity and that is certainly what the Environment Agency's response to these recent events has shown.
As noble Lords will know, the strategy against which all these matters are considered is contained within the Flood and Water Management Act, flood management plans and flood risk strategies, with the lead local authority and the Environment Agency working together to formulate management plans. That was contained in the Act and forms the background against which actions will take place.
Tabled for the convenience of noble Lords are copies of the publication about the designation, which I recommend that they read, because they reinforce the thoroughness with which that has been undertaken. It has been published jointly by Defra and the Welsh Government. It provides the framework against which designation will be maintained and guidance for individuals whose property may be so designated, so that asset owners also have a guide.
The way in which noble Lords have welcomed the regulations is very satisfactory. My noble friend Lord Greaves asked: where does that place the substantive set of regulations? Following the passage of the appeal
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That the Grand Committee do report to the House that it has considered the Public Bodies (Abolition of Environment Protection Advisory Committees) Order 2012.
Relevant document: 4th Report from the Secondary Legislation Scrutiny Committee; 3rd Report from the Joint Committee on Statutory Instruments
The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Lord Taylor of Holbeach): My Lords, in moving the Motion, I shall speak also to the subsequent statutory instrument, to which we may speak if your Lordships wish. The two orders have been considered in conjunction with one another during scrutiny; hence I think it would be most helpful to refer to them together.
The orders are to be made under the Public Bodies Act 2011. They will abolish the six regional and local fisheries advisory committees in England and the six environmental protection advisory committees in England and pave the way for more flexible, non-statutory engagement arrangements that can evolve and respond to the needs and delivery of environmental objectives.
Both sets of committees have provided valuable advice to the Environment Agency, and it will continue to need such advice. I thank all those who have been so engaged. However, we believe that a non-statutory approach to engagement could provide greater flexibility at a more local, catchment-based level. That will enable civil society and local communities to provide advice directly to the Environment Agency and to be involved and empowered to take the lead, where appropriate, on delivering environmental outcomes rather than continue the current focus on just providing advice.
As set out in the explanatory documents, in developing the successor arrangements, each of the Environment Agency's six operating regions in England has produced an engagement model, with input from existing committees and through discussion with local partners. A broad range of interactions is proposed. The regional engagement models show the relationship between the various fora-from national strategy through to local action and delivery. The models are region-specific and flexible. They will evolve over time, based on continual review by the groups involved against environmental priorities, which may vary one from another. This will ensure that the models for engagement
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In its consideration of the orders, the Secondary Legislation Scrutiny Committee concluded in its fourth report of the 2012-13 Session that it was content to clear these draft public bodies orders within the 40-day affirmative procedure. However, it had two recommendations. The first suggested that,
I assure the Committee that my department and the Environment Agency have agreed a formal review of successor arrangements within two years of the committees being abolished. Ahead of that review, the Environment Agency will undertake stakeholder engagement to allow local, regional and national customers and stakeholders to comment on how the engagement approaches, as described in the regional models, have been embedded. Based on the views of stakeholders and customers, the focus of the review will be to ensure that the right engagement happens in the right place to achieve this local, regional and national buy-in, while adapting to local needs and priorities. The review will be an important reassurance that the regional models reflect the needs of stakeholders and customers in delivering environmental outcomes.
The Environment Agency's remit, as set out in the management statement and statutory Section 4 guidance, published in accordance with the Environment Act 1995, makes it clear that the Environment Agency must work closely with a wide range of partners in the public, local community, private and civil society sectors. The statutory guidance and remit provide a clear requirement to engage and consult widely, which the Environment Agency already delivers on a regional level through, for example, the river basin liaison panels, local enterprise partnerships and various fishery forums.
With regard to publicising meetings and events with key stakeholders, the Environment Agency has developed and made good use of social media. It is anticipated that social media, along with traditional forms of communication, will be extensively used to advertise meetings and events linked to local engagement models.
I hope that noble Lords can see that we are ready for change. The committees have made a valuable contribution but we believe that the proposed arrangements will provide more flexible local, community
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Lord Greaves: My Lords, the orders stem from the proposals in the Public Bodies Act, on which we had some extensive and interesting discussions- coincidentally, with the same Minister, and he did a sterling job on that Bill. We are now discussing just two groups of bodies: the regional and local fisheries advisory committees and the environment protection advisory committees.
The first thing that I can say may be considered to be a typical niggle coming from me, but I find some of the language used in these reports a bit over the top and I wonder what it all means. I think that I know what it means, because I look at the detail, but I still do not like the language. For example, page 4 of the explanatory document for the environment protection advisory committees order-the same language is used in the other one, too-states:
I have to say that I find this language difficult to understand. I would be interested if somebody had to write an examination answer on what it means. I have spent a great deal of time, including struggling with the 450 pages of the Localism Bill, trying to understand what localism and the big society agendas really are and I am still struggling. I understand a lot of the detailed stuff which comes out allegedly as part of these agendas, but what it all means as an overall strategy is still a mystery hidden in the fogs of some of the upper echelons of the Government. However, the details here are much easier to understand.
We welcome the increased emphasis on catchment areas, which have always been difficult for public authorities to deal with, because they very rarely coincide with administrative and local authority boundaries. They are difficult to deal with, but, if you are dealing with flooding, the catchments are the most important of all.
The documents make it clear that the measures are not a matter of saving money or part of the cuts, and that the amounts being saved will come from, for example, the salaries of chairs of the bodies. I understand that existing staff resources will be redeployed to make sure the new non-statutory, flexible arrangements are fit for particular purposes. Will my noble friend the Minister confirm that that is the case and that this is not a cost-cutting exercise? Page 7 of the first of the explanatory documents states:
I am not quite sure why it says that, because I thought that cost/benefit analyses took into account non-economic terms as well, but never mind: if it is not a cost-saving measure and a matter of doing things better, that is okay.
The Minister referred to the recommendations of the scrutiny committee. I was not sure whether he was saying that the two-year review will take place. Perhaps he can clarify that or whether other arrangements will be made to make sure that monitoring and reviewing take place. On the recommendation that there should be regular meetings with the "key regional stakeholders"-I say that biting my tongue and making the words come out of my mouth-was the Minister saying that those meetings will take place or that they are not necessary because they will form part of the new arrangements anyway?
Finally, the Minister said that they will make use of social media. I think I know what social media are, but I am not sure that everyone tweeting each other all the time is the way to do this. Is he talking about more conventional websites and forums, rather than the frantic arrangements that one finds on things such as Twitter and Facebook, which seem to me not the media that should be used in this context? Perhaps I am out of date.
Lord Whitty: My Lords, I start by declaring an interest as a shortly-to-be-retiring-I regret-member of the board of the Environment Agency. In that context, I thank the Minister very much for his remarks about the performance of the agency staff during the great difficulty of having four or five serious flood instances in different parts of the country at more or less the same time, which is, thank God, a pretty unusual event. I think that the agency delivered.
I also need to inform the Minister that to some extent I am here to represent my noble friend Lord Smith of Finsbury, who is chair of the Environment Agency and who apologises for not being here today. Much of what I say reflects his views although, as I am retiring from the board, I can also make my own remarks.
I welcome the changes. The noble Lord, Lord Greaves, has already referred to the rather lengthy proceedings that the Minister had to undergo in his previous capacity during the passage of the Public Bodies Bill, which he no doubt recalls without great nostalgia. The order concerns the sole part of the Bill to which I did not object. That is because, in this instance, a statutory structure is not necessarily the best way to carry out partnership, share information and mobilise members outside the agency. It is important that the work of the advisory committees is recognised. The people who have served on them have given stalwart service and have tried to represent the interests involved in delivering environmental and fishery outcomes but also to feed back information from the agency to those bodies.
However, there are probably better and certainly more flexible ways to do that which are more nimble and able to move with the times. I have some slight sympathy with the view of the noble Lord, Lord Greaves, of the more advanced forms of social media-
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When Defra consulted on that, there was not a huge number of responses. Of those who responded, those for and against were more or less in balance. There was a distinct negative balance in the north-west-as the noble Lord, Lord Greaves, will be pleased to hear. That is not necessarily because they are more stroppy in the north-west. The agency has therefore taken steps to address the situation in the north-west, including a proactive use of social media. I think that it is true to say that most organisations in the north-west are now satisfied that the new forms of consultation will be an adequate replacement.
In my own area, which is the same as that of the noble Lord, Lord Knight, the Environment Agency has developed from a situation a few years ago where it was not seen as the most user-friendly organisation to having much more constructive relationships with organisations involved in these fields. For example, people will know that fishermen are not necessarily the easiest people to engage with, particularly if one is from a public body, but the relationship between the agency and the organisations involved in fisheries in the south-west has become very positive on the salmon, trout and coarse fishing side. We have for some time had a fisheries forum. That will be built upon and the relationships at different, more local levels will replace the rather centralised operation of the advisory committees. The situation is similar with the rivers and the river trusts in the area. Indeed, I am aware that in some areas the river trusts are taking on some responsibilities from the agency.
The abolition of the committees, while they were useful, is likely to be replaced by something more positive that will deliver the environmental outcomes that we all seek, whether it is on the electronic consultation and social media side or, possibly more importantly, the overall engagement. I know that the noble Lord, Lord Greaves, also objects to some of the conceptual terms in there, which I do not entirely dissent from. However, there is a degree of empowerment here. Bodies on the ground are taking responsibility in keeping the agency informed and being guided by the agency in dealing with incidents. For example, on rivers where there are not major flooding incidents, it takes first-line responsibility. That is quite important.
Lord Whitty: My Lords, I probably share that view. However, the reality is that it allows more people to be engaged and to take responsibility. To that extent, I share the objectives of the Government. The only note of caution I introduce is that the processes of engagement, empowerment and partnership-all abstract terms but
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In other words, the big society-if one was to call it that-is not costless. In some ways, it may be more costly than more centrally directed activities and institutionalised responsibilities. At the worst end under the old system, a member of staff might well worry about the advisory committee a month before it is due to meet and write appropriate papers and probably get a decent outcome. However, this requires a year-long engagement with the bodies that are represented on those committees. So, from the point of view of agency staff resources, this does not really save money. I know its primary aim is not to save money but to come up with a better system but, nevertheless, the Explanatory Note suggests that some of the formal money will be saved. It will not be saved. It will be deployed in a more effective way and there will be, if anything, more pressure on staff than under the old system. Subject to that caveat and the fact that we will at some point review these proceedings and changes to see if they are working, I support the Minister in these orders.
Lord Knight of Weymouth: My Lords, I, too, support the orders. As ever, it is a delight to come back to public bodies orders and to reminisce about some of the Minister's finest moments in the main Chamber working on that Bill. I am sure that he will recall better than I that when these bodies were discussed, my noble friend Lord Grantchester broadly welcomed the move to rationalise the system. At the heart of this is ensuring that stakeholders around fishing are properly engaged. That means not just the professional people and businesses that are dependent upon fishing and angling but the more than 6 million people who over the past two years have indulged in some form of freshwater fishing. This is an important issue for a large number of people.
My questions concern the two key areas. I pay tribute to the Secondary Legislation Scrutiny Committee, whose fourth report on the Session I found extremely helpful in getting my head around these orders. I start with the issue of accountability, which, as the Minister said, is the main issue about which the committee had concerns. He reminded us that its recommendation was for the Government to reconsider the need for formal monitoring and evaluation of the successor arrangements, and I welcome what he said about reviews. This is a "big society" approach, replacing a fairly complex set of statutory bodies-regional quangos, if you like-with a different form of engagement with civil society in local communities.
There is a concern that, in the absence of a formal set of structures, there will be reduced accountability, and I am sure that the review will focus on making sure that that has worked well. I would be grateful for a little more detail about how the review might work; who it might be led by, whether that person will be independent of Defra and whether the report will be published and the process transparent so that we can properly scrutinise
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On effectiveness, the Explanatory Memorandum talks about the need for effective local stakeholder engagement and partnership. It is clear that the money currently being spent on these sets of bodies-£225,000 and £192,000 respectively-is being reinvested in that engagement. I would be interested to know a little more about how that money might be spent. Perhaps unlike the noble Lord, Lord Greaves, I am quite an enthusiast for communication through social media. Indeed, in the recent flooding incident, one of the things that was quite striking was that these days the telephone is a far less reliable form of communication because most of us no longer just have a telephone that plugs into the wall and is powered off the little bit of power that comes out of the phone line; most of us have wireless phones that depend on mains power. If you are going through a flood, for example, you turn off that mains power and then your phone does not work. One of the advantages of using social media is that for many of us they are run off our smartphones or mobiles. It is difficult for any agency to keep up with the changes that people make to their mobile phone numbers, but engaging with apps, Twitter and even Facebook seems to be quite an effective way of adding a bit of resilience as technology changes.
Lord Greaves: The noble Lord was kind enough to refer to my scepticism. Does he agree that for rapid dissemination of information-for example, that flooding is likely, has started or whatever-social media such as Twitter come into their own and are brilliant, but that for more considered consultation, people putting forward their views and so on, slightly less frenetic forms of social media that are not clogged up with 95% dross are a better way of doing it?
Lord Knight of Weymouth: I certainly agree that if you need to get information out very rapidly, media such as Twitter are helpful, but in an emergency, cell broadcasting is the most effective because you can get to every mobile phone within a cell area. I think that the Environment Agency is looking at how that might be used.
I was going on to address the other point made about more sustained, ongoing stakeholder engagement. It is notable to look at how the really large commercial interests, the large retailers, are using Facebook, for example, to create massive communities of people around Facebook pages, particularly in the United States. Twitter is as good as the people you want to follow. If you choose to follow people who post only dross, you will get a lot of dross, but if you choose to unfollow the dross, you will get what you want. It is entirely up to you.
Without being distracted by the use of social media in these things, the more serious issue is to try to understand a little more from the Minister about how it might work. Will the money be spent on apps, webinars and tweet-meets? In particular, what proportion and how much will be spent on staff against this difficult fiscal environment and the pressure to reduce staffing costs? Will Defra monitor the staffing arrangements to ensure that there are enough people on the ground? Here, I might have common cause with the noble Lord, Lord Greaves. We cannot solely rely on technology because some people find it difficult to engage with technology or, surprising as it may seem, do not even want to. Often, the technology can create the noise and the interest, and bring people together, but you still need people on the ground to engage with people and with that technology.
If the Minister can give me some answers about how the review would work and how this money will be reinvested, I will be delighted. Suffice to say that I do not want to oppose the orders. I am happy to let a more catchment-based and more community-based approach operate and see how it is reviewed.
Lord Taylor of Holbeach: My Lords, again, I am very grateful to all noble Lords who have spoken and for the welcome that they have given these two draft orders. I think that there is an understanding that this represents a new way of working and doing things better. It is not about saving money; it is about engagement and providing the opportunity for fuller participation. If my noble friend Lord Greaves found the section on civil and big society vexing in its use of language, I recommend to noble Lords that they read the Explanatory Memorandum. Although it has a rather stiff and starchy front, which they all have, when you get into it, it is full of useful recommendations.
Lord Taylor of Holbeach: I know that my noble friend clearly got beyond page 4 and got well into the subject, as I would have expected him to have done. It is a very useful document, which gives a lot of illustrations which will help to reassure noble Lords about what is involved. It is about getting people involved and facilitating engagement.
It also is about a new way of working on catchment areas. I saw a map of European catchment areas the other day and it is remarkable how catchments for the United Kingdom are so much more appropriate because we have such a variety of river basins, whereas some larger countries in Europe, such as Germany, have relatively few but substantial rivers. We have a large number of rivers and it is quite right that we deal with them on the basis of catchments.
I can reassure noble Lords that there will be a review after two years. We will review progress jointly with the Environment Agency against the high-level principles. Ahead of the review, we will engage with stakeholders to allow them and local and national customers to comment on how everything has gone. Through that process, we hope to inform the Environment Agency how the policy is going forward.
There was a certain amount of jesting about social media. I probably come half way between the noble Lord, Lord Knight, and my noble friend Lord Greaves. I am certainly less familiar than the noble Lord with Twitter and such things. The Explanatory Memorandum contains examples of how social media are already being used. I draw the attention of the noble Lord, Lord Knight, to pages 42 to 45 for examples of what has already been developed. The noble Lord, Lord Whitty, mentioned the engagement that has already occurred in the north-west. At yorkshirefishing.net, anglers had a two-hour online question-and-answer session with the Environment Agency's fisheries and biodiversity team. Those are the sort of things which I see justifying the use of social media as means of engagement. I think that all noble Lords will recognise that, over time, their use will become much more customary and a part of the formal pattern of things.
My noble friend Lord Greaves and the noble Lord, Lord Knight, wanted to examine where the money would be used. No savings are being made here, but some money will be able to be redirected. That will be used to support the new England and Wales Fisheries Group. This group will monitor further changes needed for the regional models to be able to engage the right people at the right time. The money will go back into the kitty. It is anticipated that some further resources may be needed to support engagement. For example, the Environment Agency in the south-west has committed funding to provide a local angling development board and an angling development officer. Those are useful examples of the recreational opportunities which such engagement will provide.
I hope that the further reassurances that I have given will ease the way towards the next and final stage of the process, which started some 21 months ago. To this end, I commend the two orders to the Committee.
That the Grand Committee do report to the House that it has considered the Public Bodies (Abolition of Regional and Local Fisheries Advisory Committees) Order 2012.
Relevant documents: 4th Report from the Secondary Legislation Scrutiny Committee and 3rd Report from the Joint Committee on Statutory Instruments.
That the Grand Committee do report to the House that it has considered the Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) Order 2012.
The Commercial Secretary to the Treasury (Lord Sassoon): My Lords, these regulations were laid before the House on 14 June and implement changes to legislation, now required under EU law, to ensure that UK financial services and commodity trading firms are able to bid in auctions of emissions allowances in the UK and across Europe. It is important that the UK allows these firms to bid in auctions of emissions allowances to maintain London's position at the heart of the carbon market, of which it currently enjoys an 80% global share.
The EU Emissions Trading Scheme was the world's first and largest international scheme for the trading of greenhouse gas emissions and is at the heart of the UK Government's policy to tackle climate change cost-effectively. It is estimated that the EU Emissions Trading Scheme will deliver emissions reductions of 3,100 metric tonnes of CO2, relative to 2005 levels, between 2013 and 2020. Across the EU, it is predicted to deliver emissions savings of 21% below 2005's verified emissions by 2020. There will also be a dramatic rise in the level of auctioning. This is in line with the market-based approach of the scheme and best ensures the efficiency of the system.
As the system moves to a greater level of auctioning, it is important to ensure confidence and integrity in it and in the way that auctions are run, so the EU regulatory framework for auctions has been strengthened and introduces common EU standards for regulating certain bidders in the auctioning of emissions allowances. It is up to each member state to implement this framework in accordance with its own national laws. This includes requiring certain bidders in the auctions to be authorised by national authorities: for the UK, that is the Financial Services Authority. To minimise administrative burdens, these regulations apply only to banks, investment banks and credit institutions when wishing to bid in auctions on behalf of others, and to commodity traders when bidding in their own right or on behalf of others. Under the EU rules, eligible participants in the EU ETS will be able to bid directly, subject to meeting certain admission requirements, without FSA authorisation. However, it is likely that financial institutions will provide an important means for operators to enter the market where direct bidding is not practical or desirable.
Implementing these changes will result in the Financial Services Authority gaining powers to authorise those financial services to bid in auctions of emissions allowances across Europe. To achieve this, the regulations amend secondary legislation relating to FiSMA, the Financial Services and Markets Act, and make minor amendments
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It is important to note that only those financial services firms wishing to bid in auctions of emissions allowances will be subject to these regulations and need to be authorised by the FSA. Firms will therefore seek authorisation to bid only if they consider that it will provide a financial return to them.
It is important that we make these legislative changes now, before the first auctions of phase 3 and aviation emissions allowances begin. The first UK auctions will take place in November this year, subject to EU approval. Germany and the European Commission have also indicated that they will begin auctioning allowances after the summer on their own platforms.
In summary, these legislative changes are required by EU law so that UK-based firms can participate in auctions of emissions allowances across Europe and provide services to others wishing to buy allowances. The changes are necessary to preserve London's position at the heart of, and leading, the developing carbon market.
Lord Davies of Oldham: My Lords, what a joy it is to discuss with the Minister, after a fairly contentious issue last night-namely, the Government's Finance Bill-this instrument, a measure that is not only uncontentious but is in fact welcomed by the Opposition. I agree with the rationale that he has given both for the necessity of the measure and the benefits that it will bring regarding access to the auctioning of greenhouse gas emission allowances.
We have one or two questions that I am sure that the Minister will be more than ready to answer. Is he as surprised as I am that, from what one can gather, the consultation, which, admittedly, ran for a very limited period, heard from only one respondent? This must surely be some kind of record. It indicates either that the measure is beyond reproach in every way-the answer that the Minister will certainly favour-or that it presents a limited opportunity. Small and medium-sized enterprises do not appear to think that they have much opportunity under the order. Does he have any comments to make on that?
I would be interested to see just how the Minister evaluates the significance of the measure in the Government's overall objectives regarding climate change. Not only do we share those objectives but we are keen that the Government continue to sustain the policy to hit the targets that have been established for a considerable time now. I note the urgency of the situation, given that European auctions are taking place in the fairly near future. That is required under EU law and it is only right that the measure is before us. We give it our fullest support.
Lord Sassoon: My Lords, I am grateful to the noble Lord, Lord Davies of Oldham, for making sure that our afternoon is not quite as exciting as the close of business last night. I thank him for his support for the measure, which is, rightly, seen not only as uncontentious but as supportive of this important area of policy development. In response to his question about the consultation, I can tell him that it lasted for eight weeks. I believe the lack of substantive responses is a reflection that this is a very simple measure, which simply extends the requirement of authorisation to firms if they want to continue to operate in the EU auction process as it moves into this new phase 3. I am not at all surprised or in any way concerned by the lack of substantive responses. As the noble Lord says, there was one, but I believe that it was pointing out something in the grammar or the spelling of the rules, which it is important to get right-I know that your Lordships' are always very keen, as respondents to consultations are, to make sure we get the grammar right.
On the noble Lord's point about SMEs, I do not see it in the way that he sees it. Principally, this is a sophisticated market-trading in emissions is not something that the man or woman on the street would do. We are talking about, on the whole, sophisticated commodity trading firms or large financial intermediaries, so the measure is not targeted at SMEs directly. They will be the ultimate users and beneficiaries of the broad emissions system being put in place, but they are not likely to be players. On the other hand, if they want to be players, as the impact assessment set out, the costs of going through the registration authorisation process are not onerous.
On the noble Lord's last point about how the order fits within the objective of meeting the climate change targets, I confirm what I said in opening. This Government, like the previous Government, are keen to see a market-based solution as far as possible to meeting the targets-the emissions trading system and auctioning very much underpin the market-based approach. In that context, this is a small additional measure to make sure that the auctioning element of this construct is properly regulated. I hope that that answers the noble Lord's questions.
That the Grand Committee do report to the House that it has considered the Equality Act 2010 (Age Exceptions) Order 2012.
Baroness Verma: My Lords, I am pleased to confirm to the Committee that from 1 October 2012 our intention is that it will no longer be lawful to provide inferior goods, services or facilities, or simply to refuse to provide them at all, because of a customer's age. This includes public services such as health and social care. Unjustified age discrimination is already prohibited in the workplace. After extensive consultation and deliberation over recent years and by different Administrations, it is now time to complete the task and end such discrimination in the provision of services. We are doing this by implementing the prohibition on such discrimination in the Equality Act 2010, which had cross-party support during its passage through your Lordships' House. Alongside the prohibition on unjustified age discrimination I am pleased to present this draft order, which contains necessary exemptions to it. With Parliament's approval, this order will come into force on 1 October 2012, alongside the prohibition.
I turn now to the specifics. Harassment and victimisation related to age will be banned without exception. However, concerning discrimination itself, we need to ensure that the new law prohibits only harmful or unjustifiable discrimination because of age. It should not outlaw the many instances of justifiably different treatment. Nor should it have the practical effect of ending such treatment. The draft order therefore sets out a number of targeted exceptions to the ban on direct age discrimination. They add provisions to Section 195 of-and Schedules 3 and 16 to-the Act under the power contained in Section 197. Those exceptions specify particular types of age-based actions, measures and practices that we consider to be justifiable, beneficial or needed for sound public policy reasons. The exceptions will provide legal certainty for both service providers and customers. Extensive consultation on that issue in 2009, and again in 2011, has helped us to decide where exceptions are needed and what shape they should take.
I will now briefly run through the exceptions in order. The specific exception for immigration in Article 2 allows immigration officers to continue to consider age when determining a person's eligibility to enter and remain in the UK. For example, it would permit the continuation of the youth mobility scheme, which allows young people aged 18 to 30 to come to the UK for a limited period to experience life here and perhaps earn some money.
Article 3 allows financial service providers, such as banks and insurance companies, to continue to use age to determine, for example, the products and prices that they offer. Financial service companies need to factor age into their products and prices, because people of different ages carry different risks. The most obvious example is that of insurance. However, the exception is qualified because it requires any risk assessments related to age to be based on relevant information from a source on which it is reasonable for the provider to rely. We know that some older people, in particular, are concerned about access to insurance, so we have also endorsed a voluntary agreement by the insurance industry to improve that. The agreement started on 6 April this year and commits insurance companies to signpost customers to different providers
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On concessionary services, Article 4 is probably the widest ranging exception and one particularly welcomed by small business. It allows any service provider to offer a concessionary service based on age: for example, enabling a hairdresser or someone who owns a fish and chip shop to continue to offer discounts for pensioners.
Article 5 is an exception for age-related group holidays. It may be helpful to your Lordships if I touch on our overall approach to applying the prohibition to the holiday sector. We have taken the view that the provision of holiday accommodation, be it a hotel, chalet or rented cottage, should not be treated differently to the provision of other mainstream goods and services such as shops and restaurants. For example, while a hotel or cottage owner could offer discounted rates to pensioners, taking advantage of the exception in Article 4 which I previously described, they could not refuse to let rooms or their property to adults aged under 25 or 21 without showing sufficient reason-for example, evidence that their property had been damaged by younger people in the past. I refer to younger adults because the ban does not protect children, so hotels and restaurants can still lawfully have a "no children" policy from 1 October.
Our proposed treatment of some holidays, as opposed to holiday accommodation, is somewhat different for a particular reason. Rather than applying to holiday providers as a whole, the exception in Article 5 addresses the specific and limited circumstances of package holidays designed for people in certain age groups. In other words, it applies where mixing with people of a similar age is a key element of the product and its enjoyment. For example, when the product includes travel to the holiday destination, accommodation and activities during the vacation, this would qualify as a "relevant holiday service" for the purposes of the exception. Noble Lords may recall that this was an exception called for by several noble Lords in this House during the passage of the Equality Bill in 2009 and we have been convinced by those arguments.
Article 6 covers age verification schemes, which are used by retailers selling age-restricted products when they challenge customers where there is a doubt that they are not old enough to purchase the product. The exception allows this to continue so that retailers can, for example, ask for proof of age before selling products such as alcohol or cigarettes. This new exception was added following the last consultation.
Article 7 covers residential mobile homes in which people live as their main residence, but not holiday lets. This exception recognises that there is an important quality of life issue for people who want to live among others of a similar age group in contrast to the transient nature of holidays. It accordingly allows operators of residential park home sites to continue to include age limits in their park admission rules and other arrangements in respect of the sale and occupation of pitches and mobile homes.
Article 8 inserts a new exception into Schedule 16 to the Equality Act allowing, for example, golf clubs to offer concessions to members above or below a
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As well as the specific exceptions in this order, the Equality Act contains a statutory authority exception, which allows differential treatment based on age where this is required or allowed by statute. For example, exceptions to charges for prescriptions and eyesight tests based on age are provided for in legislation, as is the age of entitlement for the state pension and things such as free bus passes.
Exceptions are not the only means available to service providers wishing or needing to treat customers differently on the basis of age. Under the Act, it will be possible for service providers to justify treatment that would otherwise amount to direct or indirect age discrimination. They can discriminate where they can show that it is a proportionate means of achieving a legitimate aim. That is the legal wording but, less formally, this test is known as objective justification.
I gave an example earlier of a holiday cottage owner not wishing to rent to very young adults because their cottage had been damaged by such people in the past. Another example of objective justification might be a car rental company that has had several of its cars written off by drivers aged under 25 or over 75. It could decide not to rent cars to people in those age groups or perhaps to charge them a little more. It could seek to justify that by pointing to the need to reduce road accidents generally and particularly those caused by its clients. It might also, for example, argue that it needed to run its business efficiently. Whatever case the company might make, it would need to demonstrate how the remedy adopted was proportionate to the aim. If someone then took the company to court for not renting them a vehicle or offering them a vehicle on less favourable terms, the court would have to decide whether the company's actions were legitimate in all the circumstances.
There is widespread acknowledgement that we need to do more to address the growing evidence of poor or inferior treatment of older citizens by the health service and in social care. That is not of course to say that all who work in these sectors are discriminating in this way, but a series of recent reports have exposed existing shortcomings. Therefore, there are no specific exceptions from age discrimination for health or social care.
The ban is not the whole answer. The NHS and the social care sector are making great strides to improve the experience of older customers, in particular, but where things continue to go wrong the ban will provide a valuable new means of redress for patients. Therefore, whenever different treatment is proposed or provided for patients because of their age, the health or care provider will have to objectively justify it, if challenged. I believe that this meets our intention to eliminate harmful age discrimination in an area where the greatest concern has been expressed. At the same time, we are
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This legislation is targeted, fair and proportionate. We have consulted extensively on it. The vast majority of businesses and organisations will be able to continue to operate as usual, and certain areas will be exempt from the ban altogether. The new law prohibits only harmful or unjustifiable treatment that results in genuinely unfair discrimination because of age. It will not outlaw the many instances of different treatment that are either justifiable or do not give rise to harm. I commend the order to the Committee.
Baroness Thornton: My Lords, I thank the Minister for her very good explanation of this rather straightforward order. The order arises out of the Equality Act 2010, which my noble friend Lady Royall and I took through the House before the general election. There are two areas that I want to explore.
We welcome the implementation at last of Labour's age discrimination legislation and the fact that that the Act will come into force in October. What preparatory work is being undertaken to explain and publicise this important legislation and which government departments are involved in its implementation and rollout? Is it, for example, BIS or the DWP? Is support being given to employers and employees? Perhaps the Department of Health-to which I will return-is involved as well. Who is leading on the preparation for rollout of the legislation in October? Is it the Government Equalities Office or the EHRC? What quantum of resources might be applied to it? The impact assessment, which came with the helpful notes accompanying the order, explains what the impact might be on businesses, charities and voluntary and public sector bodies; it does not say what resources might be put into explaining and promoting the legislation.
I welcomed the Minister's mentioning the Government's awareness of issues relating to discrimination in health services, because, even at Question Time today and as the Minister will know, a noble Baroness mentioned that older people with depression are not being offered talking therapies because of their age. The breast cancer charities produce enormous amounts of evidence that suggests that older women with breast cancer are routinely undertreated.
Are the Government still refusing to implement the dual discrimination provisions in the Equality Act which will make it easier to challenge the multiple layers of discrimination that older people face, such as the toxic combination of ageism and sexism? The Secretary of State said on 15 May that there would be a delay to the commencement of the dual discrimination provisions. What does that mean? How long is that delay going to be? When can we see orders which implement those provisions, or an intention to do so?
During the passage of the Bill in another place, the Minister's colleague, Lynne Featherstone, put down an amendment which suggested that the Bill be implemented within six months of its passage, because she did not trust what might happen after the general
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I turn to the orders in front of us today. Of course we welcome them; why would we not? They directly arise from commitments given during the course of the Bill in February and March 2010. There were serious discussions during that period with Saga, Age UK and organisations that provide financial services about what those exceptions should be. The continuing consultation seems to have covered most of those points. My only question about the consultation arises from the fact that Age UK mounted a campaign objecting to the proposed specific extension of financial services, because in its view that would continue to perpetuate the culture of ageism. What is the Government's view of that campaign? The 17 campaign letters received from Cornish self-catering holiday home workers seeking a specific exception to ban young people from their accommodation have my total sympathy, when one hears about what young people get up to in Cornwall after their exams.
We welcome this measure. We think it is important, and I hope that the Government are going to put resources into supporting organisations and people during its implementation in October. During the debate in March 2010 there was cross-party agreement in the House about these exceptions, and I think that the Government have covered all the issues that needed to be covered. My only questions are about its implementation, resources and publicisation, and ensuring that all the people who should know about this will know about it.
Baroness Howe of Idlicote: My Lords, I, too, congratulate the Government on the great deal that has been achieved. I have memories of the heavy support for Saga initiatives and so on, which clearly have been very well handled subsequently.
I have a specific question about the Equality and Human Rights Commission. I happen to have been seeing the commission about another matter today, and as a result have received some comments about the articles that we are discussing. My general question, and I will back this up in a minute with a specific one, is whether the Government have had more recent detailed discussions with the EHRC and made certain that it is satisfied. I am thinking particularly about Article 4, "Exceptions for concessionary services". The commission says:
"In its 2011 consultation response, the Commission noted that the exception for general beneficial concessions was limited by a test of reasonableness. The exception also contained a requirement that the concession (or more favourable term) did not have the effect of preventing persons of other age groups from requiring the services. However, in the version of the Order currently before Parliament",
A number of examples are given, including a fashion retailer which wishes to maintain a younger customer profile. It inflates its prices for clothing while offering a 50% discount for the under-30s, thereby allowing them still to pay reasonable prices.
As regards my main point, have the Government had discussions? Is the Commission reasonably satisfied, from its independent perspective of not being part of a government department-its independence is crucial to the way in which it operates- with what the Government are doing? Have the Government at least explained why they are doing things in a specific way? Has the Commission accepted that as the Government's right?
Baroness Hussein-Ece: First, I declare an interest as a commissioner for the Equality and Human Rights Commission. I also wish to pay tribute to my noble friend Lady Verma for very comprehensively setting out the provisions of the Equality Act 2010 (Age Exceptions) Order 2012. She took us all the way through the order. I welcome the order and, in answer to the noble Baroness, Lady Howe, the Commission has also welcomed it.
Noble Lords might recall one of the key recommendations of the Equality and Human Rights Commission's very successful inquiry into older people and human rights in home care, which quite recently received widespread publicity. In that work, there was a specific call for the ban to commence as soon as possible in order to tackle the problem of ageist attitudes and unjustifiable age-based discrimination in this sector, some of which we know has been endemic and harrowing.
I should like to ask the Minister a couple of questions. I recognise that the legislation should allow for some types of age differentiation to remain lawful. However, as has been explained in response to some of the consultations last year, we have concerns about some of the exceptions-for example, Article 3 and the financial services. Obviously, we all have concerns about the financial services. That exception could be seen to have been cast rather widely in that it refers to the whole sector as well as covering all transactions and interactions between customers and service providers.
As drafted, the exception would make it difficult or impossible to challenge some types of age discriminatory treatment. I understand that these things happen; for example, a bank may decline someone over the age of 75 applying for a credit card or making another type of application. Given this exemption, presumably a bank still would be able to do that. How would such a 75 year-old have recourse to that treatment? Could that be redressed under this provision?
Another example might be that of an insurance company making a decision about someone at the other end of the age spectrum, someone aged under 25. When insuring young people for driving a car, we know that many insurance companies tend-I will not use the word discriminate-to make it more difficult or charge higher prices for those under the age of 25. What safeguards may be in place to address these points?
I very much agree with what the noble Baroness, Lady Thornton, said about information to ensure that service providers, employers and the general public are made well aware of these new provisions, as well as of their rights under the new Act.
Baroness Verma: My Lords, I thank noble Lords for their warm welcome to the order and for giving it reasonably easy travel. However, a number of points have been raised so I will deal with those first. If I do not manage to satisfy noble Lords today, I will undertake to write a fuller response and get a copy placed in the Library.
The noble Baroness, Lady Thornton, asked how the Government were preparing service providers for implementing this order from October. There is going to be tailored guidance, which is prepared by the Home Office and the GEO, and we hope that it will be published within the next week or so. It will be tailored to specific sectors. The Department of Health will be providing its own guidance to the health service and to its employees, and Her Majesty's Treasury will issue guidance related to the financial services sector.
The noble Baroness asked about dual discrimination and other delays. At this moment, we do not have plans to implement dual discrimination. This position, and its feasibility and potential burden on businesses, has been and is being reviewed in the course of our Red Tape Challenge initiative. GEO will be leading on this implementation plan, so we will be the lead within the Government taking this forward.
The noble Baroness, Lady Howe, asked if the EHRC had concerns about Article 4 on concessions. We do not believe so. We have simplified the exception, but
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My noble friend raised the point that the financial services exemption was too broad. I suspect that my response is not going to satisfy her on the question of credit cards, and we may have to come back with a bit more detail on that one. However, in most cases the problem is not that people cannot access insurance; it is that they do not always have the information about other alternatives. That is why the insurance industry has entered into an agreement with the Government to improve signposting and transparency to ensure that no one is left without access to an insurance service. However, they need to comply with responsible lending practices as well. Their entire business or individual services may be part of the market in which they have particular expertise. The example that comes to mind straightaway is Saga.
On the whole, the order covers most of the concerns raised by noble Lords. We agree on principle that older people-indeed, people of all ages-have to be treated fairly and that there should be no deviation from that principle. Equally, however, we know that we want some preferential treatments, such as free bus passes and discounts for older people, to continue. On that basis, we are confident that the combination of these exceptions and the discrimination ban will keep a balanced approach in what the Government are trying to do.
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