HANSARD 1803–2005 - 10 years ago today

LORDS AMENDMENT, Lords Sitting of 8 November 1999

1999-11-08T00:00:00+00:00

HL Deb 08 November 1999 vol 606 cc1181-213

42 Clause 57, leave out Clause 57.

The Commons disagreed to this amendment but proposed the following amendments to the words so restored to the Bill— 42A Page 66, line 4, leave out ("two") and insert ("three"). 42B Page 66, line 23, leave out ("For this purpose") and insert— ("(9) In sub-paragraph (8)—

"benefit" includes (in addition to any benefit under Parts II to V of this Act)—

(a) any benefit under Parts VII to XII of this Act, and
(b) credits under regulations under section 22(5) above;").

Lord Ashley of Stoke rose to move, That this House do not insist on their Amendment No. 42 to which the Commons have disagreed, do agree with the Commons in their Amendment No. 42B to the words so restored to the Bill, butdo disagree with the Commons in their Amendment No. 42A to the words so restored to the Bill and do propose Amendment No. 42D in lieu thereof to the words so restored to the Bill— 42D Clause 57, page 66, line 4, leave out ("two") and insert ("seven").

The noble Lord said
My Lords, in moving the Motion, I shall speak also to my Motion No. 43D. I shall seek to explain that in a moment. Under the Government's proposals in the Bill no fewer than 310,000 future disabled people will lose their disability and incapacity benefits either in whole or in part. That cannot be justified under any circumstances. The purpose of this debate is to protect disabled people from these unfair impositions, especially as most of them are very severely disabled and poor. Today I do not propose the deletion of the offending clauses dealing with incapacity benefit as I did at Report stage. I do not seek to wreck the Bill. My wish is to reach an honourable compromise with the Government. It is that compromise, and that alone, that we are debating and voting upon today.
The Government have a long list of achievements in relation to disabled people. Those achievements are impressive and the Government deserve congratulations. But they are absolutely irrelevant to this debate. It is no comfort to a disabled person who is denied his benefit, or sees it slashed, to be told about government generosity in helping some other disabled people. As always, it is the individual who counts. Many new invaluable measures have been initiated by Alistair Darling who is an outstanding Minister and one of the great successes of this Government. But I have no doubt that with these clauses dealing with incapacity benefit he has made a major political miscalculation. I understand that. We all make mistakes. However, the consequences of this miscalculation will damage hundreds of thousands of disabled people in future. Despite all the talk about constitutional propriety and the rights of each House of Parliament—some of it loose talk—I believe that it is our right and duty to try to persuade the Government to be more reasonable.
My compromise proposals are modest but important. They seek to change from three to seven the number of preceding years during which claimants need to have paid the appropriate amount of national insurance contributions to qualify for incapacity benefit. They seek to change the disregard from £85 to £128, which is the level of the disability income guarantee, and to change the taper from 50p to 23p—the same as the standard rate of income tax. My proposals would reduce the number of disabled people affected by the Government's original proposal by two-thirds and halve their original intended savings. The proposals do not neuter the effect of the clause, as claimed by the Secretary of State. I believe that to halve the savings which the Government intended to make at the expense of disabled people is a reasonable compromise. The Government would still be able to recoup money from the better off but the poor would be protected.
The question of the starting point of income for the purposes of means-testing—the disregard—is very important. The Government claim that they have made big concessions by changing the disregard from £50 to £85. I am glad that they have backed away from their original figure of £50, but it is incredible that they suggested it. It would have meant reducing incapacity benefit to someone with an income of as little as £6,123 per annum, which is way below the official poverty line. Although Ministers are fond of quoting the figure at which all incapacity benefit is deducted, the crucial matter for most recipients is where means testing begins. That is the matter on which we should focus.
The concession by the Government to change the disregard to £85 is inadequate. It means that a disabled person will start to lose his incapacity benefit when his total weekly income is an £85 pension, plus £67 incapacity benefit, giving an annual income of £7,943. That level of income—approximately £8,000 a year—is below the official poverty figure. That is the Government's latest concession for someone who is below the official poverty level. Some people say that as the Government have now made a concession we should be satisfied. These minor concessions are hopelessly inadequate. Any government who penalise people with an income of £8,000 deserve the opposition that they get.
Not only do the Government begin to hit those at a low income level; they hit hard with an incredible deduction rate of 50 per cent. Incapacity benefit is already taxed at 23 per cent. If one combines that with the additional 50 per cent deduction it means that severely disabled people suffer a marginal tax rate of 73 per cent, while the top rate for a millionaire is 40 per cent. That does not make sense. The Government's provisions turn logic on its head. The position should be the reverse. Millionaires should be taxed at the 73 per cent rate and those on incapacity benefit at 40 per cent. That is the situation with which we are faced.
My proposal for a disregard of £128 means that incapacity benefit is reduced when income starts at £10,179 a year. That income is also low, but it is much more reasonable than the Government's figure and there is greater justification for it. The Government's figure of £85 is not index-linked and therefore would be eroded by inflation. My figure is linked to the disability income guarantee and would automatically rise with inflation.
In the House of Commons the Secretary of State promised an annual review of the figure but made no effort to put that commitment into the Bill. I know that he cannot bind future governments. However, he could make it more difficult for them to backtrack. he has failed to do so. I am pleased with the other concessions: the exemption of those with the severest disabilities—the 20,000 people who get the higher rate care component of the disability living allowance—and the estimated 22,000 people who will get the disabled person's tax credit. But although the concessions are welcome, those people are a tiny proportion of the 310,000 I mentioned earlier. So I suggest that too much should not be made of the concessions for this very small number of the most severely disabled people.
Regrettably, the Government are trailing red herrings to justify their proposals penalising disabled people. As recently as last Wednesday the Prime Minister complained: Since 1979, the number of people claiming incapacity benefit has trebled". He also said: As a result of our reforms, we will bring the system of incapacity benefit under control".—[Official Report, Commons, 3/11/99; co1.289] Let us face those statements head on. I accept, as Ministers allege, that the Tory government encouraged many unemployed people to go off the unemployment register and on to invalidity benefit, as it was then called, before incapacity benefit, via friendly general practitioners who were sympathetic to the people who were disabled. So the figure shot up. I think that that is right; that is probably what happened. But the Tory government turned off the incapacity benefit tap in 1995 and the system changed dramatically.
Since then friendly general practitioners have had no role. Incapacity benefit claimants now have to be certified by two strict Benefits Agency doctors. Some disabled people complain that the tests are too stringent; even paraplegics, double amputees and blind people cannot qualify. That is a measure of how appallingly disabled those recipients are. They are the people we are discussing today.
In 1995, the Tory government also tightened the eligibility test and eliminated the earnings related supplement of £15 week. That was very tough action by the Tory government of that day. But today departmental statistics show clearly that the cost of incapacity benefit is falling. So much for the stories that it is rising out of control. It is not falling just by a small amount. The forecast decline is for as much as £750 million over the lifetime of this Parliament. So contrary to what the Prime Minister said, the system does not need to be brought under control. It is already under control mainly because of the Conservative 1995 Act.
Claims that the numbers of people and the costs of incapacity benefit would escalate without this Bill are therefore groundless. They form no excuse for the Government's proposals. I believe that penalising future disabled people for the alleged sins of the past is hardly a blueprint for welfare justice.
However, there are more examples of creating misleading impressions. By the careful use of selective figures, the Government seek to give the impression that vast numbers of incapacity benefit claimants have occupational pensions and are well off. They impel me to visualise thousands of them driving in their Rolls-Royces to pick up their incapacity benefit. But the Government's claim that nearly half of incapacity benefit claimants are in the top 40 per cent of income distribution makes it sound as though they are well off. It is one of the arguments used constantly by Ministers. But a household with average income is also in the top 40 per cent; so the Government's claim is meaningless.
The significant fact is that very few of the people on incapacity benefit are wealthy. Of those with occupational pensions, over 90 per cent have occupational pensions of less than £5,000, or £100 a week. And even with the addition of incapacity benefit of £3,000 a year, the vast majority hover around the poverty level. Those are the undisputed facts.
The Government are also trying to create an impression that these cuts to the benefits of poor people are essential for modernising the welfare state. Only the naive and the credulous could believe that. Regrettably, the Government's proposal for modernising incapacity benefit in the future is to go back to Michael Portillo's proposal of means testing incapacity benefit—a proposal rejected by his fellow Right-winger, Peter Lilley, as being too difficult for disabled people to stomach. These again are the facts. In looking to the future and in modernising, the Government are harking back to a past which was rejected on reasonable grounds.
It would be highly significant for the future of the welfare state if a means test, such as that to be applied to incapacity benefit, were to be extended to the retirement pension. Is it or is it not to be so extended? Ministers have made announcements. We are now informed officially that there will be no means test for retired pensioners. That is an important and welcome statement by Ministers. But in the light of that statement, perhaps Ministers can explain to the House why those people leaving the workforce because severe disability makes them incapable of work are to be treated so differently and so much more badly than those leaving because of age. What is the difference? Why should those who are leaving because of disability be treated so much more badly than those leaving because of age? I can see no difference. I am open to correction but to me it is a clear case of discrimination against disabled people. Perhaps Ministers can enlighten the House.
The other assurance that would be welcome is a commitment that the Government have no intention of getting rid of incapacity benefit altogether. Ministers say they want to relate incapacity benefit to recent work. So they intend to deny incapacity benefit, except for a tiny category, to all those who have had the misfortune to be unemployed for three years before claiming. They will not receive a single penny of incapacity benefit if they have been so unemployed. But there are various depressed areas in Britain where it has been virtually impossible to obtain a job for many years. I have spoken recently to MPs from Wales and elsewhere. They say that it is impossible to obtain any kind of job in their areas. It is the fate of many depressed areas in Britain. So why should disabled people who live in those areas be denied the benefit given to others in prosperous areas? It is what the noble Earl, Lord Russell, called the geographical lottery—except that in this lottery there are no winners, only losers. There is no "right" figure to provide. We can only make our best judgements. However, I believe that seven years is a more reasonable figure because in some areas people can easily be seeking work for that period.
To deny disabled people their incapacity benefit on those dubious grounds is bad enough. But the real injustice becomes clear when we consider that, in many cases, those claimants have paid their national insurance contributions for some 10, 20 or 30 years. They have paid in good faith and naturally they expect the benefits, but the Government shift the goalposts and now say that if you do not meet these conditions, you will not receive benefits. How can that be justified? That is a reasonable question and I do not believe there is quite such a reasonable answer.
I have no doubt that the Government have lost the moral argument and are now trying to turn the debate into one on the constitution. Some Members of this House who opposed my proposals complain that the House of Commons has already voted on them and that I put the whole Bill at risk. They should know that that is nonsense. The fact is that the other place voted only on my amendments to delete the damaging clauses and has not voted on the compromise proposals which we are debating today. The House of Commons will only be able to vote on the compromise proposals if this Motion is carried today. If we do not vote for these today, we deprive the House of Commons of the opportunity to vote on these proposals.
As for the allegation that I put the whole Bill at risk, there are precedents for this House returning Bills to the other place and for doing so time and time again. There is no question of the Bill being lost, at least not today, and it is right that the other place should be made fully aware of the cross-party views of this House.
The Government are saying that it is time for this Bill, including these deplorable proposals, to be put on the statute book. I suggest to the contrary. It is time for this House to assert its view; to challenge this unjustified attack on disabled people; to declare that the Government's comment, "No compromise —full stop" is a betrayal of the dialogue of democracy, and to urge the Government, even at this late stage, to think again. I commend the amendment to the House.
Moved, That this House do not insist on their Amendment No. 42 to which the Commons have disagreed, do agree with the Commons in their Amendment No. 42B to the words so restored to the Bill, but do disagree with the Commons in their Amendment No. 42A to the words so restored to the Bill and do propose Amendment No. 42D in lieu thereof to the words so restored to the Bill.—(Lord Ashley of Stoke.)

The Duke of Buccleuch and Queensberry
My Lords, I wish to support the amendment moved by the noble Lord, Lord Ashley of Stoke, in his usual characteristically compelling way. The noble Lord, Lord Ashley, and the noble Lord, Lord Morris of Manchester, have rightly earned a nation-wide reputation as the most respected and knowledgeable champions of disabled people. There are no two people whose honour and integrity I more greatly admire. If they had continued to speak from the green Benches in the other place, I doubt very much whether we would have found ourselves in the mess that we are in today.
I can honestly say that, in my 39¾ years in Parliament—partly in another place, partly in here—for the past 25 years trying, with so many other of my admirable noble friends, to secure a fair deal for disabled people, this is my saddest moment. It is not because this is my last utterance in Parliament but because of the monstrously unjust actions of this Government, made only very marginally better by last week's concessions.
One of the most worrying aspects of this episode is the further proof of the executive's ever-increasing stranglehold over parliamentary democracy. The most remarkable point about last week's rebellion in another place was not that so many defied the pressure of the Whips but that so many succumbed to it. I hope I might be forgiven for thinking that, if the Government's supporters had half as much feeling for disabled people as, they claim to have for foxes, the offending clauses in this Bill would have been strangled at birth.
If a Conservative government had behaved like this, there would have been outraged protests and demonstrations throughout the land. If the Government persist in restricting and resisting the modest offering of the noble Lord, Lord Ashley of Stoke, they will have every reason to dread the judgment of the ballot box in 2002.
On arrival here, one receives a warm handshake from the Lord Chancellor. I wonder whether, on one's enforced retirement from here, one receives a hug from the Leader of the House.

Lord Rix
My Lords, since this Bill was last under discussion in this House, there has been much talk of brokering a compromise on the vexed question of how to reform disability benefits. Scarcely two weeks ago, I signed my name in support of the very proposals which are before us again this afternoon. However, for all the talk of compromise both here and in another place, it is easy to forget that thus far neither House has actually been given an opportunity to accept or to reject these compromises.
Commentators such as Simon Jenkins, who in The Times last Friday urged the noble Lord, Lord Ashley of Stoke, to accept that it is time to give up, are quite mistaken. The debate may be well rehearsed but the options are only just being laid out before us. Only when this House and another place are given a real choice and are offered a viable alternative to the Government's cuts-led agenda, can we say that true consensus has been reached.
Of course, outside this House, we heard the nonsensical view that to lay down a choice here today somehow challenges the democratic status of the other place. How can this be so when the "Lord Ashley/Dr Berry" compromise has never been tested in the other place? There are 8.5 million disabled people in the United Kingdom whom noble Lords on the Government Benches—for instance, the noble Lords, Lord Ashley of Stoke and Lord Morris of Manchester—have endeavoured to represent over many years, as have a steadfast number of hereditary Peers from all sides of the House, some now fortuitously restored to us including the noble Earl, Lord Russell, the noble Lords, Lord Addington, Lord Swinfen and Lord Astor of Hever and, from the Cross Benches, our very own, the indomitable noble Baroness, Lady Darcy de Knayth, as well as a mere lifer, me.
Our postbags are still full of letters from anxious disabled people. We are duty bound to act on these concerns. Why should there be any question over our mandate to attempt sensibly to revise the Bill when fewer than half the Members in another place consented to the Government's own proposals?
Time and again I have stood up in this House and welcomed measures in this Bill which offer more help to young severely disabled people. As president of Mencap, I acknowledge that those who are born with a severe learning disability are likely to be better off under the new dispensation. I do not doubt the Government's commitment to this group and believe they have acted in an exemplary fashion in seeking to improve protection for youngsters in further and higher education and seeking to ensure that the new ONE service really is a service for disabled people. But on incapacity benefit, while I recognise the Government have moved, I do not believe that tightening contribution conditions to three years offers disabled people adequate protection and I do not believe that hitting disabled people living below the poverty line with a means test in order to finance increases for other disabled people is morally justifiable.
As we have heard, the noble Lord, Lord Ashley of Stoke, is advancing a realistic compromise to government proposals. Instead of denying benefit to severely disabled people who have been out of employment for a mere three years, seven years at least guards against penalising those who have made every effort to find suitable work before reconciling themselves to the limitations of their disability, or those who have faced unemployment in difficult economic conditions in advance of the onset of their disability.
As the other proposal stands, as your Lordships have heard from the noble Lord, Lord Ashley, means testing incapacity benefit will hit individuals living below the poverty line, and will withdraw benefit with a taper which is harsher than anything imposed on millionaires—some of whom are sitting on your Lordships' Benches—within our tax system. To start reducing benefit instead at £128 per week, and with a taper of 23 pence in the pound, is not generous; i t is realistic.
It may be worth reminding the House that one of the Government's new indicators in the first annual poverty audit is a reduction in the number of working age people living in families claiming income support for long periods of time. If incapacity benefit is tightened in the way the Minister proposes, and severe disablement allowance is abolished, the Government will find that increasingly hard to achieve.
In the same report, the Secretary of State for Social Security claims that, the right policies are the policies that work". He pledges, to continue to listen to people on the ground, including people who are themselves living in poverty, to make sure our policies are having the right effect". I urge the Government to look again at what they have heard from disabled individuals and their advocates within the 500 strong organisations represented on the Disability Benefits Consortium who are key partners in delivering the fight against poverty and are aware of the situation on the ground.
Furthermore, the report of the National Policy Forum to this year's Labour Party conference claims to "build upon the platform" of getting more help to the most severely disabled people. Perhaps the Minister can reassure the House today that threats to jeopardise this support are empty.
It also strikes me as extraordinary that, if newspaper reports are true, the Government have threatened to trade welfare reform against Lords reform. We are talking about the lives of hundreds of thousands of disabled people, many of whom are among the poorest in our society. Decisions about their future should be taken in all conscience and in a climate of utmost seriousness, not on the basis of political calculation.
Despite all the help that the Government have given to people with a learning disability, as well as those affected by SERPS—for which I am most grateful—and despite my high regard for the care and debating skills of the Minister, the noble Baroness, Lady Hollis, should the House divide on this matter I shall have no option than to vote with my conscience to support the fair and balanced compromises of the noble Lord, Lord Ashley. That will then offer Members of another place a genuine alternative to what is currently on offer from the Government. I urge other noble Lords to do the same.

5 p.m.

Lord Morris of Manchester
My Lords, I was deeply moved, as I know my noble friend Lord Ashley will have been, by the speech of the noble Duke, the Duke of Buccleuch. As ever, he was most kind and spoke as persuasively as he was brief and eloquent. he will be very deeply missed in all parts of your Lordships' House.
Again, I also pay tribute to my noble friend Lord Ashley for his constancy and the clarity of his advocacy in moving his amendment. As he and I are reminded by our postbags every day now, their opposition to means testing incapacity benefit and changing the contribution conditions for entitlement have united the major organisations of disabled people as never before.
Neither my noble friend nor I approach this debate with any feeling of personal animus towards those of our colleagues who were content with the Secretary of State's original proposal in the debate in this House on 13th October. Nor is there any animus on our part towards DSS Ministers. Certainly the Secretary of State knows of the warmth and kindliness of my intentions towards him personally. For as Chairman of the Managing Trustees of the Parliamentary Contributory Pension Fund, elected by the House of Commons as a whole, I looked after Alistair's own pension for 10 of the past 12 years with undeviating concern for his interests.
The plea I shall make to him today is that of a committed supporter of this administration. My purpose is not to hurt the Government, but simply to do whatever I can further to improve the Bill in the interests of disabled people and their carers. Much apart from wanting to hurt the Government, I very much want them to succeed and passionately believe that they are more likely to do so if all of us speak with total candour.
Friendship is not friendship without candour and it is as a candid friend that I ask the Government to look again not just at the detail but also the principle involved in the proposed changes to incapacity benefit. The Secretary of State told the BBC last week that, while he had moved on "points of detail" he would not water down the principle on which his proposals were based. But how principled was it to encourage tomorrow's pensioners to save for their retirement today and, at the same time, try to impose on disabled people who have already saved for their retirement, over 30 or more years, a cut in benefit of 50 per cent of any personal pension over £50 or, as is now proposed, £85 a week?
Ministers have spoken in parliamentary debates, as I also have done, of those who will benefit from the Bill. More especially I welcome the help proposed for 20 to 24 year-olds in full-time education. But we cannot ignore the losers under the Bill as drafted, one estimate of whose ultimate number is that it will total 310,000 disabled people.
The Government have now created the Disability Rights Commission for which my Civil Rights (Disabled Persons) Bill first made detailed provision in December 1991. Naturally I am delighted. This and the appointment of Bert Massie to chair the commission have been welcomed all across Parliament. It was, however, Bert Massie, commenting on this Bill in The Times, who put it to the Government that: cuts in entitlement to Incapacity Benefit do not force people to work if they cannot do so: they just make such people poorer". Even more to the point, he added: If the problem is that people not entitled to Incapacity Benefit are receiving it because of the policy of the last Government … the answer is to identify those people and to improve 'the gateway' to Incapacity Benefit, not to refuse it to those to need it.". Labour Ministers rightly condemn the Major government for their encouragement of unjustified incapacity benefit claims from unemployed people to cut an ever-lengthening dole queue. But the proposals now before Parliament do not dispossess those who allegedly ought not to have the benefit. Instead they make life harder for disabled people who, having paid national insurance for a contributory benefit in good faith over many years while in work, could now lose a substantial part of the amount for which they thought they were insured. Whatever else this might be called, it is not a triumph for high principle. Indeed, the principle involved is no less unwholesome than the detail. In the words of Sir Peter Large, than whom no severely disabled person is more widely respected here at Westminster, why on earth should we have to, take from people in need to give to those in greater need when the rate of increase in total social security spending has already been cut by half of what it was under the Major government?
Again, why should we now cut the benefits of people who become unfit for work if they have saved, year by year, for very modest personal pensions at a time when the Chancellor of the Exchequer insists that the economy has never been stronger nor Britain more prosperous?
Most disabled people are appreciative, as I am, of helpful new steps taken in their interests by Ministers all across Whitehall and, like me, they want the Government to succeed. But they say that the proposals on incapacity benefit confuse reform with retreat. They are not resistant to change, for there are many reforms disabled people want urgently to see. They want ministerial preoccupation to be with value as well as cost and disability benefits to be commended to the taxpayer not as acts of compassion, but of enlightened self-interest and moral right.
In candid and thus—as I said—true friendship, I ask my ministerial colleagues to reflect again and to respond positively 10 this amendment.
It was in that spirit that my good and right honourable friend Tom Clarke spoke and voted on the Government's revised proposals in another place. And let us all remember, on this side of the House, that it was Tom Clarke who led for Labour in explaining our policies for disabled people at the general election. In the House of Commons last week, in a speech of high distinction, he kept faith impeccably with what he told the electorate on our behalf. Let us also keep faith today.

Lord Campbell of Alloway
My Lords, a wholly compelling case has been made out by all noble Lords who have spoken from their expertise, which is acknowledged not only in your Lordships' House, but throughout the whole country. Yet it is reported that honourable Members of another place have threatened to withdraw the Weatherill amendment if we insist tonight. If so, that threat is in grave contempt of your Lordships' House, and it is a slight upon the status and dignity of the bicameral process. It is a threat to which this House should not defer.
Indeed, no second Chamber, however constituted or reconstituted, should be deprived of the option to decline to approve repugnant legislation, in particular on humanitarian grounds such as obtain in this case. As at present constituted, the House acts upon its honour to protect the interests of this vulnerable minority against oppression, for the reasons so eloquently explained by the noble Lord, Lord Ashley of Stoke. The Parliament Acts make provision for another place to have its will in due course if that is what its Members wish.
The business of government has, as is wholly predictable, again hit the buffers towards the end of the Parliament. No acceptable accommodation has as yet been afforded, and as I understand it, none is on offer. Many years ago, the noble Viscount, Lord Ingleby, who sat on the Cross Benches, gave me a book inscribed with gratitude for my work on the Floor of the House on behalf of the disabled. Therefore it would not have been possible for me today to sacrifice their interests on the altar of political convenience at the behest of the usual channels. This Government evince but scant concern for minorities. Their protection has now become the urgent obligation of your Lordships' House, and, I hope, the business of the Loyal Opposition.
To defend those unable to defend themselves from unjustified attack may not be charged as "wanton confrontation". If so charged, it would not be so readily understood by the majority of the people.

5.15 p.m.

Earl Russell
My Lords, it is one of the annual rituals of this place that, come November, Ministers facing the exertions of the ping-pong season get an attack of constitutional heavy breathing. Like other heavy breathing, it is often done down the phone anonymously and no one in this Chamber is accountable for it. I believe therefore that I need to clear the air a little.
So far as I know, no one anywhere in this Chamber questions the supremacy of the elected Chamber. That is true both as a matter of fact—the Parliament Acts see to that—and as a matter of justice. What is at issue between us, and has been an issue in debates for as long as I have been a Member of this House, is whether that supremacy is arbitrary in that another place, whenever it wishes, can say, "I am going to have my way, so there!", or whether that supremacy is governed by the rule of law as set out by another place itself in the Parliament Acts.
What is set out in the Parliament Acts is not a procedure simply for another place to be able to insist, but a procedure that requires the Secretary of State to share with us the responsibility for getting his Bill on to the statute book; to bargain, to negotiate, to compromise and to seek to reach agreement. That is a perfectly fair burden to which to subject any legislator.
This Chamber is not in the business of stopping Whipped government Bills. Whenever any Whipped government Bill fails to become law, we may say that a political misjudgment has taken place. What remains a matter of debate is whose that political misjudgment might be. The answer is usually "both" when that happens, because even if one believes that the other person has been totally unreasonable, it may be a misjudgment to fail to foresee his unreason. Therefore, I hope that we shall not have the rather petulant four year-old's "shan't play" noises that we have been hearing from time to time, but that we have serious scope for a reasonable discussion.
Furthermore, I hope that I shall not hear any more of this mysterious threat to the Weatherill amendment. I agree with the noble Baroness the Lord Privy Seal that that is not the way to proceed. It is a proposal for mutual assured destruction. On that occasion, the acronym is particularly appropriate! In any case, if any of us were to change our policy because of a threat of that sort, we should not deserve to stay here in the first place.
I shall not repeat my arguments in detail against either of the clauses that we are debating. I understand that they are grouped together. I have argued that the first one, on contribution records, is unfair to groups which do not have an equal right to make contributions: people in areas of high unemployment; people from ethnic minorities; and people who suffer progressive disabilities, such as, for example, deafness, which interfere with their ability to work before they finally become eligible for incapacity benefit.
I simply do not understand why the Government have insisted on this clause. It does not make any sense to me. When I listened to Mr Rooker, the Minister of State, replying to the debate on Wednesday evening, all I heard was the equivalent of the famous marginal note in the UN delegate's speech, "Weak point, shout".
I cannot hear any clear principle. I have read what the Minister and the Secretary of State have said. They seem to be desperately worried about people who have had long periods of unemployment and then claim incapacity benefit. I simply do not understand why that worries them so much. The Minister has said that there is no question of fraud. I thank her for that. I am not certain how far that sentiment applies throughout the Government. At the last Prime Minister's Question Time, when my right honourable friend Mr Kennedy asked the Prime Minister why he insisted on this, the Prime Minister replied with a figure from the Green Paper claiming a threefold increase in the number claiming incapacity benefit since 1981.
First, if that was the Prime Minister's reasoning, he is locking the stable door after the horse has been stolen; the horse was stolen by the previous government in the Social Security (Incapacity for Work) Act 1994. I am sure that the House will be relieved to hear that I shall not enter into a debate on that point now. However, it put a stop to that increase in the figures which have since decreased.
Behind much of this debate is the concern of people to explain the increase both in incapacity benefit and in claims for disability benefit as a whole. Many people have been inclined to claim that there has been fraud. Attempts to find it have always come to nothing. The Minister has most generously confirmed that in the case of BIP, in which her record is an extremely honourable one. The recently-published DSS research report no. 94 found that people recognised as disabled in the past few years were recognised according to the same standard as would have applied many years ago, although the numbers so recognised had increased. The incapacity benefit leavers tracking study found that those who had been unemployed before claiming incapacity benefit were less likely to become employed afterwards.
The study also found—this is a very interesting finding—that people's self-perception with regard to their own health was a more accurate predictor of their employment future than the incapacity all-work test. In fact, people are probably better judges of their own health than are the Government. I am not particularly surprised to hear that, but I believe that there are those who would be.
Therefore, why should there be such an increase in the number of people claiming disability benefits? I believe that this point is crucial to the whole of our argument. First, there is, thank God, far less stigma attached to having a disability than there was even 10 or 20 years ago. Therefore, people are willing to make a claim and to accept the label of being a disabled person when 20 years ago they would not have been. I can only regard that as a good thing. Secondly—and this is a finding of the incapacity benefit leavers tracking study—in the tightened conditions of the labour market, employers are more likely to resist employing people with lowered capacity. Therefore, those people have a greater need to claim incapacity benefit. Thirdly, it is well known that illness is a consequence of unemployment. That case is documented at length in the Acheson report; I do not need to do so now.
The Acheson report has also found that, although mortality has fallen, morbidity has not fallen in proportion, especially among the poorer part of the population. The poverty/ill health link is much clearer than it was before. Again, that is relevant to the number of claims. We also have better diagnosis in relation to mental health illness, depression, and back pain, which accounts for one in every seven days lost from work through sickness. We have the car culture which both makes people take less exercise and puts their backs in uncomfortable postures. Here, I rely on the authority of the orthopaedic surgeon who many years ago treated my own back.
I turn to the other clause concerning occupational pensions. At least I understand what the Government are doing although I do not accept it. They argue that they should concentrate help where it is needed most. That is a good principle, but even good principles cannot exist in monopoly. They have to share the world with other principles. Here, they conflict with other principles. First, they conflict with the contributory principle. That is not absolutely sacrosanct, but anyone who proposes to alter the conditions of a contributory benefit must shoulder the burden of proof. That is a heavy burden.
Secondly, what the Government are doing contradicts the need to encourage private provision for pensions. That is an increasingly urgent need of which the Government are well aware and to which a considerable part of this Bill is devoted. I cannot see that it encourages people to invest money in private pensions if they know that if they become sick, 73 per cent of what they put in will be lost to the Treasury. That does not promote the usual motive for private provision.
Finally, what the Secretary of State has done is not equipped for uprating. The uprating is discretionary, not of right. The Minister knows what has happened to the uprating of capital limits for income support, which are equally discretionary. They have not been uprated since 1988. That is the box into which the Secretary of State proposes to put incapacity benefit for those in receipt of occupational pensions. That box is a coffin. We should not put it there.

Baroness Kennedy of The Shaws
My Lords, when this matter was last before this House, I voted with the Government. I did so because I was reassured that the Secretary of State was looking again at the figures and I was given to understand that concessions would be made which would allay the concerns of many of us on this issue. I know the Secretary of State to be a man with a good heart and a good head. Like my noble friend Lord Ashley, I consider him to be one of the great talents in our Cabinet. However, it has been a source of great disappointment to me and to others that he has not accepted the compromise of my noble friend Lord Ashley.
Like my noble friend Lord Morris, I am a friend of government and I speak to government as a friend. The Secretary of State has raised the level of his means test. However, even that rate fails to take full account of the huge costs incurred by many disabled people. The point about disease and frailty is that even the most powerful people are humbled by it: by not being able to do what one once could and having to rely on others for even small assistance. The depression that comes so often with incapacity creates even greater dependency. Incapacity can come to any of us: chronic arthritis striking down a school teacher or a secretary; an early stroke ending a career in nursing; neurological disease throwing out of work a father of young children.
In his arguments, the Secretary of State has said that if the amendment of my noble friend Lord Ashley is passed, single people could have an early retirement pension of up to £23,000 before entirely losing their incapacity benefit. he went on to state that a parent with two children and a dependent spouse, for example, could have a pension of something over £30,000 before being cut off, as though those sums were extraordinarily high.
The mistake we are making is in turning our welfare system into the American equivalent, which becomes no more than a meagre safety net in which the majority of citizens have no stake. I happen to accept that the universal principle may have to be surrendered in the face of changed circumstances. It was for that reason that I argued for the introduction of fees for higher education but that there would be a means test, set comparatively high, for those who would have to pay.
When replacing thresholds, I believe that they have to be drawn at something other than a mean and miserable level. The reason why we must ensure that thresholds are not drawn too low is because we need to maintain commitment by the many to the welfare state. The risk in going down the American road is that the majority have no vested interest in protecting the welfare system; they are no longer stakeholders.
I have every sympathy with our ministerial colleagues who wrestle with the difficult problem of welfare reform. I believe in welfare reform, but I also believe in welfare. When we developed the welfare state in this country, at its heart was the belief that when calamity struck citizens who had contributed to the commonweal, they in their turn should be sustained by the commonweal; not with cap in hand or in ways which removed human dignity but in ways which were decent and fair.
I cannot understand how we can justify a withdrawal rate of 73p in the pound—50p by the means test and 23p in tax—for severely disabled people. Yet, as we have heard the noble Lord, Lord Ashley, say, the top rate for millionaires remains at 40p in the pound. How can we have that kind of disparity? What are we thinking about? What is happening to our values? Are we forgetting who we are? What does "social justice" really mean?
There is much in the Bill that is good and I would not like to see it fall. However, I cannot vote with my Government on this issue.

5.30 p.m.

Lord Davies of Coity
My Lords—

Lord Stewartby
My Lords, I shall be brief. I hope that the noble Lord will be patient for a few moments. I am minded to go into the Lobby with the noble Lord. Lord Ashley, this evening, particularly on one point. I refer to the level of disregard. It seems to me that although the Government have improved the situation from their original proposals, it is still very much on the mean side.
The only other point I make is that the more I listen to debates on this subject, the more it strikes me that incapacity benefit is not well suited to being a general source of "top-up" for income for disabled persons. We have to accept that the structure of welfare benefits generally, and particularly those available to disabled people, is complicated. In the years when one had to advise constituents in another place about benefits and their relationship to each other, particularly for the disabled, I found myself constantly confused and wondering whether I was giving correct advice.
I hope that if the Government face a set-back on this issue, they will not be deterred from reconsidering the relationship between the benefits. In particular, I hope that they will come to a view about whether incapacity benefit should be specifically related to work and the inability of a person because of disability to undertake work, or whether there is a need for a more general supplement of a kind which would assist many of those who appear to be potentially disadvantaged by the proposals introduced by the Government.
I shall say no more than that. However, it seems to me that many of the arguments which the Government may be using to defend their own position are narrowly focused on the purpose of incapacity benefit whereas many of the arguments of those who have put the contrary case are a recognition that the incomes of disabled people, particularly those who are out of work and may have been so for a long time, are modest. The structure needs to be looked at to see how that can be remedied.

Lord Davies of Coity
My Lords, when dealing with an issue as emotionally charged as this, it is not difficult to support what is seen to be popular. However, we all know that it is often much more difficult to support what is believed to be right.
Some may say that this part of the debate is a watershed, a moment of truth or perhaps a crunch time. As we are likely to have other occasions such as this before 17th November, I feel that such descriptions are not appropriate. However, it would to apt to say, like the Americans, "We are now playing hardball".
I say that because we have now reached a stage in this House where we are challenging a government elected by the British people to a point of unjustifiable conflict. We are perilously close to doing that in two ways. One is in respect of the constitutional role of this House; the other in respect of the Bill and the amendments to it.
As concerns the first point, let us remind ourselves of why we are here. Indeed, we say it so often that we should have it, if not in our hearts, in the forefront of our heads. We are here to scrutinise and revise; to point out to the Government errors in proposed legislation; to nit-pick; to cross "t"s and dot "i"s and to challenge, but only to a certain point. The moment we go beyond that point we become dangerously close to abusing our powers, our authority and the privilege which we have been given to contribute to the lawmaking process of this land and to its people.
If this continues, sooner or later it will become more and more evident that this country can no longer tolerate an unelected House holding the people's chosen government to ransom. Up to this point, this House has made its views known. The Government have considered those views. As we know, they have responded. Enough is enough. Now is the time to cease this protest. The whole House should support the decision of the elected Government. For those reasons alone, the Government should be supported at this stage.
However, it is also important to address the Bill and the amendments. I shall deal with that in two ways. First, I shall say why my noble friends on this side of the House should support the Government, and secondly, why other noble Lords, particularly the Official Opposition, should also support the Government.
I have spent most of my adult life conducting wage negotiations with employers. Never once did I obtain all I wanted, but I never expected to. Once in the realms of negotiation, you recognise that you have to compromise. I knew that I could not secure satisfaction for every demand that every one of my members wished to make; but I sought to secure as much as I could for as many as I could, and, at the same time, to ensure that all those I represented sacrificed the least, in terms of both wages and conditions and job security. That was a discipline I set myself on each and every occasion. That is not universally true throughout the whole of the trade union movement. I am sure we can all remember the miners' strike of 1984–85 when the refusal of the mineworkers' leader to compromise resulted in hardship and agony for so many miners and their families as well as for so many others.
So, what is the relevance of that to the debate on this Bill? I shall tell the House. The Government listened to the arguments advanced by this House; they made concessions and amended the Bill accordingly. Now the Bill, as acknowledged by my noble friend Lord Ashley, is generally a good one. Therefore it should be accepted. Although it may not provide all that is wanted, the vast majority of the Bill is good.
I say to my noble friends that this Bill provides far more benefit for far more people—the vast majority being among the most disadvantaged—than the numbers the amendment seeks to protect. Therefore, if this Bill falls far more people will lose compared with those who will gain because of the insistence on pushing this amendment to a Division and winning. I hope my noble friend will withdraw his amendment. If not, I urge all my other noble friends on this side of the Chamber to vote against him.
I turn now to noble Lords opposite. I appreciate that the role of the Opposition is to oppose. That they have done. But there comes a time in this House when that opposition must cease and I believe that that time has now come. If that is ignored, then in my view the Opposition are no longer acting as a responsible opposition. From their records and from the statements made by the Tory spokesman on social security at this year's Conservative Party conference, it is clear that this Bill is not to the liking of the party opposite, despite the advantages it will bring to many people. So it would seem that any support given to the amendment of my noble friend Lord Ashley by the Opposition will only be for the purpose of jettisoning the whole Bill. That being so, it is a very undignified stance. Indeed, it would be contrary to the understanding reached in respect of the Government's legislative programme when agreeing the Weatherill amendment.

Earl Russell
My Lords, has the noble Lord forgotten that these proposals were turned down by the Conservatives when they were in office?

Lord Davies of Coity
My Lords, it is true that they were turned down. It was put forward by Mr. Portillo and turned down by Mr Lilley. I am wondering whether it was with an eye on the general election that they were turned down at that time.
As I said at the outset, the Government have been driven to play hard ball. In the circumstances, no one could blame this Government, if their proposed legislation on welfare reform and pensions is further frustrated, for being less than forgiving in the wake of such destruction.

Baroness Masham of Ikon
My Lords, I take this opportunity to pay tribute to the noble Duke, the Duke of Buccleuch and Queensberry, for all the support he has given disabled people within and without Parliament. For years the noble Duke has been president of RADAR (the Royal Association of Disability and Rehabilitation). Many people thank him for all he has done.
Many people are becoming concerned about the meanness of spirit of the Government towards unfortunate people who have to struggle to survive. I should like the Minister to say how much it will cost to administer the means test to these severely disabled people. They will feel let down unless the House supports them tonight in asking the Government to try and understand their needs more closely than they have so far been able to do.

5.45 p.m.

Lord Swinfen
My Lords, the noble Lord, Lord Davies of Coity, suggested that, in what we may be proposing to do this evening, this House could be exceeding its constitutional duty. I take issue with him on that point. The House in fact is performing its constitutional duty. If this House feels that the other place should think again, it has a duty to ask it to think again. The noble Lord has not been in this House as long as I have. I can remember that when this party was in government, the House asked the government of that day—the Members in the other place—to think again.
It may be unwise; it may be inadvisable to try and delay matters. I do not know how difficult it is to arrange government business—I have never been in the position of trying to do so. But as far as I am aware there is no constitutional reason why Prorogation, which I gather is planned for Thursday, could not be postponed. I am sure that the Government will want to get their Bill through and I for one do not want to stop them, but it may be necessary for this Bill to be amended yet again. If the noble Lord, Lord Ashley, takes this matter to a Division, I am strongly inclined this evening to vote with him in his Lobby.
I have one question for the Minister. Why, when the Government are attempting to get people to produce their own private pension arrangements to back up what is acknowledged to be a rather low state pension, are they means-testing disabled people for incapacity benefit which is exactly the same sum as the state pension?

Baroness Darcy de Knayth
My Lords, I shall be extremely brief. I support these amendments. It is important that there is some method of uprating, as the noble Earl, Lord Russell, clearly demonstrated.
I reiterate something that the noble Lord, Lord Ashley, said when he so persuasively introduced these amendments; that is, the other place has not been asked its opinion on the compromise amendments. In any case, the Bill has to go back to the other place because of the successful amendment of my noble friend Lady Strange.

Lord Rowallan
My Lords, I apologise for taking up the time of the House after one and a quarter hours on this debate. However, I want strongly to speak on it.
When I was eight I had polio and was paralysed for 18 months. Luckily, I recovered. So I know what it is like to be disabled. Many more, 8.5 million people, as the noble Lord, Lord Rix, pointed out, certainly know what it is like to be disabled. The National Health Service looks after everybody equally. So should the social security system. That is the problem with which we are dealing today.
My father was a double amputee. As a result, I have worked for the past 10 years for all those who suffer from various disabilities. I am a life member of the Limbless Association; I am a director of SANE, the mental health charity; I am a patron of Depression Alliance, which deals with people who suffer from depression. Sadly, I shall not be able to do that too much longer from within your Lordships' House, but I shall continue my work outside.
The disabled did not choose to be disabled. Unfortunately, they are disabled. They must be treated fairly in all ways. Because I have lost my franchise to be here, I shall not become a hooligan; I shall not vote against this Government willy-nilly until Wednesday or Thursday. But in this case I feel it is the duty of this House to ask the other place to look seriously at this problem, which has not been debated there. It is the duty of this House to revise extreme measures of any government. We have done that successfully for many years. I urge your Lordships, if this matter comes to a vote—I feel sure it will—to support the noble Lord, Lord Ashley, so that it can be seriously examined again.

Lord Higgins
My Lords, anyone speaking in your Lordships' House in a debate on the disabled, which has had as participants those who have already spoken this afternoon, must do so with great diffidence. I speak not only of the noble Lords, Lord Ashley, Lord Rix, Lord Morris, and my noble friend the Duke of Buccleuch, but also of the noble Baronesses, Lady Masham and Lady Darcy. They have devoted their lives, in large measure, to helping the disabled. Therefore on this occasion I speak with great diffidence.
Perhaps I may remind your Lordships that we are now dealing with two sets of amendments, which have been grouped together. One group relates to the effect on the disabled if the restrictions on contribution requirements imposed by the Government are carried through, and the second group deals with the question of whether the disabled should have their benefits reduced because they happen to have occupational pensions. I believe that the grouping of the amendments is appropriate but, none the less, it is important for us to bear in mind the fact that we are discussing two issues here. Although they may be related they are, to some extent, separate. Therefore, I hope that noble Lords will feel that it is right to oppose both sets of amendments, as proposed by the noble Lord, Lord, Ashley.
We have before us some amendments on which the House of Commons has got to support the noble Lord, Lord Ashley—

Noble Lords
Oh!

Lord Higgins
My Lords, I beg the noble Lord's pardon. Let there be no doubt on the matter: we will certainly support the noble Lord, Lord Ashley.
I want to stress most strongly a point which has been made by a number of noble Lords, not least the proposer of the amendments himself; namely, that the House of Commons has not yet had an opportunity to vote on these amendments. When we discussed the matter during earlier stages of the Bill, we voted on and carried amendments to remove these two clauses, which I believe to be fundamentally wrong in principle. The matter then went to the other place and the Government came forward with totally inadequate amendments as a form of compromise. It is that on which the House of Commons has so far voted. The noble Lord, Lord Davies of Coity, seemed completely unaware of the fact that the other place has not yet had an opportunity to vote on these specific issues.
Although I continue to take the view that these clauses are wrong in principle, I recognise the fact that there is a case for compromise. I certainly believe that the compromise put forward by the Government is totally inadequate and that that put forward by the noble Lord, Lord Ashley, is one which the House as a whole should support. It is an entirely reasonable basis on which the House may proceed. Therefore, it does not seem to me that the issue of the constitutional position of the House, or whatever, actually comes into question at this point. Indeed, it is something quite separate.
Nevertheless, at the end of the day—and this is important—I feel bound to say that the matter rests with the House of Commons. We should give Members in the other place the opportunity to vote on these amendments. I do not take the view that it would then be right constantly to reject them. Indeed, as the noble Lord, Lord Ashley, pointed out, it is not his intention to kill the Bill. Similarly, it is not our intention to kill the Bill. Although there are a number of objectionable features in the legislation, I believe that, overall, it does things which ought to have support. Our task is to remove these particular clauses from the Bill.
I do not think that these clauses can conceivably be regarded as reform. They are fundamentally flawed. In addition, it has been said that this is a matter upon which there will be a conspiracy of hereditary Peers, and so on. However, one has only to look at the results of the voting on the last occasion when the matter was before the House. If no hereditary Peers had voted against these clauses, the amendments against the Government and in favour of knocking out the clauses would still have been carried by a substantial majority. I believe that there is great opposition throughout the House as regards what the Government are doing; indeed, it is all-party opposition.
My next point is equally important. It has been reported, not least in some press articles, that this is a measure to increase expenditure on the disabled. It is not so. These clauses do not represent a measure to increase expenditure on the disabled; they represent cuts in what has already been previously agreed for the disabled. That is the crucial difference between the two positions. In effect, we have been told by the Government, "Oh well, we have made a concession". But what has actually happened is that the Government have come forward with these proposals, which propose to take away benefits from the disabled. They have then said, "You can hang on to a little bit of what remains". That is not a reasonable deal. However, the proposition put forward by the noble Lord, Lord Ashley, would strike a reasonable balance between the two sides of the House.
I should like to say a few words on the substance of the matters now before the House. The first set of amendments is concerned with a contribution condition. It has been the hallmark of the Government's so-called "reforms" that, as an overall effect of policy, they have undermined time and again the contributory principle. Indeed, they have extended the question of means testing time after time. What we object to most strongly in the first clause that we are discussing and which the noble Lord seeks to amend is the proposition that people who have contributed for many years but have not done so recently—very often for good reasons—should suddenly find that they lose their disability allowance. We believe that to be wrong in principle. At any rate, one should go for the compromise which the noble Lord, Lord Ashley, has proposed; namely, that it should at least be a question of whether such people have contributed over a seven-year period.
The second set of issues relates to the question of incapacity benefit and pension contributions. I do not wish to burden the House by repeating the excellent exposition made by the proposer of these amendments as regards the way in which this will operate. It will do so by applying a ludicrously high, effective marginal rate of tax to people who cannot conceivably be regarded as well off. But there is an even stranger situation here. Under this clause, and at this very high rate of marginal tax, incapacity benefit will be taken away from people because they have an occupational pension. The whole thrust of the rest of the Bill is to say that people should make provision by way of pension. But what do we find? If you are disabled and have been fortunate enough to find a pension, you will suddenly find that you are penalised for so doing. The clause is totally inconsistent with what remains in the rest of the Bill.
However, there is something even more curious about this proposal. If you have an occupational pension at a relatively low level, your incapacity benefit will begin to be withdrawn. Indeed, after not very large increases in the level of income at which this happens, it will then be withdrawn altogether. If another individual on incapacity benefit had an income from stocks and shares of, say, £2 million a year, his incapacity benefit would not be affected at all. It is a truly lunatic situation. I really do not understand why it should be so.
There are many other arguments to deploy but, as many have already been put forward this afternoon, I do not wish to burden your Lordships' House by repeating them. However, there is perhaps one that is worth mentioning. I have in mind the question of public expenditure. We have been told, "Well, we have to make these cuts on the people who are incapacitated"—who are certainly not among the richest members of the community—"in order to pay for some of the improvements which have been made elsewhere in the welfare system". Indeed, some of those improvements will affect people who are better off and less incapacitated, if incapacitated at all. That is not a reasonable way to assess priorities.
I conclude on this note. Like most noble Lords, I am genuinely puzzled as to why the Government should persist in retaining these two clauses. I find them completely incompatible with the overall approach which they seem to be adopting. They cannot conceivably be regarded as reform. However, as I say, while they are wrong in principle I recognise that a compromise should be agreed. I do not think that this is something which should go back and forth and endanger the Bill. However, it is tremendously important that this House should carry out its duty, which is to ensure that those in another place, who must at the end of the day have ultimate responsibility for these matters, should have an opportunity to vote on the amendments which have been put forward by the noble Lord, Lord Ashley. I very much hope that your Lordships will support them.

6 p.m.

Baroness Hollis of Heigham
My Lords, in supporting Amendments Nos. 42A and 42B to Lords Amendment No. 42, I shall speak also to Amendments Nos. 43A to C. Of course I am asking the House therefore to reject the amendments of my noble friend.
It always gives me great pleasure to reply to such a balanced debate with such a variety of views as we have heard tonight. There have been three main themes advanced tonight. First, that what is being offered by my noble friend Lord Ashley is a compromise; secondly, that what the Government are doing affects people below the poverty line and, thirdly, that the other House should have a chance to consider—which it has not yet done—the amendments of my noble friend.
My honourable friend Mr Rooker in the other place said that he was engaging with myths as much as with information. I am afraid that I am about to do the same thing tonight. First, although this measure has been alleged to be a compromise, it is not. Secondly, we have been told that it affects people below the poverty line, but it does not The statistics are quite misleading.
Thirdly, we are told that the Commons have not had a chance to consider this matter when they have and have made their position already clear. I shall return to that point.
The Government have made it clear all along that the incapacity benefit reforms are based on principle, helping the 1 million disabled people who say they want to work to do so while providing the right support for those who cannot. The Government are already spending more than £24 billion a year on benefits for long-term sick and disabled people. During the course of this Parliament we expect to spend nearly £2 billion more. I repeat that this is not a cuts agenda, even though that has been alleged by some, including the noble Lord, Lord Higgins, tonight. As I say, we are spending nearly £2 billion more on disabled people in the course of this Parliament. But we believe that in doing so the greatest resources should be spent on those with the greatest needs. If we are to meet that challenge, incapacity benefit needs to be reshaped and reformed.
I remind the House that despite some suggestions to the contrary—again from the noble Lord, Lord Higgins—no one who is currently disabled and on incapacity benefit will be affected by these changes. In response to my noble friend Lady Kennedy I also remind the House that in future 90 per cent. of those on incapacity benefit will not be affected by these changes. I say to my noble friend Lord Morris, who has alleged that incapacity benefit expenditure is not out of control because the numbers on it are falling, that that is simply a result of measures taken in 1995. When someone now reaches retirement age he or she comes off IB and goes onto old age pension. That is the reason for the fall in numbers. It has nothing at all to do with the actual caseload.
The Government clearly have not gone as far as my noble friend Lord Ashley would like. I accept that. My noble friend presents his amendments as a compromise. That word has been much used tonight. However, his amendments are not a compromise by any definition of that word. They neuter most of the effect of this Bill, as I do not doubt that my noble friend intended they would. IB was devised as an earnings replacement benefit for those who became sick and disabled while in work and who might otherwise have remained in work. As people have said tonight, incapacity benefit was never intended to massage the unemployment figures, although it was so used by the previous government. IB was never intended to be a top-up for early retirement, although it is now being used in that way too. We are bringing back IB to its original intent, an earnings replacement benefit for those disabled while in work and unable to continue to work.
My noble friend's proposals for the contribution conditions would allow someone to qualify for 113 who did one year's work as long as 81 years ago. That is not creating a link with recent work. That is not compensating someone who has had to leave work recently because of incapacity. Instead it makes incapacity benefit a latent unemployment benefit.
My noble friend's proposals on occupational pensions would enable a single person to get IB with a pension—not an income—of up to £23,000 a year which would have been provided by earnings of £45,000 plus, or a couple with two children to get incapacity benefit with a pension of up to £39,000—I repeat that that is not income, wages or earnings but pension—implying preceding earnings of £60,000 to £80,000. No one in your Lordships' House—

Lord Goodhart
My Lords, I am most grateful to the noble Baroness for giving way. But are not the figures for earnings and pensions that she has just given to us similar to the sort of figures that she mentioned in connection with the working families' tax credit when she defended the fact that government benefits were being given to people on those levels of earnings?

Baroness Hollis of Heigham
My Lords, the working families' tax credit for a couple with two children would taper out at about £15,000 of earnings; that is, for a couple with dependent children. I refer to both partners being in work and eligible to claim childcare allowance. However, I am comparing like with like, not apples with oranges. The childcare allowance is equivalent to DLA, not IB. WFTC tapers out at earnings of between £14,000 and £16,000. My noble friend's amendment would result in IB tapering out at a pension of double that; that is, £39,000. That would have had to be preceded by earnings of £60,000 to £80,000. I am glad that the noble Lord, Lord Goodhart, gave me the opportunity to make that clear.
By any stretch of the imagination my noble friend is not targeting those with the greatest needs. My noble friend says that he is protecting the poor. Since when has someone with a pension of £30,000 plus—and therefore with preceding earnings of double that figure—been deemed poor? My noble friend's amendments are not a compromise. The word "compromise" is a useful one. It has become emptied of meaning tonight because, as my noble friend himself said, his amendments would remove from their reach two-thirds of those affected by the proposals.

Earl Russell
My Lords—

Baroness Hollis of Heigham
My Lords, I did not intervene in other people's speeches and I hope that I shall be allowed to make my speech tonight.

Earl Russell
My Lords, I am most grateful to the Minister for giving way. Does she understand that in the amendment of the noble Lord, Lord Ashley, we have conceded the principle? That is a great sacrifice. Some substantial share of the practice would be an appropriate response.

Baroness Hollis of Heigham
My Lords, to concede the principle and then move amendments which take almost everyone out of its operation is not to my mind a substantial compromise.
As I say, my noble friend's amendments are not a compromise. They take almost two-thirds of those affected by the measure out of its reach and they hugely reduce the impact on most of the rest. That is why the Government cannot and will not accept them. However, the Government have listened and have moved significantly. I remind your Lordships that the Government have extended the period over which national insurance contributions have to be paid from one out of the last two tax years prior to the claim for IB, to one out of the last three. In practice, that means someone will be able to get IB, given the working of the tax years, even if they last worked four and a half years ago. To qualify, people will need only to have worked for four weeks on average male earnings—or 12 weeks on the national minimum wage—sometime within the past four and a half years. Do your Lordships really believe that is an onerous contribution condition to meet?
The extra year that the Government amendment proposes will particularly help people with progressive diseases, who may lose their jobs some time before they are eligible to claim IB, and others with broken work records. As I promised on Report, the Commons amendment provides that people on disabled person's tax credit earning below the lower earnings limit will be able, like carers on invalid carer's allowance, to qualify on the basis of credits in the last two tax years, provided that they have paid contributions at some point in the past. That offers them real security if they stay in work. Again, the Government have listened, responded and moved.
Turning to occupational pensions, the Government intend to raise the occupational and personal pension threshold by £35 a week, from £50 to £85—which is substantial. That figure, as my right honourable friend the Secretary of State said in the other place, will be reviewed annually so that it keeps its value. Invalidity benefit will not even begin to be reduced for a single person until their income reaches £152 a week. Despite what was said by my noble friend Lord Ashley about the poverty line, that is some £55 a week above what many of us regard as the poverty line—below half average earnings. My noble friend misled the House, possibly because he was comparing a family with children against a single person. Again, that is apples and oranges. I am sure that my noble friend did not intend to mislead the House but he certainly did, and that mistake was repeated by the noble Lord, Lord Rix.
I repeat, the taper on IB does not even begin to come into effect for a single person, and similarly for couples, until their income is at least £55 above the poverty line that has been quoted by my noble friend. That means that single people will continue to get IB until their early retirement pension reaches nearly £11,500 a year, which is £86.50 a week higher than the disability income guarantee. A couple with two children could get £18,500 and child benefit on top of that, before they lost their entitlement to IB. On top of that, they might also qualify for DLA. Under the Government's proposals, unlike those of my noble friend, those people most severely disabled on the highest rate of DLA will not be affected at all. As a result of the Government's proposals, 100,000 disabled people will no longer be brought within these changes.
Three additional points were made. The first was that the amendment of my noble friend Lord Ashley was a compromise. Although your Lordships may wish to describe as a compromise something that effectively takes two thirds of the people out of the Bill's reach, do not think that you are somehow negotiating. Your Lordships are not and we are not.
The second point made and repeated concerned the poverty line. Given that the taper kicks in at some £55 a week over the poverty line and, on the Government amendments, would not be withdrawn for a couple with children until some £18,500 be fore child benefit and DLA, we are not talking about people below the poverty line.
The third point—made emphatically by the noble Lord, Lord Higgins—was that the other place did not have the chance to consider the amendments and that therefore we would be doing them a favour by returning these proposals for further consideration. I do not agree. I sat in the Gallery in the other place, as did one or two other noble Lords—not for the whole debate, but I went to and fro. It was clear to me and to the House that the entire debate on incapacity benefit, which went on for some three hours, was on the whole range of amendments thereto, as well as on the government amendments. My honourable friend the Member for Kingswood, Mr Roger Berry, stated in the other place on 3rd November: I have supported a compromise position, which is on the Order Paper".—[Official Report, Commons, 3/11/99; col. 321.] And he went on to describe it. That was just one part of an extensive debate on incapacity benefits. The other place had a proper opportunity to debate the noble Lord's amendment. It chose instead to support the Government rather than defeat them and to support the amendment of my noble friend, there advanced by Mr Roger Berry. The Commons have considered these amendments. They chose to support the Government. They considered this matter as part of the wider debate. They do not need these matters to be sent back to them.

6.15 p.m.

Lord Higgins
My Lords, if the Minister will allow me, the other place did not have the opportunity to vote on these amendments.

Baroness Hollis of Heigham
My Lords, if the other place had wanted these amendments, it could have voted down the Government's proposition and voted for the other amendments on the Order Paper put by Mr Roger Berry, which were basically the same as my noble friend's amendments. The other place chose not to do so. To suggest that the Commons had neither the wit nor the intelligence to see that strategy is deeply condescending to Members of the other place. They knew what they were doing. It is an act of self-deception by your Lordships to suggest that they did not.
The Government have a good and strong record of supporting disabled people. The Government are spending up to £2 billion more this Parliament. This is not about cuts. It is about seeking to respond to real, new and emerging need. The Government have delivered the Disability Rights Commission and are delivering the disabled person's new deal and the disabled person's tax credit—all in two years of a Labour Government. We are continuing that work in this Bill, strengthening the help given to the most severely disabled, the poorest disabled people, and to children and young people. That is a record of which we are proud.
We believe that what we are doing in the Bill is right. We are focusing help on people who need it most. For example, children born with a severe disability—not people retiring on a generous white-collar pension of £30,000 or more. That is why, although the Government have listened and have moved quite considerably, they will not be moving any further. The Government have sought to meet reasonable concerns. They have done so and should receive credit for that. Given that the Government's concessions and compromise have taken something like 125,000 people out of the changes in the Bill, to dismiss them as some noble Lords have done tonight—including some of my noble friends—as being somehow trivial and insignificant is deeply churlish.
The Government have listened. It is time that your Lordships listened. Ping-ponging the Bill will not bring anything further for disabled people. My noble friend Lord Ashley may believe that, but he is wrong. Ping-ponging the Bill will not bring forward any further concessions. I quote the Secretary of State: There are no further changes to come. The Lords must understand that". Ping-ponging could delay and endanger other aspects of the Bill affecting millions of people; not just extra help for the poorest and most severely disabled but the right of bereaved men to receive for the first time widower's benefits. Ping-ponging the Bill would also risk delaying and endangering the protection of SERPS widows, which we discussed earlier this evening. Let your Lordships be in no doubt that it would also risk the right of women who divorce—as, unfortunately, half of all married women will—to receive shared pension rights, which is something for which your Lordships called. Finally, it might risk or endanger the opportunity for several million low-paid people to enter a good, cheap, safe, funded stakeholder pension scheme.
I do not exaggerate when I say that millions of people—women, low-paid people, widowers and the poorest disabled people—will benefit from the Bill. So why are your Lordships proposing to ping-pong it when no further concessions are to be had? The House of Commons has twice—I repeat, twice—made its views clear that it supports the Government and that it supports the Bill. Ping-pong will delay the Bill; it could endanger it. It will not extract any further concessions; there are none to be had.
As your Lordships acknowledge, the Government have the right to get their legislation through—not my noble friend's legislation; not the Tory legislation; but the Government's legislation. I ask your Lordships and my noble friend: is it not time to acquiesce with grace to the considered decision of the elected House and send a Bill, which will benefit millions of our people, on to Royal Assent?

Lord Ashley of Stoke
My Lords, I wish to thank all the speakers who have participated in this splendid debate. We have had some marvellous contributions, nearly all of them well informed. I congratulate all speakers who have taken part. I need refer only to the brilliant speech made by the noble Lord, Lord Davies of Coity. Assuming that we were in a general election mode, it was a wonderful, rabble-rousing speech; it would have been a highly successful contribution to the hustings. Unfortunately, he got the date wrong, the time wrong and the place wrong. Apart from that it was a marvellous speech.
The only other comment I have on the noble Lord's speech is that he boasts about having been a trade union leader. If I may say so modestly, as a young man I was too. If I belonged to a trade union with a leader who was prepared to penalise severely disabled, poor people—living on a poverty level income, on £8,000 or whatever—I would join a different trade union.
The Minister has spoken with her usual eloquence. My noble friend is a great expert in this field. She is far more expert than anyone else in the House—with, perhaps, the exception of the noble Earl, Lord Russell. Both of them are exceptional speakers. However, I must pick her up on one or two small points.
She began her contribution by saying that there had been a splendid variety of views. I heard no variety of views at all; all I heard was unanimous condemnation.

Baroness Hollis of Heigham
My Lords, that will teach me to indulge in irony.

Lord Ashley of Stoke
My Lords, there was unanimous condemnation in the House of the Government's policies—except from our great friend, the noble Lord, Lord Davies of Coity.
The Minister said that my amendments were not really compromise. I know that my noble friend is good at fiddling figures—

Baroness Hollis of Heigham
Never! Never!

Lord Ashley of Stoke
My Lords, playing with figures perhaps. All I shall say is this: my amendments halve the money that the Government tried to save and squeeze out of disabled people.

Baroness Hollis of Heigham
My Lords, that is not correct. The Government's original proposals were for £700 million. My noble friend's proposals will bring that down to approximately £190 million.

Lord Ashley of Stoke
My Lords, the last Government proposals that I saw were £500 million. They were left with £350 million if my amendments were accepted. We could not lean over backwards further than that to be more compromising. I was against the principle—as was the noble Lord, Lord Higgins—of hitting severely disabled people in this way. As the noble Earl, Lord Russell, said, we gave way on the principle; we tried to compromise and to be reasonable because we recognise that the Government have this great majority in the House of Commons. That is the point.
Another point is that my noble friend mentioned those great examples of people on incapacity benefit who have marvellous pensions of £23,000 or £30,000. For her to quote those kinds of extreme examples shows the desperation of the Government. The wages necessary to receive a pension of that kind will be somewhere in the region of £100,000 or £200,000—I do not know. It requires an enormously high salary. How many severely disabled people applying for IB will have earned that kind of vast fortune? Maybe a dozen; maybe two dozen; maybe 100; maybe 1,000—but, out of the 310,000 people that we are talking about, that is nothing.
My noble friend seemed to be proud of excluding people from the measures in the Bill. It is a strange Bill where one has a Minister standing up to say "I am proud that this Bill does not cover these people and does not cover those people". The Bill is supposed to help people; it is to make specific provisions for IB to help people.
Perhaps I may round off in this way. My noble friend did not dispute that the Government's concessionary position leaves some disabled people in poverty of one kind or another. Someone receiving £8,000 is not a wealthy person to be hit by these proposals. She did not deny that the tax rate for these people is 70 per cent compared with 40 per cent for millionaires. She did not deny that the concessions given by the Government relate only to some 20,000 people with the high rate of DLA and 22,000 people with the disabled person's tax allowance.
Speeches have been made in the House by various speakers. I do not intend to go through them all. The Minister has failed to deal with them adequately. When she tries to frighten the House by mentioning all the good things in the Bill that are at risk, I shall say this: she knows that no one has been a stronger supporter of this Government than me; no one has been a stronger supporter of this Bill than me; no one has been a stronger supporter of welfare reform than me. I started my speech by saying that I admired the Secretary of State; I said how good he was and how wonderful was the record of the Government. But on incapacity benefit the Government are acting disgracefully by hitting these people. We are not jeopardising the good things in the Bill; we are simply challenging the Government for hitting people on incapacity benefit.
I hope that the House will support my amendments. As far as concerns the future, my options are open. I commend my Motion to the House.

6.28 p.m.

On Question, Whether the said Motion shall be agreed to?

Their Lordships divided: Contents, 260; Not-Contents, 127.

Division No. 2
CONTENTS
Ackner, L.	Denham, L.
Addington, L.	Desai, L.
Addison, V.	Dholakia, L.
Ailsa, M.	Dundee, E.
Alderdice, L.	Eden of Winton, L.
Allenby of Megiddo, V.	Elles, B.
Alton of Liverpool, L.	Elliott of Morpeth, L.
Anelay of St. Johns, B.	Elton, L.
Annaly, L.	Exmouth, V.
Ashbourne, L.	Ezra, L.
Ashley of Stoke, L.	Falkland, V.
Astor, V.	Feldman, L.
Astor of Hever, L.	Ferrers, E.
Attlee, E.	Fitt, L.
Avebury, L.	Flather, B.
Banbury of Southam, L.	Fookes, B.
Barker, B.	Forsyth of Drumlean, L.
Bathurst, E.	Fraser of Carmyllie, L.
Belhaven and Stenton, L.	Gage, V.
Bell, L.	Gardner of Parkes, B.
Berners, B.	Geraint, L.
Bethell, L.	Glanusk, L.
Biddulph, L.	Glasgow, E.
Biffen, L.	Glentoran, L.
Birdwood, L.	Goodhart, L.
Blatch, B.	Gormanston, V.
Blease, L.	Gray, L.
Blyth, L.	Gray of Contin, L.
Boardman, L.	Greenway, L.
Bowness, L.	Grey, E.
Bradshaw, L.	Hampton, L.
Bridgeman, V.	Hamwee, B.
Bridges, L.	Harding of Petherton, L.
Brougham and Vaux, L	Hardinge of Penshurst, L.
Bruntisfield, L.	Harmsworth, L.
Buccleuch and Queensbarry, D.	Harris of Greenwich, L.
Buckinghamshire, E.	Harris of Peckham, L.
Buscombe, B.	Harris of Richmond, B.
Byford, B.	Higgins, L.
Cadman, L.	Home, E.
Caithness, E.	Hood, V.
Calverley, L.	Howe, E.
Campbell of Alloway, L.	Howell of Guildford, L.
Carlile of Berriew, L.	Hutchinson of Lullington, L.
Carlisle, E.	Hylton-Foster, B.
Carnegy of Lour, B.	Ironside, L.
Charteris of Amisfield, L.	Jacobs, L.
Chesham, L.	Jeger, B.
Clancarty, E.	Jopling, L.
Clark of Kempston, L.	Kemsley, V.
Clement-Jones, L.	Kennet, L.
Clwyd, L.	Kilbracken, L.
Cochrane of Cults, L.	Kingsland, L
Coleridge, L.	Kinloss, Ly.
Cope of Berkeley, L.	Kintore, E.
Cowdrey of Tonbridge, L.	Kirkwood, L.
Craig of Radley, L.	Lamont of Lerwick, L.
Cranborne, V.	Lane, L.
Crickhowell, L.	Lauderdale, E.
Cross, V.	Lawrence, L.
Cumberlege, B.	Layton, L.
Darcy de Knayth, B.	Leigh, L.
Davidson, V.	Lester of Herne Hill, L.
Dean of Harptree, L.	Limerick, E.

Lincoln, Bp.	Redesdale, L.
Lindsey and Abingdon, E.	Rees-Mogg, L.
Linklater of Butterstone, B.	Rennard, L.
Listowel, E.	Renton, L.
Liverpool, E.	Richardson of Calow, B.
Lloyd-Webber, L.	Rix, L.
Long, V.	Roberts of Conwy, L.
Longford, E.	Rochester, L.
Lucas of Chilworth, L.	Rodgers of Quarry Bank, L.
Luke, L.	Roll of Ipsden, L.
Lyell, L.	Rotherwick, L.
McCarthy, L.	Rowallan, L.
McColl of Dulwich, L.	Russell, E. [Teller]
Mackay of Ardbrecknish, L.	Ryder of Warsaw, B.
McNair, L.	St. John of Fawsley, L.
McNally, L.	Saltoun of Abernethy, Ly.
Maddock, B.	Sandberg, L.
Mancroft, L.	Sandwich, E.
Mar and Kellie, E.	Sandys, L.
Marsh, L.	Seccombe, B.
Masham of Ilton, B.	Sefton of Garston, L.
Massereene and Ferrard, V.	Selsdon, L.
May, L.	Shannon, E.
Mayhew of Twysden, L.	Sharman, L.
Miller of Chilthorne Domer, B.	Sharp of Guildford, B.
Miller of Hendon, B.	Sharples, B.
Mills, V.	Shaughnessy, L.
Molloy, L.	Shaw of Northstead, L.
Monro of Langholm, L.	Shore of Stepney, L.
Monson, L.	Slim, V.
Montagu of Beaulieu, L.	Smith of Clifton, L.
Monteagle of Brandon, L.	Soulsby of Swaffham Prior, L.
Morris, L.	Steel of Aikwood, L.
Morris of Manchester, L.	Sterling of Plaistow. L.
Mountevans, L.	Stewartby, L.
Munster, E.	Stoddart of Swindon, L.
Murton of Lindisfarne, L.	Strafford, E.
Napier and Ettrick, L.	Suffolk and Berkshire, E.
Newall, L.	Swansea, L.
Newby, L.	Swinfen, L. [Teller]
Nicholson of Winterbourne, B.	Taylor of Warwick, L.
Noel-Buxton, L.	Temple of Stowe, E.
Norrie, L.	Tenby, V.
Northesk, E.	Teviot, L.
Norton, L.	Teynham, L.
O'Cathain, B.	Thomas of Gresford, L.
Ogmore, L.	Thomas of Swynnerton, L.
Onslow, E.	Thomas of Walliswood, B.
Oppenheim-Barnes, B.	Thurso, V.
Orme, L.	Tordoff, L.
Oxfuird, V.	Torrington, V.
Palmer, L.	Trenchard, V.
Park of Monmouth, B.	Trumpington, B.
Pender, L.	Turner of Camden, B.
Perry of Walton, L.	Waddington, L.
Peyton of Yeovil, L.	Wade of Chorlton, L.
Phillips of Sudbury, L.	Walpole, L.
Pilkington of Oxenford, L.	Weatherill, L.
Plumb, L.	Westbury, L.
Prentice, L.	Wharton, B.
Prior, L.	Wigoder, L.
Quirk, L.	Williams of Crosby, B.
Rathcavan, L.	Wise, L.
Rawlings, B.	Wright of Richmond, L.
Razzall, L.	Wynford, L.
Reay, L.	Young, B.

NOT-CONTENTS
Acton, L.	Bassam of Brighton, L.
Ailesbury, M.	Berkeley, L.
Alli, L.	Blackstone, B.
Amos, B.	Borrie, L.
Archer of Sandwell, L.	Bragg, L.
Ashton of Upholland, B.	Brett, L.
Bach, L.	Brooke of Alverthorpe, L.

Brookman, L.	Jay of Paddington, B. (Lord
Brooks of Tremorfa, L.	Privy Seal)
Burlison, L.	King of West Bromwich, L.
Carmichael of Kelvingrove, L.	Kirkhill, L.
Carter, L. [Teller]	Lea of Crondall, L.
Chandos, V.	Lipsey, L.
Christopher, L.	Lockwood, B.
Clarke of Hampstead, L.	Lofthouse of Pontefract, L.
Cledwyn of Penrhos, L.	Lovell-Davis, L.
Clinton-Davis, L.	Macdonald of Tradeston, L.
Crawley, B.	McIntosh of Haringey, L.
Currie of Marylebone, L.	[Teller]
David, B.	Mackenzie of Framwellgate, L.
Davies of Coity, L.	Mallalieu, B.
Davies of Oldham, L.	Marlesford, L.
Dean of Thornton-le-Fylde, B.	Mason of Barnsley, L.
Diamond, L.	Massey of Darwen, B.
Donoughue, L.	Merlyn-Rees, L.
Dormand of Easington, L.	Milner of Leeds, L.
Dubs, L.	Mishcon, L.
Elder, L.	Monkswell, L.
Evans of Parkside, L.	Murray of Epping Forest, L.
Evans of Watford, L.	Nicol, B.
	O'Neill of Bengarve, B.
Falconer of Thoroton, L.	Pitkeathley, B.
Farrington of Ribbleton, B.	Plant of Highfield, L.
Faulkner of Worcester, L.	Ponsonby of Shulbrede, L.
Filkin, L.	Prys-Davies, L.
Gale, B.	Puttnam, L.
Gavron, L.	Ramsay of Cartvale, B.
Gilbert, L.	Randall of St, Budeaux, L.
Gladwin of Clee, L.	Rendell of Babergh, B.
Goldsmith, L.	Richard, L.
Goudie, B,	Sainsbury of Turville, L.
Gould of Potternewton, B.	Sawyer, L.
Grabiner, L.	Scotland of Asthal, B.
Graham of Edmonton, L.	Serota, B.
Grantchester, L.	Shepherd, L.
Gregson, L.	Simon, V.
Grenfell, L.	Smith of Gilmorehill, B.
Hacking, L.	Smith of Leigh, L.
Hanworth, V.	Strabolgi, L.
Hardy of Wath, L.	Symons of Vernham Dean, B.
Harris of Haringey, L.	Taylor of Blackburn, L.
Harrison, L.	Thornton, B.
Haskel, L.	Thurlow, L.
	Uddin, B.
Hayman, B.	Varley, L.
Hilton of Eggardon, B.	Walker of Doncaster, L.
Hogg of Cumbernauld, L.	Warner, L.
Hollis of Heigham, B.	Warwick of Undercliffe, B.
Howells of St Davids, B.	Wedderburn of Charlton, L.
Howie of Troon, L.	Whitaker, B.
Hoyle, L.	Whitty, L.
Hughes of Woodside, L.	Williams of Elvel, L.
Hunt of Kings Heath, L.	Williams of Mostyn, L.
Irvine of Lairg, L. (Lord Chancellor)	Winston, L.
	Woolmer of Leeds, L.
Islwyn, L.	Young of Old Scone, B.

Resolved in the affirmative, and Motion agreed to accordingly.

Electricity from Renewables: ECC Report, Lords Sitting of 5 November 1999

1999-11-05T00:00:00+00:00

HL Deb 05 November 1999 vol 606 cc1102-35

11.6 a.m.

Lord Geddes
My Lords, I beg to move the Motion standing in my name on the Order Paper. I, and I am sure the whole House, greatly look forward to the maiden speech of my noble friend Lord Cathcart. I know a little of what my noble friend is going through because, by chance, I opened my account in this House almost exactly 24 years ago on the subject of an energy report from the European Communities Select Committee. In my remarks, nervous though I was, I concentrated entirely on what was then called "alternative energy". There is a certain amount of déjà vu this morning.
The report, and I hope the debate, is not an exercise in nostalgia. The development of renewable energy is of vital present and, even more importantly, future interest. The report being debated today resulted from the inquiry carried out by Sub-Committee B of the European Communities Select Committee of your Lordships' House. Having had the honour of chairing that committee, I wish genuinely to thank all its members, both present and past. I am particularly pleased to see six members on the list to speak today. I want also to thank and pay tribute to our specialist adviser, Mr David Milborrow, and to not one but two clerks who assisted us sequentially, Miss Kate Ball and Mr Roger Morgan.
The report was prompted by a projected draft EC directive to set a framework for expanding renewable energy with targets for member states. The only slight dilemma we had was that the draft never appeared! We found it on the Internet. It was then withdrawn, but I shall deal with that in a moment. We took evidence during the period January to March this year and published our report in July. The Government responded in the middle of last month in—and I say now, and I shall say again—somewhat discouraging terms.
It proved to be a very large and complex subject. We had 19 sessions of oral evidence, including John Battle MP, the then Energy Minister at the DTI, and Richard Caborn MP, the then Planning Minister at the DETR. We visited renewable energy installations in the north east of England and in Denmark. In addition to our oral evidence, we received 31 written submissions of evidence. Even then, we realised that we had not done full justice to the subject.
The December 1997 Kyoto protocol set firm targets for the reduction in pollution caused by the heavy reliance on fossil fuels and the resultant consequences for climate change. In our opinion, three complementary actions are required to meet those binding Kyoto targets: reduce energy consumption; improve the efficiency in both generation and use; and increase the proportion of energy from renewable sources.
Our inquiry focused on only the last. But our report emphasises—and I want to re-emphasise it this morning—that if we are ever to come close to meeting the Kyoto targets, the development of renewables must be accompanied by action in the other two fields. For instance, this country's medium-term emissions target to 2005 is equivalent to shifting all electricity generation to the renewables. Clearly, that is totally unrealistic. However, I hope that it gives your Lordships an idea of the magnitude of the problem.
Our inquiry also focused on progress to 2010. The climate change agenda seems bound to require further action over future years; for instance—and I am sure other speakers will take up the points—nuclear capacity will need to be decommissioned in due course. That is not far away. Fossil fuels will not last for ever. That has been said again and again, but it is a truism; they will not. However, we do not know when commercially they will run out.
In our inquiry, we defined renewable energy as that derived from non-fossil fuel sources: wind, waste and other biomass, hydro, wave, tidal, solar and geothermal. We specifically excluded nuclear power. Some have taken issue with us on that point, but we did so in order to contain the magnitude of the inquiry on which we were embarking.
We examined each of those non-fossil fuel sources in sufficient depth, we hope, to make informed comment. Of course, fuller study would have been possible, and perhaps should have been carried out, or could perhaps be carried out at a later date. We acknowledged in particular some important environmental issues in anticipation of the contribution from my noble friend Lord Cranbrook, but noted that we were able to touch on those issues only lightly. There are greater environmental issues than those specified in the report.
I turn now to the targets. The UK has pledged to derive 5 per cent of its electricity from renewable sources by 2005, and 10 per cent by 2010. Those targets are very much in line with those proposed by the EC. The Government say that existing contracts and arrangements will deliver the 5 per cent target by 2005, and that the new arrangements will shortly be in place to secure the 10 per cent target by 2010.
In our report, the committee agrees that such targets are technically feasible, but we cannot share the Government's confidence that either of those targets will be delivered. I shall discuss first the 2005 target of 5 per cent. The Government imply that the UK is on track towards meeting that target because renewable generation grew from 2 to 2½ per cent of electricity supplies between 1997 and 1998. That was, in the words of the government response, due both to a recovery in output from large hydro plant and to further NFFO projects coming onstream". NFFO is the dreadful acronym for Non Fossil Fuel Obligations.
The proposed EC directive would, in itself, have excluded large hydro. The Government are in a way—dare I say—massaging the figures, because not comparing like with like gives them a 1.3 per cent start. Even so, will the Government tell the House how much of that half a percentage point increase—between 2 and 2½ per cent—from 1997 to 1998 was due to NFFO projects coming on stream, and how much was due to recovery in output from large hydro plant"? Is enough capacity really set to flow from NFFO projects to meet the 2005 target?
The Government accept that that will not happen unless the integrity of existing NFFO contracts is maintained during the upheavals of the present electricity market reforms. That is another major problem area, which I hope that the noble Lord, Lord Sainsbury, will address in his response. When will the steps that the Government are committed to taking actually take place? Will they be on time to meet those targets?
I turn now to the more long-term target of 10 per cent. Our inquiry found that to achieve the 10 per cent target by 2010 would require a seven-fold increase in the average rate of the installation of renewable energy. We checked that figure extremely carefully because it was so alarming. It is a staggering figure and we are nowhere near meeting it. The Government agree that to do so will require a new suite of policies, but in their response to our report, they do not say what those will be, nor when they might be in place.
To meet the targets, all available renewable energy sources will need to be expanded at the maximum practical rate. We came to the conclusion that the main hope must rest on wind power, particularly from offshore sites. Having said that, there will be important contributions from waste combustion and landfill gas. The development of small hydro plants will be useful, but not significant in the overall situation. We did not see a significant input from energy crops. The Government in their response take issue with us on that score.
Photovoltaics harness the sun's energy indirectly, rather than using direct solar power. We considered them unlikely to be a major source of power, certainly in northern Europe, but we saw that there were important implications in photovoltaics for British industry. In the longer term, we saw useful contributions from offshore wave tidal streams and barrages, but not within the timescale up to 2010.
A key new policy is the financial support mechanism. The effective and well-regarded non-fossil fuel obligation (NFFO) arrangements will clearly not work in the newly re-structured industry. A decision was urgently needed in that context at the time of our report in July. That decision has still not been made. The Government say that they intend, to take the broad powers to establish a new support mechanism in the Utilities Bill which they hope to announce this autumn". It is now November, and we still have not heard about it. What is that new mechanism to be? Will the Government at least say when those key details are to be announced and give the target date for their implementation?
On the report's publication, I commented that, the right words are said, but we found too little sign of these delivering the necessary action". The dispiriting dead bat of the Government's response invites the same comment, dare I say it, even more strongly. I could illustrate that point, but I shall not waste your Lordships' time. I am sure that noble Lords will have seen the Government's response. I use perhaps a slightly strong word in saying that it is woolly. It does not get to grips with any of the problems that we tried to highlight in our report. There was no mention of action—it was all words.
On the question of unit price, our report was clear that for as long as the price of electricity generated from fossil fuels ignores the external costs of pollution, renewables are being set an unfair target. That is a very important point that is continually skirted over. Again, it is not a like-for-like comparison at the moment. In their reply, the Government acknowledged that the "polluter pays" principle holds. However, they then go on to say that account must be taken of other considerations. Yes, my Lords. But where should the balance be struck? Are they content to hinder the development of renewables by retaining that price inequity?
I make one more point on the financial aspects. In our report we use some quite strong language in saying that we considered it absurd that the climate change levy might be applied to renewable energy. Others have made the same point. I hope that we may hear from the noble Lord, Lord Sainsbury, that there is some movement on the Government's part in this respect. It seems absolutely crazy to levy a climate change tax or levy on the very type of fuel which is trying to achieve the objective of a climate change to improve the climate. That is a contradiction in terms.
We were extremely concerned about the whole planning situation, particularly in this country. The Government's response seems to us to indicate that they are far too confident that the planning regime will not frustrate the necessary massive development of renewables. There is one particular remark that I should like to quote from the Government's response that will sum up this point: It will ensure that Regional Planning Guidance and development plans play a key role in fostering a strategic approach to renewable energy provision". That did not fill us with great confidence. Our recommendations for improving the planning regime and for stimulating local interest in renewable energy schemes remain just as valid today as they were when we produced our report. I particularly draw your Lordships' attention to paragraphs 216 and 225 of the report, which I shall not repeat.
At the very least, can we be assured that there will be no more—I give this merely as an illustration—public inquiries into, say, wind farm proposals, where the inspectors simply repeat often misleading statements by objectors without qualification or comment? Many people have written to me saying that their heads are becoming very sore from knocking against an extremely heavy reinforced wall. It seems desperately difficult to get the message across that the planning regime should be proactive rather than immediately giving the easy answer—"no".
This whole problem is not about modest incremental change. The climate change imperative requires some dramatic action. New means must be found for achieving the necessary ends. I give a small illustration regarding the Ministry of Defence. We particularly included a comment about the, again, dead hand of the MoD. The Government say that work is in hand to codify measures to mitigate the impact of wind farms on radar reception. Phew! When will that be finalised? It has gone on for years and there is just a blockage. When will the MoD look seriously at this problem in order to try to help the development of renewable energy, not hinder it?
On embedded generation, we recommended in our report that work should be done to establish the relatively high limits of embedded generation with which the National Grid could cope. The Government agreed that that was an important issue which "needs to be addressed". But when, and how will it be taken forward?
We recommended what is known in the trade as "net metering". Some of your Lordships may not be aware that at the moment an extraordinary system exists which affects those who are doing their best. I think particularly of a house just outside Oxford, which was built specifically for photovoltaic power. Taking account of the different levels of demand for electricity within that house, there are occasions when the owner exports electricity to the grid and occasions when the owner imports electricity from the grid. That is fine. The problem is that presently the owner is paid 3p for the electricity going to the grid and has to pay 7p for the electricity coming from the grid. There is something wrong there. We strongly advocate net metering so that there is an equality in electricity going both in and out of the grid.
At the end of our report, we invited the Government to, declare unequivocally that the 'target is to achieve 10% of the UK's electricity supply from renewables by 2010'—and their determination to reach that target". In response, the Government restate the formula we criticised. They say that they have the, intention of working towards the aim of achieving 10%". with only the hope of achieving that by 2010. That is not good enough. We have gone past the stage of words. We must have action. Can the Government today be firmer on the date and strip out at least one of those temporising words in their reply?
As so often happens with reports in your Lordships' House, we acknowledge that the debate concentrated mainly on this country, rather than on the European dimension, because of the pure practical fact that witnesses tend to be local. However, we were conscious of the European dimension. The intended EC directive that inspired the inquiry was, as I have said, withdrawn after pressure from some member states. However, we have just heard that a revised directive is about to be published. We hope that the Government will do their utmost to ensure that the momentum is maintained at EU level.
Few things of such long-term importance as the climate change agenda are before us. The development of renewable energy is an integral part of that. The Government acknowledge that achievement of the targets will require coherent policy action and a sustained drive and leadership. They say they intend to provide that drive and leadership. However, I make no apologies for repeating that action is needed now. We have gone past the time of words. The Government may say that they are doing their best. However, I end by reminding them and your Lordships of Winston Churchill's wartime saying: It is not enough to do one's best. Sometimes one has to do what is necessary". I commend this report to the House.
Moved, That this House take note of the Report of the European Communities Committee on Electricity from Renewables (12th Report, HL Paper 78).—(Lord Geddes.)

11.28 a.m.

Lord Williams of Elvel
My Lords, the House will be grateful to the noble Lord, Lord Geddes, for introducing with the greatest clarity the report of his committee. First, I have to declare an interest as a vice-president of the Campaign for the Protection of Rural Wales, known as CPRW.
I noted that the three members of the committee also declared an interest. What worried me slightly was that the specialist adviser, who was praised so fulsomely both in the report and by the noble Lord, Lord Geddes, is himself technical consultant to Windpower Monthly. I am not saying that he behaved with any impropriety, but that perhaps explains the central flaw in the report, which is that it is too bullish about onshore wind power.
I also regret that the submission which was made by CPRW, both by e-mail and hard copy to the Clerk of the committee, was not apparently read by the committee. It certainly is not recorded in the report and it was not even acknowledged. As Wales is part of one of the most contentious areas for onshore wind power, I believe that it would have been good if the CPRW submission had been read. Had the committee in fact gone to Wales, members would have benefited from seeing some of the developments there and I believe they might have been a little less emphatic in their belief that it is a vocal minority which is opposing wind power schemes in Wales; and I believe they might have been less emphatic in their view that visual intrusiveness is on the decline or is overstated.
On some of the substantive issues, I agree very much with what the committee said. I agree with what the noble Lord, Lord Geddes, said about energy efficiency. It is vitally important to make sure that the cake does not grow larger and larger simply because people burn too much fuel, too much electricity.
I also agree with the tenor of the remarks of the noble Lord, and certainly the remark of Professor Fells in his evidence to the committee, that to reach the target set by the Government—5 per cent from renewables by 2003 and 10 per cent by 2010—requires action on an "heroic scale". That is what Professor Fells said and I believe that is what the noble Lord was saying today. Unless such action is taken, the targets are simply pie-in-the-sky; they will not be met.
I hope that my noble friend the Minister in his reply will take up this point and explain what the Government propose to do now to meet these targets. In particular, can he explain what, in the Government's response, is meant by protecting the "integrity of existing contracts"? I thought contracts were meant to have integrity anyway. We did not get much enlightenment from the Government on that; nor indeed from the committee.
On the various forms of renewable energy, I found the arguments that the committee produced against the Severn barrage to be rather less than convincing. The base load for the grid, of course, is nuclear. The flexible load is fossil fuel generating stations, which can be brought in and brought out of use as required. The tide is predictable, so a tidal barrage, like the Severn barrage, will produce electricity at a given and predictable time. That means that fossil fuel stations can be phased in or phased out, or reduce their output as the tidal barrage comes in.
Like all renewables, the problem is connection to the grid. It is extremely expensive to connect any type of large producer of electricity to the grid, but those costs just have to be faced. I accept that there is a financial problem with the Severn barrage. The return on investment is unlikely to be very high. Nevertheless, if we do nothing about climate change the return on investment will be even worse. I believe that is the sort of action on a heroic scale about which Professor Fells was talking.
I also believe that there is much more potential for photovoltaics than the committee and the noble Lord indicated. I was rather disappointed by their treatment of photovoltaics. There are only two paragraphs on solar energy. The problem is that the technology in that area is difficult. Although the technology is developing and developing quite fast, as the October issue of Electricity UK states: It comes down to a classic chicken and egg problem. As long as demand is small, production of solar energy will remain small scale and expensive, and as long as production is small scale and expensive, the price will remain high and demand small. Catch 22". I believe that at some point one has to break through that.
I turn to wind power. The technology for offshore wind power is not entirely proven. It is developing quite fast, but again the problem is the economics. The connection of large offshore wind power stations to the grid is very difficult and very expensive, but, again, it will have to be done.
Of course, onshore wind does not replace nuclear or fossil fuel generated power. It only displaces it when the wind happens to be blowing at approximately 11 mph, which is the cut-in speed, and lower than 55 mph, which is the cut-out speed. That, of course, is unreliable. So we have to keep fossil fuel stations going as back-up. Wind power will not replace fossil fuel power stations.
I understand that Denmark is well advanced in onshore wind power. I understand that 5 per cent of the electricity output of Denmark is produced by 4,700 turbines. The population of Denmark is 5.5 million; the population of the United Kingdom is 58 million. So arithmetically, if we want to achieve the same proportion of our electricity output by onshore wind power as the Danes, we would need some 45,000 wind turbines in this country. I really do not believe that that would be acceptable to public opinion. If all the wind farms in the whole world were put on to the South Downs, they would generate only 5 per cent of the total demand for electricity in the United Kingdom. Of course, we are not going to put them on the South Downs.
If the Government's figures are right—here I concede a point to the noble Lord, Lord Geddes—it means an enormous increase in the production of renewables and in their output. But this is a local problem. I am sorry that the committee did not visit Wales to see what the problem is. In Wales the most attractive places for wind farms—if one can call them "farms"—are the tops of hills. The most visually intrusive places for putting wind farms are the tops of hills. So the planning process is absolutely vital to make sure that we do not destroy our beautiful countryside in Wales.
I am sorry to say to the noble Lord, Lord Geddes, that the planning process is working very well as it is. Local people can give their views; councillors can give their views; people can get elected, or deselected on that basis. That is the way you have to proceed because you cannot force these things down people's throats, as sooner or later they will rebel. I applaud the Government's response in not changing PPG22.
There is one point on which I agree with the noble Lord, Lord Geddes. If the Government are serious, action needs to be taken now, but action needs to be taken on a very wide front. It is not just a question of one type of renewable; it is not just a question of two or three types; it is a question of getting to grips with energy efficiency and all the other things that the noble Lord spoke about, and of developing at speed the technologies which are environmentally friendly. Personally I believe that the Government should start the Severn barrage now. That would be an indication of how seriously they take this matter.
Again, Professor Fells said—I come back to where I started—that action is needed on an "heroic scale" if the Government's target is to be met. In my view, the committee has highlighted the problem, but has not produced a satisfactory solution.

11.38 a.m.

Lord Methuen
My Lords, I thank the noble Lord, Lord Geddes, for introducing the debate. It was a most fascinating inquiry and one that is highly relevant at this time. The noble Lord has been a most able chairman of our sub-committee and it has been a real pleasure to work with him during the time that I have served on the sub-committee.
The subject of our inquiry was limited to the generation of electricity from renewable sources. The technologies involved will be even more relevant to future generations. It is perhaps interesting to remember that our forebears, before the introduction of the steam engine, were perfectly familiar with and totally dependent on the use of renewable energy and its technology in the form of windmills and watermills.
One point that was specifically excluded from our inquiry, though mentioned in passing, was energy conservation. I felt that was a pity because electricity from renewables and energy conservation go hand in hand. Indeed, when we were in Copenhagen we were shown a graph which indicated that the Danes were expecting to reduce their energy consumption by 10 to 15 per cent by 2050. If we consider the likely demise of our nuclear power plants, the need to conserve energy becomes even more paramount. It may need to be achieved by long-term changes in our working lifestyle by such things as telecommuting with only occasional visits to the office. I do not usually use the M4, but the other day I got stuck in a traffic jam there. I was appalled to see that virtually every car alongside us had just one person in it. That is the type of energy conservation that needs to be emphasised at all times.
I was disappointed in the Government's response to our report. They need to get their act together if there is to be any hope of meeting their targets for the provision of electricity from renewables. The public have to be brought round to see the benefit of locally sponsored wind farms, from which they themselves will derive benefit, and thus defuse the NIMBY attitude which is so prevalent. I accept the comments of the noble Lord, Lord Williams, in relation to Wales. I have seen wind farms only in Cornwall. I live in Derbyshire and we have many sites there too which could be useful as wind farms, though I do not believe there are any at present.
It is crazy when we have probably the best environment in Europe for wind generation, both onshore and offshore, that we have such a poor success rate in the installation of wind farms. The planning regime has a significant part to play in our failure to install them and there need to be changes to ensure that a greater success rate is achieved. Success in this field could lead to significant industry in manufacturing wind turbines, creating tens of thousands of jobs and export opportunities. The same can be said for photovoltaic. We saw an active system in the University of Northumbria which was effective even when there are overcast skies, as there were when we were there.
Mass production can bring dramatic cost reductions, as we have seen in the personal computer industry. Again, there are vast overseas market opportunities. But for PV in this country we need to solve the net metering financial hurdle, as mentioned by the noble Lord, Lord Geddes, where electricity is bought and sold at vastly different figures. There are also certain technical problems to be overcome, such as "islanding", when a house is isolated in a small area and we try to feed all the neighbours rather than their obtaining their electricity from a distribution company.
I want to comment briefly on biomass. We saw examples of this both at a straw-burning plant in Denmark and in Northumberland where they were growing and using willow. Both installations were out of action when we visited due to corrosion problems, and there is obviously a lot of development necessary before they become realistic and practical installations. But with that development work, success should be achieved. However, we must remember that we have to move the biomass to the plant and we must be careful to ensure that the energy costs of transportation do not exceed the benefits of the electricity. In Denmark huge straw bales were being taken over significant distances to the plant.
I should like to comment on system distribution problems. Due to the intermittent nature of many renewable energy sources, the technology used in the generator and the often remote locations of generation sites, the operators of the grid transmission system and local distribution companies have serious anxieties with regard to system stability and frequency control. Problems may occur when the intermittent sources of supply begin to become a significant portion—say, 25 to 30 per cent—of the supply total. I understand the Danes have already experienced problems at times of low demand.
In committee we considered the Severn barrage for some time. The general opinion was that it was one of those projects that was always being put back because it was too expensive. But if it had been put in place 20 years ago it would by now be cost-effective and the initial amounts would have been written off. The noble Lord, Lord Williams of Elvel, overestimates the problem of connecting to the grid system. There are large, 400 kilovolt power lines which cross that area and I should be surprised if integration with the grid system was any problem at all.
Finally, the Government have to do much more to meet the targets which have been set and more joined-up thinking is required in these matters. I commend the report to the House.

11.45 a.m.

Earl Cathcart
My Lords, it is a great privilege to be addressing your Lordships' House in its current form. Indeed, I may well be the last hereditary Peer to make a maiden speech in your Lordships' Chamber. My maiden speech will be an easy day for me to remember as it falls on the anniversary of the Gunpowder Plot; but let me assure your Lordships that my speech will contain no fireworks, though wind maybe.
I too offer my congratulations to the Select Committee, in particular to my noble friend Lord Geddes, on its excellent report which I found informative and easy to comprehend. I live and farm in Norfolk. I am a district councillor on Breckland council. I am a member of the planning and development committee and the environment scrutiny panel, and I recently co-wrote a policy paper on the environment.
The whole subject of renewable energy should be viewed as an important part of the drive for sustainability which has been adopted wholeheartedly by government, both present and past. The Select Committee identified various features of the government and regulatory systems in this country which impact on this subject, and I have chosen to concentrate on just one or two of those.
First, I want to comment on the difficulties in obtaining planning permission. It is not the planning system that is obstructive to the development of renewables, but those who determine the planning process. Local difficulties exist when specific applications are considered. After all, all installations have an environmental impact. In Breckland, my local authority, we have a policy which positively encourages such development. The results are there to be seen in the electricity generation from poultry litter at Fibro-Thetford and the new wind turbine at Swaffham, both the largest of their kind in Britain.
Breckland has taken the view that we must contribute to global issues. Our policy is one of encouragement rather than obstruction. Sadly, not all councils take that view. Some authorities have policies which seemingly support renewables, but in practice create insurmountable obstacles to development. For example, one council encourages wind turbines—provided they are at least five kilometres from any built-up area. Just by looking at a map one can see that that becomes very restrictive, if not impossible.
As we have heard already, the report mentions the defect of planning inspectors' reports running counter to government planning policy guidelines—a clear case of a lack of joined-up thinking. So I submit that it is not the planning system which is obstructive, but the attitudes of those who determine the planning process. This report advocates more action to raise awareness of the need for renewable energy and I fully concur with that.
As my noble friend Lord Geddes said, a key feature which is impossible to disentangle from that of energy generation is energy conservation by that, I mean its frugal and responsible use in industry, public and domestic settings. Are we doing enough to reduce our energy consumption? I think not. Do we offer incentives which make a real difference? Again, I think not.
The many tried and tested ways of reducing energy use could make a significant contribution to the reduction in the greenhouse gas emissions. If these were adopted, the need for more power-generating capacity would be removed. Estimates range from 5 per cent to over 20 per cent of our energy consumption being removed by the adoption of better conservation practices. Let us compare this to the target of 10 per cent of generating capacity from renewables.
At the beginning of my remarks, I said that this subject is a sustainability issue. The thrust of sustainability is to ensure that decisions are no longer taken in isolation. The Government have described this process using the term "joined-up thinking". But the report concludes that as far as electricity from renewables goes, there is a decided lack of joined-up thinking. Indeed, many witnesses testified to their feeling of frustration at the fragmentation in the UK Government's policies.
The report recommends the establishment of a renewable energy agency, with real teeth. This is crucial if we are to have a co-ordinated approach to this whole subject and any chance at all of delivering our target, a target, agreed by the Government, that 10 per cent of the UK's energy requirement will be met by renewable energy by the year 2010.
It is this aspect of the report that I found most disappointing and indeed depressing. I did not have to read far, for on the first page of the report it states that although these targets are "technically feasible", the committee did not see them being delivered under present government policies.
But why not? Why are these targets not going to be met? There appears to be a lack of resolve on the part of the Government, whereas in other areas of planning targets have been set and the necessary procedures put in place to ensure that they are met. In particular, I am thinking of the Government's desire to have 4.4 million new houses built by 2010 (coincidentally, the same date as the renewable target). Each county was given its quota, which was then allocated to each district within the county.
In Breckland, our allocation was 10,000 new houses, and we are on target to achieve this. Surely it is not beyond the wit of man, or government, to apply a similar determined approach to renewable energy. If it can be done with housing, why can it not be done with energy?
If a renewable energy agency is to be formed, it can allocate targets to regions, as recommended in the report, via the regional development agencies. They, in turn, can then allocate to counties, and then on to districts. This would have the effect of making councils clearly accountable for the progress towards their target.
I would suggest that targets should be expressed in terms of the number of megawatts generated, rather than be too specific. This flexibility would allow each region and, indeed, each district to construct generators most applicable to its area. The UK's target by 2010 is technically achievable. What is lacking as the co-ordination and the resolve to do so. I do hope that this Government will have the courage to react positively to this report.

11.54 a.m.

The Lord Bishop of Hereford
My Lords, it is a great pleasure for me, on behalf of your Lordships, to congratulate the noble Earl, Lord Cathcart, on his notable maiden speech; indeed, a truly excellent speech, full of wisdom and interest and based on his first-hand experience in Breckland. I was particularly impressed by what the noble Earl said about the need for the conservation of energy and interested by his brief reference to the combustion of poultry litter, about which I should like to have heard more. I served my curacy in Breckland, so I can envisage those places where people are working so hard for energy conservation and renewable energy.
I warmly welcome the Select Committee's report on this immensely important matter. I have enjoyed reading it and I agree with much of it wholeheartedly. But I must first declare an interest on two counts. First, I am joint patron of Country Guardian, the organisation which opposes the large-scale development of wind turbines in sensitive landscape areas (though, I should add, not in a dogmatic or irrational way). Country Guardian is keen to see appropriate small-scale use of wind power in inconspicuous places. Secondly, I am county president for Herefordshire of the Council for the Protection of Rural England and, therefore, have another role in seeking to safeguard beautiful and precious rural areas.
I do not underestimate the very great seriousness of the problems caused by climate change and the urgency of the need to reduce greenhouse gas emissions. It is imperative, as the committee says, that we develop a clear, coherent, long-term energy policy, including the proper part to be played by renewable sources of power. I am glad to see in the report the rather chilling phrase: We have hardly begun to appreciate the difficulties that the future may bring". The overriding need is to reduce greenhouse gas emissions, and that should be the overriding objective of government policy. In seeking to meet our Kyoto commitments, and, I am sure, the very much more demanding targets which are bound to follow in the next century, the greatest emphasis must be on energy efficiency, on a reduction in the use of fossil fuels and on a complete transformation of our cavalier and self-indulgent use of road and air transport. The electricity industry is doing its bit in this regard, as is clear from the fact that, despite an increase in electricity consumption of 13 per cent between 1990 and 1997, overall emissions from electricity generation decreased by over 25 per cent in that same period—thanks to a greater emphasis on gas and nuclear as generating fuels, and much higher efficiency. If those improvements had been accompanied by a reduction in demand for power rather than an increase (and that could in fact have been achieved if we had been serious about energy conservation) emissions would have fallen even more dramatically.
So I want to set my comments on this report on renewables firmly in the context of the need for a coherent energy policy, for a proper emphasis on conservation and efficiency (and that implies, among other things, a radical change to the absurd policy of charging VAT at 17.5 per cent on insulation materials) and a serious attempt at reducing CO₂ emissions from road and air traffic.
Within that context, what part have renewables to play, in what timescale and in what proportion as between the various sources of renewable energy? These are serious and urgent questions, and I am grateful to the committee for having addressed them with such care and thoughtfulness. But I am sorry that the committee seems to have been driven to an unacceptable degree, in coming to its conclusions, by the target of achieving 10 per cent of electricity from renewables by the year 2010. That is, frankly, an arbitrary target. We have already heard that the consultation document has not yet been published. It is a target which has been plucked out of the air in order to show that we are serious about renewables and prepared to play our part properly in a European energy strategy.
The trouble with the 10 per cent by 2010 target is that it has inevitably led the committee, despite its scepticism as to whether the target is attainable, to place disproportionate emphasis on those renewable technologies which are at present most highly developed and able to deliver electricity at something very close to the market price—that is to say, wind power and energy from waste. I agree that if we were seriously to try to achieve the 10 per cent by 2010 target we would have to rely considerably on those two sources, despite their high environment cost. But I want to suggest that the environmental cost of straining every muscle to reach that target is too high. I wish that the committee had recognised that and concluded that the right way forward is to concentrate very much greater investment on research and development into the environmentally more benign forms of renewables—at present our research and development budget is preposterously small, despite the recent modest increase—so that by, say, the year 2030 there would be a good chance of a huge increase in the contribution from renewables, even as much as 30 per cent. of our by then reduced demand for power.
The long-term possibilities which look really promising in terms of generating power to feed into the grid are tidal, stream and marine current energy, more efficient and pollution free energy from waste, and possibly offshore wind, although by that I mean really offshore, over-the-horizon offshore wind, for otherwise we merely transfer the awful visual consequences of wind turbines from landscape to seascape sites.
The second hopeful approach is to reduce the degree of our dependency on the grid—although we shall of course still have to maintain it essentially as a national system; that is quite clear—by encouraging many more small-scale, local uses of renewable energy, so that many more people need the grid only as a fallback source of supply. Small-scale wind turbines in remote communities, much more domestic use of solar and photovoltaic power, much more local exploitation of energy crops, all these can make a significant contribution, in each individual case small but in aggregate of real value. I am sorry that that point was not made more powerfully in the report, though I recognise that it does recommend support of community-based energy proposals.
I comment briefly on one or two particular issues. I warmly welcome the suggestion that we should press forward with an integrated policy to encourage waste combustion, together with the exploitation of landfill gas. But I recognise the need for some convincing reassurance for the public over safety issues, for great sensitivity in the siting of waste combustion projects and, of course, for an even more vigorous policy of recycling to reduce the need for landfill sites in the first place.
I am sorry about the rather negative tone of the report in its treatment of energy crops. I am glad to see the robust response by the Government. The possibilities are, I believe, considerable, from coppiced wood in particular. There is a splendid example of this not far from Hereford in the large village of Webley, where two schools, a secondary school and a primary school, share an energy efficient and environmentally benign heating system fuelled by locally grown coppiced wood. This has provided local employment and a sense of pride and achievement in the community and has led to real environmental benefits with fuel "miles" down to a maximum of four or five as the coppiced wood is brought in from local woodlands behind a tractor.
I have already mentioned tidal power and I hope to see a much more enthusiastic government response on this. It is truly shameful that this area is not being properly funded in terms of research. I share the doubts expressed in the report about the practical difficulties and the serious environmental consequences of tidal barrages, despite their enormous potential in terms of power generation. Here I differ from the noble Lord, Lord Williams of Elvel. I know that the noble Lord knows the Welsh highlands well but he does not live on the Severn Estuary. The environmental consequences of tidal barrages are serious indeed.
Finally, I turn to wind power where I declare my particular interest. I am deeply concerned by the committee's criticisms of the planning process in relation to the development of new wind turbine installations—I shall not call them farms—and by the decisions of some planning inspectors. I am appalled by the suggestion that there should be, a presumption in favour of wind farm proposals". I am pleased to note the Government's robust and absolutely correct rejection of these criticisms in paragraphs 12 and 22 of their response. I warm to the vigour with which the noble Lord, Lord Howell of Guildford—I am sorry to see that he is not present today—described the lamentable environmental damage inflicted on central Wales and Cornwall when he stated, Visually these things are quite horrific, and are widely complained about, and I think rightly so". There are places where even quite considerable numbers of wind turbines might be sited without undue environmental damage. Blyth Harbour, which is mentioned in the report, is a case in point. Even the installations in Anglesey are not intolerably intrusive in a fairly flat and already quite developed landscape. But to contemplate the ruination of any more of our lonely and so far unspoilt hill country or coastline simply in order to meet this 10 per cent by 2000 target would be environmental vandalism of a disgraceful kind which we would live to regret.
As the committee observes, no method of energy generation is totally benign". There have to be compromises, but they must be sensible ones, not driven by panic or by an unrealistic timescale. I very much prefer the DTI's cautious and considered statement that, the Government intend to work towards the aim of achieving 10 per cent. of the UK's electricity supply from renewables", to the rather strident demands in the committee report for an unequivocal commitment to the target and determination to reach it by the implementation of "all necessary policies"—those are sinister words.
I am glad that the Government are playing a "dead bat". If it is a woolly dead bat, I know that it will not score many runs. But I hope that the woolly dead bat may be concealing a time for proper reflection and eventually the production of wise policies which will not be panic driven. By all means let us pursue a coherent, long-term energy policy and see the long-term potential of renewables, which is enormous. However, I am fearful of the prospect of what the committee calls for; namely, a renewable energy authority with real teeth". That might be a dangerous animal, especially if it sought to dismantle or override existing planning processes. I hope that the noble Lord, Lord Sainsbury of Turville, will be able to reassure us of the Government's strong commitment to well targeted research into renewables and of their continuation of their tough line on planning which is so encouragingly taken in their response to the committee report.

12.6 p.m.

Lord Paul
My Lords, I start by declaring an interest. I am chairman of Caparo Group, a company involved in manufacturing industry and, as such, a user of energy. I also wish to take this opportunity to thank the chairman of the sub-committee on which I had the pleasure to serve, the noble Lord, Lord Geddes, for his excellent leadership. Because of the rules governing committees, we shall lose our chairman at the end of the Session. However, as a result of the elections of last week, the House will continue to benefit from the noble Lord's presence. I also congratulate the noble Earl, Lord Cathcart, on his excellent maiden speech. I am sorry that we shall lose the noble Earl but we enjoyed his speech.
It is abundantly clear that one of the major issues of the coming century will concern the uses of energy. For most of the 20th century humankind has consumed energy with reckless profligacy and wanton disregard for the environment. Unfortunately the consequences of the past now demand a price and the circumstances in which we have to pay it are not the most favourable. In short, we have to find ways rapidly to reduce our use of fossil fuels, reduce our emissions of greenhouse gases and increase our use of sustainable sources of energy.
In any circumstances this is a heavy task. But we have to do it at a time when global population is both increasing and increasing its use of energy. That means questions of entitlements, social justice and all the other debates and demands that currently define the global energy-equity discussion. That larger context gives our deliberations today a certain urgency. As members of the European Union and in our sovereign capacity, we have undertaken commitments to conform with the Kyoto Protocol of 1997.
In conventional perception, the Kyoto Protocol may be just another international agreement—a set of guidelines produced by conference diplomacy. To my mind, however, it is much more. It concerns the future of Planet Earth and symbolises our participation in a covenant to sustain human life. Perhaps your Lordships may feel that I overstate the significance of Kyoto, but anything to do with the preservation and improvement of the quality of human life is surely of transcendent importance.
That is why the report of the Select Committee, of which I had the honour to be a member, is deeply disturbing. The report makes it evident that, with business as usual, we simply cannot meet our commitments to the targets set by the Kyoto Protocol. Those targets are not exceptionally excessive. With appropriate action, they are well within our capability. If we fail to meet them, that will tell us something disquieting about our own society; our commitment to the human prospect; our ability or inability to mobilise ourselves for tasks of high purpose; and our willingness to keep our sovereign obligations. In many ways, our response to Kyoto is more significant than Kyoto itself.
The report makes several recommendations that will enable fulfilment of our undertakings, which will get us from here to there. On balance, the proposals are not radical, but they do require that we urgently advance the development of several known sources of renewable energy—perhaps green energy is a more descriptive term.
Britain's target is to have 10 per cent of our electricity from renewables by the year 2010. To reach that figure will require accelerating the average recent rate of installing renewable electricity generation by a factor of about seven. On the surface, extrapolating current trends, that may seem difficult—but with policy changes and vigorous implementation, it should be well within our reach. I say that because of two intangible imperatives that are not easy to quantify but which will certainly have an impact—the velocity of technology and Britain's unequalled ability to mobilise in a crisis. That was how this country won the Second World War. We now have to understand that the challenge of energy and the environment is part of the challenge of sustaining life and ultimately is as critical as winning that war.
The Government's response to the report is encouraging, to the extent that it is almost in complete concurrence with the findings and recommendations of the Select Committee—with only one serious difference. I hope that concurrence will translate into vigorous implementation. Generally, I am not a very ardent proponent of greater government intervention—yet in matters such as these, only the momentum of government-supported efforts can provide the required co-ordination, incentives and public mobilisation. Naturally, there will be some policy and political pitfalls along the way.
Questions, such as how much the polluter should pay and what special treatment, if any, renewables should get are controversial. But we are a society that has come to realise that environmental relationships imply a balance between current costs and future benefits. What alternative have we, other than to move ahead?
Both the report and the Government's response mentioned the need for enthusing the public, which is essential. No policies and programmes in this area can work effectively without public endorsement. I am convinced that if we have the political will to proceed with resolution and despatch, we can secure that endorsement. Moreover, I see green energy and emission reduction as a category where private and public investment can engage in joint enterprise, underwritten by community involvement. It is an opportunity for an environmental compact that can be a model for sustainable development.
The report reminds us that we will not be alone in that effort. Many other responsible nations will be engaged in meeting their own targets. If those nations and our own are successful, this will be an environmentally safer world. That is surely a goal worth striving for.

12.16 p.m.

The Earl of Stair
My Lords, the Select Committee is to be congratulated on producing an excellent report. The requirement for the reduction in polluting emissions is long overdue. It is encouraging that the Committee is convinced that the United Kingdom can fulfil its obligation of 10 per cent energy from renewable sources by the year 2010. However, I agree with the statement in the report that reminds us—as did the noble Lord, Lord Geddes, in his introduction—that there is a long way to go to increase the use of renewable energy by seven times to approach that figure.
The summary to the report gives guidance, so I will not touch on that aspect further except to endorse the Committee's comments at paragraph 394, concerning the agencies that will have to co-ordinate and co-operate.
Several years ago, I conducted extensive research into the gasification of wood chips and other biomass for industrial use as steam. At that time the fuel was not competitive against hydrocarbon fuels because they were much cheaper and considerably easier to handle. Biomass has the disadvantage that the higher the moisture content, the more energy is used in the gasification of the biomass to expel the moisture and still produce a relevant energy output. The second big disadvantage is the large volume of low-density material that has to be moved from the forest or field to the factory. That increases the cost in direct relation to the distance of haul. At that time there was no Kyoto Summit and no environmental price was put on emission pollution from hydrocarbons.
The report investigates all currently feasible forms of renewable energy. I am encouraged that there is a perceived use for most of the by-products of our wasteful life. It will be a considerable improvement if, by reusing some of that material to generate electricity, we will be left with a negative CO₂ gain. It shows a good example of planning, if we can combine landfill sites with electricity generation—perhaps fuelling the generation by combustible rubbish and using the domestic waste to generate methane in a dual-fuel furnace.
If such waste processing schemes are to work, the important parts will be planning and public relations in regard to the environmental impact that the plants will have. Scare stories and rumours, particularly about dioxins and heavy metals, can cause serious delays in the development of power systems.
While wind generation is seen as an immediate opportunity, I am disappointed that the outlook for energy crops is not so encouraging. In line with the European reorganisation of the CAP, this would have been the perfect opportunity to encourage fuel crops on surplus agricultural land.
Forestry timber in Scotland has suffered a drop in market sales of 37 per cent over the past two years, due partly to the strong pound, but also to the mass import of cheaply produced timber from eastern Europe. There is a tremendous resource of timber and timber residues that could be converted to fuel for regional power plants; making use of the report's suggested assistance from the Government to start the system off.
The report implies that energy crops are more expensive than others, such as landfill and wind power. However, with sympathetic planning that could be improved. First, much of the cost for energy costs lies in the transport distance the material has to be taken by road to a power plant. If the exemption on tax which is currently applied to agricultural diesel was extended to renewable energy supplies and restricted to specified vehicles on the road, the price would be dramatically reduced. Secondly, if a 0.6 pence per kilowatt climate change levy were to be removed, the price would be further reduced. The report suggests several ways in which this can be achieved through community incentives. I do not wish to go into them any further at this stage.
Wind turbines have recently been one of the most controversial forms of renewable energy. Without doubt, wind farms are extremely unattractive because the only place they are remotely efficient is on the top of hills. It is of relatively little relevance that they have become quieter with recent development. There is a further unknown impact on the populations of bird life which live in the vicinity of these farms.
However, I agree that offshore wind farms should be developed. The only doubt I have is that these sea-borne units will hot be sufficiently high above the surface to make efficient use of the wind flows. I suspect that, from an environmental aspect, anything involving the sea or tidal flows will prove too controversial, too expensive and too complicated in the short term.
The report is very interesting. It gives great encouragement to getting under way some environmentally beneficial power generation. On the continent—especially in Scandinavia—localised power generation has been actively encouraged for many years. I hope that the Government will be able to facilitate the development of renewable energy in line with the report's recommendations.

12.22 p.m.

Lord Berkeley
My Lords, in the past few days, many noble Lords may have seen in the press quite a lot of discussion about the Kyoto targets. I recall reading that my right honourable friend the Deputy Prime Minister was slightly critical of the United States for not doing more to play its part in reducing the targets. There has been a big debate between the developed world, developed nations, and the third world as to who should set the example. This provides an opportunity for the member states of the European Union to set an example. We may be wobbling a bit in our targets—to which I shall come later—but we are doing quite well. It is terribly important that the United States plays its part as a demonstration to the rest of the world. There is total agreement that the targets have to be met or bettered.
I have the honour to be a member of the committee. I congratulate the noble Lord, Lord Geddes, on chairing it fairly, with humour, on keeping us moving and on stopping us from developing our own pet projects—some of which will probably emerge during the debate. But that is what these debates are about.
My feeling about the subject is that we do not need to be so cautious; the technology is there for many of the systems, as we have heard this morning. We can argue about which technologies, but, taken in the round, they are all there or can be developed quite quickly in a process which will reduce their price. We have heard an awful lot about technologies which are good or which are bad. We could move towards the stage where we say that all these technologies are fine—we want the electricity—but we do not want it generated in our backyard because our backyard is nice. It could be on the end of a jetty in Blyth; not many people live there and it does not matter so much. It could be out at sea, provided we do not see it.
When I was much younger I worked briefly on the Severn Barrage. I was interested to hear what my noble friend Lord Williams of Elvel said about that. There are, equally, environmental pressures and problems for the bird and marine life connected with that scheme.
We must not forget that there are environmental pressures with regard to greenhouse gases—which is where we started. If we do not want to have any electricity generators, that is fine, but we have to balance these matters. One could call the reasons for global warming "environmental vandalism", as the right reverend Prelate said. We have to balance all these matters—but it is a question of how we do so.
I believe that wind technology is proven. The committee saw it in operation in Denmark; it is quiet. I believe that there is a place for it, but I accept that it should not be on the tops of beautiful mountains. I see also a role for wind generators— if that is what we like to call them—on some of the structures that litter the Thames estuary, which the people who live there probably see. Many are relics from previous oil or gas explorations or from wartime defences. They do not look particularly nice and one could probably build on them.
Offshore technology for wind generation is exactly the same as that for onshore generation, except that the wind probably blows more constantly offshore and there may be more problems with connecting to the grid. But the technology is there and should be looked at. We have talked about tidal power. A lot could be done also with the photovoltaic in the longer term. I shall return to that matter shortly.
My general conclusion is that renewables can achieve the target. The question is which ones—it is probably several—and how. The report went into whether the target could be achieved with a number of small projects developed locally. I hope that the Government will pick this up; their response was not quite clear. Again, we saw this in Denmark. It is not a question of which project but of local communities having ownership of whatever is the plant or facility. That ownership can be financial ownership, community ownership or a kind of technical ownership. The community gets something out of it—which may be reduced costs for electricity, pride in what they have achieved or a benefit to the environment, whatever it is.
There needs to be a mechanism to encourage this practice. The Government have said they will do so through the regional development agencies. Whether targets are the right solution—as the noble Lord, Lord Cathcart, said in his excellent maiden speech—should also be looked at.
Let me now turn briefly to the photovoltaic question. It was mentioned by the noble Lord, Lord Geddes, in his opening remarks. I believe that the technology is proven. The noble Lord spoke about the house in Oxford which some of us visited. I know of another project which, sadly, illustrates a similar problem.
Greenpeace sponsored a demonstration in three houses on the Peabody Estate in Silvertown, east London. A very small installation of slightly more than a kilowatt was situated on top of each roof at a cost of approximately £6,000. The objective was that the tenants should save £60 a year in electricity costs. In that kind of estate, £60 a year is quite a saving. It is more than half of the cold weather payment that we were debating recently. The problem was that they met the same obstruction—I use the word advisedly—from the electricity board as happened in Oxford. It took a year to negotiate the contract. The board sold at 8p and bought at 2.9p—which are figures similar to those mentioned by the noble Lord, Lord Geddes. The board required the tenants to hire a special new meter; they could not buy it. In Oxford, the board reserved the right to read the meter every 30 minutes while the exporting was going on, and it was going to charge £26 for every reading. In both cases this would have resulted in the tenants paying the electricity board for the privilege of exporting power. The board came up with many technical reasons to hide behind what I believe are straight bullying tactics.
Net or revenue reverse metering, as the report said, is feasible for quite high levels of inputs, and is applicable to photovoltaic, small wind powers and small hydro powers. I believe that the public, investors and developers are hungry to participate in using renewables of whatever kind. However, they need a policy and incentives. They also need to feel that they are being fairly treated. Projects like the photovoltaic cells used in Silvertown, if installed widely in affordable housing, could greatly assist in reducing social exclusion at a very low cost. However, they must be able to sell back the electricity.
I must say that I was very unimpressed with the evidence presented to the committee from the regulators. They did not seem to believe that net metering or helping small-scale installations had anything to do with them. They felt that it comprised a great number of little people who were trying to dribble back into the grid and that the big boys would not like it. But lots of dribbles make a river and that river could significantly contribute to the 10 per cent target. For that reason, I hope that the Government will provide instructions to the regulators to change their policy on the matter.
Perhaps I may say a few words on jobs. Power for the New Millennium: Benefiting from Tomorrow's Renewable Energy Markets is an interesting report produced for Greenpeace by Forum for the Future. It points out that five to 10 times more jobs would be created in the construction and operation of renewables than are available today with gas-powered stations. My message to the Minister is that I do not see a downside in opting for renewable energy sources. It is a win-win situation. I hope that the Government will have the courage, in the best sense of the word, to move a little faster on the issue.

12.31 p.m.

The Earl of Cranbrook
My Lords, like other speakers, I congratulate my noble friend Lord Geddes and his committee on producing a powerful report. I also welcome the maiden speech of my noble friend Lord Cathcart. It was a thoughtful and profound contribution in many ways.
Not only is it Guy Fawkes Day today, as has been drawn to our attention by the noble Lord, Lord Berkeley; it has been the week during which we had the fifth meeting of the parties to the Convention of Climate Change. In preparation for that, the Hadley Centre for Climate Prediction and Research prepared an updated paper for the conference of parties. The paper has been available on the Web for a little time, and has been published by the Department of the Environment, Transport and the Regions under the title Climate Change and its Impacts. The foreword written by the Deputy Prime Minister must be one the gloomiest that has ever been written over the name of a Secretary of State for the Environment. I am sorry that the right reverend Prelate has left the Chamber because the Deputy Prime Minister says here that: without action to curb emissions [of greenhouse gases], many parts of the world will suffer severely from the effects of climate change in the lifetime of many people alive today … even stabilising carbon dioxide at twice pre-industrial levels, which is the EU objective—and which represents a considerable challenge—will nevertheless entail significant damage". He goes on to list the severe damage that may occur in many parts of the world under the latest Hadley predictions. The only totally bizarre point here is that the right honourable gentleman Mr John Prescott has chosen one of his "chubby cherub" photographs to head the piece. I strongly advise his public relations team to acquire a much more set-jawed, determined and resolute image to accompany such serious and gloomy messages. This is a very real and serious issue.
In paragraphs 248 and 249 of the report my noble friend Lord Geddes makes it clear that "renewables" in the terms of the committee's report and under the terms of the United Kingdom targets do include municipal wastes. At the same time as Sub-Committee B of my noble friend Lord Geddes was conducting this inquiry, Sub-Committee C, which I chair, was examining the proposal for a Council Directive on Incineration of Wastes, COM(98)588 final. Our report was ordered to be published a fortnight earlier than that for my noble friend Lord Geddes—we just beat him to the post—but the Government have been much more laggardly in their reply, which we received only on 29th October. However, I have given notice that today I shall be speaking on matters of cross-interest between the two reports.
As has been indicated in the Government's reply to the report on the incineration of wastes, progress on the waste incineration directive has been diverted by action in the European Parliament, by decisions taken at the June 1999 Environmental Council and by the publication of an amended waste incineration proposal by the European Commission. Furthermore, the whole issue is now under review by the new European Parliament. For that reason, my intervention today does not preclude a much fuller debate at a later date when a clearer picture emerges on the question of incineration processes. However, particular attention will need to be paid to wider aspects, including the position of incineration in an overall strategy for wastes management, emission standards and public health issues. However, it is appropriate for me to thank our specialist adviser, Professor Judith Petts, who is now deputy director of the Centre for Environmental Research and Training at the University of Birmingham. Furthermore, I thank the witnesses who assisted us and my fellow members of the committee who took part in the inquiry.
Wastes are substances that must be destroyed or disposed of under safe conditions. One disposal route that can be taken is incineration under controlled conditions. In whatever form it re-emerges, the revised wastes incineration directive will surely contain the requirement that best endeavours must be made to utilise the resultant energy. For that reason, the key point for today's debate is that wastes can substitute primary fuels in thermal processes for the production of energy. In that way, the incineration of wastes can lessen the overall production of carbon dioxide, which is the most abundant of the greenhouse gases to threaten the world's climate.
The debate today is focused on electricity generation, but it is actually far more efficient to make direct use of the heat of combustion. The members of Sub-Committee C were impressed by the extent to which cement kilns in particular can directly use the heat from burning certain wastes with or without pre-treatment. That process is known by the general name of co-incineration. The committee firmly recommended that so long as it is possible to comply with emission standards, all opportunities should be seized for the increased use of co-incineration. Co-incinerated wastes include treated liquid wastes which are marketed as secondary liquid fuels. In paragraph 85 of its report, the committee recommended that no barriers should be put in the way of continued use of secondary liquid fuels except those that can be justified on health and environmental grounds.
Our attitude was the same towards co-incinerated solid wastes; for example, arisals from carpet manufacture and so forth. In Belgium, I have seen problematic wastes successfully co-incinerated in cement kilns; for instance, sewage sludge mixed with sawdust from furniture manufacturers.
I therefore welcome the Government's positive response to the committee's set of recommendations on co-incineration—and I shall quote from the government response to the report from Sub-Committee C— properly regulated, this technology can recover significant value from wastes, displace the use of fossil fuels and help to reduce fuel costs for businesses". In their response the Government added their views on the treatment of used tyres for incinerated waste. The European Union directive will ban whole tyres from landfill by 2003 and shredded tyres by 2006. That will create a very considerable problem for the disposal of useless and worn tyres. In their response the Government have stated that they, consider that recovery in properly controlled cement kilns will have a key and increasing role to play". In that context, I presume that "recovery" means energy recovery. I hope that when he replies the noble Lord, Lord Sainsbury, will assure us that there will now be a strong government effort to promote such disposal routes through co-incineration with the direct recovery of energy.
The Government's response also supports the conclusion of both committees that in a system of sustainable waste management there will be a need for modern municipal waste incinerators with tight emission controls to protect the environment and public health. Furthermore, it may provide combined heat and power where practicable. In this area the government response is somewhat defensive. It attempts to defend the UK record for combined heat and power from waste. However, the figures speak for themselves. There are only two schemes in Sheffield and Nottingham. What should be the flagship scheme, the south-east London SELCHP scheme, is a misnomer because of failure to agree by the local authorities involved which it would serve. There is no combined heat and power being provided by SELCHP.
Sustainable waste management will give proper emphasis to the waste hierarchy. The prior objectives, as the right reverend Prelate said, must always be for waste reduction, recovery and recycling. The key question posed by Sub-Committee C is: what additional capacity will be needed? In this country only 10 waste incinerators are currently in operation, disposing of about 7 per cent of national waste arisings. The noble Lord, Lord Geddes, referred to a déjà vu experience. I, too, have a déjà vu experience. In 1989 I chaired the precursor of Sub-Committee C on the issue of incinerators. At that time we warned against the loss of existing incineration facilities. They were lost and difficulties are now being encountered in restoring them.
When we took evidence from the Minister, the right honourable Michael Meacher, the departmental estimate was that between 28 and 165 new incinerators would be needed in the United Kingdom to meet the targets of the landfill directive. As a committee, we were astonished at the imprecision of those predictions and we commented: We have been offered no indication where these plants might be sited, or their capacity". The answer, in the Government's response of 29th October, when one finds it, is quite simple. The Government state that: it will never be possible for the Government to suggest an exact number of facilities". Sub-Committee C also said: We find it inconceivable that, without direct government intervention, as many as 165 plants would ever receive planning permission". The role of the planning system has been a prominent feature of the debate so far. The report of the noble Lord, Lord Geddes, deals in some detail with the difficulties that are encountered in planning permission for renewable energy installations and recommends that the national policy for renewable energy should be an integral part of planning guidelines. What happens at present? As the noble Lord, Lord Williams of Elvel, indicated, there is considerable opposition to, for instance, wind farms. I notice that the Council for National Parks, which is an organisation I support, listed as one of its three main achievements of the past year successful opposition to a proposed wind farm fought against through a long and expensive public inquiry. In another context, some other local action group or NGO may well be boasting of its achievement in beating off a CHP incinerator for municipal waste.
Denmark has been widely quoted. Denmark has a high level of municipal incineration providing combined heat and power. When we visited West Jutland recently on another committee visit we found that some 10 per cent of the power supply is already provided by wind generation and there is a target there of 50 per cent, apparently with full public consent.
So the United Kingdom has fallen behind. Whatever one may say about our planning system, one has to face up to the fact that it is incurably adversarial. A solution must be found to shorten the process and to eliminate the resentment and the reaction that inevitably arise after huge contested inquiries where one party always feels aggrieved and resentful.
I agree with the Government in rejecting the solution put forward by Sub-Committee B that there should be a general planning presumption in favour either of wind farms or waste incinerators. There are important planning conditions in both cases. But the Government's response to the report is dead bat and is woolly. There are seven paragraphs of total obfuscation and obscure jargon ending up with the rather extraordinary sentence that this process will, encourage regional planning bodies to set targets in RPG, where sensible to do so, for the structure plan and UDP areas within the region consistent with the regional target provided by the regional framework. Advice on this will be in the final version of PPG11, due to be issued later this year". We must wait for that with bated breath. In Wales there is separate planning policy guidance and in Scotland we are told that the promotion of renewables is devolved to the Scottish Executive and is an issue of considerable interest to the Scottish Parliament. The only catch phrase I do not see is "world class benchmarks".
The response to the committee's report is weak and temporising. Something has gone wrong. When these targets are achievable, as the noble Lord, Lord Berkeley, said, and when there is a great variety of ways in which renewable energy can be obtained, why cannot we get our act together? I believe that one of the problems is the mixed and uneven devolved constitutional structure that has been put in place. That lacks the defining federal centre with the obligations and the powers to take a lead on critically important global and national issues. It seems to me that the United Kingdom Government, which we have to distinguish quite frequently from the administration of England—although it is the same people at different levels—have abdicated entirely the role of national government in an important area. We are left with a system which is so devolved that it lacks the ability to come together in a coherent way.
The solution proposed by the committee for the establishment of a dedicated agency has been rejected by the Government but I am pleased to see that the Government have accepted the committee's recommendation that they should undertake an authoritative public attitude survey. But I think that much more than that is needed. What I should like the Minister to say is that he will commit the Government immediately to a national consensus conference sponsored by the Government and clearly led by central government but without preconditions and involving, if I may use the jargon, all the stakeholders, including the NGOs, the energy producers and the vast range of people who have a special interest in different renewable processes. We need an immediate focus because the problem is urgent. We need to determine what renewable facilities are needed, including wind farms and waste incinerators with CHP, and where they will be placed. Let us predict in advance where these will be needed and where they will be acceptable so that the process can march on with the speed that is necessary.
It has already been said in the debate that action is needed on an heroic scale. The Government cannot opt out of the national duty of governance that will be sorely needed with regard to the global disasters that are predicted by the Secretary of State for the Environment, Transport and the Regions and the Deputy Prime Minister in his foreword to the Hadley Centre report. Those disasters can only be alleviated because, as the report makes clear, many of them can no longer be averted.

12.46 p.m.

Lord Brooke of Alverthorpe
My Lords, as a member of the European Communities Committee, I pay tribute to our chairman, the noble Lord, Lord Geddes, for the excellent leadership which he gave us throughout this complex inquiry. I express gratitude, too, to our specialist adviser, David Milborrow, and our clerk, Roger Morgan, for helping us to produce a wide-ranging but coherent and constructive report on this important topic. I should also like to thank the many witnesses who gave evidence to us. I hope they feel that their efforts were worth while. I should like to thank the Government for responding to our report. We had a quite lengthy response from them. Notwithstanding the length, I have to join previous speakers in expressing a shade of disappointment with what they have had to say. I rather suspect that many of those who gave evidence will share those feelings.
Why do I say that? I sense that as time has passed there appears to have been some weakening of the Government's manifesto commitment to a new and strong drive to develop renewable sources of energy; specifically, achieving 10 per cent of UK electricity requirements from renewables by 2010. Further qualifications of this target seem to appear every time another review or statement on renewables is made. The statement to us in October reads: Development of renewable energy, along with the promotion of improved energy efficiency and CHP, is an essential component of any cost-effective climate change strategy". We have no problem with that. It continues: A combination of all these factors will be needed". We have no problem with that in the committee. The statement goes on: The Government has announced its intention of working towards the aim of achieving 10% of the UK's electricity supply from renewable sources". That was quoted by my noble friend Lord Geddes. However, he missed something out. The statement went on to say, as soon as possible". So in fact a further qualification has been added to that.
That hardly sounds like a firm and ringing recommitment to the 2010 target for renewables or indeed to the 2003 target. Moreover, our confidence in that has been further undermined by the Government's announcement that another statement on renewables will come some time next year after a new draft climate change programme has been published around the turn of the year. The latter, we are, told will recommit the Government to ensuring that the UK meets its climate change targets. That is good news, as is the subsequent distribution of the Kyoto target in the European Union. The Government state that there will only be moves towards meeting the more challenging domestic goals for renewables. As I understand it, that represents a shift in policy position since the Government first talked to us on the matter 12 months ago. I should be grateful if my noble friend would tell me whether I am right or wrong. I must say that I should prefer to be wrong.
Will my noble friend tell the House when the renewables statement is likely to be made? Will it be a programme with targets, and if not, why not? Is he aware that doubts are beginning to arise, and also within the renewables industry, about the Government's ability to deliver their target of 5 per cent of electricity from renewable energy sources from 2003? That is worrying. While the 2010 target has always been stretching, so far there has not been the same amount of questioning about delivery of the 5 per cent target for 2003. That depends significantly on presently developing, and existing, contracts for electricity from renewables being maintained. As regards contracts reached on the non-fossil fuel obligation (NFFO) arrangements, with the restructuring of the electricity industry the NFFO support mechanisms are likely to go. So there are understandable fears that renewable contracts could be at risk. In turn, the 2003 target could be at risk. Like other speakers, I ask my noble friend the Minister to endeavour to assuage the fears, particularly in the industry, and at least recommit the Government firmly to the 5 per cent target for 2003.
The Government have already said that that is, critically dependent on maintaining the integrity of the existing contracts through the reform process currently under way in the electricity market". Will my noble friend indicate how they intend to achieve that? Does he foresee the plans being acceptable to existing contractors? If not, will my noble friend listen to their concerns and meet with them?
I apologise for rather labouring these points and concentrating almost exclusively on the issue of targets—I was pleased to note that the right reverend Prelate took up the same point; indeed, he voiced criticism—but unless there is a firm commitment in relation to those targets, the many statements that we have made in the report and the recommendations in other areas are worth nothing. We really must stick with the attempt to obtain firm commitments from the Government.
On the positive side, I welcome the lead role that the Government adopted at Kyoto. The UK accepted that urgent action is required on global warming and climate change. As we heard today, the Hadley Report re-emphasises the fact that there are even greater problems ahead, that there is no time to be wasted and that we must move quickly. I am pleased that the Deputy Prime Minister has taken the matter on board promptly.
The UK adopted more onerous greenhouse gas obligations than most of our European partners, and we set internal targets that go well beyond even those savings. The committee believes, as I do personally, that we should stick to them. This is a global issue. There is no escape from the consequences of our failure, or that of others, to act. We must use our influence with other countries within the EU, and especially with the USA, to encourage an adequate level of commitment and a sense or urgency— and in China also. The best approach is to set a good example by doing it ourselves. Our report sets out a way forward based on that example. I commend it to the House.

12.54 p.m.

Lord Lucas
My Lords, I congratulate my noble friend on the production of this excellent and timely report. I, uniquely among speakers so far, remain a sceptic about global warming. If we manage to double the level of carbon dioxide in the atmosphere, my judgment is that, with luck, it will postpone the onset of the next Ice Age by 200 years, and I am in favour of that. In the meantime, it will help my garden grow, and I am also in favour of that. If anyone is listening, we could do with a bit of global warming in the Chamber at the moment. I do not know whether there is a tap that can be turned, but I have been getting very cold sitting on these Benches.
Regardless of matters of timing, and however relevant or irrelevant the quota for Kyoto, it is clear that the fossil fuels that we are using will run out and that there will be a need to develop other means of supplying energy. In the process of fossil fuels running out, we shall at one time or another encounter some pretty severe shocks in regard to supply and price, which, if we have not prepared for them by putting in place a good quantity of renewable energy, will be much more damaging for this country than they need be.
We face a future that is unpredictable in the long term. The Government and successive governments must approach the matter with determination and consistency. The first thing that a government must do—more so than the present Government are doing—is to provide for research. That is a long-term area, and one where there are a number of possible solutions, none of which yet seems likely to be "the one". We cannot see where that is likely to happen. It is essential to keep research going on a broad range of activities, and not be put off by my noble friend's pessimism about the possibility of agriculture providing some of the sources of energy. We must look broadly and widely, and make sure that we do not attempt to back individual horses at this stage.
The Government must also develop the technologies that are beginning to look promising, and must support their early commercial development. Too many technologies have had their birth in this country but have gone on to be developed elsewhere because we have not allowed them to begin their commercialisation here. When we come to technologies such as photovoltaic, in which we have a major company as a world leader, it is essential that we continue to provide opportunities in this country for that technology to be used.
One crucial thing that the Government can do in that connection is attempt to remove some of the distortions that are present in the system. Net metering has been referred to by many speakers and it is mentioned in my noble friend's report. It is an enormous disincentive to people trying out small projects on a local basis. At present, the grid can clearly afford inputs from such sources without incurring any great costs or distortions. It is essential that we should allow those types of projects to go forward on the most profitable and commercially sensible basis by offering net metering and not imposing on them the extraordinary costs that the generators seem to want to impose.
We must also concentrate on storage. I have not seen that mentioned in the report. I declare an interest. Local schemes, particularly those that rely on intermittent sources of energy, require methods of storing that energy so that it can be dispensed over the period in which it is likely to be used locally; otherwise, we need to rely on a National Grid into which the energy can be fed. One of the principal contenders in that area, although it is not the only technology by any means, is the use of fuel cells to produce a hydrogen-based economy. Intermittent power is used to produce hydrogen, and the hydrogen is converted into power as required. That kind of avenue and that type of technology should come within this area. We are some way away from major commercial possibilities; however, the Government should not neglect that method when considering renewables. Sources of energy produced locally have many advantages. They can use local types of fuel, initiative and labour that are not available on a larger scale. If ways can be found to use those energy sources locally rather than transport them long distances, it is more likely that they will be commercially viable.
This report comes at a time when it appears that the Government are flagging in their resolve. Although I do not share the great fear of global warming that appears to motivate so many people in this area, I believe that it is something on which the Government must press ahead. They must make clear their planning policies and support for small-scale renewable energy initiatives so that they do not run into difficulties of the kind which mean that in the end we lose out on this technology.

1 p.m.

Lord Judd
My Lords, at the outset I must declare an interest. Apart from my membership of various environmental organisations, I am an honorary vice-president of the Council for National Parks and serve on the north west regional committee of the National Trust. I am also fortunate to live in a national park. Tribute should be paid to the noble Lord, Lord Geddes, supported by the members of the committee, for this interesting report. If it is in order, tributes should also be paid to others, such as the noble Earl, Lord Cranbrook, under whose distinguished chairmanship I have been privileged to serve on Sub-Committee C, for all that they have done on kindred committees.
Sometimes I feel that committees of this House which deal with environmental concerns haplessly struggle to contain the consequences of a situation that is out of our control and that we are fiddling with detail while a potentially terminal environmental crisis gathers momentum. Whether it be waste management, biodiversity or power, we could yet be damned by history for masking the symptoms of a fatal social disease; namely, that our present style of materialist growth simply cannot be sustained. If we do not look out we shall bury ourselves in our own waste, irreparably harm the globe's ecological systems, destroy biodiversity and eliminate the space and aesthetic balance, not least the beauty of our countryside, without which the wellbeing of our species will undoubtedly be damaged, perhaps fatally.
Remember, all the warning signs are there, not least on global warming and its devastating consequences. While a mere 25 per cent of the world's population continues to consume 80 per cent of the world's resources, God knows what will happen as the excluded demand their fair share. We simply must reduce the waste that we produce, limit the energy that we consume, protect the open spaces—the lungs of humanity—stop talking about agricultural policy with certain environmental responsibilities and begin to talk about environmental management, of which agriculture is merely a part. These are the urgent realities.
The truth is that a grip on environmental strategy is central to any kind of relevant politics. That raises the most immense issues of access, equity and justice. Without this priority becoming a constant, evident reality for the United Kingdom, and the international community as a whole, all our work in Select Committees may add up to nothing more than occupational therapy for those of us who do it—card playing while the "Titanic" sinks.
For all those reasons, I am 100 per cent in favour of producing energy from a variety of renewable resources. Among them I welcome wind power, but I favour it as a means to a decent, balanced and sustainable society. Wind power, or any other alternative power, must be planned in such a way that it does not destroy what it is there to serve. That is why much clearer guidance is needed on where wind power developments in either onshore or offshore locations are environmentally acceptable and where they are not. There is an urgent need to use stakeholder inputs to regional, county and district planning in order to identify the most environmentally suitable areas for the development of renewable energy in general and the wind energy resource in particular.
There are indeed places where wind and other renewable energy generation can be developed in an environmentally benign way. The coast north of Workington, Liverpool docks, or Blyth Quay, to which the report refers, are all examples. Renewable energy strategies, such as those pioneered in Cumbria and Cornwall, are needed to guide developers to such places. Their preparation should involve full public consultation and participation by local communities. However, we must beware of putting all the load on the relatively disadvantaged, creating new social sinks where we expect to find the power generation, the incinerators, the sewage works and the poor.
When we consider future planning for renewables it is essential that some kind of environmental appraisal is built into the incentive process. This will help to weed out the most environmentally questionable applications. I think of those on the fringes of national parks that keep being refused but will not take no for an answer. For example, there is a proposal for a wind power station at Mynydd Cilciffeth on the edge of the Pembroke National Park which I understand has recently raised its head for the third time in three years. Such an appraisal will also help to direct developers towards more environmentally acceptable locations, thereby reducing delays in the planning system.
Government guidance should make it much clearer where such developments are acceptable and where they are not. Nationally designated special landscapes and their fringes need stronger protection within planning policy guidance on renewables. Planning policy guidance in this context should underline that national parks are afforded the highest status of protection for landscape and scenic beauty: It is essential that planning guidance is not weakened to secure permission for developments that would otherwise be unacceptable, particularly in designated areas.
By being clearer on the appropriate siting of wind energy developments and in future introducing a form of prior environmental appraisal, the planning system would hold the key to the Government's policy on renewables. It would enhance countryside protection, increase public support for renewables and direct developers to environmentally more acceptable locations. It must be recognised that the sensitive boundary zones around the national parks are under great pressure from large-scale wind energy development.
Considerable pressure is being exerted by developers. The boundary zones of the Lake District, Snowdonia, the Pembrokeshire coast and Yorkshire Dales have been particular targets. As turbine size increases, the visually sensitive zone around the national parks will obviously become enlarged. For all those reasons, financial support should be given to a wider mix of renewable technologies, such as photovoltaics and solar energy. That will increase the choices available to the public and local authorities in deciding what renewables are appropriate for their areas.
The non-fossil fuel obligation inevitably encourages developers to target the economically most advantageous sites. As my noble friend Lord Williams of Elvel powerfully argued, this means that areas of greatest landscape sensitivity are the preferred choice for developers because that is where the highest wind speeds are to be found. NFFO's narrow focus on cost has encouraged the insensitive siting of wind turbines in or near nationally recognised landscapes. I believe it is highly questionable to claim that NFFO has been a considerable success because of the environmental benefits of the wind energy projects that it has supported. Surely, financial contracts for new wind power developments should take account of a range of environmental considerations, including the landscape and wild life impacts.
I should like to put five specific questions to my noble friend. First, does he agree that policies for renewable resources should be set within a strategic framework for energy policy, with emphasis given to measures to promote a reduction in energy consumption and efficiency? Secondly, does he agree that public policy guidelines should be speedily reviewed with a view to giving clear strategic guidance on developing regionally based policies for renewables and stronger protection for national parks and their sensitive fringes? Thirdly, does my noble friend agree that the planting of large-scale energy crops and the deployment of offshore wind turbines should be brought under the control of the local use planning system? Fourthly, does he agree that financial support should be made available for a portfolio of renewable technologies, including small-scale and community-based schemes? Fifthly and finally, does my noble friend agree that projects should be required to obtain planning permission prior to receiving a financial contract, and there should be a sustainability appraisal for each round of contracts under the future support arrangements?
Wild landscapes are a valid and genuine sustainable development issue. Future generations will need clean energy, but they will also need open and wild countryside. I believe that if ever there was a dimension of human affairs where the drive and rules of the market must be balanced by intervention for the common good, unarguably this is one.