Grand Committee
Electricity Capacity Mechanism (Amendment) Regulations 2024
(1 week, 5 days ago)
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Lord Hunt of Kings Heath
That the Grand Committee do consider the Electricity Capacity Mechanism (Amendment) Regulations 2024.
The Minister of State, Department for Energy Security and Net Zero (Lord Hunt of Kings Heath) (Lab)
My Lords, this instrument was laid before the House on 18 November 2024. It seeks to revoke and alter several provisions in assimilated Regulation (EU) 2019/943 of the European Parliament and of the Council of 5 June 2019 on the internal market for electricity, relating to the capacity market. For ease, I will refer to this as the assimilated electricity regulation. The instrument makes targeted, technical amendments which are intended to support the continued operation of the capacity market, Great Britain’s main mechanism for ensuring security of electricity supply. It does not introduce any practical changes to the operation of the capacity market.
Before outlining the specific provisions of this draft instrument, I will briefly provide some context. Great Britain’s electricity capacity market was introduced in 2014 and is designed to ensure that sufficient electrical capacity is operational and on the system to meet future predicted demand, thereby maintaining security of supply. The capacity market scheme provides all forms of existing and new-build capacity with the right incentives to be on the system to deliver when needed. It covers different types of electrical capacity, including generation, storage, consumer-led flexibility and interconnection capacity.
Through capacity market auctions held annually one year and four years ahead of delivery, the aim is to secure the capacity needed to meet future peak demand under a range of scenarios. This is based on advice from the capacity market delivery body—the National Energy System Operator. Capacity providers which are successful in the auctions are awarded capacity agreements, which range in duration from one to 15 years.
The capacity market was introduced in 2014. Since then, it has contributed to investment in just under 19 gigawatts of new, flexible capacity needed to replace older, less efficient plant as we transition to a net-zero economy. The capacity market was originally approved under European Union state aid rules for a period of 10 years. Following the United Kingdom’s withdrawal from the European Union, a requirement in EU law for approval of up to 10 years was brought into domestic law as part of the assimilated electricity regulation. To date, the capacity market has been successful in ensuring that Great Britain has sufficient electrical capacity to meet demand and continues to be required to maintain security of supply and provide confidence to investors.
On the detail of the instrument, it revokes and alters a number of provisions relating to capacity mechanisms in the assimilated electricity regulation, including Article 21.8, which requires that
“Capacity mechanisms shall be temporary”
and
“shall be approved … for no longer than 10 years”,
and other references to such mechanisms being temporary. The instrument also revokes provisions that either are no longer considered to be necessary or require minor correction following the UK’s withdrawal from the European Union. We are seeking to make these changes so that our post-EU exit legal framework reflects the continuation of current arrangements for maintaining a secure electricity supply, since there remains an ongoing need for the capacity market to ensure sufficient investment in reliable electricity capacity.
Furthermore, following the UK’s withdrawal from the European Union, the domestic subsidy control regime was introduced. The subsidy control regime does not require subsidy schemes to be granted an approval or limited for a specified period. Therefore, the approval requirement in the assimilated electricity regulation does not reflect our post-EU exit arrangements. Of course, it is important that we keep the capacity market under review and there are multiple controls set out in domestic legislation, all of which will be retained. This includes a statutory requirement for my department to review the capacity market regulations every five years, which provides an opportunity to review the need for the scheme. Ofgem also undertakes an independent five-yearly review of the capacity market rules. Furthermore, the Secretary of State can decide not to hold a capacity market auction. These embedded controls all remain as part of the wider domestic capacity market legislative framework.
In conclusion, this draft instrument revokes and alters certain provisions related to the capacity mechanism in the assimilated electricity regulation. This includes a requirement for an approval lasting no more than 10 years, as well as references to capacity mechanisms being of a temporary nature. These changes are being made to ensure that our domestic legislative arrangements reflect the continuation of the capacity market, which is Great Britain’s main mechanism for ensuring electricity security of supply. I beg to move.
Lord Lilley (Con)
My Lords, I want to use this as an opportunity simply to ask a question of the Minister. Why do we not take the advice of Professor Dieter Helm, in his review of energy policy, which was that instead of us providing the capacity mechanism centrally, we require anyone providing electricity into the system—wind generator, solar generator or whatever—from an intermittent source to provide firm power, in other words to pay for some capacity for the times when the wind is not blowing? If that were done, this whole arrangement would be unnecessary. We would have a much clearer idea of the total cost of intermittent energy if the supplier were also paying for some of the back-up capacity that is necessary to meet the occasions when intermittency prevents delivery of the power.
The only argument I have heard against this is that, if you do it wind farm by wind farm, the aggregate amount of capacity would be statistically greater than is necessary to meet the fact that some wind farms will be producing when others are not, but that surely can be overcome by saying that a certain statistical proportion of the necessary capacity should attach to any intermittent generator. Then we would have a more rational, more credible and more manageable system than the one that we have under these regulations.
Earl Russell (LD)
My Lords, this instrument revokes and alters several provisions of the assimilated EU regulations relating to the internal electricity capacity market. The draft regulations make changes necessary for the operation of the capacity market following our withdrawal from the European Union and they revoke the 10-year approval requirements. We do not oppose these changes—I just say that to start with.
Our electricity capacity market was introduced in 2014. The measure is designed to ensure that maximum output is always available and thus that we can maintain sufficient electricity capacity to meet future predicted demand, always ensuring the security of electricity supply. As we have heard, the capacity market covers generation, storage, consumer-led flexibility and interconnector capacity. It is about ensuring the security of this supply at all times. Auctions are held annually, one year and four years ahead of delivery, to ensure that we have supply when we need it and can meet future peak demand in a range of scenarios, based on advice from the capacity market delivery body, the National Energy System Operator.
The capacity market was originally approved when we were part of the EU and was made under the European Union’s state aid rules for a period of 10 years. Following our withdrawal, this requirement was brought in and enshrined in our domestic law as part of the assimilated electricity regulations. The capacity market will continue to be required to maintain the security of supply and investor confidence. This market will be of even greater importance as we seek to decarbonise our electricity generation by 2030 and, at the same time, see an ever-growing increase in electricity demand. The draft regulations revoke the requirement that
“Capacity mechanisms shall be temporary”
and
“shall be approved … for no longer than 10 years”,
and other references to such mechanisms being temporary. The draft instrument also revokes several provisions that require minor correction. As I said, we do not oppose the recommendations in the instrument, but I wanted briefly also to turn to some broader points.
As we seek to reach net-zero carbon generation by 2030 and beyond, the Government have a continued dependency on unabated gas and propose that carbon capture and storage should be used as a key part of our energy mix. Indeed, the clean power 2030 plan has around 35 gigawatts of unabated gas on standby for security of supply, and this requirement for gas capacity will remain throughout the early 2030s until more low-carbon dispatchable power comes on board to replace it. Although required, back-up reserve gas generation that is used intermittently and only when necessary is also very expensive, understandably. The Government have agreed to invest some £22 billion over the next 25 years in carbon capture technology to help make sure that we can have this unabated gas without adding to our greenhouse gas emissions.
The week before last there was a debate in the Chamber on the Science and Technology Committee’s report on long-term energy storage. We have also had a couple of Questions about the Russian shadow fleet and the attack on Baltic power cables. Of course, renewable energy is not always reliable, and everybody knows that it needs to be backed up by a wide variety of other sources to help ensure the security of supply. On that basis, can I ask the Minister about the Government’s proposed energy mix going forward to net zero and beyond? I am a little concerned that we continue to have this requirement: it is basically solar, wind and dispatchable gas backed by CCS and nuclear. Will the Minister say a word about how the Government will keep this mix under continuous review? I encourage them to invest in alternative renewable technologies, such as wave, tidal and geothermal, that are able to provide the dispatchable power that we need. What is the Government’s thinking on that?
We must also ensure that all the wind energy we generate is available and can be used. As I said, there is also a need to radically increase our medium and long-term energy storage, which is available to help us get through periods when other sources of renewable energy are not on tap. I hope that the reforms to the capacity market already announced will help make that happen. More must also be done to reduce demand; as the Government know, the best energy is the energy we never use.
Turning to this SI, I note that, as the Explanatory Memorandum says,
“there is a requirement to review the Electricity Capacity Regulations … at least every five years to determine whether they are meeting their objectives and remain fit for purpose”,
and I note that the Minister said the Government will continue to keep the controls in place. As we are going through such a rapid period of change, we welcome the fact that the Government have brought forward the plan to decarbonise our power generation by five years, but what consideration have they given to the need to review these mechanisms more than every five years? What might trigger that? What is the Government’s thinking on those matters?
Lord Offord of Garvel (Con)
My Lords, these regulations represent an essential step in ensuring the continued security of electricity supply in Great Britain. This SI builds on the work initiated by the previous Conservative Government, which reviewed electricity market arrangements in 2022. The task in hand is to amend the existing provisions of the Energy Act 2013 following the UK’s withdrawal from the European Union and align our national electricity market with the post-Brexit reality. These amendments are crucial to ensure that the capacity market can continue to operate effectively and flexibly in a changed regulatory environment.
As we transition towards a low-carbon energy future, securing a reliable electricity supply requires robust mechanisms that incentivise investment in reliable and flexible energy sources. The amendments introduced by these regulations are intended to bolster the capacity market’s role in supporting the security and reliability of electricity supply in a period of evolving energy needs and shifting market conditions.
These changes enable the UK to pursue an independent course, while ensuring that the capacity market continues to provide the stability and security our energy grid requires. By revoking outdated EU provisions, the UK can define its own market mechanisms that better reflect national priorities, including transition to a low-carbon energy future and enhancing energy resilience across Great Britain.
Lord Hunt of Kings Heath (Lab)
My Lords, I am most grateful to noble Lords who have taken part in this short but none the less interesting debate. As we move to a clean power system and closer to achieving net zero, it will be critical to ensure we have adequate flexible electricity capacity that can be ramped up quickly when renewable generation is low, such as on dark, still days.
We believe the capacity market remains an effective insurance mechanism for security of electricity supply, providing revenue certainty to market participants and a secure and affordable electricity supply that families and businesses can rely on. I am grateful to the noble Lord, Lord Offord, for his general support for the regulations. I certainly acknowledge that a lot of the groundwork was undertaken by the previous Government, as he suggested. I can also assure him that we as a department will continue to provide oversight of the way the arrangements will operate.
As for the point raised by the noble Lord, Lord Lilley, the noble Lord, Lord Offord, referred to the REMA consultation, which we have debated as well. I think that Professor Helm’s proposals were considered by the previous Government, who decided not to take them forward. My understanding is that there was thought to be insufficient evidence that putting responsibility for procuring flexibility on generators, which would mean decisions being taken at a project rather than a system level, would lead to a low-cost capacity mix. Many respondents also expressed concern that this option would increase risks on renewable generators, leading to higher strike prices and overall system cost without the compensating benefits of efficiency or security of supply. We remain of the view that the current system is probably the best way to manage the issues that I have referred to.
I thank the noble Earl, Lord Russell, for his support. The question of reviews was also implicit in the question from the noble Lord, Lord Offord, and alongside the five-year reviews, each year an assessment is made of the required capacity to meet the expected level of peak demand in four years’ time. The majority of the predicted capacity required is secured well in advance. A proportion of capacity requirement is secured one year in advance, based on latest demand forecasts, so it is a continuous process, if you like.
We keep the capacity market mechanism itself under constant review and consult regularly on amendments and incremental reforms. In late 2024 we consulted on a number of changes to the capacity market to ensure security of supply and enable flexible capacity to decarbonise. We hope this will ensure that supply can meet demand as we transition to net zero.
As for the comment about the mix of technologies going forward, the report by NESO and my department’s clean power action plan set out our view of the technologies by around 2030. We will rely on unabated gas as the main mature, reliable technology capable of filling that role at the moment. We expect that the amount of unabated gas we need will reduce as we deploy more low-carbon technologies. Our aim is to move gas into a reserve role, used primarily to ensure security of supply.
The noble Earl also mentioned tidal and other technologies, and we remain open to those possibilities. He may know that I am meeting the noble Lord, Lord Alton—tomorrow, I think—to discuss tidal, so we are not ruling out the use of those technologies. I am grateful to noble Lords.
Clean Heat Market Mechanism Regulations 2024
(1 week, 5 days ago)
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Lord Hunt of Kings Heath
That the Grand Committee do consider the Clean Heat Market Mechanism Regulations 2024.
Relevant document: 10th Report from the Secondary Legislation Scrutiny Committee
The Minister of State, Department for Energy Security and Net Zero (Lord Hunt of Kings Heath) (Lab)
My Lords, I beg to move that these regulations, which were laid before the House on 21 November 2024, be approved. The instrument forms an important part of the Government’s commitment to make the UK a clean energy superpower and deliver warmer homes. It is the Government’s mission to make energy affordable and to strengthen the UK’s energy security. By supporting heat pump manufacturing and encouraging innovation, we are giving more consumers the choice to make the transition to low-carbon, high-efficiency heating.
With over 80% of homes using fossil fuel gas for heating, there is a huge opportunity to deliver affordable and efficient heating and protect consumers from the costly vagaries of international gas markets while reducing a major source of greenhouse gas emissions. Heat pumps, which are on average three times more efficient than a gas boiler, are suitable for the overwhelming majority of UK homes, and they have a role of paramount importance role to play in delivering this ambition. That is why in November last year the Government announced a range of first policy steps under our warm homes plan, alongside investment in training and British manufacturing capability, to make it easier and more affordable for consumers to make the switch to a heat pump.
The clean heat market mechanism will provide industry with the stability and confidence to scale up and invest in the heat pump supply chain. It will also ensure that British businesses can benefit from the transition to low-carbon heating as they create future-proofed skilled jobs. Importantly, the scheme protects consumer choice in when and how to upgrade to clean and efficient heating, while providing industry with the encouragement to develop a wider range of products and services for consumers to choose from as the transition gathers pace. Neither this scheme nor any other requires home owners to remove or replace their boiler against their will. For their part, we know that businesses are ready to drive innovation, build relationships with installers across the country and continue to make heat pumps more affordable and more accessible to home owners.
Today’s statutory instrument establishes the scheme from 1 April this year, setting its rules, parameters and timelines under enabling powers established in the Energy Act 2023. The scheme is designed to accelerate deployment of heat pumps, thereby driving down energy demand and greenhouse gas emissions from buildings. It complements, and is complemented by, a range of other policies, such as grant funding for heat pump installations through the boiler upgrade scheme and other schemes; investment in British manufacturing through the heat pump investment accelerator competition; and support for installer training through the heat training grant, to provide wraparound support for a transformation of the low-carbon heating market over time.
The scheme sets a requirement for heating appliance manufacturers to achieve the sale and installation of a proportion of heat pumps relative to their gas and oil boiler sales or to acquire equivalent credits from other heat pump manufacturers. For the first year of the scheme, starting this April, this is set at 6% of relevant boiler sales. The record number of heat pumps installed last year, a full 43% growth in certified installations in 2024 versus the previous year, would suggest that it is right to support the development of a thriving UK heat pump market and that the target of 6% is entirely achievable—and there is no reason to believe that there will be any undue costs faced by manufacturers.
The proposals for the scheme were subject to three rounds of public consultation—two under the last Government, in late 2021 and mid-2023, then a third in mid-2024. These consultations sought views on, among other things, scheme targets, technologies in scope, credit trading and scheme administration. A wide range of organisations, representative and trade bodies and industry professionals, as well as individual members of the public, responded on each occasion.
The Government are committed to working in partnership with industry on delivering the warm homes plan, and since coming into office have been engaging with market actors from across the supply chain to consider views on the right mix of policies and other enabling actions needed to support the expansion of the UK heat pump market that is needed. The Government have also taken steps to provide appliance manufacturers with more time and space to adapt to the introduction of this mechanism, scale up supply chains and expand heat pump operations. This includes a decision to reduce the payment in lieu for any missing heat pump credits to £500 for the first year, which is a change from the £3,000 previously proposed.
We will continue to engage closely with industry both on considerations related to the future evolution of the clean heat market mechanism and, more broadly, on the development and delivery of the warm homes plan so that we can put the UK’s world-leading businesses at the heart of leading the transformation of the heating market. The clean heat market mechanism is an important part of the framework that the Government are putting in place to support a much-needed acceleration in our transition to low-carbon heating, strengthening our energy independence and delivering warmer homes for all. I beg to move.
Lord Lilley (Con)
My Lords, here we have it: 32 pages of regulation to introduce something that some would consider a mere mouse in terms of its impact on this market. After all, it introduces a £500 fine for selling each excess gas boiler, relative to the proportion that is prescribed in the regulation. That £500 is actually quite big relative to the cost of a gas boiler, which is typically around a couple of thousand pounds, even though it is relatively small relative to the cost of a heat pump. None the less, I ask the Minister this: will that £500 fine, which then becomes a marketable instrument, be available to importers? If I have correctly understood how the system will work, someone who exports to this country heat pumps from abroad could sell the certificate that this measure will give them to a domestic producer who has not sold enough electric heat pumps for up to £500—that is a jolly nice subsidy for importers of heat pumps into this country, even if it is not massive.
It is expected that this measure will raise the number of heat pumps sold from roughly 40,500 last year, nearly 3% of the boiler market, to 77,000 pumps—6% of the expected market this year. That is not a huge increase. The Minister said that last year, without the benefit of this measure, the number of heat pumps sold increased substantially. So it will not be a huge increase in the coming year. Why do we think this measure is necessary if these things are proving so attractive and the market is growing anyway? Can the Minister confirm that the 6% target is what is introduced, and that it will continue and persist unless and until he introduces, via further legislation—I also ask him to confirm that this will require further legislation—a higher target?
Failing the introduction of a higher target, any future growth in the market will depend on hopes on the cost of heat pumps coming down as manufacturers find more efficient ways of making them. When I was still in the House of Commons I had a meeting with Octopus Energy, which reckoned that the materials involved in making a heat pump cost about £2,000. Obviously, a huge amount of processing goes into making a heat pump, but it suggested that the potential for bringing down the cost over time was significant. One hopes that will happen. Failing that, the only other thing—we are stuck with the 6% target and this £500 fine—will be the lure of subsidies for consumers to buy heat pumps instead of fossil fuel boilers.
The costs and benefits of the whole procedure are spelled out in the impact assessment. It says the net present value of the costs involved is £195 million. The benefits were put at £220 million, of which those that result from the main purpose of the operation, to reduce carbon, were less than the costs. The total benefit is above the costs only if you allow for the impact it will have on cleaner air. As well as reducing the amount of CO2, which is a very clean thing that we breathe all the time, the reduction in the other impurities put in the air by fossil fuels just about brings it to a net benefit. We are talking about the costs and benefits being roughly the same order of magnitude. Once again, an almost religious fanaticism, which does not take the costs and benefits into account, is driving this policy.
I will make a few observations about the situation in France, because I have a house in France and I observe what is happening there. Two of my French neighbours have installed heat pumps. One in a comparatively small cottage cost over €20,000—not for the pump but for the insulation—all paid by the French taxpayer. Bully for him. Another friend has a rather more substantial old house. It cost the French taxpayer €100,000 to install the heat pump and the necessary insulation. In his case, it would not work for a year because the installers were so busy—because it is free to users—that they would not come back and tell him how to make it work. It took him a long time to find anyone who would. I noticed, when I went round to enjoy his hospitality over the new year, that he had wood fires burning as well.
I sincerely hope that we do not go down the path of subsidising something at the huge costs that the French taxpayer is having to absorb, when the costs and benefits of the whole process, even without subsidies, are so marginal. We do not want to put ourselves as near bankruptcy as the French state is.
Baroness McIntosh of Pickering (Con)
I am grateful to the Minister for setting out the contents of the regulations before us. I am afraid that I share some of the scepticism of my noble friend Lord Lilley. I am grateful to the noble Lord, Lord Hunt, for referring to the warm homes scheme. He is aware of my disappointment that the discount is not going to be revisited, and I say that as honorary president of National Energy Action.
My understanding is that the heat pumps that are the subject of this measure simply are not as efficient as oil-fired central heating. I say that as where I live in the north of England, it is all oil-fired central heating; we are off grid and we cannot use gas. I walked past a surgery in the north of England that did not have just one heat pump; it had fitted three heat pumps, which probably means that one heat pump was not sufficient to generate the heat required.
My understanding—and I would be grateful if the noble Lord, Lord Hunt, could confirm this—is that, without log fires or some other secondary heating, heat pumps heat only to a top temperature of about 16 degrees. If you are retrofitting an existing building, as many of the windows may not be able to accommodate the size of the heat pump or the radiators that connect to it, substantial renovation may be required.
Furthermore, I am grateful to the Secondary Legislation Scrutiny Committee, which highlighted that the starting point referred to by the noble Lord, Lord Hunt, of around 40,500 installations per year is—in its word, at paragraph 56 of its 10th report—“ambitious”. The department expects the scheme to help ensure the installation of at least 77,000 heat pumps a year in existing homes between 2024-25 and 2028-29. I ask the Minister a simple question: is that feasible and realistic?
My noble friend Lord Lilley quoted £2,000 as the cost of an ordinary boiler. I recently got two quotes for a boiler. The boiler itself was not the issue. For the fitting, even that of an oil-fired boiler, you are looking at something in the region of £8,000 to £10,000. I repeat: if you live off-grid in a very rural area, it would be nice to think that heat pumps were an alternative, but, given the state of the current market, I just do not see them as feasible if they heat up to only 16 degrees when, in just the past two weeks, we have regularly had temperatures of freezing or down to minus 10. With those few remarks, I press the Minister to comment on these queries.
Earl Russell (LD)
My Lords, we are supportive of these regulations and the other actions that this Government have already taken—particularly in removing the outdated 1-metre rule on the requirement for planning permission—since coming into office. We are hopeful that, taken together with the other measures that the Government talk about, these measures will help us begin to make progress towards the target of 600,000 heat pumps by 2028 and help us to fulfil the need to meet these same figures every year going forward.
There are both supply-side actions and demand-side actions in this SI. We feel that the combination makes some valuable reforms. Most of all we welcome the work that has been done with industry after listening to concerns, making some much-needed reforms and finding ways forward on these issues. Our worry, though, is that, as welcome as these changes in the regulations are, they may not be sufficient in and of themselves to deal with the scale of the problem. In making this point, I quote the conclusion of the House of Lords Secondary Legislation Scrutiny Committee, which has already been mentioned:
“The DESNZ expects the scheme to help ensure the installation of at least 77,000 heat pumps a year in existing homes between 2024/25 and 2028/29. We consider this, from a starting point of around 40,500 installations per year, to be ambitious”.
Before I turn to the SI, judging by the debate on this measure in the other House, a little background information would be useful.
These regulations amend and reform a system that the Conservative Government brought in but mainly failed to make work in practice. The last Government compounded these problems by failing to work alongside and with industry and others in order to find amendments to the proposals, such that industry itself was prepared fully to support them and get behind them. These problems then led to further internal discussions about the policy itself, which further derailed progress. This problem meant that the implementation never really got resolved and, as a result, we are a long way behind on these targets. In short, the Conservatives had clear targets for the installation of heat pumps but failed to deliver them.
I give this background only because the Conservative Opposition spokesperson appeared to disown or not acknowledge that this is a reform of their policy. It may be that the Conservative policy has changed. If that is the case, I hope that the Conservative spokesman can make that clear.
Lord Lilley (Con)
They are of course three times more efficient on average—though not necessarily in cold weather. But electricity is four times as expensive as gas per therm.
Earl Russell (LD)
I welcome the intervention and will come back to the noble Lord on his point. During this transition, it will take a huge effort across government and beyond—and beyond the scope of this instrument—to meet the scale of these changes.
The regulations establish the new UK-wide heat market mechanism to promote the development of the market for retrofit installations of heat pumps in existing buildings. The CHMM is to launch on 1 April 2025 and run for an initial period of four years. In the interests of time, I will not go on too much, but there are two big changes from previous proposals. First, they propose to reduce the payment in lieu of any missing heat pump credits to £500 from the first year from the £3,000 proposed by the previous Government. Secondly, the period over which boiler sales are counted has been delayed to give the obligated parties more time to prepare. The Government have said:
“As set out in the consultation response published in November … We have also aligned the periods over which boiler sales and heat pump installations will generate obligations and credits, respectively, providing manufacturers with more time to prepare”.—[Official Report, Commons, Second Delegated Legislation Committee, 13/1/25; col. 4.]
The big change is that the new Minister has engaged and listened to industry and has managed to make some of the adjustments required by working in partnership. This approach has been welcomed by industry. Removing penalties and allowing more time is pivotal to finding common solutions. The approach of giving manufacturers more time to scale up the supply chain and expand sales without penalising customers is good and needs to continue while hitting some very ambitious and fast-approaching targets.
The ongoing relations with manufacturers and industry are clearly key to delivering this policy. How do the Government intend to continue these better relations while making sure that targets are met and that unnecessary costs are not passed on to consumers? I want to make it clear that this is not a boiler tax. The Conservatives, when this was their policy, were very keen that those words were not used to describe it.
Review mechanisms and relations with industry are crucial to delivering this policy. I note that any adjustments would require further legislation and that would change the whole impact assessment. Any increases in the target in future schemes would require further secondary legislation. I note that the Government have said that they will not force consumers and that this is about working in partnership. My worry is about the confidence that the Government have in the ability to deliver the volume of heat pumps required in the time available.
I would like briefly to ask the Minister about some wider points. The cost of getting a heat pump is still a barrier to entry. I welcome the fact that the Government have continued the £7,500 grant, which, to their credit, the Conservatives not only introduced but increased. Since that increase, we have had a remarkable uptake in the number of heat pumps. But, as we have heard, installing a heat pump is about a system-wide change. It is more than just installing a heat pump; often it involves under-floor heating and changing radiators. On average, this seems to be costing consumers at least an additional £5,000.
We have had some conversations as part of the GB Energy Bill about green mortgages. Are the Government considering finding ways that the additional costs, not just of heat pumps but other renewable energy technology, can be added to mortgages? Quality and innovation are clearly important as well, as is making sure that these are good-quality products.
The noble Lord, Lord Lilley, intervened on electricity market reform, and to some extent I agree with him. Our electricity is still very expensive—some of the most expensive in Europe. The Government’s policy is to get people away from gas and on to electricity. What plans do they have to make sure that electricity is affordable and to introduce social tariffs for those struggling to pay their bills?
On disinformation, misinformation and ignorance, according to the Government’s own policy document, only 51% of people in the UK know about heat pumps. There is disinformation and misinformation in this space—for example, that heat pumps do not warm our homes enough—so it is important that the Government have a strong public information campaign for the take-up of heat pumps, about what they are, how they work and what they do.
Finally, heat pumps can save the average household £300 a year, so they would go a long way towards Labour meeting its manifesto pledge. I wish the Government well, but these things are complicated.
Lord Offord of Garvel (Con)
My Lords, the clean heat market mechanism represents a clumsy attempt by the Government to impose unrealistic and burdensome targets on the heating industry. While the overarching goal of reducing carbon emissions and decarbonising heating in the UK is commendable, the regulatory approach taken here is flawed.
The mechanism requires that major boiler manufacturers—those selling more than 20,000 gas boilers or 1,000 oil boilers annually—must ensure that at least 6% of their sales consist of heat pumps by 2025-26. Although heat pumps, which run on electricity rather than gas, are often hailed as a cleaner alternative, these regulations fail to consider the practical challenges faced by both manufacturers and consumers.
This mechanism promises market certainty, investment in low-carbon technologies and a reduction in heat pump costs through increased competition. However, these lofty claims are undermined by overly ambitious targets, coupled with the Government’s failure to address the considerable barriers faced by consumers. Far from facilitating a smooth transition, these regulations risk causing significant disruption to the industry.
Set to run from April 2025 to March 2029, the scheme faces growing doubts about its ability to meet its long-term target of 600,000 heat pumps sold annually by 2028. This concern is further exacerbated by the fact that heat pump sales remain alarmingly low, with both the National Audit Office and the House of Lords Environment and Climate Change Committee warning that current sales levels are far too low to meet the proposed targets.
Returning to the effects of this SI, this initiative imposes stringent sales targets on large boiler manufacturers, forcing them to meet heat pump quotas. If these quotas are not met, manufacturers will face damaging fines, in some cases of £3,000 for every heat pump missed. Although manufacturers can carry forward up to 35% of their annual target to the following year, this strain on the industry cannot be overstated. When the original plans for the CHMM were first announced in 2024, some manufacturers pre-emptively raised their prices to account for the anticipated fines, only to lower them after the previous Conservative Government pragmatically delayed the scheme in March to allow the industry more time to prepare. Will this Government consider doing the same?
Furthermore, it is not only the industry that will face a financial burden from these regulations; the most pressing concern is the significant impact on consumers. Although environmentally beneficial, heat pumps remain expensive for many households, with installation costs ranging from £6,500 to £11,500. This is not just a challenge; it is a significant obstacle. Many families are already struggling with the cost of living, and these regulations threaten to impose yet another financial burden. The Government cannot continue to ignore the stark reality that these high costs will place heat pumps well beyond the reach of many ordinary households unless substantial and sustained financial support is provided.
The burden of financing such an expensive transition should not fall squarely and only on consumers. Despite the grants available through the energy company obligation and the boiler upgrade scheme, which offer up to £7,500 in England and Wales, the high upfront cost of heat pumps remains a significant barrier. This policy risks making a greener future inaccessible to those who need it the most.
Moreover, it is essential to question whether the Government have adequately considered the industry’s capacity to meet these targets. The regulation requires major manufacturers to ensure that a specific proportion of their boiler sales, 6%, consist of heat pumps. However, given that the heat pump market is still in its early stages, with many manufacturers struggling to scale up production, where is the recognition of this challenge?
Lastly, the proposed scheme risks undermining the very people it aims to help. The Government’s approach, imposing fines on manufacturers that fail to meet the sales targets, could lead to price hikes for consumers. There is already evidence that some manufacturers have raised prices, as has been said before, and if that trend continues it will not be the manufacturers that bear the cost; it will simply be passed on to the consumer.
In conclusion, although the Government may be well meaning, the clean heat market mechanism, as it stands, is flawed and could have serious unintended consequences for consumers, manufacturers and the wider heating industry. It is vital that the Government reconsider this approach, provide proper financial support for consumers and work with the industry to ensure that the transition to low-carbon heating is both achievable and affordable.
Lord Hunt of Kings Heath (Lab)
My Lords, I am most grateful to all noble Lords who have taken part in this interesting debate. The noble Lord, Lord Offord, says that although he understands the intent behind the regulations, we are clumsy and have overambitious targets. He asks us to repeat his Government’s actions in delaying or not going ahead with implementation. We are not going to do that. We are confident that we have a scheme that is practical. As a new Government, we have engaged in extensive discussions with industry.
The noble Earl, Lord Russell, was critical of us for reducing the level of the fine. The fact that we have done so shows that we are concerned about ensuring that we introduce this in an evolutionary way, which is why we have started with the fines at the level we have set. We are confident that industry can rise to the challenge. The noble Lord, Lord Offord, said that sales of heat pumps were disappointing. I thought he might have said that in the last year, 2024, sales had an encouraging increase. We want to build on that with the incentivisation for householders plus the introduction of potential fines for manufacturers, although overall we think that manufacturers will be able to rise to that challenge.
On the issue of cost, which a number of noble Lords raised, of course heat pumps cost more money than gas boilers, but as when one introduces most new technologies, or extends them, the price will come down. We think it will fall significantly, making pumps a more attractive and affordable options for UK households. As noble Lords have referred to, at the moment we are funding installations to kick-start the market, for example through schemes such as the boiler upgrade scheme and the warm homes local grant.
The noble Lord, Lord Lilley, asked whether non-UK manufacturers of heat pumps could earn and sell credits under the scheme. The intention here is that any manufacturer of heat pumps sold on the UK market acquires credits and can make them available to other parties in the scheme. Of course, there is no obligation on manufacturers to acquire those credits; this is one of the various options available to them. In parallel, the Government are supporting the expansion of UK heat pump manufacturing through the heat pump investment accelerator competition. The noble Lord is absolutely right that further legislation would be required to revise targets for future years of the scheme.
The instrument today sets a target for the first year. This would roll over to year 2 if there were no amendment by further legislation. Here, the Government have committed to consult further this year, before setting targets for future years, and then returning to the House if we wanted to change the target. I hope this reassures noble Lords that we are fully engaged with industry. We will obviously discuss the implications carefully before we come back with any further proposals.
Lord Lilley (Con)
I am grateful to the Minister for letting me intervene and for answering a number of my questions. On his point about costs coming down, is he suggesting that they will come down in Britain because they are artificially high to start with, or because we will discover technological ways of producing it that have not been found in continental countries, where they already have large-volume manufacturing? That is one thing.
Could the Minister also respond to another point I made, admittedly in rather garbled form, so I can excuse him for not replying? The correct figures in his document are that the costs of this process are £195 million, while the benefits from reduced carbon emissions are £187 million—less than the costs—but, fortunately, that is supplemented by £34 million of benefits from cleaner air. The whole thing is pretty marginal. Could he comment on the marginality of the cost benefits of this extraordinary regulation?
Lord Hunt of Kings Heath (Lab)
My Lords, surely the point is this: we have to decarbonise our home stock. At the moment, 80% of homes use gas for heating so, as part of our plans towards decarbonisation and moving on to net zero, this is an essential mechanism that we need to take forward. As for the cost-benefit analysis, I do expect the cost of the heat pumps to come down in relative terms, in future. I am not prepared to engage with the noble Lord on the exact whys and wherefores of how that might happen. I just look in history—
Lord Hunt of Kings Heath (Lab)
No. The noble Lord referred earlier to mystical or quasi-religious belief. I regard myself as a high church Anglican atheist, and I do not bring a fervour to this from belief; I think that the rational response to what we are doing, and to the risk of climate change, is so huge that we have to use these kinds of mechanisms and do something about housing and the current use of gas. This is the way that we think we need to go forward, but we will keep it under review and look closely at costs, manufacturing capacity in this country and the public’s ability to ensure that they have good installations. Overall, I commend these regulations to the Committee.
Deposit Scheme for Drinks Containers (England and Northern Ireland) Regulations 2024
(1 week, 5 days ago)
Grand CommitteeRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Baroness Hayman of Ullock
That the Grand Committee do consider the Deposit Scheme for Drinks Containers (England and Northern Ireland) Regulations 2024.
Relevant document: 11th Report from the Secondary Legislation Scrutiny Committee. (special attention drawn to the instrument).
The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Baroness Hayman of Ullock) (Lab)
My Lords, the Government are committed to transitioning the UK to a circular economy. We want to finally move away from the linear “take, make, throw” model, which we know causes harm to our environment and our society, and towards an economy that keeps our valuable resources in use for longer. A deposit return scheme for drinks containers is a strong example of the circular economy in action. It is a critical first step.
Deposit return schemes are a well-established and proven method and over 50 schemes are already in place, including in Germany, Sweden and the Republic of Ireland. A DRS incentivises consumers to return and recycle their drinks containers and means that valuable materials are collected, recycled and made back into new drinks containers—a truly circular loop.
The deposit return scheme is one of the three core pillars of the packaging reforms, alongside the extended producer responsibility for packaging and the simpler recycling programme for England. Together, it is estimated that these packaging reforms will support 21,000 jobs in our nations and regions and help stimulate more than £10 billion of investment in recycling capability over the next decade. They are also estimated to deliver carbon savings of over 46 million tonnes of carbon dioxide equivalent by 2035—valued at more than £10 billion in carbon benefits.
At its heart, the deposit return scheme is a key environmental policy that will tackle the scourge of littered drinks containers, protect our beaches and countryside, preserve our wildlife and restore pride in our local communities. The benefits of the DRS in reducing littering cannot be overstated. Each year in the UK, approximately 4 billion plastic bottles and 2.5 billion metal drinks containers are not recycled. Instead, they are disposed of in general waste or littered.
We are all familiar with the destructive impact of litter. In recent years, we have seen littered drinks containers blight our marine environment, but it does not stop there. According to a recent report from Keep Britain Tidy, littered drinks bottles and cans along our roadsides are killing millions of our native mammals every year. This is devastating our rarest and most important small mammals such as shrews, bank voles and wood mice. We must act to protect our natural environment.
A deposit return scheme established under this instrument will also promote a fairer society. Obligations will be placed on drinks producers to ensure that containers are collected and recycled. This is consistent with the well-established “polluter pays” principle. We have set an ambitious target for the scheme to collect 90% of in-scope containers by the third year of operation.
Laid in draft before the House on 25 November 2024, this instrument establishes, in England and Northern Ireland, a deposit return scheme for drinks containers. Under a deposit return scheme, a person who is supplied with a drink in a container that is in scope of the instrument pays a deposit that can be redeemed when it is returned for recycling. The scheme design in this instrument is informed by well-established international examples and extensive industry experience. Many of our industry partners have shared their experiences delivering these schemes across the world. The scheme will be centrally managed by an industry-led, not-for-profit organisation called the deposit management organisation.
This instrument applies to England and Northern Ireland, but my officials have worked closely with the Scottish Government, who are amending their existing legislation to launch simultaneously across England, Northern Ireland and Scotland in October 2027. The Welsh Government have withdrawn from the four-nation DRS approach. However, we remain in close working partnership with them as they make decisions regarding a DRS in Wales. We are keen to keep the door open to provide as much interoperability of schemes across the UK as possible.
Before I turn to the detail of the instrument, I acknowledge the work of the Secondary Legislation Scrutiny Committee, which draws this instrument to the special attention of the House on the grounds that it is politically or legally important and gives rise to issues of public policy likely to be of interest to the House. The committee highlighted questions on the scheme’s application in Scotland and Wales; the exclusion of glass; the deposit level; interactions with the extended producer responsibility for packaging scheme; and the set-up of the deposit management organisation. The committee also highlighted correspondence received from the Wildlife and Countryside Link, which is supportive of the legislation in principle but raised questions about ensuring a comprehensive return point network; the exclusion of glass; monitoring and review mechanisms; and enabling reuse.
I now draw Members’ attention to the obligations introduced by this instrument. It sets out the scope of the scheme and places obligations on drinks producers, importers and retailers. Producers of drinks in plastic and metal containers from 150 millilitres to 3 litres will be obliged to label products and charge a deposit when supplying the drink into England and Northern Ireland. They must also pay the deposit to the deposit management organisation, along with the producer fees to fund the scheme. Retailers across England and Northern Ireland will be obliged to participate in the scheme by charging a deposit on plastic and metal drinks containers then taking the containers back and refunding the deposit. They are also required to pass the collected containers to the deposit management organisation for recycling and to display information to consumers so that they understand how the scheme works. These obligations on producers and retailers across England and Northern Ireland will start from October 2027, when the scheme is launched.
To administer the scheme, this instrument requires the appointment of the deposit management organisation. It allows for certain provisions to come into force on the day after the instrument is made. These are necessary for the appointment of the deposit management organisation and the establishment of the administrative arrangements in advance of the scheme launching. The deposit management organisation, which will be appointed in April 2025, will be obliged to meet collection targets, pay return point operators for collecting the containers, recycle the collected containers and pay national enforcement authorities.
The instrument provides powers for the deposit management organisation to set deposit levels, prescribe labelling, interact with other schemes, set producer fees, calculate handling fees for return points and exempt some retailers from hosting a return point. Under the “polluter pays” principle, it is the responsibility of businesses to bear the costs of managing the packaging that they place on the market. Through specific return point exemptions based on store size, proximity to another return point and suitable premises grounds, this instrument also protects small businesses across England and Northern Ireland, which are vital to our high streets and are the backbone of our economy.
Finally, this instrument makes provision for monitoring and enforcement activities by the Environment Agency and local authority trading standards to ensure that mandated businesses and the deposit management organisation are compliant.
In conclusion, the need for a deposit return scheme is plain to see. This scheme will not only improve recycling rates and provide better-quality material for recycling but make a difference to people’s daily lives. It will encourage people to see waste as a valuable resource and, by reducing litter, it will improve local communities. With this scheme, we can turn back the plastic tide. I beg to move.
Baroness McIntosh of Pickering (Con)
My Lords, I thank the Minister for introducing the instrument before us. I support its contents but I want to clarify a couple of issues.
Can the Minister clarify the situation in Wales? I understand her to say that the scheme will not be offered in Wales and that the Government are no longer engaging with Wales. Do they have a commitment from Wales? I just want to clarify that because, obviously, the situation in Scotland is welcome.
I am grateful to both Coca-Cola and the Food and Drink Federation for their briefings and preparation for today; I am an officer of the All-Party Parliamentary Group for Food and Drink, which is why I asked them for a briefing. They welcome the concept but, in their view, it is important that it is rolled out across the United Kingdom.
The Minister referred to other jurisdictions. I am familiar with how the scheme operates in Denmark; it has had rather perverse consequences. I sometimes feel as though I could pay for my whole Danish holiday if I went around collecting all the bottles and cans left after picnics in parks across Copenhagen and took them back. The deposit—it is called Pant—is actually set at quite a high level, so it would be helpful to know what level the Minister and the Government have in mind. Obviously, it has to be set at a level that is affordable for the consumer, ensuring that they are willing to go back and return a container to the place where it was bought.
Obviously, we must have a deposit management organisation on side. Who will be the deposit management organisation in England? Will it be the supermarket? As consumers, we are concerned about the impact this will have on small convenience stores, which will perhaps not have the facilities to take these returned bottles or whatever after use. It would be helpful to have clarification on what the costs will be and who will provide the service, because they are going to require a very large facility to accommodate the containers being returned.
Coca-Cola is keen to see the DRS—the deposit return scheme—considered as part of the extended producer responsibility. Is that something the Minister can confirm this afternoon?
The Minister concluded by saying that the monitoring and enforcement will be done by, among others, trading standards and local authorities. Are the Government convinced that they will have the resources to do this? Obviously, it is an additional responsibility over and above what they are currently doing in relation to food standards and other commitments.
Finally, if glass is to be excluded at this time, when do the Government envisage glass being included? As I understand it, glass is included in most other jurisdictions, so a big chunk of deposit returns will be excluded if glass is not included.
With those few queries, I lend my support to the scheme.
Baroness Ritchie of Downpatrick (Lab)
My Lords, I thank my noble friend the Minister for presenting the case for the deposit return scheme. I declare my interest as a member of the Secondary Legislation Scrutiny Committee in your Lordships’ House. I welcome this SI and agree with my noble friend that it will make a major contribution to the reduction of littering. Numerous cans and other types of litter are strewn across the countryside and nobody appears to take responsibility, apart from local neighbourhoods that engage in their own collection schemes. I laud them for doing so.
I have some questions in relation to Northern Ireland. Normally this would be a devolved measure. I suppose that the UK Government were trying to ensure that there was a collective approach on the part of the Government and the devolved nations and regions. Perhaps my noble friend could explain the purpose of including the devolved nations and regions. Also, will the money collected from this scheme in Northern Ireland go to the Treasury, or will it go to the Department of Finance, where it can be invested in local schemes, and into the general exchequer for the delivery of lots of different types of service? I am well aware of the value of the plastic bag scheme in reducing litter but also in terms of the money. It has added to the portfolio of money available for the enhancement of services.
Secondly, I have a couple of questions in relation to Wales, which, I note, has not signed up to this scheme. How can the interoperability of the four UK schemes and the avoidance of unique identifiers in the Welsh market be assured? With Welsh proposals not yet published, how can the October 2027 introduction date be assured to avoid material switching under the EPR scheme? Will the Government ensure that the divergence of the Welsh scheme does not impact the governance of the UK, Northern Ireland and Scotland deposit return scheme and the appointment of a scheme administrator?
Those are the issues that most interest me in this SI, which I strongly support.
Lord Hayward (Con)
My Lords, I echo the comments made by the two previous contributors on compliance for small businesses, which is crucial. It is all very well for large companies to say, “Yes, we support these schemes”, but the burden will often fall heavily on the small retailer, in one form or another. I should start with a mea culpa, in that I was head of personnel for Coca-Cola when it introduced the first ever plastic bottles into this country, so it is all my fault. For the benefit of my noble friend next to me, in particular, the first plastic bottles produced in this country were made in a factory in Leeds—a bottling plant in Pudsey.
I therefore also have a memory of glass bottles and the system that worked then. The glass bottle return system had gone out of operation in most parts of the country when plastic bottles were introduced. At the risk of being accused of regionalism or being rude about the Scots, that system lasted longer in Scotland because that part of the country returned their products to the retailers to reclaim the deposits available.
Lord Hayward (Con)
It is important to small businesses and, because we are talking about companies that operate worldwide, both producers and retailers. How closely will our system meet that of the other countries that the Minister identified? I am aware that there are negotiations in other parts of Europe on some form of return system; it would clearly be better for all concerned if there is either a common or a virtually common system. That is particularly the case for Northern Ireland versus Eire, as many of the products will move from one side of the border to the other.
My concerns are about why glass is excluded, the international basis of the operation and its similarity with others, and small businesses that will carry a burden in one form or another. Given the experiences that I witnessed in my previous role for many years—I should add that I later went on to become head of the British Soft Drinks Association, and therefore saw operations not only from Coca-Cola’s side but for waters and fruit juices—it is important that this works across the whole country. I recognise and expect that the returns will operate much better in some places than in others.
Baroness Bakewell of Hardington Mandeville (LD)
My Lords, I thank the Minister for her introduction to this statutory instrument. It is vital to ensure that, as a country, we reduce our waste and engage the consumer fully in the process. As the Explanatory Memorandum clearly states, the power to introduce a DRS was enshrined in the Environment Act 2021, nearly four years ago, but the issue was being debated as early as 2019, with Defra running two public consultations. The first gave 84% support from those participating; the second, 83%, so why has it taken so long to get to this position? I do not wish to be impolite to the Minister, as she has been in post for only a short time, but it has to be said that there was a lot of pratting about by the previous Government. This is, of course, a technical term.
The scheme is to be run by a direct management organisation—a DMO—and this will take another two and a half years to get up and running, so will not start until October 2027. They say that Rome was not built in a day, but I despair at the leisurely timeframe. Meanwhile, the country is knee-deep in waste.
I welcome the application of civil penalties to drinks producers that do not comply, but it would make a big difference if civil penalties were applied to individual consumers who carelessly discard their drinks containers around the countryside. I am not convinced that the carrot of a returned deposit will alone change behaviour; there needs to be a stick element as well.
Despite a not-for-profit DMO being set up to administer the scheme, local authority trading standards departments will be involved in monitoring and enforcement, along with the Environment Agency. As the Minister knows, local authorities are underfunded, with social care swallowing their budgets at an alarming rate. Do the Government intend to produce additional funding for local authorities trading standards to carry out this not inconsiderable extra work?
Despite the Explanatory Memorandum referring to the instrument enacting the “polluter pays” principle from the Environment Act, I can hardly be excited about the fact that it has taken so long to reach this point, as 2021 has disappeared over the horizon. The first Defra consultation was in February 2019, six years ago. That first consultation response was published within four months. The next consultation in March 2021 was not published until January 2023, nearly 18 months after it closed. The responses showed that 83% of respondents were in favour of a DRS. Was Defra waiting for a 100% response before it acted?
Lord Blencathra (Con)
My Lords, I begin by commiserating with the Minister on the enormous amount of work she has to handle in this House. The Commons have four Ministers carving up the legislation between them, but the noble Baroness has to do the whole shooting match on her own—to use an unwoke term, probably. Last Monday we were into the details of free-range egg definitions in this Room, while on Thursday it was just a simple little thing like saving the world from destruction. Today it is one of the most difficult and complex instruments we have seen for some time, with 108 regulations and seven schedules—97 pages of controversial detail. In the last debate I heard my noble friend Lord Lilley complain that the heat pumps regulations ran to 32 pages—he should be so lucky.
If I were to comment on or ask questions on every section and subsection that concerns me, it would be an hour-long speech—I will not do that to the Minister or the Committee. Even so, I still have a lot to ask, but I have notified the Minister about my questions since clarity is more important today than trying to put one over on the Minister. I am a recycling enthusiast but not a fanatic, and I hope I am realistic. When I heard my noble friend Lord Hayward talk about the Scottish experience, I interjected to say “A thruppenny bit”, because I recall that if, as a 10 year-old boy in the Highlands in the early 1960s, you collected the glass lemonade bottles with their bakelite screw-on tops, you could get a thruppenny bit back every time. I had a nice little business going collecting those bottles, although admittedly some of them were probably not capable of being refilled. In the terms of the current legislation, they were a bit soiled. But it was a good little business—and I am probably the only person in this Room who did recycling at that age and at that time.
Lord Hayward (Con)
I am afraid that my noble friend is showing his age, because the deposit went from a thruppenny bit to 6p and then to a shilling—so to be able to recall the thruppenny bit collections displays an age that I am not sure he wishes to do.
Lord Blencathra (Con)
Because I had engaged some others to help with collecting the bottles, to whom I paid 1.5p while I took the thruppenny bit, I was put out of business prematurely before I could collect the 6p.
The last Government started this in 2019 with their first consultation, and there have been two more since, as well as various workshops and draft regulations like these. The fact that we did not lay those regs for approval was not through lack of belief in recycling but because there were still far too many loose ends to tie up. I am one of the 84% of consumers who like the concept of this, but I am deeply worried about the detail—just like the Secondary Legislation Scrutiny Committee. We saw the Scottish SNP Government, with their usual fanatical incompetence, rush into this then have to pull back. My principal concern is that this may be one more recycling initiative too far at the moment.
First, we have just done the EPR, which will force all manufacturers of glass, plastic, cans, paper and cardboard to do more recycling. Then, on 3 February, we are due to have the regs on consumer recycling, whereby we will allow all cans, glass and plastic to go into one bin, which will boost recycling. I am totally in favour of that, as long as paper and card are kept clean and pure in a separate bin. In March, the commercial simpler recycling scheme will come in, which will boost commercial recycling. With all that going on, why do we need a scheme to take back empty drinks containers to the shops when it is easier and cheaper to do it at home? It is not just me who is concerned. WRAP said in its response that it is difficult to understand the full impact of deposit return schemes on local authorities before they go live and before adaptations to the EPR and simpler recycling are known.
The Explanatory Memorandum says that we looked at foreign deposit return schemes, and the enthusiasts all cite Germany, which has a phenomenal 98% return rate for its DRS. That is fantastic, but let us look at the German history of this. Germany started a refillable bottle scheme in the 1950s, then had initial legislation on recycling in 1991 and gave a big boost to it in 1996. In 2003, it introduced yet more legislation to introduce DRS for single-use containers and there was a big change in 2006 when it legislated to make all retail outlets take back other shops’ bottles. That encouraged deposit return schemes to take off. One year later, the German company TOMRA sold over 9,000 reverse vending machines, of which 25% of return locations in Germany have one. Incidentally, TOMRA was created way back in 1972 to handle refillable bottles.
Germany is still tweaking it. Only in 2022 did it bring in a DRS for alcoholic drinks, juices and nectars in single-use plastic bottles and cans, as well as milk-based drinks in cans. I can only assume, to borrow the words of the noble Baroness, Lady Bakewell, that the Germans were faffing around for the last 50 years before coming to the present scheme. They have been at it a long time, slowly adding to the legislation as experience, technology and acceptance grew. Their success has depended on three things: first, 42% of all beverages in Germany are filled in refillable containers, and they get a 98% return rate on that; secondly, they have over the years built 135,000 return locations; and the third aspect is the German mentality. That is not a jibe at an alleged Teutonic tendency that orders will be obeyed but comes from the fact that the Germans have been doing this deposit return scheme for about 50 years. It is their modus operandi, and they know little else. The main pick-up from their kerbside collection is lightweight stuff such as wastepaper and card.
Thus, we have to look at this from the point of view of the English and Northern Irish householder. We are used to separating waste into different bags and bins—far too many in some council areas—for kerbside collection and to taking plastic, card, glass and paper to big recycling bins. Norway launched its DRS in 1996 after 10 years of discussion, development and testing. I presume that it was also “faffing around” in taking 10 years to get it right. We have neither 10 years of testing nor 30 to 50 years of experience of DRS and I fear that the Government are biting off more than they can chew here, especially with all the other recycling initiatives.
Let us look at a few of my many queries. Wales has already been mentioned. Retailers and importers working in Wales will face the practical difficulties of operating under different schemes—separation of stock, unique label identifiers and new accounting systems. How can the interoperability of the four UK schemes and an avoidance of unique identifiers in the Welsh market be assured? With Welsh proposals not yet published, how can an October 2027 introduction date be assured, to avoid material switching under the EPR scheme? Are the UK Government considering a United Kingdom Internal Market Act exemption for the Welsh DRS? Will they ensure that the divergence of the Welsh scheme does not impact the governance of the UK-Northern Ireland-Scotland DRS on the appointment of a scheme administrator?
A unique approach in Wales threatens seamless intra-UK trading and risks delaying the October 2027 start date. The Welsh Government will not publish their proposals for their scheme until spring and they plan additional initiatives, such as glass reuse and refill schemes. It looks like Wales wants to do in two years a full-on German scheme that took the Germans 50 years to perfect. Unless the Government can persuade the Welsh Labour Government to fall in with the rest of the UK, I would be loath to support this whole scheme in England and Northern Ireland, much as I like the concept of it.
Baroness Hayman of Ullock (Lab)
My Lords, I thank all noble Lords who have made valuable contributions and asked extensive questions in this debate today. I will do my best to address as many questions as I am able.
First, the noble Lord, Lord Blencathra, asked a large number of questions. I shall start with his question on why we need a scheme to take back empty drinks containers to the shops, when it will be easier for us just to carry on doing it at home. I shall explain the rationale for introducing a DRS alongside existing recycling collections. In the UK, despite having kerbside recycling systems that collect plastic and metal drinks containers, recycling rates for these materials have stagnated at around 70%, and they continue to represent a high proportion of litter by volume, at 55%. By introducing a DRS, we create a separate waste stream which can improve the quality of drinks containers collected for recycling by collecting them separately from other recyclable materials. Comparable international examples have shown that alongside kerbside recycling systems, a DRS can offer unique benefits to recycling rates and quality, and to littering, by offering a true circularity of the material, meaning that used bottles and cans will be made directly into new products.
The noble Lord, Lord Blencathra, and the noble Baroness, Lady Bakewell, asked about Germany. We believe that the German scheme is a good example of a DRS which has scaled up and matured since it was implemented in 2003. We can learn from an awful lot from the experiences in scaling up a scheme such as Germany’s, but there is also a lot we can learn from deposit return schemes launching more recently, which offer more up-to-date learnings in how you can successfully implement a DRS from scratch in today’s world. This has included engagement with other recently launched schemes in the Republic of Ireland and Slovakia, while drawing on direct experience across many of the European schemes—those in Latvia and Sweden, as well as Germany. As was said, the deposit return scheme in England, Northern Ireland and Scotland will launch in October 2027 and we do not intend to deviate from that, because we want to see the environmental benefits being made.
A number of noble Lords asked specifically about Wales and the interoperability of the four UK schemes. We recognise that this is a challenge and that industry has specific concerns. We are working through the detail with industry, including through facilitating meetings across our devolved nations to understand potential solutions. We are listening to industry’s views to see where we can support and ensure that DRS is successful across England, Northern Ireland and Scotland. But in practical terms, the regulations also allow the deposit management organisation to work in an interoperable way with any other deposit return schemes, so when Wales proceeds with setting up a DRS, the deposit management organisation can work alongside a Welsh scheme administrator. How a scheme works in Wales will of course be for the Welsh Government to determine, but we want to continue to work with Wales and industry as we progress our DRS.
There is currently nothing that prevents DRS items produced in England, Northern Ireland and Scotland being sold in Wales, including those items labelled as part of a DRS. Businesses will need to take this into account when considering how this works for their product lines and supply chains. Any labelling requirements will be a matter for the DMO to provide detail and guidance on.
The pEPR regulations include an exemption for plastic and metal drinks containers across the UK as these materials are going to be captured through the DRS in England, Scotland and Northern Ireland when it goes live in 2027. Glass drinks containers across the UK will, as we have heard, be subject to the pEPR fees from January 2025. Because the future scope of the Welsh scheme is not yet confirmed, we want to work closely with the Welsh Government to ensure that the DRS and pEPR work effectively right across the four nations. Once we have the detail of the Welsh scheme confirmed, we can consider whether any further amendments to the pEPR regulations will be required.
Lord Hayward (Con)
In referring to locations in and around Westminster, the Minister said that they were close to 100 square metres and would therefore be required to operate the scheme. That is not quite my understanding from what the noble Lord, Lord Blencathra, said. Could I clarify whether shops and other outlets below that figure will be required to offer those facilities?
Baroness McIntosh of Pickering (Con)
Could I add a rider? Will there not be a de minimis rule? I asked about the size of stores; surely there will be a de minimis rule below which stores will not be required to participate.
Baroness Hayman of Ullock (Lab)
I have further information around size, which I will come to. The noble Lord, Lord Blencathra, referred to all the shops selling drinks containers in the Westminster area being bigger than 100 square metres. The regulations set out that supermarkets and convenience stores will be required to host a return point unless they are subject to an exemption, which would be given if they did not meet that size and had applied for that exemption—that is how it is set up—or they could opt in. So takeaways are not included, but they could opt in, as the idea is to have a bit of flexibility in the regulations. I think that is correct.
Lord Blencathra (Con)
The takeaway joints—the Prets and Leons of this world—do not sell groceries, but people buy cans of drink from them to take away. Irrespective of size, are they included or are they not grocery retailers?
Baroness Hayman of Ullock (Lab)
No—as I said, takeaways such as those will not be required to host a deposit return point, but they can opt in if they choose to do so. Automatic exemptions also do not currently apply to rural stores, as we need to ensure that there is sufficient return point coverage for all consumers, regardless of where they live. However, rural businesses are still able to apply to the deposit management organisation for a return point exemption, based on store size, proximity to another return point and suitable premises—for example, if they cannot adapt their premises to host a return point. There are grounds around what premises look like that permit them to apply for an exemption. I hope that has helped to clarify that point.
It is critical that we have sufficient return points such that consumers can take things back to get their deposits back. We also need to minimise the demands placed on businesses wherever possible, particularly on the local businesses that are essential to rural communities. Return point obligations will be kept under review as the scheme becomes more established, because this is clearly complicated, so we need to watch it as it is implemented. We need to ensure that the network is appropriate, is accessible and does not overly burden rural businesses. Coming back to the noble Lord’s final remarks, the DMO, with due regard to work already conducted by the ONS, will help retailers determine whether they are in an urban or rural area. They will not just have to read the regulations, as he pointed out.
I was asked whether hospitality venues, airports and railway stations can host voluntary return points. Under the regulations, other types of organisations that sell in-scope drinks containers, including hospitality venues, food-to-go stores, schools, hospitals, gyms, sports centres and community centres, will not be mandated to host a return point, although all could operate one voluntarily if they wanted to. Grocery retailers in locations such as airports and railway stations will be obliged to host return points in the same way that any other grocery retailer would be. In practice, we expect these businesses to be pragmatic when considering how to host a return point, which may be best achieved by having a centralised return point that operates on behalf of all the retailers in that area. The regulations contain provisions for exemptions and strategic mapping of return points to ensure that the deposit management organisation can work with businesses in high-footfall areas to deliver appropriate return point accessibility.
The noble Lord, Lord Blencathra, asked how the Government define “same” in the definition of low-volume products and how we police the potential for cheating, as he put it. The deposit management organisation will work with producers to help them determine whether a product should be regarded as a low-volume drink. The producer will need to clearly demonstrate how the product constitutes a new product line, with relevant branding and labelling for the drink. The low-volume exemption is designed to support the smallest producers and, due to the cost of labelling production processes, it is highly unlikely that larger producers will be able to take advantage of this measure through the creation of multiple product lines.
I was asked about consumer research on how well a varied deposit would be received by consumers. There was a consultation in 2021; this included consideration of a variable and fixed deposit level, with many respondents agreeing that the DMO should be responsible for determining whether to adopt fixed or variable deposits. It also discussed how it could be varied with respect to many elements, such as material or container size. Our consumer research suggested a preference for simplicity in introducing a DRS, but recently the Republic of Ireland successfully launched a DRS with a variable deposit, based on the size of the container.
The noble Baroness, Lady McIntosh, asked how a deposit level is set appropriately. The deposit management organisation, as I said before, will be responsible for setting that level. It is incentivised to balance the need to ensure that returns are at the targeted level with the need to ensure that products remain affordable. We have commissioned research that showed that an effective deposit level is typically around 15p to 25p. This aligns with international precedents. For example, the DRS that launched in Ireland last year has a 15 cent and 25 cent variable deposit level based on volume. We are confident that the risks of a deposit level being too high or low are being managed, and we have sufficient levers in place to mitigate it being set at a level which impacts consumer affordability. But, as a last resort, Ministers also retain the power to remove the deposit management organisation and take control of the scheme under certain conditions.
I was asked who keeps the deposit if I buy a drink from a shop but recycle it at home. Consumers must return the container to a return point to redeem the deposit. Any financial surplus made by the scheme, for example through unredeemed deposits, will be reinvested into the scheme to fund the overall running costs. Again, this is in line with international schemes. I hope that answers my noble friend Lady Ritchie’s question about where the money goes.
However, for material which is recycled in kerbside collection, we anticipate that the deposit management organisation will work closely with local authorities to ensure that as much material as possible is returned via return points, and to help meet collection targets and keep material within the closed-loop model of the DRS. Local authorities and, where relevant, waste operators will be able to separate out containers and redeem the deposit on them, provided they meet the criteria for return.
Noble Lords asked specifically about Tetra Paks. The deposit return scheme focuses on containers made wholly or mainly from PET, aluminium or steel. This material can easily be recycled through the closed-loop system and reused by producers to make new containers. Unlike PET, aluminium and steel, which are collected from all local authority kerbside collections, just 64% of local authorities in 2022 collected beverage cartons. As the noble Lord said, that does not happen in our area. But with the introduction of simpler recycling, beverage cartons will be collected from all kerbsides. Therefore, Tetra Paks and other material combinations which are harder to recycle will be captured by the pEPR legislation and associated fees.
A number of noble Lords asked about the exclusion of glass. As was rightly pointed out, England, Northern Ireland and Scotland will not be including glass when the DRS is introduced. The Government’s position is that glass would add considerable upfront cost and create complex challenges to the delivery of DRS, particularly for the hospitality and retail sectors, as well as disproportionately impact small breweries, and be inconvenient for consumers due to its weight and potential for breakage in transit to a return point. Glass drinks containers across the UK are included in the scope of the extended producer responsibility for packaging scheme to make sure that they are appropriately and efficiently recycled. Additionally, the glass recycling targets within the packaging scheme have been increased from 83% to 85%, but we are also considering how reuse systems could be developed in the future.
Baroness McIntosh of Pickering (Con)
I asked specifically about the Minister’s point on monitoring and enforcement by local authorities. Will they have the resources to do that going forward?
Baroness Hayman of Ullock (Lab)
We want, as we bring the scheme in, to work closely with local authorities to be aware of any impacts on them and to ensure that they have the resources they need to manage the scheme effectively. I shall move on because I have been speaking for a long time.
Implementation timelines came up. The Government are not faffing around. Some people think that we are moving too quickly while others think that we are moving too slowly, but there is a scale to this challenge and a lot of effort from industry will be required to deliver the DRS. We believe that our timeline will provide the industry with the amount of time that it needs to implement the scheme properly. It assumes 12 months for the DMO to scale up, to make key decisions and to make the relevant appointments in its delivery partners, then 18 months of practical implementation time. That is why this timeline, which was agreed with industry and represents international best practice, has come in.
The noble Lord, Lord Blencathra, asked about costs of set-up and implementation. Following an impact assessment last year, we updated the previous figures, but it is important to consider that some costs will be compensated through the retailer handling fee, paid by the DMO. There are also benefits from increased footfall. Obviously, some costs could be passed on to consumers, but international evidence suggests that this would be relatively minor and well within the scope of the normal cost variations in the sector.
The noble Lord, Lord Hayward, and the noble Baroness, Lady Bakewell, asked about the impact on small businesses. There are exemptions for small retailers, as I mentioned earlier. The DMO will be required to consult with businesses of all sizes before it makes any of the key scheme decisions, such as on fees.
My noble friend Lady Ritchie asked about Northern Ireland. The Environment Act, under which this statutory instrument is established, provides powers for the Secretary of State to legislate on behalf of Wales and Northern Ireland, with their consent. On Northern Ireland, DAERA asked Defra to legislate on its behalf, which is why we are including Northern Ireland in the legislation.
I have been talking for some time. I hope that I have covered most of the questions asked by noble Lords; a lot of questions were asked. I assure the noble Baroness, Lady Bakewell, that Defra is determined to make this work; I thank her for her support for these regulations. I hope that I have answered most of the questions asked and trust that noble Lords accept the need for this instrument.
Airports Slot Allocation (Alleviation of Usage Requirements etc.) Regulations 2025
(1 week, 5 days ago)
Grand CommitteeRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord Hendy of Richmond Hill
That the Grand Committee do consider the Airports Slot Allocation (Alleviation of Usage Requirements etc.) Regulations 2025.
Relevant document: 12th Report from the Secondary Legislation Scrutiny Committee
The Minister of State, Department for Transport (Lord Hendy of Richmond Hill) (Lab)
My Lords, these draft regulations were laid before Parliament on 4 December 2024 and will be made under powers conferred by the Retained EU Law (Revocation and Reform) Act 2023, also known as the REUL Act. They are an example of the UK making use of the freedom gained from the UK’s departure from the European Union.
This legislation amends Council Regulation (EEC) No 95/93, which sets out the rules for allocation of airport slots. In taking these amendments forward, we are moving ahead before the European Union. Slot allocation rules apply only at what are known as co-ordinated airports, where capacity at the airport is unable to meet demand for slots at those airports. Nine airports are now covered by these rules, including the main London airports of City, Gatwick, Heathrow, Luton and Stansted, as well as Birmingham, Bristol, Manchester and Leeds Bradford.
The regulations will update the definition of a new entrant air carrier—or airline, as most of us would refer to it—for slot allocation purposes. This will allow air carriers with a small presence at a co-ordinated airport the opportunity to benefit from greater priority in the allocation of airport slots from the slot pool, prior to the start of the summer or winter scheduling seasons. This change not only aligns UK regulations with international guidelines but has the potential to provide more choice for consumers in terms of routes, destinations and the carriers they can fly with.
In addition, the regulations will amend assimilated EU law to enable the UK to respond in the event of a pandemic, epidemic or other outbreak of disease, such as was experienced during the Covid-19 pandemic. It will remove the need for emergency legislation to provide alleviation from slot usage rules, as was the case during the Covid-19 pandemic, in order to protect consumers, the environment and the aviation sector.
Noble Lords will be aware that co-ordinated airports are the UK’s busiest airports and that gaining a slot at them can be a challenge. It is not uncommon for air carriers to have to spend several years on the waiting list before being allocated a slot. Added to this, the current new entrant definition restricts new entrant carriers from being able to obtain enough slots for the number of daily rotations necessary to make a route commercially viable. Pursuing the necessary number of slots results in them losing their new entrant status and the benefits that come with it.
This hampers competition, which is why my department wants to update the definition of a new entrant. This seemingly small change is the difference between a new entrant air carrier being able to successfully establish and maintain a service and having to give up after a few years. The revised definition of a new entrant also brings the UK’s legislation in line with the Worldwide Airport Slot Guidelines, which provide the air transport industry worldwide with a single set of standards for the management of airport slots at co-ordinated airports.
Regulation 95/93 sets out that air carriers must operate their airport slots 80% of the time in order to retain the right to those same slots the following year. This is known as the 80:20, or the “use it or lose it”, rule. Under normal circumstances, the 80:20 rule helps encourage the efficient use of airport capacity while allowing air carriers a degree of flexibility in their operations. However, throughout the Covid-19 pandemic, the 80:20 rule was waived to avoid environmentally damaging and financially costly flights with few or no passengers—so-called ghost flights. Using powers afforded to the Government in the Air Traffic Management and Unmanned Aircraft Act 2021—known as the ATMUA Act—a full waiver from the 80:20 rule was initially provided. However, as the industry recovered from the pandemic, usage ratios and other measures set out in that Act were amended, allowing a managed return to business-as-usual operations as demand for aviation recovered.
Due to the unpredictability of the Covid-19 pandemic, the powers granted under the ATMUA Act were necessarily time-limited; they expired in the summer of 2024. However, the experience of Covid-19 has shown that a permanent provision for slot alleviation relating to a pandemic, epidemic or other outbreak of disease is needed. This is to provide a means by which a collapse in aviation demand because of an event of a similar magnitude to Covid-19 can be managed as part of normal operations by the UK’s airport slot co-ordinator. Without this provision, if a health crisis similar to Covid-19 were to occur, the Government would need to bring forward further primary legislation, as was done through the ATMUA Act, in order to enable alleviation from the 80:20 rule.
Turning to the content of the statutory instrument, this draft instrument will amend Regulation 95/93 to change the definition of a new entrant carrier. The purpose of the new entrant rule is to stimulate competition. New entrant carriers are given priority in the allocation of slots, as the regulation requires that 50% of slots shall first be allocated to new entrants unless the requests made by new entrants are less than 50%. Currently, an air carrier is a new entrant if it has fewer than five slots at an airport on a given day. Under this instrument, a new entrant is defined as a carrier that holds fewer than seven slots at an airport. The update to the new entrant rule is designed to enhance the presence of new entrant carriers at slot co-ordinated airports.
As I said, the instrument will also build on previous regulations that provided carriers with slot alleviation during the Covid-19 pandemic by introducing a permanent provision for carriers in order to obtain slot alleviation where there are government-imposed measures relating to a pandemic, epidemic or other outbreak of disease, provided that certain conditions are fulfilled. This will put in place a much simpler process by which an event such as Covid-19 can be managed for slot co-ordination purposes.
In conclusion, in this instrument, the Government have recognised the need to update the definition of a new entrant and to provide additional reasons for allowing alleviation from slot usage rules in order to protect the aviation sector from the potential impact of another pandemic occurring, however remote that possibility might or might not appear. The provisions in the instrument were subject to consultation with the aviation sector in 2023 and received strong support from across industry. The Secondary Legislation Scrutiny Committee flagged these regulations as an instrument of interest but did not make any adverse comments. The Joint Committee on Statutory Instruments did not report this instrument. I hope that noble Lords will join me in supporting these measures. I beg to move.
Lord Kirkhope of Harrogate (Con)
My Lords, I want to make a shortish contribution. First, in general, I welcome these proposals. I declare my interest as a former director of Newcastle Airport, which is of course not on the list of co-ordinated airports because of the lack of congestion—I think that is the term used. I am also a private pilot so I have a particular interest in the way in which this interesting phenomenon of slots has developed over the years.
It seems to me that, in terms of their balance sheets, quite a lot of airlines would not be able to operate unless they had slots as part of the asset base, which isa little unreal and unacceptable. In my opinion, that also puts pressure on obtaining slots out of the pool—or, indeed, in any other way possible. Airport Coordination Limited, which is the organisation that decides on the allocation of slots, therefore has a difficult job, particularly in areas where the return of slots from airlines is quite a difficult situation. Obviously, there are far too few slots relating to all the airports on the list of co-ordinated airports.
Interestingly, although Leeds Bradford Airport is now included as a co-ordinated airport, it certainly does not appear in much of the evidence that I have read in relation to ghost flights, and so on. Will the Minister let me know whether Leeds Bradford Airport has been a late entrant on this list? I would be interested to know.
Lord Empey (UUP)
My Lords, I have been following these issues for some years, and I find myself in broad agreement with the noble Lord, Lord Kirkhope. He mentioned air traffic control and the fact that restrictions are regularly placed on flights coming in and out of Heathrow, in some cases because of the absence of qualified staff.
I welcome the end of ghost flights, which were a nonsense not only environmentally but economically for the airlines. It was ridiculous having flights with half a dozen people, or none, going around, so that is a perfectly sensible provision. However, I want to draw it to the Minister’s attention that on two occasions I brought the Airports (Amendment) Bill to this House. It passed through this House twice. The noble Lord, Lord Ahmad, who was the Minister at the time, said that the problem, from the Government’s point of view, was that because of our membership of the European Union, we were not able to address the matter that I was raising.
That matter was the slots at London airports. Let us face it—Heathrow is the primary national hub, though I accept that other London airports are important—but there is no requirement to ensure that the main regional airports have access to Heathrow. We in Northern Ireland do not have much in the way of an alternative; in fairness, Boris Johnson promised us a bridge, but that has gone the way of all flesh so, in practical terms, we are left primarily with one way of getting here. You can get a ferry—but that can take a couple of days.
This applies to Edinburgh, Glasgow and Manchester. The Secretary of State does not have the ability to guarantee that the main regional airports have access. This is all to do with national connectivity. The primary clause in my Bill was:
“The Secretary of State may give to any airport operator a direction requiring him (according to the circumstances of the case) to do, or not to do, a particular thing specified in the direction, if the Secretary of State considers it necessary to give such a direction in the interests of ensuring sufficient national air infrastructure between hub and regional airports”.
It was to give the Secretary of State a power to deal with this. Even if competition is improved by these regulations, which I would support, that has nothing to do with where those slots are allocated. Maybe they are allocated to an airline, but they can fly anywhere. There is still a gap here. Now that we are not bound by the European regulation, will the Minister reflect on this? I appreciate that it is not in these proposals, but I am sure that he can see the rationale of ensuring this.
At the moment, we are well served—I have no issue with that. There are a number of airlines, albeit the competition has narrowed recently—but we are entirely at the mercy of the airlines. We have no ability to ensure that they travel on that route. It is a bit like the 80:20 rule; most of the time it works fine, but there could be circumstances in which it does not. We can also see that competition is limited and our fares are high, so there is a link to the consumer. The noble Lord, Lord Kirkhope, made that point; the consultation was wide, but consumer interests perhaps did not dominate to the extent that they should have.
I broadly support these proposals, but I ask the Minister to consider that with his department, because there is no guarantee that our key regions will have access, particularly to Heathrow. In those circumstances, the Secretary of State should have that power.
Lord Rogan (UUP)
My Lords, I will speak about the Northern Ireland aspect of this. Any legislative changes aimed at increasing competition in the airline industry and allowing smaller airlines to enter the market are to be welcomed. However, I am sure I speak for all Northern Ireland Peers when I say that more competition—and many more services, particularly between Belfast and London—is not a luxury but an absolute necessity. We have no other means of getting here other than the ferry.
Getting flights at short notice and at an affordable price is becoming difficult to the point of impossibility. As we know, parliamentary business changes all the time and being able to contribute to debates and attend other meetings is a duty on all of us. However, there are times when there are simply not enough airline seats for noble Lords and elected representatives in another place to get to Westminster, and that is not acceptable.
I raised this matter several times in the past Parliament, only to be told by Ministers and the Government that there was not a problem. I am afraid that there is a problem. As I said previously, and I say it again today, I urge the Ministers and their officials to please take my concerns seriously and work with airlines and airports to ensure that air connectivity between Great Britain and Northern Ireland is swiftly and significantly improved. The problem that I highlight also impacts on businesspeople wishing to travel across the Irish Sea. Failure to address the issue will continue to have a detrimental impact on the Northern Ireland economy until more services are created.
Although most of the provisions in this legislation are UK-wide, some do not extent to Northern Ireland. In his reply, can the Minister clarify which specific aspects of the regulations do not apply to Northern Ireland, and why? Is there any link between these exemptions and the continued diversification of rules and regulations between Great Britain and Northern Ireland, caused by the imposition of an Irish Sea border? I look forward to the Minister’s response.
Baroness Pidgeon (LD)
My Lords, I appreciate the opportunity to discuss this statutory instrument, which amends airport slots. I thank the civil servants who spoke to me on Friday to provide more detail to the background, and the Minister for the opening statement. Put simply, these slots provide the permission to use airport infrastructure on a specific date and time for take-off or landing, and they apply, as the Minister has outlined, to congested airports in the UK only.
The first change is logical—it is putting in place rules to cover scenarios such as a pandemic. Slot alleviation was granted on a temporary basis during Covid to prevent flights running empty in order that airlines could keep their slots. These new rules would cover any government-imposed measures whereby passenger travel would be significantly reduced. I am pleased to read that nine out of 10 respondents supported this, and it makes clear sense. Perhaps the Minister could advise whether this is something that is also being implemented in the EU or in other countries post pandemic.
The second area is an amendment to the definition of a new entrant carrier from an airline that has fewer than five slots at an airport on a day to one that has seven. My key question when reading the statutory instrument was where the demand has come from to raise this number to seven. Why do the Government want to make this change? I could not see anywhere that the airline industry was clamouring for it. Paragraph 7.3 of the Explanatory Memorandum states that
“some respondents felt that the suggested change to fewer than seven slots was too small to have a tangible effect on competition and wanted a higher threshold”.
What conversations has the department had with the airline industry? Is there any consensus or appetite for the definition of a new entrant carrier to include a higher number of slots?
Conversely, is there a concern that while raising the slot threshold to seven could make it easier for new entrants, it might also limit opportunities for smaller carriers? Surely we need to ensure safeguards and encourage broader market diversity. Perhaps the Minister can clarify how the Government will ensure that the allocation of slots increases choice for passengers.
What conversations has the department had with the EU about its plans in this area? While I understand that this change would bring UK legislation in line with international guidelines, which were updated in 2020, in these areas it is often sensible to be aligned with our nearest neighbours, and it would be good to understand where the EU is in this particular field. In my view, it is not an area where divergence is necessarily needed.
I would appreciate some responses from the Minister to these questions—but, overall, the statutory instrument is acceptable in its current form.
The Earl of Effingham (Con)
My Lords, I reiterate the words of my noble friend Lord Kirkhope and the noble Lord, Lord Empey. Many years ago I used to do business with National Air Traffic Services. As noble Lords have highlighted, that body does an excellent job—often in the background, but it plays a crucial role.
The regulation of airport slot allocation is an important aspect of maintaining the efficient operation of the UK’s busiest airports, which are often constrained by capacity. This statutory instrument implements measures raised in the previous Government’s consultation on airport slot allocation.
In line with the International Air Transport Association’s guidelines, the core objective of airport slot co-ordination is to optimise the use of available airport infrastructure, benefiting consumers and industry alike. Airport slots are allocated by independent co-ordinators to airlines for their planned operations, particularly at level 3 airports such as London Heathrow, London Gatwick and others where demand consistently exceeds available capacity.
Lord Hendy of Richmond Hill (Lab)
I thank noble Lords for their consideration of these draft regulations. I will attempt to respond to as many of the specific points raised as I can.
The noble Lord, Lord Kirkhope of Harrogate, asked about Leeds Bradford Airport. It is a late entrant, entered in 2024, and is subject to slot allocations only in the summer months. The noble Lord also asked how the 80:20 rule is administered. The answer is that, if under 80% of flights over the entire season are not used, they are lost. For desperate circumstances other than Covid, the regulations already have some alleviation, but this statutory instrument adds to them in respect of Covid. I will come back to the change from five to seven slots in answering some other points.
The noble Lord made a serious point about consumer interest in consultation. The Competition and Markets Authority was consulted and supported all the changes. The Civil Aviation Authority was also consulted because it has consumer protection obligations; it, too, fully supported this measure.
The noble Lords, Lord Empey and Lord Rogan, mentioned the provision of adequate services to Northern Ireland from Great Britain. From some previous work that I did on the union connectivity review, I know that this is a subject of much concern—and, occasionally, criticism—in Northern Ireland. Recently, I answered a Question in your Lordships’ House about the cancellation of an early flight from Belfast to London; that cancellation seems to have been astonishingly ill advised from the point of view of the airline operator, judging by the number of noble Lords and Members of the other place who were inconvenienced by it. So I understand the noble Lords’ points and the previous proposals for Bills in this direction.
The noble Lord suggested a more fundamental review of slot allocation system; such a wider reform would need primary legislation. The previous Government consulted on this from December 2023 to March 2024, and the current Government are now considering the need for wider slot reform; I am sure that the specific availability of slots from Northern Ireland will be part of that consideration.
I draw to the attention of both noble Lords the fact that, as I noted in the union connectivity review, the Government have a public service obligation and support flights from Derry/Londonderry to London precisely to make sure that there is connectivity from Northern Ireland to London.
The noble Baroness, Lady Pidgeon, made two points about the extent to which the European Union is in advance of or behind these changes. In both cases, we are making these changes in advance of the EU making similar changes in respect of both Covid and the minimum slot allocation. On her point about moving from five to seven slots, that move is certainly helpful to consumers because, as other noble Lords have noted, increasing the number gives an opportunity for new services to support themselves in viability and, therefore, to be more permanent. So the answer to that question is that it will help. On whether the number is the right one, there was certainly consensus that the number should be increased but little consensus about what it should be, so bringing ourselves in line with international legislation seems, frankly, a pretty sensible thing to do.
The noble Earl, Lord Effingham, asked whether new entrants can be protected in some way. Of course, I raised in my original speech that new entrant carriers are given priority in the allocation of slots, as the regulation requires that 50% of the slots shall first be allocated to new entrants unless the requests from them are less than 50%. That seems a sensible provision to allow new entrants a first opportunity here.
Lastly, the noble Earl asked how the Government will ensure that the provisions for severe disruption are used only in exceptional circumstances. In respect of something like a pandemic, it is pretty clear that the provisions have to be drastic. There are other provisions in existing regulations for alleviation, which will continue to apply.
I hope that I have covered all the points made by noble Lords on this proposed statutory instrument. I conclude by saying that it will make two permanent changes to Regulation 95/93, reducing barriers to entry at UK airports and making the slot allocation system more resilient. This instrument is putting the UK on the front foot; as I said, we are now in advance of the European Union on both of this measure’s substantial subject matters. I commend this instrument to the Committee.
Representation of the People (Northern Ireland) (Amendment) Regulations 2025
Baroness Anderson of Stoke-on-Trent
That the Grand Committee do consider the Representation of the People (Northern Ireland) (Amendment) Regulations 2025.
Baroness in Waiting/Government Whip (Baroness Anderson of Stoke-on-Trent) (Lab)
My Lords, these regulations will ensure that those who remain eligible to be registered on the electoral register but did not respond to the last electoral canvass can remain registered while attempts are made to contact them. Strengthening and encouraging participation in our democracy is an essential part of a strong democracy, which is why this Government committed to doing so in our manifesto.
It may be helpful to provide some context. In GB, the annual canvass requires most registered individuals simply to confirm that their circumstances have not changed in order to remain on the register. However, in Northern Ireland, there is no annual process; rather, the independent Chief Electoral Officer—the CEO—is required to conduct a canvass at least every 10 years. This requires all eligible individuals to respond by completing a full new application form or risk being removed from the register.
All registered individuals who fail to complete a new application are removed from the register at the end of the canvass period unless, having cross-checked their registration record with other government data, the CEO is satisfied that the entry remains valid. In these circumstances, under the existing law, the non-responder can be retained on the register, becoming a retained elector for up to three years.
Under the existing legislation, and following the last canvass in 2021, there are 87,000 retained electors—around 6% of the total electorate. Without the changes in this statutory instrument, they will all be removed from the register on 1 February 2025. The CEO’s assessment is that almost all of these retained electors remain eligible to vote. The view of the CEO and the Electoral Commission is that this loss of otherwise eligible electors would negatively impact the quality of the electoral register in Northern Ireland and potentially disenfranchise electors. The Government agree with this assessment.
To avoid this outcome, these regulations extend the retention period from three years to six years. Crucially, they provide a framework to audit the retained electors annually. It also stipulates the required engagements needed to encourage re-registration. We are satisfied that the extension from three years to six years is reasonable; additional data is available to the CEO, and improvements in data science since the legislation was made mean that the data is of a much higher quality than it was when the canvass retention provisions were previously set. The CEO has made it clear that he has full confidence in the quality of the data available to him, and that this provides him with confidence in determining eligibility in terms of both retention and, where warranted, removals. This instrument provides a framework for these engagement processes to take place.
The CEO will for the first time be required to conduct a residence audit every year to check the residence details of retained registrants against the external data streams available. The CEO regularly checks and verifies entries on the register against the external data to which he has access. These regulations will formalise the process in respect of retained electors and will set out the steps to be taken to encourage re-registration. Where the audit raises a question as to residence at a registered address, a removal warning notice must be sent.
If an elector does not re-register within 28 days of a notice, they will be removed from the register where, on the basis of the audit, the CEO remains satisfied no further action will be taken in years 1 to 3. In years 4 and 5, where the CEO is satisfied that retained electors remain resident, they will be sent a household notice showing which electors in the household must re-register or risk removal. They will not at this stage be removed. Given that three years have already elapsed since the 2021 canvass, the current retained cohort will start this new framework in year 4 and be subject to the provisions relating to years 4 to 6 of the scheme.
I turn to final year notices. In the sixth and final year, all remaining retained electors will be sent up to three notices informing them that, if they do not re-register, they will be removed. If they fail to respond, they will be removed from the register. This is in line with the primary legislation, which is clear that non-respondents may not be retained indefinitely.
The central purpose of these processes is to ensure that reasonable efforts are made to prevent the loss of eligible electors from the register. The CEO and the Electoral Commission have supported the development of this framework; I thank them for their engagement. His Majesty’s Government will work hard to strengthen our democracy by encouraging participation in the democratic process. These regulations are a first step towards that.
I beg to move.
Lord Hayward (Con)
My Lords, I thank the Minister for her introduction. I note that within it she observed that the processes for registration differ between Great Britain and Northern Ireland. That is for specific reasons in terms of the system, which is somewhat different in Northern Ireland from that applying in Great Britain. However, the process suggested here is substantially more elongated than what would apply within Great Britain. I can understand why this is, given the difference in processes, but I am not convinced that it is absolutely necessary so to do. I am not against these regulations because, given the circumstances, they make sense, but I am making a comparison with Great Britain.
I understand that there is a capacity to register online. At the last general election, 3 million people across the whole United Kingdom took advantage of that, only for half of them to be told that they were already registered, because there is no read-only access to the electoral roll in this country. I am talking here about the United Kingdom and commenting on a decision of the previous Government. It is striking that they would not introduce read-only access to the electoral roll, despite the fact that in Ireland they have one and it only cost them £6 million. There are alternatives in tackling the issue of people who do not respond.
The route which has been gone down of accessibility, with the capacity for individuals to register online for elections, is one we should give serious consideration to. I know there are alternatives such as automatic registration, which is being considered and advocated. I am not convinced of that route. While I can understand why this is being proposed in these circumstances, it would be sensible if we acknowledged—across the whole of the United Kingdom—the position whereby people can register simply for an election and then participate. They are the people who will be willing to participate. We are asking for a fairly lengthy and costly process to be undertaken, when people who fail to respond are more likely to be those who do not participate in elections anyway.
I have made a few brief comments in broad terms, contrasting the processes in Great Britain and Northern Ireland. I understand why this is being done on this occasion but online registration is a much better system, from which we could all operate.
Lord Rogan (UUP)
My Lords, on behalf of the Ulster Unionist Party, I would welcome some clarity from the Minister on two aspects of these regulations.
First, we are keen to know how many checks the Government expect the Electoral Office to carry out on individual voters to ensure that they are genuinely resident in a Northern Ireland household before giving them a vote. It is a simple fact, and one which some noble Lords may not be aware of, that we currently have people living in the Republic of Ireland but with a registered address in Northern Ireland, often that of a relative. Not only does this give them a vote in Northern Ireland; it also allows them to register with a GP and receive free National Health Service care in the Province, courtesy of the British taxpayer. This situation has been allowed to develop because the Electoral Office seems simply to take the word of those who complete the canvass forms, without conducting any additional checks. Can the Minister advise the Committee how His Majesty’s Government intend to address this situation, which I am sure she will agree is unacceptable?
Secondly, in our view, the application process for absent votes is open to serious abuse. As the Minister will be aware, to obtain a postal or proxy vote under these regulations, the applicant will need a digital registration number and their national insurance number. However, those details are now in the possession of some of the political parties standing for election in Northern Ireland, with few checks on their signatures. What assurances can she offer us to counter the very real threat of votes being stolen or misused under these rules?
Baroness Ritchie of Downpatrick (Lab)
My Lords, I thank my noble friend the Minister for presenting this statutory instrument and declare an interest as a member of the Secondary Legislation Scrutiny Committee of your Lordships’ House.
Elections are undoubtedly fundamental to our democracy, no more so than in Northern Ireland, where I have participated in district council, Assembly and Westminster parliamentary elections. They are fundamental to strengthening our democracy and, as the noble Lord, Lord Rogan, referred to, they have also been subject to abuse. Some of our political parties in Northern Ireland, along with their candidates, have been subjected to that abuse through voter fraud. That area requires further investigation.
I support this SI because it provides an opportunity for the retained voters—some 87,000 people—to remain on the register for a further three years. However, I exhort those people, after all the hard work that political parties do, to ensure that they have contacted the Electoral Office for Northern Ireland headquarters in Belfast to verify their presence and say whether it is actual or not. What level of consultation has taken place with political parties regarding the retained electors and the welcome extension? What is the breakdown among the 18 constituencies in Northern Ireland?
In further legislation, statutory photographic voter identification needs to be made tougher and, maybe, more transparent, as some of us who were candidates found to our cost. People who wanted to vote at a parliamentary election in June 2017 told me that they had turned up at 7 am with their proper identification, but their votes had already been taken by others. How did that happen when there was photographic ID? There needs to be greater protection against electoral fraud.
While I welcome and participated in online registration, I would like to find out what percentage of the electorate take up online registration and how successful it has been in the make-up of the register. Bear in mind that some people are transient and move from one house to another; they are entitled to vote, but there is a need for an exhortation to them to clarify their position directly with the Electoral Office for Northern Ireland to prevent electoral officers having to do this type of work.
I would also support any attempt in forthcoming legislation to lower the age of voting from 18 to 16, because I believe that that would build a democratic base among young people in understanding the role of politics in our society.
Lord Elliott of Ballinamallard (UUP)
My Lords, every vote counts. That is one of the things that we hear regularly coming up to an election, particularly in Northern Ireland. I am well aware of that because, in my former constituency of Fermanagh and South Tyrone, at one stage an election was won by four votes. When it went to court, three votes were excluded, so it was won by one vote. I have been in contests with very narrow margins.
Quite a lot of illegal activity goes on at election time in Northern Ireland, believe it or not. One case concerned a polling station in Garrison, County Fermanagh, which was kept open for an extra 20 minutes by a group of supporters of a political party to allow their people to get in and provide extra votes for their candidate.
Lord Murphy of Torfaen (Lab)
My Lords, I support this statutory instrument. It is very important that we try to ensure that as many as people as possible vote in Northern Ireland, and indeed the rest of the United Kingdom—
Lord Murphy of Torfaen (Lab)
Legally—I will come to that in a moment. Therefore, these regulations are absolutely right. We need to ensure that turnout is up, and that people vote and are encouraged to vote. I am quite attracted by the suggestion of the noble Lord, Lord Hayward, about the increased use of registering online, which is very sensible in this digital age. However, I agree with noble Lords who have spoken about the difficulties one encounters in Northern Ireland because of fraud and intimidation.
One of the first shocks I had when I became a Minister in Northern Ireland was to meet with the—very famous—chief electoral officer, who announced the referendum result in 1998. He came to my office in Millbank with a suitcase, which he plonked on my desk. He opened it up, and there were between 200 and 300 votes, every one of which was illegal. Obviously, we knew that this was going on, but to have it from the horse’s mouth, so to speak, concentrated the mind.
The noble Lord, Lord Elliott, was right about the closeness of results in Northern Ireland, not just for the general election but for local government elections and elections to the Assembly. Often, the complicated PR system over there, STV, means that in many cases it literally comes down to single figures. Clearly, there are people elected to public bodies in Northern Ireland who should not be because of the system that I have just described.
I agree with what has been recommended to us, but I ask my noble friend the Minister to keep an eye on developments in Northern Ireland and to work with the chief electoral officer to ensure that we are increasingly aware of fraud and intimidation and that we have a healthy system of democracy in Northern Ireland—one which, as I said earlier, we can improve so that people are voting, the turnout goes up and we get a true representation of what people feel.
Baroness Suttie (LD)
My Lords, this has been an interesting short debate that strayed a little beyond these regulations, here and there. I thank the Minister for her introduction and the Electoral Commission for the briefing it provided ahead of this debate. I shall be extremely brief.
We support these regulations and see them as a necessary short-term fix to ensure that we do not lose the 87,000 electors from the register. However, I hope the Minister will accept that we probably have to revisit comprehensive, long-term reform of the electoral registration process in Northern Ireland. It is now essential that we modernise the system, perhaps especially ahead of the next scheduled canvass in 2030. Could the Minister say whether the Government intend at some point to introduce automatic or automated voter registration, whether they intend to use enhanced government or local government datasets for a more targeted canvass in Northern Ireland and whether they intend to incorporate electoral registration into other public service transactions to improve efficiency and accessibility?
I agree with the questions asked by the noble Lord, Lord Hayward, and the noble Baroness, Lady Ritchie, to get a government response on the increased use of online registration. It is an extremely important point and I look forward to the Minister’s reply.
As other noble Lords have said, confidence in the accuracy and completeness of the electoral registration processes in Northern Ireland is a key part of the democratic process. This measure, although a short-term fix, is important to allow 87,000 electors not to fall off, but I hope that we will look at this more comprehensively in future.
Lord Caine (Con)
My Lords, I am grateful to the noble Baroness, Lady Anderson of Stoke-on-Trent, for setting out the terms of this statutory instrument and to noble Lords from both Northern Ireland and Great Britain for their contributions. As the noble Baroness made clear, the purpose of these regulations is to extend the retention period for electors in Northern Ireland and to retain these electors on the register for an additional three years, bringing the period to six years in total. The regulations also introduce an annual audit of these retained electors, including measures to contact them in an effort to encourage them to reregister.
At present and without this measure, as has been mentioned, it is expected that approximately 87,700 retained electors will be removed from the register on 1 February. While the Opposition obviously support these regulations, does the noble Baroness agree that this is quite a significant number and that we are justified in asking why such a large group of eligible voters is at risk of being removed from the register on this date? The regulations offer a framework for auditing and engaging these electors, but this still raises questions about whether enough is being done to prevent the unnecessary disenfranchisement of the electorate.
The noble Baroness will be acutely aware of the history of elections in Northern Ireland and that, as a number of noble Lords have pointed out, they have not always been without controversy. It was due to widespread concerns over fraud that, some 20 years ago, the last Labour Government introduced individual voter registration in Northern Ireland, and I commend them for doing so. I merely wish that they had been more supportive of our efforts in Great Britain to deal with electoral misdemeanours and fraud in the previous Parliament. Even more recently, despite the efforts of the last Labour Government and others, there have been serious allegations of vote rigging.
I was interested to hear the noble Lord, Lord Elliott of Ballinamallard, refer to Fermanagh and South Tyrone. He will be aware that I was actively involved in the election campaign in 2010 in Northern Ireland, when the candidate agreed by my party, the Ulster Unionists and the Democratic Unionists lost to Sinn Féin by a mere four votes. The noble Lord will also recall that a number of photocopied ballot papers mysteriously turned up at polling stations shortly before 10 o’clock that evening.
The noble Baroness, Lady Ritchie of Downpatrick, also referred to vote stealing. She will remember that in the Foyle constituency in 2017, Sinn Féin defeated the former leader of her party, Mark Durkan, by a mere 169 votes, I think it was, there were again many serious allegations of vote stealing. As far as I am aware, these were investigated and no evidence was found, but the suspicions remain very widespread, and the noble Baroness was right to raise them.
Despite the progress that has been made in tackling fraud, the need for vigilance remains, not least when a number of constituencies in Northern Ireland are much more marginal than they might have been in the past. Indeed, I think around half of the constituencies in Northern Ireland are held by majorities of under 6,000 these days. This highlights, as the noble Lord, Lord Elliott, said, the importance of every vote, and we must ensure that no eligible voter, particularly in closely contested areas, is unfairly removed from the register and that retaining people on a register for longer periods does not increase the scope for fraud. While the extension of the retention period may provide flexibility for electors who are unable or unwilling to respond in a timely manner, it could also open the door to exploitation. The longer individuals remain on the register without reconfirmation of their eligibility, the greater the risk that ineligible individuals could be made, either deliberately or inadvertently, to vote fraudulently.
Can the Minister therefore reassure the Committee how the Government, working with the chief electoral officer, will ensure that the retention of electors for up to six years does not create opportunities for fraudulent activity? Are there sufficient safeguards in place to prevent ineligible individuals from being added to or retained on the register, particularly if they have not been adequately contacted or if the audit process has not been thorough enough?
My final point touches on issues raised by the former Secretary of State, the noble Lord, Lord Murphy of Torfaen, and my noble friend Lord Hayward regarding voter turnout, which in 2024 was down by four percentage points to just 57% of the electorate, which is very low. Again, can the Minister assure us that this is an issue that the electoral office takes very seriously and that every effort will be made to boost turnout across Northern Ireland? My noble friend Lord Hayward made some very sensible suggestions regarding online registration, and so on, to boost turnout next time for both Stormont and Westminster elections.
On that note, I will finish, but I reiterate that the Opposition support the regulations before the Committee this evening.
Baroness Anderson of Stoke-on-Trent (Lab)
I thank all noble Lords for their thoughtful consideration and input, as ever when we discuss matters pertaining to Northern Ireland. Building confidence in our electoral system will help strengthen engagement in democracy and, in turn, strengthen democracy. I am therefore pleased that we have been able to discuss the statement. With regard to some of the specifics raised, I will go in order; noble Lords will have to bear with me as some of them made similar points. I hope to be able to respond to everybody.
For the information of the noble Lord, Lord Hayward, Northern Ireland has an online register checker that allows people to establish in minutes whether they are already registered, which I think is incredibly helpful. Many of his questions were slightly outside the scope of these specific regulations. However, I would very much welcome an opportunity to meet the noble Lord, along with my officials, to discuss some of his suggestions in detail—especially as the Government are looking at how to review this measure in terms of a UK-wide solution and next steps. I assure the noble Lord that we are using all the tools at our disposal, as is the chief electoral officer, to encourage sign-up and engagement. Obviously, the world has changed significantly since this legislation was originally done, so we must ensure that we have the opportunity to engage appropriately with all potential voters.
Lord Hayward (Con)
Can I make two observations? First, I thank the Minister for her generous offer of a meeting to have further conversations on the issues I raised. Secondly, I observe for the Committee in general that, when I was the MP for Kingswood in Bristol, an eight year-old female came to visit the House of Commons with her mother. I am pleased that the guided tour I gave the now Minister was so successful in interesting her in politics that I have the honour of sitting opposite her, asking her questions and accepting her invitations. In conclusion, I just wish that she had listened to my influence on that guided tour rather than her mother’s, which may have decided why we are sitting on opposite sides of the table.
Baroness Anderson of Stoke-on-Trent (Lab)
I thank the noble Lord and I am grateful to my mother for the values that she gave me.