Live Debate: Lords Chamber

Oral questions: International Monetary Fund estimate that the UK will have the lowest per capita growth and the joint highest inflation rate in the G7 this year

Fourth Oral Question Lord Londesborough. >> My Lords, I beg leave to ask the question. Standing in my name on the Order Paper. My Lords, we did the Order Paper. My Lords, we did not start this war, but it does affect us. The IMF's updated forecasts build on their judgement that the UK is more exposed to

15:39

Lord Livermore, The Financial Secretary to the Treasury (Labour)

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energy price shocks than our counterparts, a problem this government is tackling but which the previous government failed to the previous government failed to address in 14 years. The IMF has address in 14 years. The IMF has described. The IMF has described our plan as the appropriate response and forecast. The UK will response and forecast. The UK will be the fastest growing European G7 economy this year and next. I economy this year and next. I salute the Minister for his stout defence and robust response, but

15:40

Lord Londesborough (Crossbench)

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it's not altogether shared by the gilt market's witness. Our highest gilt market's witness. Our highest borrowing costs for 18 years and, my Lords, it's not just the IMF, but the OECD. Both have cut their but the OECD. Both have cut their growth forecasts for the UK by a greater margin than for any other greater margin than for any other G7 country. Yes, they flag up the openness of our economy and the gas openness of our economy and the gas intensive nature of our energy mix.

But they also point to UK's zero per capita growth throughout the second half of last year, and with inflation now rising, is the Chancellor not premature in making repeated claims of having built stability and resilience in our economy?

15:41

Lord Livermore, The Financial Secretary to the Treasury (Labour)

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Well, no, I don't think she is, >> Well, no, I don't think she is, because the spring forecast showed precisely that. The spring forecast showed that Britain is well placed showed that Britain is well placed to weather this conflict. Inflation was at 3% and it was set to fall to target. Borrowing was set to fall more over this parliament than in any other G7 economy. GDP per capita was forecast to rise by 5.6% over this parliament, compared to a fall of 0.2% in the previous parliament, and we had increased headroom to over £23 billion.

All of these things, as I say, I think, mean that we are well placed to weather this conflict. And then in terms of actual outturn data, last week's figures show that the economy grew faster than expected in the three months to February. Growth for the three months to January was upgraded and yesterday's labour market figures showed for February, unemployment coming down and real wages continuing to rise.

15:41

Lord Hintze (Conservative)

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Services. >> Services. >> May I ask the noble Lord, the Minister, does he agree that the only genuine way to look at prosperity in this country of our citizens is GDP per capita? And does he also agree that one of the big detractors of growth in GDP per capita is the growing and significant welfare spend? And if not, why not?

15:42

Lord Livermore, The Financial Secretary to the Treasury (Labour)

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Yeah. Yeah. with the noble Lord on the first part of his question. GDP per capita at the time of the spring forecast, as I said already, was forecast, as I said already, was forecast to rise by 5.6% over this parliament. And that compares to a fall of 0.2% in the previous parliament. I think the worst parliament on record for living standards in terms of welfare spending, as he knows, the previous government increased welfare spending by £88 billion.

15:42

Baroness Kramer (Liberal Democrat)

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Keeps looking. >> The IMF report in today's inflation numbers are telling us that forecasts that were made in January essentially now go into the January essentially now go into the bin and what we need are policies to deal with uncertainty and provide resilience. So the new big scheme that provides energy intensive industries with some benefits, but no money will flow for a year. When will firms know what that money will be and when they will get it, so they can plan? Is anything going to be put in place for food and agriculture? Because we're seeing a real rise in food prices and potential food shortages, and small businesses are frankly on the brink.

So are there new policies to come forward that will provide the resilience that we need?

15:43

Lord Livermore, The Financial Secretary to the Treasury (Labour)

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Yeah. >> Well, the noble Lady is absolutely right to point to the need for economic resilience. She knows we must do more on economic knows we must do more on economic security so that the UK does not continue to be more exposed to energy price shocks than our counterparts are. Since the election, we've invested in clean home-grown, energy, renewables and nuclear. And yesterday the Chancellor announced steps to go further, harnessing our domestic supply of oil and gas production from the North Sea, further removing barriers to new renewables investment and reforming our energy system by further weakening the link between high gas and electricity prices.

The noble Lady asked specifically about. Because she'll know that the consultation on scheme design and eligibility on scheme design and eligibility was published last week.

15:44

Lord Watts (Labour)

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Can I can I encourage the case? OK. OK. >> Isn't it the. Case that inflation, the growth in the economy and living standards were improving until we had the problem with Iran? And isn't it the case that as soon as that problem is on, the government has the policies to actually drive the economy?

15:44

Lord Livermore, The Financial Secretary to the Treasury (Labour)

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Yeah. >> Yeah. >> My noble friend is absolutely right. The the economy at the time of the spring forecast showed that of the spring forecast showed that we are well placed going into this conflict. As I say, inflation was at 3% and set to fall to target a much lower starting point than at the point when Russia illegally invaded Ukraine. Borrowing was set to fall more over this parliament than in any other G7 economy. We'd increased headroom to over £23 billion, giving us the buffer to respond to these shocks, and GDP per capita was forecast to rise.

So I think my my noble friend is absolutely right. And as I say, outturn data for February, the final month before this conflict began, showed that the economy grew faster than anyone was expecting.

15:45

Lord Macpherson of Earl's Court (Crossbench)

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Nothing. >> Nothing. >> My Lord, can I encourage the noble Lord, the financial, not to become mesmerised by IMF forecasts? The British economy has proved remarkably resilient in the last. Over the last 18 years, in the face of a succession of shocks and generally. The government has got into difficulty when the Treasury and the Bank have done too much rather than too little. So can the noble Lord confirm that any interventions will be targeted and that the government will maintain its inflation target and stick to its fiscal rules? Very good.

15:46

Lord Livermore, The Financial Secretary to the Treasury (Labour)

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I can absolutely confirm to the noble Lord all three of the things that he asks about. As he knows, that he asks about. As he knows, the price cap is giving households certainty on their bills until July ahead of the winter months. And as ahead of the winter months. And as we respond to this crisis, we must absolutely learn from the mistakes of the past, some of which the noble Lord mentions. The previous government pushed up borrowing interest rates, inflation and mortgage costs with an unfunded untargeted package of support under Liz Truss, and they gave most support to the wealthiest households.

We will not repeat the mistakes of the previous government. We're planning for every eventuality so that we can keep costs down for everyone and provide support for those who need it most. Acting within our fiscal rules. As

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the noble Lord says, to keep inflation and interest rates as low as possible. Here.

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Here. My Lords, the economic forecast. Set out by the. MEF and indeed by Lord.

15:46

Baroness Neville-Rolfe (Conservative)

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>> MEF and indeed by Lord. concerning. >> From a national standpoint. I

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From a national standpoint. I mean, party passions aside, I believe we must pursue a national believe we must pursue a national growth path in the national interest and that needs to include a reduction, not an increase in regulation, especially in building and planning a cut in welfare spending. As we've heard, support for enterprise and full utilisation of our energy resources. Does the Minister agree with that?

15:47

Lord Livermore, The Financial Secretary to the Treasury (Labour)

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Yes, we're doing most of it and she's opposing most of it. The she's opposing most of it. The noble Lady says, the noble Lady says that we need to pursue a growth path. She'll know that one of the most important things when it comes to growth is keeping inflation and interest rates as low as possible. But her party has unfunded proposals to deal with this crisis that would stoke inflation and put up interest rates. Exactly the wrong thing to do now would be a knee jerk response to this crisis that would put household finances at risk.

During the last energy shock, the previous government got the response completely wrong. It meant higher inflation, higher interest rates and higher taxes. We will not repeat those mistakes. Report the.

15:48

Lord Leigh of Hurley (Conservative)

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Respected EY. Item Club has said that the economy will flatline in the second and third quarters, leading to the real risk of recession, Deloitte has said. Business confidence is at its lowest since Covid, and unemployment is thus now expected to rise to 5.8% by 2027. And one of the reasons for that is the Employment Rights Act. The Prime Minister may not respect the employees rights, but business does, and business is stopping hiring for that reason. Given the war, is it not time to soften the effects of the Employment Rights Act?

15:48

Lord Livermore, The Financial Secretary to the Treasury (Labour)

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The. >> Well, look, the noble Lord pointed to some forecasts that are being made. I think he then drew the wrong conclusion. I would just point him to the conflict that is going on in Iran. It's not a war that we started, but it is a war that is going to affect us. I've said already that we went into this economy, into this crisis, with the economy well prepared to weather that crisis. We're doing that. And as I say, the outturn figures for last week showed that the economy grew faster than expected in the three months to February.

I remember when the data for when the data for January came out, the noble Lord asked me a topical question, which I answered that was upgraded this week for exactly that month. He didn't mention that. He keeps saying it's one month, but it's one month after another, isn't it? And they tend to they tend to add up. So I think that the, the, the, the outturn figures before this conflict began showed that the economy was growing faster than anyone expected. Of course, this war will have an impact on our economy.

It's this government's responsibility to ensure that working people, whether that in the right way.

15:49

Lord Wallace of Saltaire (Liberal Democrat)

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The recipient. payments in the form of my old age pension and my wife's old age pension, the whole discussion about pension, the whole discussion about cutting welfare seems to leave out the very substantial chunk of welfare that goes to those of us who are retired. Does the Minister think that all the effort in cutting welfare has to be on the young, or does he think that any discussion about cutting welfare has to include the old as well?

15:50

Lord Livermore, The Financial Secretary to the Treasury (Labour)

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Well, clearly we need a welfare system that's working and no one system that's working and no one believes the system that we inherited is working. It abandoned too many people to a life on benefits. It wrote off too many people as too sick to work, and it condemned too many children to be too poor to eat. That is why we are reforming the welfare system.

15:50

Baroness Smith of Basildon, Leader of the House of Lords and Lord Privy Seal (Labour)

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My Lords, that concludes our. >> Questions for today. >> Business of the House. The Lord Privy Seal.

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Privy Seal. My Lords, I beg to move the motion standing in my name on the Order Paper. My Lords, the House is Order Paper. My Lords, the House is aware three sitting hereditary peers have received life. Peerages and a further limited number were received. Life peerages in a future list. The purpose of this motion is to allow any existing hereditary peer who has received or will receive a life peerage to take their seat, continue to sit in the House without a full introduction ceremony.

This mirrors the motion moved by the Lord Williams of Mostyn in 1999. As in 1999, the change has the approval of His Majesty the King in terms of practical realities. If this motion is agreed today, any hereditary peer who is granted a life peerage will be required to take the oath and sign the roll to undertake to abide by the code. But the full ceremony of introduction, including robes, the involvement of Garter and supporters and the reading of letters patent will not take place again.

This mirrors the situation from 1999. My Lords, I believe this meets the best interests of the

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House as a whole, and the individual hereditary peers concerned. I beg to move. Yeah.

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Yeah. The question is that this. Motion be agreed to. As many of

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Motion be agreed to. As many of that opinion will say, content contrary, not content. The contents have it. This may be an opportunity for those who wish to leave the

15:53

Lord Hanson of Flint, The Minister of State, Home Department (Labour)

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amendments on. >> The Crime and Policing Bill Lord Hanson of Flint. >> My Lords, I beg to move motion A

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My Lords, I beg to move motion A that this House do not insist on its amendment to D to Commons amendment two, B and its amendment amendment two, B and its amendment two E to Commons amendment two C and to agree with the Commons in their amendment to F to Commons amendment two B and amendment two G to Commons amendment two C in lieu. I will also, in a moment, if I may, my Lord, speak to motions B, C, and D before I begin my main remarks.

However, my Lords, may I just say that today marks Stephen Lawrence Day, 33 years to the day since the loss of Stephen and my noble friend Baroness Lawrence of Clarendon is in the chamber today and I want to pay tribute to her and her campaigning activity over those 33 years. I was pleased to join my noble friend earlier today for an event at the King's Trust in Southwark to continue the campaigning work of the Stephen Lawrence Foundation. And today is a really good opportunity for us to remember Stephen, but also to recommit to continue to make a stand against racism in all its forms.

I just wanted to place that on record on behalf of the whole House before we commence the Crime and Policing Bill, which in itself deals with a number of issues which

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are important in both combating racism and securing knife crime. Yeah.

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Yeah. Is that the Commons amendments be now considered? As many of them will say, content contrary, not

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will say, content contrary, not content. The contents have it motion a Lord Hanson of Flint. My Lords, as I beg to move a

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My Lords, as I beg to move a motion a. And as I said last week, I'm grateful for both the engagement that I've had with the noble Lord Davies of Gower and with the noble Lady Baroness Doocey and the noble Lord Clement-Jones. On these matters. We have had a number of amendments in this group, and I'm pleased that they're all considered now in one group. As I said last week, I do understand the concern, particularly in relation to motion a about the enforcement agencies potentially issuing fixed penalty notices for anti-social behaviour offences where there may be a financial incentive to do so.

However, I remain of the view that it's not appropriate to put in place a blanket ban on the issue of fixed penalty notices by enforcement companies and contractors. Introducing such a ban would be disproportionate and would significantly weaken enforcement capability. Contracting enforcement to third parties is a common arrangement, and it is for local authorities themselves to ensure the use of powers remains just and proportionate. It is for that reason that the government last week tabled amendments to A to two C in lieu, which would rightly ensure that statutory guidance addresses these very points that noble Lords are concerned about.

Now, I do recognise that the noble Lord Clement-Jones has moved on this and tabled amendments in lieu to ensure that such guidance may not address the need to ensure the proper proportion, ensure proportionality in the use of fixed penalty notices. I therefore hope that he's content with the further government's amendments in lieu that have been tabled amendments two F and two G, which also seek to ensure that any guidance issued must address the issue of fixed penalty notices by authorised persons.

In addition, I've discussed again in discussions with the noble Lord the DEFRA statutory guidance on litter enforcement powers. That guidance includes various entries relating to the need to exercise enforcement powers proportionately. It also addresses the use of contractors. I hope I can give an undertaking to the noble Lord that we will adopt similar language in the guidance to be issued in respect of anti-social behaviour enforcement powers. Under this potential act, we commit to including the passage in the guidance which says, and I would quote from what I intend to include, which will be that we're.

External contractors are used. Private firms should not be able to receive greater revenue or profits just from increasing the volume of penalties. I will also ensure the statutory guidance reminds local councils that contracted agencies are not expected to issue fines, fines purely purely for profits and if they're found to do so, local authorities may take appropriate remedial action, such as revocation, in line with the terms of their contract. I hope that that provides the noble Lord the reassurance not to move motion A one motion B.

As I've said throughout the passage of the bill, again, the government fully agrees with noble Lords on the need to do more to tackle fly tipping and our recently announced Waste Crime Action plan, which I referred to in our last round of ping pong and which was published over the Easter recess, does just that on the amendment. 11. Again, I stress that local authorities already have powers to seize vehicles if they have reason to believe that the vehicle is being used or is about to be used to commit a fly-tipping offence.

This is in addition to the police's general power under the Police and Criminal Evidence Act 1984 and its associated codes to seize items as evidence if they believe they're being used in the commission of a criminal offence. Now, the government wants local authorities to use these powers fully to tackle fly tipping. And to that end, again, I've tabled amendments in Lieu Amendments 11 C to 11 F that make it clear that the statutory guidance to be issued to waste authorities in England under clause nine of the Bill must not may include advice to local authorities on exercising their powers, including on the seizure of vehicles.

I'm grateful for the gentle discussion that we've had with the noble Lord on these matters and for the pressure that he's put, and I hope that reassures the noble Lord Davies of Gower on this matter. On motion C My Lords, we return to the issue of must versus May again. And last week, the noble Baroness, Lady Ducey, reiterated her concerns that the police are only required to consult Youth Offending Teams when applying for a youth diversion order. As I mentioned last week, multi-agency engagement will be crucial to the success of these orders, and I want to be clear to the House that youth offending teams are already multi-agency by statute, and they include representatives from health, education, social services and probation, as mandated by the Crime and Disorder Act of 1998.

Youth Offending Teams may also engage with child, adolescent, mental health services, education, inclusion teams, voluntary and community organisations and local early health services. Now I recognise the noble Baroness, Lady Lucy has raised concern about the involvement of parents. I would like to reassure her that engagement with parents or carers is a routine and integral part of the work of youth offending teams, beginning both at assessment stage and continuing through any intervention. This engagement is led by practitioners who are trained to work with families, understand family dynamics and assess what engagement is appropriate, safe and in the child's best interests.

The nature and extent of parental involvement is therefore nuanced and individualised, and I hope that the noble Lady will recognise that it, I don't think, would be right to prescribe a one size fits all process for what could be very often likely complex, varied cases. And the statutory guidance, however, will also provide guidance on multi-agency engagement for orders involving respondents over the age of 18. And taking all of this into account, I'm confident this will cover a broad range of expertise and ensure police take a variety of factors into account before applying for an order.

The government have again committed to issuing statutory guidance, which will set out what the police should take into account in terms of proportionality before applying for an order, and that will include the need to consider alternative interventions. The police will clearly need to take an individualised approach and it will, in my view, not be helpful for the government to set out a prescriptive list of alternatives in the guidance. In addition to this, as I've previously set out, the courts will be required to consider whether an order is necessary or proportionate before granting any order.

And to be clear, the police, as the applicants, will need to provide the necessary evidence to enable courts to make that decision, and this will necessarily involve consideration of what alternative options are available and relevant in each case. Having said all of that, however, and notwithstanding the House of Commons rejecting the Lords amendment by a majority of 233, which was Lords Amendment 342, and interestingly, it was a vote in which the official opposition in the Commons did not vote and abstained.

The government have brought forward amendments three, 42C and 342D in lieu, which make it clear that the statutory guidance will also include guidance to the police on the circumstances where it may be appropriate for police to consult others belong beyond the multi-agency youth services. The police must have due regard to this guidance. In addition, these amendments in lieu make it clear that the guidance must address these matters. In summary, I hope that with these additional resources and again, I'm grateful to the noble Lady for her engagement, that they are acceptable in lieu to the noble Lady.

And we finally come to a motion D now again on motion D, I stress again that it's the long standing position adopted by successive governments, including the previous one, that the government does not provide a running commentary on which organisations are being considered for prescription. Furthermore, deciding whether an organisation needs prescribing requires intensive analysis. And I would suggest to the noble Lord that it's not helpful to suggest that the government should review every organisation linked to the Iranian government within one month of Royal Assent.

Now, I note that the noble Lord has brought forward amendment 439E, which narrows the category of organisations within the scope of the duty. But my point is one of principle and still stands. We cannot reach decisions on prescription to an arbitrary timetable set in stone by statute. Now the government keeps the list of prescribed organisations under close review. We do not comment on whether a specific organisation is being considered for prescription. We continue to take strong action to hold the Iranian regime to account, and I just say to the House that more than 550 Iranian individuals and entities, including the IRGC, are now sanctioned, as well as placing Iran on the newly provided Enhanced Foreign Influence Registration scheme.

The House should not be in any doubt that the government cannot and will not accept amendment four, three, nine or the new Amendment 439E but that is not because we're against any action being taken on the Iranian regime. Contrary, we are strongly opposed to the activities of the Iranian regime and have taken steps to do that. As your Lordships House has insisted on amendment 439 for a second time. We have, however, brought forward amendments four, three, nine C and 439D in lieu, principally to keep the parliamentary process going.

But I hope that they will also aid understanding of the prescription procedure in terms. The amendment will require the Home Secretary to lay before Parliament within six months of Royal Assent. A statement about the general policies and procedures of the Secretary of State in relation to the powers under section three of the 2000 act, which gives powers for the government to prescribe organisations. I understand you know the points that the noble Lord has made. I can't agree with him.

I would ask him to give the government the benefit of the doubt on this matter. But in the meantime, my Lords, I beg to move the amendments motions in my name.

16:05

Lord Clement-Jones (Liberal Democrat)

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The question is that motion A, B agree to motion A one Lord agree to motion A one Lord Clement-Jones I beg to move motion. >> A1 as an amendment to motion A at end insert and do propose at end insert and do propose amendment two H as an amendment to amendment two F and amendment two J as an amendment to amendment two G. My Lords, before I speak to the motion, can I thank the Minister for reminding us of the anniversary of the tragic death of Stephen Lawrence, and can I join with him in his tribute to the noble Baroness Lawrence and.

And join these benches with his commitment to combating racism in all its forms? My Lords, while I welcome the fact that the government has acknowledged the widespread concern over how these powers are enforced, I must express my profound disappointment that they have chosen again to strip out a robust amendment passed by this House only last Thursday, which would have implemented a strict statutory ban on fining for profit. The government's replacement amendment, under motion A is simply too weak, offering only that the Secretary of State must issue guidance.

In recent days. The Minister and I do thank him for his engagement, has sought to reassure me that this will be sufficient because the Home Office intends to draw directly on the recently published DEFRA statutory guidance on litter enforcement to update the anti-social behaviour guidance. My Lords, incorporating the language of the DEFRA guidance will not solve this problem. If we look at that DEFRA guidance, it states that private firms should not be able to receive greater revenue or profits just from increasing the volume of penalties.

As Josie Appleton, the director of the campaign for Freedom and Everyday Life, who have done so much to highlight the problems with the way that fines are collected for Pspos and cpns, has rightly pointed out to me, relying on this guidance framework is fundamentally flawed. She's highlighted three crucial points that explain why primary legislation is vastly preferable. First, if the government genuinely intends to do as they say and stop this cowboy practice, then they should have absolutely nothing to fear from passing my amendment in primary legislation.

Secondly, she rightly asks whether the government is actually going to ban payment per fine and the use of tacit or explicit targets, or whether they will simply fudge the issue with fine words about proportionality. The DEFRA guidance relies on the permissive word should, rather than a legally binding must, leaving the door wide open for these lucrative contracts to continue. Third, and perhaps most importantly, what is the enforcement mechanism for this guidance? As Miss Appleton asks, would somebody be able to appeal an FPN a fixed penalty notice on the basis that it was issued under payment per fine arrangements? The answer is no to mean something the law needs to have teeth.

Guidance is not strictly legally binding. Local authorities and private agencies simply have a duty to have regard to it. My Lords, we cannot regulate a multi-million pound industry built on aggressive, incentivised ticketing by politely suggesting what they should do in non-binding guidance. The scale of this issue is immense. The surge in penalties is overwhelmingly driven by the 31 councils that employ private companies, who issued a staggering 75.7% of all pspo penalties last year, with the government pushing ahead to increase the maximum fine for these breaches by 400% from £100 to £500.

This industry is about to be supercharged. We cannot allow a system that financially incentivise incentivises the punishment of our citizens to masquerade as justice, and that's why I hope the House will fully support motion A1 today. Motion A1 puts the necessary teeth into the government's proposals. It ensures that the guidance must explicitly set out how authorised persons can be disincentivized from issuing fixed penalty notices for the purpose of generating any direct or indirect financial benefit. And, crucially, it provides a real enforcement mechanism by stating in the Bill that any person found to be in breach of this guidance may have their designation revoked by the local by the relevant local authority.

And my Lords, if we're to rely on guidance based frameworks, its prohibition on financial incentives must be explicit and there must be statutory consequences for breaching it. My Lords, I urge the House to support motion A1.

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The original question was that motion A be agreed to since when motion A be agreed to since when motion A1 has been moved as an amendment to motion A at the end to insert the words printed on the Marshalled List. The question, Marshalled List. The question, therefore, is that motion A1 be agreed to.

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agreed to. My Lords. I rise to speak to motion C1 and thank the. Minister for moving amendment

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Minister for moving amendment three, 42C and D. I'd also like to thank the Minister and his officials for the time they've

16:10

Baroness Doocey (Liberal Democrat)

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spent with me during the passage of the Bill. I am pleased that the government has taken on board a government has taken on board a number of the concerns I have raised. Amendment 342C now ensures raised. Amendment 342C now ensures the guidance is mandatory. The police must have due regard to it police must have due regard to it and it must address alternative interventions. The Minister has also confirmed that police will be also confirmed that police will be required to present evidence to the court on what alternatives were tried or considered, and has also provided helpful clarity on the broader consultation process beyond Youth Offending Teams.

These are important technical steps towards the informed justice I have sought. However, it's a matter of regret that the government did not feel able to go further. We debate these powers in the immediate wake of the Southport inquiry, where Sir Adrian Fulford identified a fundamental failure by agencies to take ownership of risk and an inappropriate merry go round of referrals, the government argues it would be premature to codify the inquiry's lessons before a fuller review of its recommendations this summer.

But we've seen before how recommendations from vital inquiries, such as the independent Inquiry into Child Sexual abuse and the Manchester Arena inquiry, can be accepted in principle yet delayed in practice. The families in Southport deserve more than a watching brief. They deserve the certainty of law. I also hope these concerns will be reflected in the Home Office guidance for youth diversion orders. I welcome the Minister's offer to share the guidance in advance and trust it will be as clear and unambiguous as he has indicated.

However, in light of the concessions made and the Minister's assurance on parliamentary oversight via the negative proceeds, I am prepared to accept the government's position today and will not divide the House on motion C1. But let me be clear this is not the end of the matter. We will watch closely for the guidance to be laid before Parliament. The Home Secretary has already admitted past guidance failed because it was applied inconsistently. If the new guidance is lacking or the government's response to the Fulford report is diluted, I will not hesitate to table a motion to ensure this House can fully debate those failings.

My Lords, we are legislating for powers designed to prevent mass casualty tragedies, so safety must be built on the full multi-agency picture, not on administrative hope.

16:13

Baroness Fox of Buckley (Non-affiliated)

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Yeah. >> Yeah. >> And my notes, and I'd like to congratulate the noble Lord Lord congratulate the noble Lord Lord Clement-Jones on pushing amendment A1, which I will be supporting just very briefly after the last ping pong debate on the issue of on the spot fines by private enterprises, I was actually inundated by lots of people sending me complaints of egregious harassment by these very agencies, these very bodies, these enforcement agencies. And people were just outraged at what they saw as an abuse of a system.

And I thought I'd just quote one. He said, not only does one have to, as you walk down the high street, look out for phone snatchers, but you also have to look out for official muggers after your money and then find out they're employed by the contract, and they're just as illegitimate and just as anti-social. So if I can emphasise this abuse of the public's absolutely understandable concern and frustration about anti-social behaviour and the government's completely correct focus on tackling anti-social behaviour is threatened by an enforcement regime that's discrediting.

That's why enforcement matters. If the legitimacy of the enforcement response is weak, then it actually means that we're not tackling anti-social behaviour and the public just becomes cynical about the whole enterprise. And I also wanted to support amendment D one under the name of the noble Lord, Lord Davies of Gower, who I'm glad to see has brought this back in a different way. The horrifying context that we live in are the series of arson attacks, alleged plots and conspiracy of firebombings of synagogues, Jewish charities and Jewish businesses that we're all familiar with, and the Prime Minister rightly says we won't relent in our fight against anti-Semitism and terror.

Perpetrators will feel the full force of the law. And I think that this is one way that they could feel a fuller force of the law, because we do know that there is increasingly likely that many of the issues that we're facing on UK soil are committed by Iranian commissioned proxies and are tangled up with the ID, R, C and the noble Lord, the Lord Minister, suggested that it is not appropriate to have a running commentary on prescription. And I think I understand his concerns, but I think this amendment is trying to tackle the key question of how the government can stop the IRC operating on British soil.

But it's also the case that when in opposition, the Labour Party had in fact conducted a long running commentary on this very issue. So early in 2023, the shadow foreign secretary, David Lammy, said in Parliament we will prescribe the ID r c either by using existing terrorism legislation or by creating a new process for prescription for hostile state action. And in July 2023, the then shadow home secretary, Yvette Cooper, reiterated that a Labour government would apply full ban.

Now in 2026, at a time of heightened threats and and and heightened Iranian backed anti-Semitic attacks. We get zilch. It just feels inexplicable. I just don't understand it. And then just finally, the noble Lord, the Minister rightly reminded us at the start of this debate about the anniversary of the horrific murder of Stephen Lawrence, and those of us old enough will remember the impact that racist murder had on us all. It was a jolt for society, and it rightly led to serious actions and legislation to tackle racism.

I just want to remind the House that anti-Semitism is the oldest form of racism, yet somehow it doesn't seem to merit the same strength of action. It deserves urgent action against the culprits. And we know who some of those culprits are the I, g, r, C, or at least one of the key players in anti-Jewish attacks anti-Jewish hatred, let alone its own attacks on its own Iranian citizens who live here. So I just would urge us all to support the prescription of the ID BRC.

prescription of the ID BRC.

16:18

Lord Marks of Henley-on-Thames (Liberal Democrat)

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My Lords, in relation to motion A1 move so ably by my noble friend Lord Clement-Jones on disincentivizing fining for profit and importantly, ensuring that contractors found to be profiting profiteering from fixed penalty notices may risk losing their contracts. I have nothing to add to what he said on motion C and C1, to which my noble friend Baroness Doocey spoke. It is encouraging that she has accepted the insurances assurances and that the government has given the assurances they have as to the future guidance that there is to be on youth diversion orders, but I do hope to hear from the government that they take her note of possible future action, parliamentary action on this.

If the guidance doesn't work, I turn now to the Conservative Motion D1 to be moved by the noble Lord Lord Davies of Gower relating to the proscription of Iran related entities. Now we accept that on some readings, the Marshalled List could be taken to suggest that the government and opposition parties are not dramatically far apart on motions D and D1, so motion D1, the conservative motion, which we support, calls for a review of organisations related to possible proscription of Iranian armed forces within a month, whereas the Commons amendment in lieu in which in favour of which the noble Lord the Minister spoke would require only a statement about the general policies and procedures of the Secretary of State relating to prescription orders.

But, my Lords, those differences, in fact, mask an important point of constitutional principle when this issue of proscription of the IRGC was considered by this House last Thursday, the noble Lord, the Minister said, as he said again today, that the government would not give a running commentary on prescription. And that's been the position of previous governments and keeps the issues of prescription under review. The noble Lords approach was. And is that because the noble Lord Lord Davies of Gower and I, and by implication, everyone not privy to government intelligence intelligence briefings has not had the intelligence the government has received from the intelligence services.

It follows that it is the government's right to make these judgements as a government on what organisations are prescribed and when. And the noble Lord. The Minister's approach was largely echoed by Minister Sarah Jones in the other place, on Monday of this week. My Lords, I say that we do understand the government's approach and in particular, we are not seeking a running commentary on ongoing consideration of the prescription of possible organisations. Nevertheless, we contend that the government's approach misunderstands the constitutional position decisions on orders proscribing organisations are subject to the affirmative resolution procedure, and such orders cannot take effect unless approved by both Houses of Parliament, so they are ultimately decisions for Parliament.

If these decisions were for the executive alone, the requirement for a vote of both houses would be both meaningless and contradictory of the legislation. Furthermore, the government's position would mean inconsistently, that while parliamentary approval is required to approve a prescription recommended by the executive, Parliament is not entitled to take a view on the prescription of any organisation that the government does not recommend for any reason for prescription, whether that reason be good or bad. My Lords, that is constitutionally unsustainable.

Just as a sovereign Parliament would be entitled to legislate to require a prescription. So this Parliament is entitled, quite entitled to take the far more modest step of insisting on a report, not just about the general principles of prescription, to enable us to understand the procedure, as the noble Lord would have us accept. But on the government's reasoning in relation to the IRGC and other organisations related to the Iranian military considerations, such as those spoken to by the noble Lady Baroness Fox, are important for Parliament and Government in considering whether or not to prescribe organisations, just as they might be on a motion to approve an order laid by government for a positive prescription.

The noble Lady referred to David Lammy's and Yvette Cooper's support in opposition for proscription of the IRGC, and those are relevant considerations for Parliament. So, my Lords, we will vote solidly in support of Lord David's amendment, and we commend it to the House.

16:24

Lord Davies of Gower (Conservative)

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Yeah, yeah. Thank you. >> Yeah, yeah. Thank you. >> My Lords. I thank. >> The noble. >> Lord, the Minister, for moving the. Motions in his name today, and the. Motions in his name today, and I'm pleased to see the government moving. Amendments 11 C to 11 F to include guidance and evidence collection and the exercise of seizure powers in the Secretary of State's statutory guidance, and we are happy to accept these. But I would add that it's over a year ago now that my hon.

Friend Matt Vickers brought these to the attention of the Other place, and it was rejected at that point by the government, and it's regrettable that the government were against our amendments here, and we have only just arrived at this point as a result of the persistence of this side of the House. I'm also pleased that the noble Lord Lord Clement-Jones has tabled his motion. We support this, and if he decides to divide the house, we will be with him. I've tabled motion D one to disagree with the Commons amendments and to offer my own amendment in lieu, which is only slightly altered from the previous version.

The only change I've made is to narrow the language to mention groups linked to the Iranian armed forces, as opposed to focusing on groups linked to the Iranian government as a whole. My Lords, it's it's very peculiar how one's opinion can change so greatly when one enters government. As has already been alluded to by the noble Lady Baroness Fox of Buckley, the Labour Party used to stand on this side of the House, urging conservative Ministers to proscribe the IRGC. In fact, on the 7th of March 2023, during the Report stage debate on the National Security Bill in this House, the noble Lord Lord Coaker, then the opposition Home Office Shadow Minister, moved an amendment with the express purpose of requiring the government to proscribe the IRGC.

Now the noble Lord stood at this very Dispatch Box and said, it is in the national security interests of this country for the IRGC to be prescribed as soon as possible. End of quote. And that was the view the Labour Party in 2023. But clearly they no longer believe that that is the case. Instead, the government have offered us a statement within six months outlining the process of prescription under the Terrorism Act 2000, and when speaking to the government's amendment in the House of Commons, the Minister, Sarah Jones MP, said that this was to help the opposition and others to understand the prescription process.

My Lords, we do not need to be patronised by this government. We can all read the conditions in section three of the Terrorism Act. We know what the process is. Our contention is that the government is not willing to use that process effectively. We can see plainly and clearly that the IRGC meets that threshold. And I say to the noble Lord, the Minister, put yourselves in our shoes. If he were standing where I am today, would he accept a statement on the process as being sufficient to prevent him pressing this to a division? I'm doubtful he would.

My Lords, we should be in no doubt that the IRGC poses a significant threat to our country when we have seen in 2025 alone more than 20 potentially lethal Iran backed plots on British soil when we have seen numerous anti-Semitic attacks carried out in Britain, and when we have seen the IRGC ramping up their plots in attacks across the Middle East and beyond, then we know we have a problem. The IRGC is a dangerous and lethal organisation. Just today we have seen how they have fired a merchant vessels transiting through the Straits of Hormuz.

We must act against groups that pose a threat to our national security. The United States have banned the IRGC, as has Canada, New Zealand, Australia and even the European Union. If they can, why can't we? Surely, my Lords, it is time for the government to listen to the British people, listen to Parliament and listen to themselves and prescribe the IRGC as soon as possible, and I beg to move the. And, my Lords, may I just, before I sit down, align myself with Commons in relation to the appalling events that led to the death of Stephen well.

16:28

Lord Hanson of Flint, The Minister of State, Home Department (Labour)

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Well, said Lord Davies of Gower. who've spoken in this short debate, and may I just, with the leave of the House, respond to those comments on fixed penalty notices? I had genuinely hoped that the noble Lord Lord Clement-Jones would have accepted that we've moved significantly towards this position. Everybody wants to see fixed penalty notices issued in a fair and proportionate manner, and the government amendments would have helped and will help ensure that this is the case. But I think we also need to accept that there's a continuing role for external contractors in the enforcement of ASB orders, and I don't believe we should close the door to that, which I think our assessment is.

The noble Lords amendment would do. So. I recognise that the noble Lord Clement Jones is not happy, but I just before before we move to a potential division on this, I just want to again recommit what I said in my initial opening remarks that we commit to a passage in the guidance that I will produce on behalf of the Home Office that will say where external contractors are used, private firms should not be able to receive greater revenue or profits just from increasing the volume of penalties.

I think that meets the overlord's objective. But if if he remains unhappy, then that's the way these things work. So we'll have to examine that in a moment. Can I also note and welcome the noble Lord Davis's of Gowers acceptance of our position on the Fly-tipping issue and the removal and crushing of vehicles? The guidance will help, and I'm grateful for his support. I'm also similarly grateful to the noble Baroness, Lady Ducie, for accepting the government's amendments in lieu on youth diversion orders.

Now, I know again, she feels very strongly about the issue of Southport and the recommendations from Southport, and I just reiterate, for the purposes of placing on record that we will respond to Sir Adrian Fulford's recommendations on Southport by the summer. We received them a week last Monday at 12 noon. We want to ensure that we give full consideration to them and we will respond to them and take action accordingly, and I can't therefore pre-empt our consideration of those recommendations, but I it doesn't mean we're not going to look at them significantly and ensure that we respond in due course to those recommendations.

But I'm grateful to her for at least today, accepting, I hope, our amendments in lieu on these matters. Now, again, the Lord Davies of Gower, the noble Lady Baroness Fox of Buckley and the noble Lord Marks of Henley have all spoken on the question of the IRGC. I have to say I'm disappointed that the noble Lord is continuing to press this issue. And I know, and I've heard what other noble Lords have said on this matter. I just refer back to the very principle that the prescription of a body, any organisation at any time, is subject to the 2000 act, and that is, as the noble Lord Marks Lord Henley rightly said, subject to affirmative resolution in both Houses of Parliament, and that is an opportunity for government then, to both lay out the reasons why prescription should take place, to be tested on those reasons and to be done in a public forum where those matters are considered.

This is asking the government to take a prescription potential order when information that we are examining may not be it yet on any particular body information that we can share or discuss in a public forum, there is the Intelligence and Security Committee, which we've already given commitments to following Palestine Action's prescription that will be sharing information with them. I've sat on the Intelligence and Security Committee. We have non-party cross-party examination of officials in secret, in private, with Privy Council based briefings about matters to which we have to take judgements.

That is an appropriate forum also to examine this, but I don't think that we can, I say, give a running commentary on the prescription, and it's completely inappropriate for the government to break with that. Now, measures have been mentioned about the previous opposition's view on these matters. I just have to say, I was on an enforced sabbatical between 219 and 224. I wasn't the Home Office spokesman in either House of Parliament. We've taken a judgement now as to what we should do, and we're not going to give a running commentary on prescription because if we say we're going to prescribe an organisation, whether it's the IRGC or anybody else, we give them notice.

We're going to do that. If we say we're not going to prescribe them, we leave, you know, a potential view as to why not. And we have to then potentially talk about things that we don't want to talk about in a public forum, such as the House of Commons and House of Lords. There is a time and a place for judgements to be made. And if a government determines that a prescription order should be brought forward, we will bring it forward. We will set out the reasons why, and we will be held to account by both Houses of Parliament for that.

And as was known on both the Palestine Action prescription recently, we were tested and individual members of both houses voted against that order. So I simply say to the noble Lord Davies of Gower and to the noble Lord Marks of Henley that there is a procedure to undertake prescription. We're not going to comment on the IRGC. We're not going to give a running commentary. If we decide at any time to prescribe, any organisation will bring it forward and to have a procedure that is different to that.

In my view, it is not helpful to

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the process. I come from this. From a somewhat naive point of

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From a somewhat naive point of view perhaps, but what I can't understand, having heard the noble understand, having heard the noble Lord the Minister, is why on earth the government hasn't done it

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already. Well, again, if I answered that question, I am straying into the question, I am straying into the very issues that I don't wish to talk about, because there are issues which we have to keep under consideration. What I will say to the noble and learned Lady is what I said in my opening remarks. We have sanctioned Iranian officials. We have put visa sanctions on Iranian officials. We have got Iran under the Firs scheme for registration of foreign interests.

We have taken action, as is self-evident in relation to the current crisis that is happening now. I just say to the noble and learned Lady that I don't want to comment on those matters. That's not because, again, I don't want to comment on those matters. It's because whatever I say on those matters gives an indication of what the government might wish to do at any particular time on any particular topic, and it's not right. We give a running commentary. So I would say to the noble Lords who've spoken in this debate, I welcome their support of the two government amendments in lieu.

I hope I've convinced the noble Lord on his amendment in relation to fixed penalty notices, but I suspect I haven't, and I hope that they will not push motion D for the arguments that I've put. But in the meantime, I beg to move the amendments in my name.

16:36

Lord Clement-Jones (Liberal Democrat)

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Can I start off by thanking the noble Lord Davies of Gower for his consistent and solid support on the issue of fining for profit and can issue of fining for profit and can I also. And his colleagues on the conservative benches and can I also thank the noble Baroness Fox for thank the noble Baroness Fox for her consistent support throughout for the same issue, my Lords, and can I add my thanks again to the Minister for his engagement? I don't think there's been a lack of engagement, my Lords, but the Minister is shuffling towards the finishing line.

He could still do more and more quickly. My Lords, in addressing the concerns expressed in motion, a one. My Lords, I do urge him to take his department by the scruff of the neck, get this matter done with a bit more creative thinking, my Lords. That's all it requires. So my Lords, for the reason I set out earlier, I wish to test the opinion of the House.

16:37

Division

17:02

Short debate: Impact of the Clean Power 2030 Action Plan upon rural communities

Impact of the Clean Power 2030 action plan upon rural communities. Baroness McIntosh of Pickering.

17:02

Baroness McIntosh of Pickering (Conservative)

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My Lords, I'm delighted to have secured this debate and I look forward to hearing all forward to hearing all contributions, in particular from the maiden speech this afternoon. I declare my interest as Honorary President of National Energy Action and also of the UK Warehousing Association. I also serve on the Environment and Climate Change Committee. The impact of clean energy on rural areas is potentially devastating, and yet, I'd like to start off positively and look at the alternatives that would prevent this from happening.

North sea oil why are we importing oil and gas from Norway when we could produce our own oil fields entirely adjacent to theirs? That's right. Drilling for oil in the North Sea is good for UK jobs. Tax income and the balance of payments. Even in Denmark, where I'm half Danish and I follow fairly closely developments there in Denmark, with a developed renewable sector, it has the largest oil and gas production in the EU. All sources of energy are joined up and it brings community benefits to its residents.

Nuclear power is another alternative. I particularly would look favourably on smaller nuclear power stations, which are relatively quick to build safe and efficient. Energy from waste. This would tackle two issues at once disposing of household and light commercial waste, as well as heating homes and hot water for households and businesses. Solar panels could be built on rooftops, car parks and brownfield sites, and I'm very proud that the UK Warehousing Association are leading the way in this regard. The future also could contain floating solar, whereas clean energy entails major concrete and other installations.

It involves wind turbines and pylons, solar farms, battery storage plants including inverters, transformers, substations, control rooms, connection to the grid. It is often built on prime agricultural land and causes tensions between farmers and developers, but judicial review is underway, involving around 500 farmers and landowners, many of whom face losing farmland, homes and livelihoods to a proposed 200 kilometre pylon scheme stretching across several counties and into the West Midlands. These facilities amount to creeping urbanisation, right.

Currently, applications have been made in North Yorkshire alone in the following East Cowton Light Valley Solar, South Millfield, Hillam, East Appleton Marsh, Masham and Swinton East Rounton and Scotland Lord Lingfield. Many of these are integrated BS s schemes with a horrendous array of solar panels, integrated battery storage and all referred to as above. This is an unacceptable cumulative impact of various forms of clean energy. In one instance, that of Scotland Lord Lingfield, the developers acknowledged the very real risk of a fire and need for evacuation.

Also, a real risk of a smoke plume reaching into the nursery. These facilities, in my view, are inherently unsafe as they are highly combustible and flammable, with fire risks from solar panels themselves and even more so from battery storage units. In many cases, these are positioned simply too close to residential homes, schools, nurseries and other businesses. It is staggering that fire and rescue services are not statutory consultees. They are not formally consulted as to site engineering and positioning of the facilities or the resources in terms of water, equipment and manpower required in the event of a fire.

This is despite the intrinsic unsafety of such flammable sites. In addition, these sites require wind turbines and overhead power lines criss crossing the countryside to bring the energy generated to London and the south east. These are highly intrusive, environmentally unfriendly and wasteful as energy is lost in such transmission. In any event, pylons transporting energy long distance via vulnerable overhead power lines are environmentally challenging, can be damaging to birds and wildlife, and are wasteful and hideous. This is an ecological scandal in the making, particularly the end of life of clean energy infrastructure.

How will this be decommissioned and disposed of in an environmentally safe way? Will a bond be taken out from the applicants in each case, to cover the cost of restoring the site after 40 years, or in the event of a developer failing before that time? Many environmental groups, including CPR, the Commission for the Protection of Rural England, deeply regret the impact on the countryside, residents and livestock. Offshore wind farms threaten the very marine life that is the lifeblood of marine areas.

Many argue that in view of the potential damage, there is a strong case for a moratorium on new applications for offshore wind farms until there is a better understanding of these issues. One of the worst aspects of these facilities is the impact of farming, food and production. Food production potentially. The government has admitted it will take 10% of farmland out of food production. What assessment has the government made of the impact on food security and food production of their clean energy proposals? Mr Speaker.

At this stage, we are roughly 60% self-sufficient in food, but this is challenging and in fruit we are only 18% self-sufficient and only 55% in vegetables. The majority of these are imported. Moreover, current levels of debt per household are high and increasing, amounting to a total of £5.5 billion in February this year. The arrears represent around 75% of the total of all unpaid energy bills. Energy spending by households and businesses is increasing. We are paying for infrastructure use in advance before it is even being constructed.

This is the only utility to do so. Piling costs in the form of energy levels and high standing charges over which households have no control. Continuing the Danish theme in the H. S PCC Andersen's, we call it Danish fairy tale. The Emperor has no clothes. Everyone feared the Emperor and wanted to display loyalty. They praised his garments. But in truth. In truth, he was wandering around in his underwear. Only a young boy was brave enough to tell the truth. That the emperor was indeed wearing no clothes.

So I'm being very brave today, saying to the Minister and to the government that this is wrong. The Minister will respond by saying that clean energy is safe, sustainable, reliable for our energy. I disagree. Many of the clean energy sites are intrinsically unsafe, highly flammable, combustible. They're not reliable, as when the wind doesn't blow and the sun doesn't shine, we are left powerless. I urge the government to look closely and positively at the alternatives. Renewables are, in practice, potentially wasteful, lose energy and transmission, and bring no significant community benefits.

They amount to creeping urbanisation of the countryside. The proposals, contained in the Clean Power 2030 paper are premature, ill thought out, potentially devastating for the rural communities, their residents, livestock and nature. I. The proposals are unravelling rapidly. They need to be revisited.

17:11

Lord Nagaraju (Labour)

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Yes. rise and address this House and I am grateful for the opportunity. I thank the noble Baroness, lady McIntosh of Pickering, for raising McIntosh of Pickering, for raising this important question. I express my sincere thanks for the warm welcome from all sides of the House. I'm appreciative of Black Rod. The clerk of the parliaments and officials and staff. I'm grateful to my noble friends, the noble Baroness, Lady Berger of Barnhill and the noble Lord Lord Duvall of Hertsmere for their support during my introduction.

I would also like to thank my noble friends, the noble Baroness, Lady Smith of Basildon, and the noble Lord, Lord Kennedy of Southwark, for their guidance and support. My Lords, I was born in India and came to the UK as a student. My journey is shaped by education. I pursued a master's degree in computer science at Oxford Brookes University, leading me into a career in the technology sector. After more than two decades, I returned to study at University College London, undertaking a master's in public administration focusing on development, technology and innovation policy.

That experience, together with my work on AI policy, reinforced my belief that technological progress must be guided by thoughtful governance and a commitment to the public good. It is for this reason that I have chosen the territorial designation of Bloomsbury, reflecting both my academic connection and its long, traditional tradition of intellectual inquiry. My Lords, I declare my interests as a technology consultant. As an AI policy advisor and as a director of AI companies, my experience in the technology sector has given me a deep appreciation of both the opportunities and the complexities of innovation.

I strongly believe that the opportunities and risks of artificial intelligence must be understood widely, and that its benefits should be shared across all parts of society. My Lords, I turn briefly to the subject of today's debate. The transition to clean power is both necessary and welcome. As the government advances its ambitions to the Clean Power 2030 action plan, it is vital that the impact on rural communities is carefully considered. Technology and innovation can play an important role. AI will increase electricity demand, but it can also help a clean power system to operate more effectively.

Improving renewable forecasting. Balancing the grid and detecting faults faster. The opportunity is to ensure that the rural communities are not merely asked to host this transition, but are enabled to share in its benefits through community energy. Local participation and greater local resilience. My Lords, we are living through a period of profound technological change. Artificial intelligence presents both significant opportunities and important challenges. We must harness its potential to drive growth and improve lives, while ensuring that its risks are addressed responsibly and with foresight, particularly in relation to safety, security, ethics and bias.

In doing so, I am guided by values long associated with the labour movement, fairness, inclusion and the belief that progress must benefit all. This is not a challenge for the UK alone. It calls for stronger international cooperation and meaningful partnerships, including those between the United Kingdom and India. The European Union and the United States. My Lords, I take my place in this House with humility, mindful of its traditions and the wisdom and experience of its members.

I hope to contribute constructively, particularly in the areas of technology, policy, innovation and global cooperation. I thank you, Lordships,

17:15

Baroness Gill (Labour)

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My Lords. >> It is a privilege to follow Lord Nagaraju maiden. He is the first representative from Telugu speaking representative from Telugu speaking states in India. He has already introduced much of the diaspora from there to this house. I had the honour of meeting many of them and his wife and daughter at his introduction and at many events he's organised. Subsequently. I have known him as a person of relentless energy and commitment to work through the Labour Party organisations, including founding the Mahatma Gandhi Future Leaders Program, which was primarily about mentoring political leadership.

But moving on to his contributions to improving understanding of the AI field, his work reflects a clear commitment to the responsible advancement of technology and its role in society. As the founder of AI Policy Labs. He has brought together policy makers, academics and industry leaders to engage with the challenges and opportunities presented by artificial intelligence through initiatives such as UK India collaboration on AI. He has encouraged international dialogue and cooperation in an area that is increasingly debated here and shapes our global future.

His emphasis on ethical, inclusive and socially beneficial applications of AI is both timely and necessary in public life. He continues to demonstrate a thoughtful, forward looking approach grounded in services and a sense of responsibility to wider society. Lord Nagaraju contributions lie not only in the ideas he promotes, but in the conversation he enables and the bridges he helps to build. I am sure, my Lords, he will play a

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critical and valuable role in your Lordships house. Yeah.

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Yeah. Moving on to the main topic and I thank Baroness McIntosh Pickering I thank Baroness McIntosh Pickering for putting this item on the on on the Order Paper. The UK the Order Paper. The UK Government's Clean Power 2030 Action Plan, I believe, sets out a Action Plan, I believe, sets out a bold and necessary ambition to deliver a cleaner, more secure energy system by the end of the decade. In today's uncertain world, doing nothing is not a serious option.

But it does raise an important question. If not here, then where? And if not now, then when? The developments in the Middle East and in Ukraine earlier highlight the necessity to have independent sources of power. It is important that we all play our part in communicating that fossil fuels do not give any area of this country security or supply. Now, having represented five counties in the past with numerous rural communities, I've seen just how difficult it is to strike the right balance.

The rural communities are not against progress. They understand the need for clean energy investment and energy security, but they're also being asked to change because the reality is this much of the infrastructure needed to deliver this plan will be built in rural areas, wind farms, solar developments and new grid connections don't appear in abstract. They appear in real landscapes and near real communities. So we must ask, can we expect the benefits of clean power without being willing to host part of the solution? That is the challenge.

Rural communities often want development, but not always the change that comes with it. And that tension is entirely human. But I believe this plan also brings many opportunities to rural communities in terms of investment, jobs and chance for rural Britain to play a leading role in securing our energy future. And the government has recognised the need for community benefit and engagement as part of the process. So the real question is not whether change will happen, but whether we shape it in a way that is fair.

In my experience, impact assessments can be lengthy, time consuming exercises and will only delay the implementation. Whereas engaging now with the proposals that the government has put forward will start to show results sooner rather than later. If we get this right, rural communities won't just carry the burden of change. They will share the rewards. So my Lords, that is how Clean Power 2030 will succeed, not just nationally but locally too.

17:21

Lord Howell of Guildford (Conservative)

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Well done. >> My Lords. I thank my colleague Baroness McIntosh for securing this debate and the government for providing or the authorities providing or the authorities providing room for it. And also I congratulate Baron Lord, the noble Lord, Lord Nagaraju, for his maiden speech, which seemed full of common sense aimed at the right issues, and I was glad to learn about his expertise on AI as applied to policy organisation. I say on a day when it's becoming increasingly clear that there's something rotten at the central machinery of government in this country.

His contribution will be very welcome and very valuable indeed. Now I'm going to just in my short time, ask one question to the Minister, and I would value some many details as he can give in his answers if he has time. The Minister obviously is aware, as not everybody is, but I'm sure he is, that Nezo has announced its plans for building an army of new electricity pylons, mostly of traditional design, but some new ones are to march across this countryside as part of the great grid grid upgrade, which on which they're embarked.

That's going to add 50GW to our existing electricity clean electricity output, which is various, but it's on average about 45GW a year. By 2030, and with the hope to build more, far more than that, 3 to 5000 and new pylons with gigawatts in the range of 290 or 300 by 2050. I don't know whether any of that can possibly be achieved. Doesn't look like it at present. And of course, even if it is, it's still far too small for meeting the demands of clean electricity, which are going to be in a modern nation by 2050 or indeed by 2030.

There are 71 data centre applications roaming around, not all of them accepted by the National Grid. About half of them are accepted and many will never be built. But their land would swamp the sort of sums of amounts of gigawatts we're talking about by far. So that would have to be revised upwards, and the chances of meeting them will have to be revised rapidly downwards. All my all my question is, have the government looked at alternatives as are being looked at in many other advanced industrial societies, and in particular, the hydrogen vector.

Now, talk about Germany, for instance, which is planning three new hydrogen type networks around the whole of Germany to reinforce the vast demands for clean electricity in their expanding industry and expanding investment. If we could focus on that much more than we've heard so far from the government and a lot of the countryside to which my noble friend rightly referred, a lot of the countryside will be preserved. The hydrogen vector can provide a system of transmitting electricity very different to the the great wires of these vast, vast 50 metre structures that are planned with much, much less countryside impact.

Much easier to store. No need to pay billions to switch off wind power at night. Which of course is the present problem for fear of unbalancing the entire system, of measuring intermittent and regularly generated electricity, which is proving much more difficult than some people realise. No need to. No need to develop a pattern which has to be interrupted and was interrupted with dramatic effect down in Iberia at the other day. Japan itself was declared that the real pattern for the future for them is through the hydrogen vector predominantly.

And there are, of course, problems that deny that there are difficulties about transportation. One way is by road, which is in practised in 4 or 5 other advanced industrial countries. One way is by storage and indeed by shipping and various other means. But all of them mean that there will be less pylons and a better and happier nation and a happier countryside. And I hope that one question will get some sort of answer in the debate this afternoon.

17:26

Lord Fuller (Conservative)

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Yeah. >> My Lords, as we all know, I see I've got an extra minute, so I might take it just to welcome the might take it just to welcome the Lord to his place. And from one technology geek and computer enthusiast to another, I welcome him to this House and congratulate him on a wonderful maiden speech. Now, my Lords, last month the government published the Land Use Framework and seldom has such a long awaited report been found to be out of date.

On the date of its publication, with all the intellectual depth of a sixth form geography project, it fails to recognise that Britain and any society is no more than three meals away from anarchy and a government that forgets that deserves everything that's coming to it. Now this is a debate about clean energy and the rural economy, and I declare my interest involved in farming and fertilisers. But I was struck that the framework outsources much of the future land use policy in this nation, not just to civil servants or to Defra or any other part of government for that matter, but to the Green Finance Institute and the World Wide Fund for nature, who are namechecked.

Now, my Lords, the Green Finance Institute is recorded by the Electoral Commission as being a substantial donor to the Secretary of State for DESNZ and in an astonishing twist, not only a company's house sales, but both the Institute and the WWF share co-directors in that same web of Institute companies. So we see for the first time that Labour's donors have written and will control rural policy in this nation through the Land use framework. The. The. The donors have ensured that rural policy has been bent and twisted.

Those who. And those with an axe to grind, tainted by ideology and class hatred. Viewed through that lens of wishful thinking and ignorant of the reality of what it takes to feed us. So I sound the alarm today in this debate, because there is one table in the framework driven by net zero 2030 ideology that should strike fear into anyone who is concerned for our food security, our rural economy, and the resilience of our society. Because Labour's lobbyists have managed to insert into the report that fully 1.7 million hectares of productive land will be entirely removed from agriculture and then have additional controls on hunting shooting activities which help our rural country pubs survive the winter.

The library tells me that Defra estimates that the total area of farmed land in England is 8.9 million hectares, so 1.7 million is just shy of 20% of all the land farmed in England. The report breezily asserts that this is enough to go round land, to go round to feed ourselves. My Lords, that simply cannot be true. So let's see what it means for the rural economy, the sort of analysis the framework should have done but did not. Now a farmer would hope that his farm would yield, say, ten tonnes a hectare of wheat, with increased food price inflation barrelling down the tracks, it might generate gross sales of, say, £2,000 a hectare.

So your 1000 hectare farm would generate 2 million in sales. Let's hold that number. Against that income, he might pay a neighbour for seed, a local merchant for fertiliser. There'll be some crop protection projects. His farm machinery will be serviced by a local dealer. The sheds and grain storage need repairs. There's vermin, contractors, builders, fitters, fences, ditchdiggers, plant hire suppliers and any number of ancillary businesses like timber builders, merchants and so forth. In total, he will pay 1.8 million on local suppliers, including to that boiler repair man who he keeps going in the summer.

So it's available for the villagers in the winter. And all these people buy meals in the pub or support the local Post Office stores. My Lords, that is the rural economy. Labour is destroyed now. That's one farm of 1000 hectares, but the government wants to remove 1.7 million hectares from production. That's what the land use framework says. The net zero ideology, by my reckoning, will cost us 15% of all our national cereal production. The grains that bake our daily bread, brew our beer, create our cakes.

Government tells us that in 2022, agriculture's contribution to the UK economy was 13.9 billion. Based on my simple arithmetic, 1.7 million hectares removed on the altar of net zero. It's £3.5 billion taken from the rural economy every year. These are round numbers, but it's between 20 and 25% of agriculture's total GDP. These zealots will not rest until our best land is given up for solar. That generates no rural income at all. So there will be no need for the little doers whatsoever.

Solar only enriches the private equity backers and the sovereign wealth funds. So I thank my noble friend for allowing me to enumerate so clearly the economic effects on Labour's war on the countryside, the economic damage that is to be visited on our rural community, their jobs, our social fabric is being destroyed by Labour's paymasters, who deny the harsh reality of putting food in our belly, without which a nation can neither thrive nor survive.

17:31

Lord Berkeley (Labour)

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Oh my Lord sir gives me great pleasure to follow the noble Lord. pleasure to follow the noble Lord. Lord Fuller on working out how to discuss these various means of producing energy and transmitting it, and whether it's best to be doing it in the sea, on the agriculture or somewhere else. And then, of course, we've got this debate about should we have pylons or should we have hydrogen? And nobody has yet invented a skyhook which had sort out sort out all the problems.

But I would just like to congratulate my noble friend Lord Nagaraju on a really interesting maiden speech. He didn't have very long to do it, but I can see that in the future he's going to give us some really useful tips and thoughts about how we can improve what we do on these issues, including access to rural communities. And I hope that he will take it upon himself to challenge the government and challenge the opposition and challenge everyone who he may have an issue with, because the more experience we get here, the better it'll be for everyone.

My Lords, I'm not going to repeat we've had many debates on them, rural communities and the needs for special fuels to to fuel people's boilers. But I really do welcome the boiler upgrade scheme that the government recently announced, with about £9,000 for off grid, off grid households, but it is worth noting that there are still some quite uncovered costs of some significant in installing heat pumps. It's not a question of just, you know, having them delivered off the back of a lorry and plugging them in.

It's really it works well, but it just takes a lot of time and it's quite expensive. And we've debated in the past and some communities, especially in people in Cornwall where I live who have got together and saved quite a lot of money and efficiency by working with one supplier to get to create the right amount of power at a reasonable cost. But I've got a question or two for my noble friend. Because there are some issues which maybe need a little bit more thought.

I mean, there's the issue of the cost of electricity, which we can go on debating, but putting in a heat pump can have a problem with building rigs. And it's not possible always to do that. And if something goes wrong, then and you have to revert to what you had before, which is probably an oil burner, you suddenly find that the building regs don't allow you to replace it. And what you're going to do. So. Most of the time it'll work, I'm quite sure.

But if I'm off grid, consumer finds that heat pumps are inadequate or unaffordable with running costs at a very high. Is there any measures that my noble friend can tell the House now or in necessarily in writing in place to give them a bit more protection? In other words, what can the rural communities who are relying on oil do to help themselves? One of our big debates we've had in the last few months is the the the balance in demand between this fuel to be used, the new fuels to be used in in the air sector, with the fuels to be used in our, in our heat pumps.

And I hope that my noble friend, when he comes to respond, will confirm that government policy. It doesn't give either of those two options any strong priority over other ones, because it's more important for people to fly than to stay warm. I think that's a very dangerous attitude to take, and I don't think my noble friend is taking it, but it would be gives them some comfort. But when the subsidy comes, we will we'll be looking for our bit, for the for the rural communities, as well as trying to fly.

17:37

Earl Russell (Liberal Democrat)

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My Lord, I congratulate Lord Nagaraju on a fine maiden speech, Nagaraju on a fine maiden speech, and I recognise his work in the field of AI. I also thank the noble Baroness, lady McIntosh of Pickering, for bringing this debate and her contribution and those of others. I've listened to the concerns. There are real concerns. We are going through a real energy transition. However, there is a danger of framing, framing clean power as somehow inherently anti rural or of treating net zero as a threat to our countryside.

And the evidence and public opinion does not support either of those two stances. DESNZ Public Attitudes tracker shows that 68% of people support government actions to reduce the impacts of climate change, and over 60% support 2050 net our net zero goals. The Clean Power Action Plan is the backbone of our energy transition to get 95% of our power from clean sources from 2030, and it involves major investment in flexibility and necessary grid infrastructure. I recognise concerns, we've heard concerns of the loss of high agricultural land from Lord Fuller, although I didn't recognise the figures, given concerns about food security from Baroness McIntosh, visual immunity from Lord Howell, worries about large scale battery scale, possible fires from Baroness McIntosh and fears that infrastructure is being imposed on communities.

These are legitimate concerns, and those on this side who support renewable energy do need to answer them. But I do also want to make the other case for renewables as well. The fact that I support renewables does not mean that I recognise that they will not have impacts, and it's important that we discuss what those impacts are and how we can best limit them as far as possible. Electricity demand is expected to more than double by 2050, so major investment is not an option.

It is essential. It would have been easier if we'd started earlier, but we must be done with our communities and not to them. And with proper regard to the visual amenity of our landscape, proximity to people's homes and communities, and compensation where it is necessary. But we should use. Look at the figures. At the moment, only 0.3 percent of the UK's land is used for large scale solar, and the government's land use framework indicates that just 1% of England's land will be needed for renewables by 2050.

This is still less than the land taken and used by golf courses, yet I haven't heard them mentioned today as a threat to our future. I support floating offshore solar. It would be good to hear something from the Minister about that. There is a lot of misinformation in this space, and we do. You know, I there was a newspaper article last week comparing solar to Chernobyl. The implication is that every solar project is obliged on the countryside, and that is simply not true.

Solar can have low visual impacts. It can increase bio diversity gains and bring meaningful community benefit. Agrivoltaics can help farmers to transition to help improve crop yields in the face of rising climates. The real threat to our countryside is not from clean power. The real threat to our countryside is from the cost of inaction. It's from the rise of fossil fuel markets, escalating bills and the growing damage caused by climate change itself. Our rural communities are more susceptible because they have less well insulated homes.

They need to drive more, and they are subject to the impacts of climate change, whether that be declining harvests, whether it be rising temperatures, whether that be from increased flooding. The UK has warned already by 1.2 degrees C since 1884, we've had the five worst harvests since 2000. Inaction on climate change threatens our security, our food security, far more than any solar panel ever could. But I do want to look at the opportunities to get this right and to look at what more can be done.

So we do need to use rooftop first. I would push the government what more they're doing to make use of warehouses, car parks and public buildings. Planning is also absolutely crucial. So I ask the Minister about the strategic spatial energy strategy. My understanding is that it's coming by autumn 2027, and I pushed the Minister as well on community energy has also been mentioned because the people in the countryside should be able to benefit from the energy that they host. So I asked the Minister about the community right to generate what more is going to be happening to push onshore wind.

But, my Lords, the idea that the renewables transition is something that's inherently anti our rural

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communities and our way of life is simply not true. And my Lords.

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And my Lords. I declare my interest as chairman of EMI Action and Buckthorn Partners, all of whom were involved with the energy transition. I would also like to share in the congratulations to the share in the congratulations to the noble Lord Lord Nagaraju, who spoke outstandingly well, and we look forward to his contributions in future debates. He will be a very welcome member of this House, and I

17:42

Lord Moynihan (Conservative)

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also echo what was said about my noble friend. Thank you very much indeed. On behalf of the House for for securing this debate. Many of the comments she made, not least the comments she made, not least about North Sea gas, are exceptionally important, and from our benches there can be no case. our benches there can be no case. Not for for not developing our reserves to the full, and instead reserves to the full, and instead to look to increase imports of LNG from Norway and the US, neither of which reinforce our security of supply.

Just to take the example of Norwegian gas, Norwegian gas supplies will be reduced this summer and this is presented as a planned maintenance issue rather than a political decision to restrict exports. But we should not be deaf to the fact that there was a major political debate in Norway on restricting exports from Norway, and that would threaten our supplies from that country, given that the high level of dependence with Norway providing 70% of UK gas imports in some periods, any reduction, even temporary, raises concerns about UK energy security and the argument often used about developing the North Sea is the environmental impact.

We are told by the government that to encourage new exploration, appraisal and production in the North Sea will be inactive. And I quote, environmental vandalism. Yet the average carbon intensity in the North Sea is 24kg of barrel of oil equivalent, and victory is predicted to be 12kg of barrel oil, equivalent to just eight. Norwegian gas through the pipeline is eight kilograms, but imported LNG from the states is 85kg. A barrel of oil equivalent in terms of carbon intensity, surely that is a major multiple than delivering our own gas from the North Sea is a strong environmental argument to develop our own reserves.

So what the government is saying is, or to be more accurate, that the Secretary of State at DESNZ is saying, which increasingly does not reflect Treasury good sense is that because the price is set internationally, there is no benefit in maximising our own gas and oil production. Yet the more we develop our own reserves, the more we control our own prices. We only need to look at Henry Hub prices in in North America to prove that point. So the issue today is whether we're making the best use of our own gas.

And obviously the answer is no. We are intent on not using our own gas. Our energy policy is sequentially driving us to shut down the reserves in the UK. CS first by stopping new licence rounds whilst allowing limited tie backs, second, by imposing regulatory and environmental policies which deter investment, to which we add a burdensome windfall tax and create a hostile environment to new investment which seeks projects internationally in a highly competitive global market for every investment dollar. My Lords, this is intellectual folly and I do urge the government to change course or to provide one well-argued reason why we should shut in future North Sea reserves.

My second point that I'd like to raise as a result of this debate is our dependence on the grid, delivering the government's ambitions for clean power would require I quotes, rapid delivery of 18 network and enabling infrastructure projects, according to Niso, as cited in the Clean Power 2030 plan, the government said that by 2030, around twice as many new electricity transmission networks would be needed compared to the number built in the past decade. My Lords installing more renewables weakens the grid.

The growth in intermittent renewable generation disrupts system frequency in two ways. Intermittent renewable generation delivers an output that is highly variable in time. Wind speeds are rarely constant, changing in both intensity and direction by the second, and similarly, cloud patterns can create significant instantaneous variations in solar output. Changes in either generation or demand can lead to changes in grid frequency. So highly variable generation patterns make maintaining a stable grid frequency more difficult. Intermittent renewable generation is increasingly displacing conventional generations in the generation mix, reducing the amount of heavy rotating turbines on the grid and therefore the amount of inertia they provide.

My Lords Minister, the National Grid said operating the system with low inertia will continue to represent a key operational challenge into the future, and we will need to ensure we improve our understanding of these challenges. This will bring. My Lords, I ask the Minister, is he confident, therefore, that there will be no blackouts during this period of government and if so, on what technical assumptions does he reach that decision?

17:47

Lord Whitehead, Minister of State (Department for Energy Security and Net Zero) (Labour)

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Well, I my Lords, I'm very grateful to all those who've contributed to this important debate and in particular to the noble Baroness, lady McIntosh, for securing the debate. In the first instance. She makes a number of important points which. Go along, I think, with her particular view about the role of renewables, but nevertheless, our important points that need considering as far as this particular debate is concerned and before proceeding, I would like to add my congratulations to noble Lord Nagaraju, who made his maiden speech this afternoon, and I think he will have gathered already from the acclaim around the House for his maiden speech, that he will undoubtedly be a tremendous asset to our house for the future.

The. Noble Baroness. Baroness McIntosh did list in her initial contribution a number of alternatives to Clean Power 2030, and what was striking. I thought about the list of alternatives that she put forward is they are mostly things that the government is doing already, not necessarily in the context of exactly the Clean Power 2030 action plan, although there are many things, many more things in that Clean Power action plan than many noble Lords and others seem to think.

There are, for example, a substantial role to play for hydrogen in the action plan itself, and also on a on a longer term basis after 2030. So the noble Baroness, for example, mentioned the question of clean power as far as floating solar. She mentioned energy from waste. She mentioned a small nuclear. All of these things the government is actively involved in undertaking at the moment. But what I have to emphasise is that these things are not alternatives to the race and the journey to clean power.

They are part of that journey along with other things such as offshore and onshore wind and solar, and various other arrangements which we can see blossoming before us. So the action blossoming before us. So the action plan is a. Requirement to get to mostly almost wholly renewable power by 2030, both for reasons of carbon emissions reduction and the move towards net 0 in 2050, but also in terms of making sure that the nation has energy independence as far as is possible and that we are not dependent on fossil fuels from around the world dictating how our energy economy works for the future.

Now, noble Lords have drawn attention to just how hard this work is going to be as far as achieving those particular goals are concerned, and it is absolutely right. It is a very ambitious ask to to ask the energy system to translate itself into a low carbon system with the speed that we are hoping it will be achieved. But I think we ought to be very clear about the means that are are being put in place to do this are not the bogey that is mentioned by a number of noble Lords.

This is genuinely clean power. It will certainly, as far as rural communities are concerned, enhance their ways of life in terms of cleaner air, in terms of much greater community involvement with their own power that they are introducing, which the noble Lord, Lord Russell, did mention in his contribution. And all together will make our society a much cleaner, greener and more liveable place overall. Now that does indeed involve certain changes to how we deploy our power in the future.

And indeed, noble Lords have mentioned, for example, that we may be. Using 10% of productive farmland, for example, for solar and similar activities. Certainly as far as. Reports are concerned, the land use framework, for example, particularly published by DEFRA in March 26th, states that renewables are projected to take up approximately 155,000 hectares of England's utilised agricultural area, which is about 2%, not 10%. And indeed, as noble Lord Lord Russell mentions, that is far less than the amount of land taken up by golf courses in this country for the future.

So it is it is not. The huge take that some people suggest

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is the case. And sorry, selectively. Quoting from the table. And indeed he may be right on solar, but the land use framework enumerates a whole load of other different types of use. And in different types of use. And in total, 1.7 million hectares, about a fifth of all the farmland in England is to be taken from England is to be taken from agriculture and applied to other uses. You can't get away from that. Those are the numbers. The

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government's numbers. Well, the noble Lord says, I'm selectively quoting. I'm sorry to disagree with him that I'm not selectively quoting. I am quoting, and that is what the land use framework says in terms of the best estimates for the land that is being taken. And in addition to that, he will and other noble Lords will be aware that in the guidance and arrangements for the development of solar, it is a clear understanding that best and most versatile land is excluded from those solar developments and that they should primarily go on brownfield land or or less important.

Agricultural land. So that actually precisely that best and most versatile land for farming and food use is actually preserved as far as that activity is concerned. That is indeed is what is happening with the solar developments that are coming forward at the moment. Now, the other thing I would want to mention in terms of rural communities is that. When we are putting forward which other noble Lords are mentioned, noble Lord, how, for example. When we are putting forward proposals for grid coverage of the country, that is not just about Clean Power 2030 that, among other things, is for actually getting the grid fit, for energy for the future in general.

So even if Clean Power 2030 were not in place, it would be necessary to undertake that huge program of grid renewal and and updating, partly because of the extreme neglect of grid updating that took place during the last conservative government, which immediately preceded this government. So we are undertaking not just grid for the future, but actually catching up from the past. And that yes.

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I'm not accusing the noble Lord in any way of misleading the House because it's a different department. because it's a different department. But the actual figure that was consulted upon by the Department of consulted upon by the Department of Environment, Food and Rural Affairs in January 2025 would be more than in January 2025 would be more than 10% of farmland in England is to be diverted towards helping to achieve diverted towards helping to achieve net zero and protecting wildlife by 2050.

That was in the consultation, which was the prelude to the land use framework, and I understand was in parallel with this net zero policy.

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Well, I'm very happy to write to

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Well, I'm very happy to write to the noble Baroness to clear up that the noble Baroness to clear up that exact point. But what I quoted from, exact point. But what I quoted from, as I'm sure she will know, is the actual land use framework, not the actual land use framework, not the precursors to it. And that was the the final point published by DEFRA, which came to the conclusion that I've mentioned that that is actually on table one, page 19 of that land use framework.

So that can be that can be looked at. I'm very happy to, to to write further to the noble Baroness on that particular point. What I think though is, is absolutely right. And that is the contribution from the noble Baroness Baroness Gill, who did indicate that basically we're all in this together. It is it cannot be the case that we can exempt parts of the country from the energy revolution that is taking forward taking place in front of us.

But what we can do is make sure that weather has effects upon those particular areas. They are mitigated as far as possible that they have, for example, as we are planning at the moment, to have community benefits coming their way from those from those changes. And also community investment through the discount schemes, for example, that is coming forward for a new electricity Bill discount scheme providing £2,500 over the next decade to households living within 500m of new and significantly upgraded transmission infrastructure.

And indeed, with the first payments expected in 2027. And we're also looking very seriously about community benefit from upcoming changes to grid systems and various things. For example, the SS n's upcoming to Aberdeenshire transmission line, for example, could mean funding of more than £23 million for local communities. So assistance for those communities that are associated with those changes. But an understanding that whilst those changes have to be made very carefully, with full consultation, with full, with full appreciation of the difficulties that may stand in the way of some of those particular schemes that where those schemes do go ahead, they have gone ahead on the basis, as we've seen in the Planning and Infrastructure Act, that we now have of full scrutiny, full consultation, full arrangements for remediation and a full consideration of what, indeed, among other things, the cumulative effect on the landscape may turn out to be.

So. With that, I hope I have answered or addressed the points made by most noble Lords. If I have failed to do that because of time constraints, then I'm happy to. Right? I think particularly to the noble Lord. Lord Howell to go a little further in the question of hydrogen for the future, because I can assure him it plays a very substantial role in the process, along with other non. Variable things such as biomethane and biogas for the future part of the energy economy.

I think overall the government is doing a responsible job in terms of trying to match the requirements of the Clean Power Action Plan with the quality of life and the future, particularly of rural communities. And certainly we will continue to take that very carefully in into consideration as the plan develops and indeed, as clean power goes beyond 2030 and

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into the next decades after that. Alone for this question. So I understand the frontbench would like to make a very brief statement.

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like to make a very brief statement. Very brief statement. My Lords, as advertised on today's list, we will start proceedings on the pension scheme proceedings on the pension scheme bill ping pong. Once the statement concludes, the Marshalled List and groupings are available in the

18:01

Government Spokes. Lord Wilson of Sedgefield (Labour)

groupings are available in the print office. Now. >> My Lords, do we need to take a moment or two just to rearrange the. But no, we do not. Everyone's very keen to crap on. Oh, here we go then. Questions on a statement made

18:01

Deputy Lord Speaker Lord Duncan of Springbank (Conservative)

in the House of Commons on Thursday, the 6th of April, the British Industrial Competitiveness Scheme.

18:01

Lord Sharpe of Epsom (Conservative)

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My Lords, the noble Lady. The Minister will soon trumpet the British Industrial Competitiveness Scheme as being very good for business. But for all the rhetoric and all the self-congratulation, this policy will have no meaningful impact on the overwhelming majority of British businesses. By the government's own figures, around 99% of firms will see no benefit whatsoever. So while the government speaks grandly of intervention and support the reality for most businesses, our small manufacturers, our family firms, pubs, farmers, retailers and countless others is unchanged.

They will go on facing the crippling costs that we've actually just heard debated in the previous debate, with no help at all from this announcement, and even with the reliefs that have been announced, they are staggered and the earliest will only kick in in April 2027. And the wider context in which this statement must be judged. What is that? It is not one of support for enterprise, but of cost, burden and damage inflicted by this government. On British industry, employers have been hit by increased national insurance contributions.

Businesses now face the additional costs of the Employment Rights Act, which, by their own admission, runs into the billions. Together with the further burden of expanded trade union access to workplaces. That's something that many employers will regard in practice not as access but as a licence to raid workplaces, disrupt operations and undermine confidence. Having said that, of course, we must acknowledge one delicious irony of the Employment Rights Act, which is that the Prime Minister will be soon the first high profile victim of an uncapped Unfair dismissal award, which we on these benches warned about.

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Yeah, yeah, yeah. The government will now seek to blame the war in the Middle East. But the explanation, that But the explanation, that explanation simply won't wash. Britain's industrial electricity prices were already among the prices were already among the highest in Europe, and around four times those in the United States. Long before this latest crisis. Long before this latest crisis. These are not sudden or unforeseeable problems. They are the product of policy failure. They are the result of loading electricity bills.

With the cost of an energy system increasingly structured around subsidising intermittent renewables, managing grid constraints and paying for mechanisms such as contracts for difference, those costs were there before the latest conflict, and industry has been warning about them for years. My Lords, in what sort of alternative reality does it make sense to have to come up with various schemes? This. The bikes, the supercharger pack, the Energy Intensive Industries Compensation Scheme, the Network Charging compensation scheme and all the rest, all of which are of mind bending complexity.

And they are

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all designed to mitigate the effects of the government's own policies with taxpayers money. Exactly.

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Exactly. And then we come to domestic energy production, my Lords, at precisely the moment when Britain should have been strengthening resilience and insulating itself from geopolitical shocks, this government has moved in the government has moved in the opposite direction. They have imposed a 78 punitive 78% tax burden on North Sea oil and gas producers, a windfall tax on windfalls that in many cases simply don't exist. They have halted new licences at exactly the wrong moment, when domestic production is needed most to buffer Britain from volatility abroad.

My Lords, the jackdaw Gasfield, could provide 6% of Britain's gas needs. As my noble friend Lord Moynihan just noted in the previous debate, there is no case to not do this and the result is plain to see. Jobs are being exported, gas is being imported, rigs are leaving, investment is frozen and capital is fleeing to more stable and more welcoming jurisdictions. Hundreds, if not thousands of skilled jobs are being lost and Britain is becoming more, not less, exposed now. The government will soon blame the high international gas price, which is used to set the domestic electricity price two thirds of the time.

But my Lords, as any O-level student knows, increasing supply lowers prices. Will the government therefore reverse the ban on these licences? Is not the simple truth. This. My Lords, the government have chosen to make this country more vulnerable to geopolitical shocks, including conflict in the Middle East, than it needed to be. Now, my Lords, the Minister in the other place, Peter Kyle, said that this package would deliver for Britain's manufacturing. But has the government actually what has the government done, done to British manufacturing? The manufacturing base is already being damaged by the government's disastrous steel strategy, which has raised the cost of both domestic and imported steel.

Steel that matters profoundly for sectors such as automotive, where steel is not incidental but foundational. One cannot claim to back manufacturing on Monday while making core industrial output inputs more expensive. On Tuesday, the Secretary of State also cited the support of the Society of Motor Manufacturers and Traders. But, my Lords, does the noble Lady, the Minister, accept that the motor industry is simultaneously being hit by other government policies that are doing real harm? The electric vehicle mandate is imposing enormous costs on manufacturers, and the industry itself has warned of a multi-billion pound burden.

Around 6 billion by the Smt's own assessment. So the government's rhetoric is one thing, but the reality is quite another. They speak of backing British industry while in practice they're crushing parts of our industrial base under the combined weight of energy costs, regulation, mandates and taxation. Will the government consider abolishing or at least relaxing the EV mandate to give much needed relief for the British automotive sector? Yes, my Lords, we welcome the announcement of the carbon price support will be removed from April April 2028.

But if the government now accept that this burden damages competitiveness, why on earth are they waiting until 2028? Why must British industry continue to suffer for another two years before any relief is given? My Lords, British industry needs lower costs, a competitive tax regime and a government that stops making this country harder to invest in, harder in which to manufacture and harder in which to do business.

18:07

Baroness Kramer (Liberal Democrat)

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Yay yay yay! >> My Lords, that's. This debate now picks up very much on the oral question earlier today on the IMF, question earlier today on the IMF, a warning that the global economy is losing momentum as a result of the Iraq war, with the UK expected to be the hardest hit of the G7 economies. And the government needs to rethink, in the shadow of war, not to just watch and wait. And that brings me to the big scheme.

We welcome plans to bring down some of the highest energy prices in the world, and we're pleased that the BIC scheme, which benefits 10,000 of the most energy intensive businesses, will also provide a one off payment to cover this year. But the money won't actually come until next year. So when will those businesses, all of which have to plan ahead, need to know the details? Indeed, many are negotiating a whole variety of contracts as we speak. When will they find out exactly what they will get, what benefits they will get, and when they will come? Good point.

And many other businesses are threatened by rising costs here and now. Now, I'm not clear that the government has recognised the acute energy cost problems in the food and agri businesses, which not only have a huge impact on the cost of living at ordinary people, but has. Now we're starting to hear. Some reports might even lead in certain areas to food shortages. Surely this is a call to action. And my question is what action can we expect? And many SMEs, the backbone of our communities, are frankly on the brink for many kinds of pressures, as the government will be very much aware.

But SMEs are exposed to a deregulated energy market with very little support to face that market. And there's a widespread concern about a lack of competition, which has the effect of locking SMEs out of good deals so that they can price energy more effectively. SMEs with over 50 employees don't even have access to the Energy Ombudsman, and the hospitality industry right now is an extreme case and is frankly pretty desperate. So will the government at the very least, instruct the CMA to open an urgent investigation into the state of competition in the energy retail market for hospitality, and frankly, for all of these areas that I've covered, will it find some quick solutions? Because we cannot afford that for these industries to to endure any more stress and potentially curtail or kerb their business.

And of course, SMEs need to achieve energy efficiency. But we all know that that means upfront costs. So will the government set up an energy security bank, essentially a mechanism to provide SMEs with low cost finance so they can invest in energy tech? And of course, they can then repay that finance because of the savings that they make. So it's a sensible and appropriate way in which to generate a circle of financing. And going with that, we would need a real overhaul of the business rate system, because at the moment firms are penalised if they invest in productive, energy saving investments made on their premises.

And this surely is the opposite of what the government wants. Will it take actions on these fronts and

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take those actions quickly? Yeah.

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Yeah. I am grateful to the. Noble Baroness. For bringing the topic back to

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For bringing the topic back to the British. The the the, the, the big scheme, the British Industrial big scheme, the British Industrial Competitiveness Scheme. Let me just set out why we are making this intervention. We are making this intervention because the party opposite left us with the highest industrial energy prices in Europe. When they entered office in 2010, electricity prices were 8.4 £0.02 per kilowatt kilowatt hour and when they left office in 2024, it was 25.9 £0.07 per kilowatt hour.

So it is no surprise that under the previous government, output in the UK's energy intensive manufacturing industries fell to the lowest level in 35 years. That is why we are having to take action. We are also taking action, learning from the lessons of other previous schemes, to do so in a way that is responsible, that keeps our fiscal rules, that is funded and is focussed and is targeted. And that is why the BIC scheme is targeted in the way it is.

It will benefit and it is also aligned to the industrial strategy. It is aligned to those areas of the industrial strategy that will that will support growth, that will support the growth in manufacturing that we all want to see. We have been clear that the conflict in Iran is not our war. We will do everything we can to shield businesses from the worst effects of this. The basics are in its. In its way has been designed as a long term measure to support growth and competitiveness in our strategic manufacturing sectors.

It is not, in that sense, a short term response to fluctuations in oil prices. The best way we can progress in that, in that sense, is to de-escalate. But it is also to learn the lessons of the past. What has caused some of this volatility is the reliance on fossil fuels. That is what we have seen in the last decades. We have seen spikes in energy prices caused by that, by by fossil fuel shocks, which is why we are very committed to our Clean Power mission.

It is why buy clean Home-grown power? We will secure better energy security, better resilient energy supply. We. I was asked about the. The position in the North Sea. We do. Value production from the North Sea and

18:13

Baroness Lloyd of Effra, Parliamentary Under Secretary of State (Department for Business and Trade) (Labour)

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we value the workforce. We have. We will introduce new transitional energy certificates that will energy certificates that will enable some oil and gas production in areas adjacent to already licensed fields linked via a licensed fields linked via a Tieback, or in areas that are already part of an existing field, and developers can also apply for and developers can also apply for these transitional energy certificates for production in areas adjacent to already licensed areas adjacent to already licensed fields that are linked via a tied bag, but developers will not be able to carry out new exploration because regardless of where it comes from, the price of oil and gas is determined by international markets.

By the UK. We are price takers, not price makers. So the only way to take back control of Britain's energy and bring down bills for good is with clean home-grown power drilling in the North Sea is simply too marginal to make a difference to the overall supply of commodities traded in an international market, the North Sea has been in natural decline for the past 25 years. New licenses to explore new fields would also take up to ten years to be developed, and wouldn't make any difference to UK domestic energy production.

Now, the. The noble Baroness raised the question about the timing of the payments and the implementation. We. We. In our consultation we did hear strong calls from the industry for the government support to be felt sooner and that is one of the reasons why we have announced that there will be an additional payment for businesses which are eligible, eligible for Bics. That payment will be delivered next year and will reflect the support businesses would have received had the had the scheme gone live sooner.

I was asked about the scope of the BIC scheme. It covers 10,000 electric electricity intensive manufacturing businesses. Why are more businesses not eligible? The answer is that Bics is targeted where it will have the greatest impact on growth. It focuses on the highest growth potential sectors identified within our industrial strategy, that is, car areas like the car industry, aerospace, defence, those most exposed to high electricity prices. And it is right that we should implement this tailored scheme for them so that we give those businesses a fair shot at winning at in the global economy.

In terms of the timing, the Bics will be delivered next year in line with the commitments set out in our modern Industrial Strategy. The exemptions on bills will take effect from April of next year for the renewables obligation and the feed in tariff levies. Exemptions from the capacity market levy will then kick in from next October, and we have set out in our consultation paper the regulatory changes and the scheme delivery to make sure the Bics works effectively in terms of support for SMEs and the hospitality sector, we are closely in touch with other sectors.

We are engaged in support. We are supporting the development of high streets on sensitive places in terms of hospitality and the. The scheme will be open to SMEs in those eligible sectors and I would encourage any businesses who are considering if they are eligible to consult the eligibility checker that we will be making available in the summer to see if if they qualify and then go through the process of, of of applying for the Bics.

The Bics is an excellent targeted scheme that is, that will bring down the energy, the electricity prices with an average discount of 25%. It will bring electricity costs for those businesses in line with other economies in the in Europe, and it will set us up over the long term as we create the pro-business, pro-investment environment that we need for growth, for growth.

18:18

Lord Gove (Conservative)

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Can I congratulate the noble >> Can I congratulate the noble Lady, the Minister, on the beautiful complexity of a scheme which picks winners, allocates taxpayers money to those winners so that they can avoid paying a subsidy to other winners who have been picked in the energy sector. Tony Benn would be proud. My home city is Aberdeen. Given how competitive the energy sector is overall, can the noble Lady, the Minister, tell us, as a result of this and other government interventions over the next five years, will the number of jobs in the energy sector in Aberdeen rise or fall?

18:19

Baroness Lloyd of Effra, Parliamentary Under Secretary of State (Department for Business and Trade) (Labour)

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We. In terms of the support for >> We. In terms of the support for the transition, we have set out a lot of detail in terms of energy transition, the Clean energy jobs plan and specifically in terms of the North Sea. We have the North Sea future plan that will set is setting out how we scale up our North Sea. Clean energy, clean energy industries such as the government backed Acorn, Viking and East Coast carbon capture clusters to the UK's first regional hydrogen network and plans to host the world's biggest offshore wind farm.

We are very supportive of of places and of industries as they transition from fossil fuel economies to the clean power agenda.

18:19

Lord Sikka (Labour)

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My Lords, all. >> My Lords, all. >> Businesses and households deserve lower energy bills. This can be done by cutting profit margins of energy companies. Since 2020, they have made £125.7 billion profit, which is roughly £4,400 per household, and they have inflicted enormous pain on businesses and households. I'm sure the Minister knows that countries with significant public ownership of energy have lower energy bills. So when and how will the government eliminate profiteering in the

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energy sector and build a resilient economy? Good luck.

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Good luck. The noble Lord raises the question of of the business environment and the question of environment and the question of electricity prices. The one of the most important things for most important things for businesses in terms of energy prices, in terms of business

18:20

Baroness Lloyd of Effra, Parliamentary Under Secretary of State (Department for Business and Trade) (Labour)

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confidence, in terms of investment capability, is the fiscal situation. Last week, the IMF welcomed the UK's notable improvement in our public finances. The economy was growing by 0.5% in the three months to February. It is taking those long term steps to create a stable economy that will enable. Sound finances, lower prices and the investment in energy over time that will bring prices down.

18:21

Lord Lansley (Conservative)

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My Lords. The alleviation of the high. >> Imposed on. >> On energy intensive. >> And internationally. >> Competitive manufacturing. >> In this country is to be welcomed. But I want to ask a question, if I may, about the the the manufacturing sectors that are going to benefit from BRICs. Clearly, these are the industrial strategy eight sectors and the related foundational technologies. But that leaves some key manufacturing sectors out. She will have seen in the other place what was said about ceramics.

I think I would also particularly want to ask the Minister about food manufacturing. It is our largest manufacturing industry. It is highly internationally competitive but exposed to a great deal of international competition. It is often energy intensive and actually in terms of growth, given what's happening in the agri tech sector, there is considerable potential for growth. I never thought that the Industrial Strategy eight was designed to to really to leave others behind. And I hope Ministers will and I hope this Minister will give food manufacturing and ceramics the opportunity to make their case as well.

18:23

Baroness Lloyd of Effra, Parliamentary Under Secretary of State (Department for Business and Trade) (Labour)

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Yes, sir. You. >> The noble Lord is right. There are many thriving, growing businesses, industries, sectors in the country. Not all of those are going to be covered by the Bics in the eligibility consultation that we put out before this confirmation. That was one of the questions that we were consulting on. We did expand the scope from the beginning to the to the end of that consultation, from what we thought was going to be about 7000 businesses to 10,000 businesses.

But the focus is on the strategic manufacturing sector, supporting frontier industries. As the noble Lord mentioned, and frontier industries and foundational manufacturing industries. That is the focus of this scheme. We will also, obviously, looking very carefully at supply chains. For example, the fertiliser availability, fertiliser costs as we monitor the impact of the current situation in the Middle East.

18:24

Earl Russell (Liberal Democrat)

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I thank the honourable Minister >> I thank the honourable Minister for her response. And can I pick up on a point that my noble friend made as part of her formal response to the statement in relation to the retail energy market, and it may be, one, the Minister needs to go away and think about, and that may well be the answer. But does the Minister admit that there is scope for further action to make sure that the the retail energy market is is more competitive, that actually the SMEs are getting able to secure good energy deals, that there's competition in that market and that actually they've got access to the Ombudsman scheme.

18:24

Baroness Lloyd of Effra, Parliamentary Under Secretary of State (Department for Business and Trade) (Labour)

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As the the noble Lord raised the question again, it is he's right to draw my attention to the fact that I did not address the question the first time around. This particular scheme will be subject to. And we will go through the subsidy, control the Subsidy Act and make the the the declarations and so on that you need to. And that detail is set out in the consultation paper that we published on his specific question. I will need to revert to him on the CMA question.

In the energy retail energy market.

18:25

Baroness Dacres of Lewisham (Labour)

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Yeah, >> Sorry. >> My Lords. While the scheme supports energy intensive sector, can my noble friend the Minister set out how this scheme will strengthen the competitiveness of our manufacturing base while still supporting the jobs and growth in our communities across the country? Thank you.

18:25

Baroness Lloyd of Effra, Parliamentary Under Secretary of State (Department for Business and Trade) (Labour)

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I thank my noble friend for her question. The Bics will bring down question. The Bics will bring down electricity costs more in line with other economies in the the EU. 14 cutting costs by 35 to £40 per megawatt hour, and that will bring them in line with those countries and enable them to compete. The scheme is open within Great Britain. It is open to businesses of all sizes and it is very aligned with the industrial strategy and all the support that is going into the industrial strategy, including investment in skills and investment in people.

18:26

Lord Fuller (Conservative)

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Today, the Chemical Industries Association reports a survey of its members. They are the members who members. They are the members who produce those essential chemicals that drive our manufacturing economy. They report their members are suffering from increased energy costs, raw material costs, output is down, and whole branches of their industry are at risk of closure. Food businesses wear protective atmospheres are at risk, medical where vaccines are harder to produce defence, including ballistic protection and clean energy and nuclear safety.

Does the Minister accept that the Bics money is spread so thinly as to be irrelevant for the largest energy uses? And will she agree that these large businesses need help now, not in 12 months time, because the thousand jobs a month that are being lost in my noble friend's area in Aberdeen and related energy businesses cannot wait for the government's Bics scheme.

18:27

Baroness Lloyd of Effra, Parliamentary Under Secretary of State (Department for Business and Trade) (Labour)

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Yes. program to support industries in line with the industrial strategy. I have heard calls to expand the I have heard calls to expand the scheme and to deepen it. We have designed the scheme to support about 10,000 businesses that are aligned with the manufacturing, frontier industries and the foundational industries such as chemicals. They will get the support. We have also heard the call to act sooner, the call for transitional relief, and that is why we have said that there will be a payment next year, reflecting the the situation.

Had the scheme been applied this year.

18:28

Lord Johnson of Lainston (Conservative)

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My Lords, I was extremely excited about this debate today. I saw British Industrial Competitiveness Scheme and raced to read the statement made by the Minister, but all I see in it is simply a series of taxes that were being levied on businesses being discounted back to them. As my noble friend Lord Gove has said, why are we engaging in such a complex process? And I wanted to pick up on a point made by the noble Baroness, the Minister. She said there was no point in exploiting our North Sea oil and gas assets because it wouldn't shift the global price.

That's like saying we shouldn't grow wheat in this country because it won't shift the global price. The tragedy is we have everything in this country. We are a wealthy country. We're as wealthy as any country in the world in terms of our natural fossil fuel resources. And it just beggars belief that we could decide actively in this act of self-harm to limit the opportunity for our nation to access these resources. So what needs to change for the government to change their mind and actually take advantage of what God has given us? That is what businesses really want.

18:29

Baroness Lloyd of Effra, Parliamentary Under Secretary of State (Department for Business and Trade) (Labour)

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We have seen the damage that volatility and energy price spikes have caused in the past. That is why the long term plan towards a clean energy future will bring more stability, more resilience and more home-grown power in respect of the North Sea, as I mentioned earlier, we we will introduce new transitional energy certificates that will enable some oil and gas production in areas adjacent to already licensed fields like licensed via a Tieback, or areas that are already part of an existing field.

That is what we are doing. And the, the, the, the only way to take back control of Britain's energy and bring down bills for good is with clean, Home-grown power.

18:30

Baroness McIntosh of Pickering (Conservative)

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On North Sea oil. As she >> On North Sea oil. As she rehearsed it this afternoon, because we just had a debate on clean energy and my noble friend clean energy and my noble friend Lord Moynihan from the front bench said that 70% of our gas imports to the UK are coming from Norway, and that these are potentially under a challenge from the Norwegians because they're not entirely the population are not that keen on exporting their oil to to a third country.

Is the government apprised of that? That surely should be setting alarm bells as to why we do need to take more oil from the North Sea? And can I just press her on the urgent case for the Cyto phytosanitary agreement to be reached with the European Union? As my noble friend Lord Lansley said, our largest exports really now are food manufacturing. Salmon is one of them, which is obviously very perishable. So it really is absolutely vital that we do proceed to get a phytosanitary agreement with our nearest exporting neighbour, importing neighbours at the earliest opportunity.

18:31

Baroness Lloyd of Effra, Parliamentary Under Secretary of State (Department for Business and Trade) (Labour)

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The noble Baroness is right that resetting the relationship with the resetting the relationship with the EU is a priority for the government. We are working across a number of fields to progress all of those dossiers that we had set out across energy, across food and space and so on. In respect of her specific question around Norway, I I'm not aware of that, and I may have to revert to her on specific questions, but I am not aware of any issues around security of supply for any fuel or oil and gas, or any issues

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of those kind. No further. Questions on the statement. We

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Questions on the statement. We can move to next business. May I can move to next business. May I suggest that? I'm. I'm coming to it. If any noble Lords wish to leave the chamber before next business, the chamber before next business, may I suggest that they do so now?

18:32

Legislation: Pension Schemes Bill - consideration of Commons reasons and / or amendments (day 2) (if required)

>> Commons that they insist on their disagreement with the Lords in certain amendments to the Pension Schemes Bill. Insist on certain amendments to the word so restored to the Bill. Do not insist on an amendment to the word so restored to the Bill, and propose further amendments to the word, so restored to the bill to which they desire the agreement of your Lordships they insist on their disagreement with the Lords in certain amendments, and propose further amendments in lieu thereof, to which they desire the agreement of your Lordships they disagree to certain amendments made by the Lords in lieu of amendments to which they have disagreed, and propose further amendments in lieu thereof, to which they desire the agreement of your Lordships.

They disagreed to an amendment made by the Lords in lieu of an amendment to which they have disagreed, and proposed further amendments in lieu thereof, to which they desire. The agreement of your Lordships.

18:33

Baroness Sherlock, The Minister of State, Department for Work and Pensions (Labour)

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Consideration of Commons amendments on the Pension Schemes amendments on the Pension Schemes Bill Baroness Sherlock. >> My Lords, I beg to move that the Commons Amendments be now

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considered forthwith. Question is that the Commons Amendments be now considered forthwith as manager of that opinion will say content to the contrary, not content. The contents have it motion a Baroness Sherlock.

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Don't get to say forthwith often enough. That's a great start of the day, my Lords. I beg to move motion day, my Lords. I beg to move motion A that this House do not insist on its amendments 15 to 24, 27, 30 to its amendments 15 to 24, 27, 30 to 34, 36, 38 to 42, 83 and 88. And do you agree with the Commons in their amendments? 88 A, 88 C and 88 E to £0.88 to the words restored to the bill.

I will also speak to motions B, C and D. I'd like to thank all noble Lords for their continued scrutiny of this important bill. We're now looking at the remaining areas of disagreement. Let me start with the reserve power, my Lords amendment 15 and those connected with it sought to remove the reserve power on asset allocation from the bill. Noble Lords will be aware that. And indeed, we just heard that the Other place has considered this House's amendments and has once again disagreed with the amendments that would remove the reserve power from the bill.

In doing so, it is tabled further amendments in lieu, and I'll come to those in a moment. But I want to first to acknowledge the level of interest in the House on this issue. Noble Lords have engaged with these provisions with great care, and I'm genuinely grateful for the quality of scrutiny that has been brought to bear at every stage, from committee, through report and to our exchanges between the two houses. I know that many noble Lords remain concerned about the reserve power, and I do not dismiss those concerns out of hand.

But I must also be candid with the House about where we stand. The elected House has now considered the case for the reserve power on two occasions, and on both occasions it has concluded that the power should remain in the Bill, but the government has not simply dug in. It has responded to the concerns raised in this House with substantive changes to the legislation. In a moment, I'll set out what those changes now amount to, because I think the cumulative picture is important. But let me briefly restate the case.

There is a well-evidenced collective action problem in the defined contribution market. The industry itself has been clear that a key barrier to delivering on its commitments are market dynamics that continue to focus on minimising cost, rather than maximising long term value. For savers, the industry want to diversify in their savers interests, but risk being undercut by competitors who see a commercial opportunity. The reserve power exists to address that problem and that problem alone. In the first round of these exchanges, the government tabled three amendments in lieu, delivering two concessions that responded directly to arguments made in this House.

The first, which had been pressed by the noble Lord Viscount Younger of Leckie Baroness Stedman-Scott, and indeed the noble Baroness Brady Baroness McIntosh of Pickering, was the statutory cap. Regulations may not require more than 10% of default fund assets to be qualifying assets, or more than 5% to be of a UK specific description, Lord Dannatt writes. The Mansion House Accord targets into primary legislation so that no future government can use the power to go further. The second, responding to the type of concern raised by the noble Lady Baroness Bowles and other noble Lords about the breadth of the power was the asset class neutrality requirement, which ensures that regulations must cover each of the named private market categories and cannot concentrate requirements in any one class.

Those amendments by Lord Dobbs represent meaningful constraints on the reserve power of a kind for which this House has previously signalled strong support. I stand by them today. The government, with the support of the Other place, proposes to go further in three ways. First, we have tabled an amendment to bring forward the existing sunset date for the reserve power from 2035 to 2032. The Mansion House Accord commits the industry to reaching its targets by 2030. Bringing the sunset forward aligns the power more closely with that timeline.

If the power has not been exercised by the end of 2032, it falls away entirely. And if it has been exercised, the percentage requirements set under it may not be raised after that date. The Second Amendment ensures that the power to set the headline percentage may be exercised only once. Combined with the statutory caps. This means that any future government has at most a single opportunity to set the asset allocation requirement, and only up to the levels to which the industry itself has committed under the accord.

Third, and I ask the House to consider carefully the significance of this step. The Other place has agreed an amendment providing for the full repeal of the asset allocation regime at the end of 2035. I want to be precise about what that means, because it goes beyond the sunset of the enabling power. Even if the power has been exercised and requirements are in force, the entire framework, the approval requirements under section 28 C, the savers interest test, the associated penalty and review provisions, and any asset allocation requirements which have been brought into effect.

The entire framework is repealed from the statute book at the end of 2035, so I do hope those noble Lords have expressed objections to this power being a permanent feature of our pensions. Legislation will recognise that the government has listened to them. And so let me set out what the reserve power now looks like taken in the round. It's capped at the accord targets. It cannot be used to compel investment in a single handpicked asset class. The headline percentage can be set only once the power lapses in 2032 if not used, and if it were ever used, the entire regime is repealed at the end of 2035, every element of it removed from the statute book.

On top of all that, it remains subject to the savers interest test statutory reporting requirements, both before and after any regulations are made, and the affirmative procedure, as this is a power which has been meaningfully altered and constrained by the scrutiny of this House, and I hope noble Lords will recognise the collective significance of those safeguards. Industry have welcomed our amendments to constrain the power. By way of one example this morning, Aviva said we welcome the government's amendments to constrain the reserve mandate power so that it could only be used to support delivery of the Mansion House Accord.

They continued we hope this is enough to build the consensus needed for the Bill to be passed in this parliamentary session. My Lords, I understand the position of those who believe the power shouldn't exist at all. The noble Lady Baroness Bowles has made that case with clarity and with rigour, and I respect it. But the government's view is that the risk of inaction, of allowing the collective action problem to persist to the detriment of pension savers, is the greater risk. And the power, as it now stands, is a carefully circumscribed instrument designed for a single purpose and limited in every dimension.

My Lords, this House has done its job as a revising chamber. The government has engaged in good faith with the concerns raised, and has responded with changes to primary legislation, not undertakings, not assurances, but amendments to the Bill. I hope this demonstrates the seriousness with which we have taken this House's scrutiny, and I ask noble Lords not to insist on their amendments and to agree the amendments proposed by the Other place in lieu. Let me turn now to Lords Amendment 35 B.

This would require the Secretary of State, when making regulations across the scale measures and those for default arrangements, to have regard to the benefits of competition among providers of pension schemes. But as the government absolutely supports a competitive market, that's evident through all of the scale measures. However, we believe that in designing regulations, a range of factors must be taken into account. Our focus always has to be on delivering the best outcomes for members. Now, noble Lords have stressed the importance of competition as the market moves towards scale.

The government agrees. We've always considered it to have a central role in the policy. The new entrant pathway is designed to drive this as is. The freedom schemes will have to open new default arrangements which will support competition. However, my Lords, we've listened carefully to the arguments that have been made during debates and most especially by the noble Baroness, Lady Noakes, and we recognise the desire to see that commitment commitment feature in the Bill. We've therefore tabled amendments in lieu to set out the regulations, both those in respect of the scale measures and those relating to default arrangements, must have regard to the importance of competition and innovation.

However, under the government's amendments, 35 C and 35 D regulations will also need to have regard to additional factors. The importance of scale, improving member outcomes and effective governance. Now, it is clearly right that we place members at the heart of this policy. I am sure there can be no disagreement that their needs are just as important as those of the market that serves them. Members interests come first, and this amendment recognises that the noble Lady Baroness Noakes has asked me to confirm two matters in relation to this amendment.

First, how the government will meet the new duty in relation to the different factors set out under our amendments. When making regulations, the government will need to have regard not just to the need to reach an appropriate scale, but also to the importance of competition and innovation in the design and operation of schemes, to effective governance and the vital objective of improving outcomes for members. This amendment captures the basic but important principle that the government's approach to making this regulations must be holistic, one taking account of many relevant factors.

The explanatory notes will also make this clear. Secondly, the noble Baroness asked me to confirm why new section 28 G does not appear in the list of provisions in this amendment, and I am very happy to do so. My Lords, it's because new section 28 J will allow the Treasury to make regulations that switch on the FCA's enforcement powers in relation to chapter three. So this is primarily a question of whether these powers should be available to the FCA. So the matters listed in the amendment are therefore not applicable to that question in the way that the same way that they are to the powers that allow the government to construct key elements of the scale framework.

So I hope that explains things to her satisfaction. Let me turn now to Lords amendments 37 B and 37 C. These set out the ability ability for a regulator to exempt a scheme on the basis of an innovative offering or consolidation, or where consolidation may not improve member outcomes. And we debated this amendment this week, and I won't restate the arguments in the interest of time, because the government has long been clear about our intention to adopt reforms to ensure that workplace pension schemes take advantage of consolidation and scale, to deliver better returns for UK savers.

And that is what we're doing in this bill now. My Lords, whilst I recognise that the impact of this policy may have an effect on some schemes in the market, we must prioritise the need to deliver on this commitment to members. Our priority is to serve those who have begun to say to auto enrolment and who work hard to save for retirement, and we want to ensure their savings schemes which deliver better outcomes. However, we have heard in this House and the Other place concerns expressed that the benefits that innovation can bring should not be lost in the process of consolidation.

We agree. We therefore tabled amendments 37 D and 37 E in lieu to require the Secretary of State, in conjunction with the regulators, to publish a report about the effects of pension scheme consolidation and the extent to which innovative product designs are adopted or maintained following consolidation activity, as well as any barriers that may exist to preserving these features. This report will be published within 12 months of the Bill becoming an act. The timing of the report would ensure the government will then be able to take action as needed, in advance of the scale measures being commenced in 2030.

Finally, I turn to Lords Amendment 77, which called for a review of public service pensions schemes. I'm grateful to the noble Lady Baroness Neville-Rolfe for making yourself available to engage my colleague, the Minister for pensions, yesterday, and I agree with her that it is crucial for the government to understand the intergenerational impact and long term cost of public service pensions, and to ensure that these costs are taken into account when making staffing decisions in the public sector. The government has listened closely to the arguments made during the bill's passage, both in this House and the Other place, and in response, the government brought forward a concession in the other place.

I can confirm that they have now agreed to that concession. The government's amendment in lieu will ensure that Parliament has clear sight of the long term costs of unfunded public service pensions. The amendment will require the government actuary to publish projections of the cost of unfunded public service pension schemes for each of the next 50 years, within 12 months, the government actuary is uniquely well placed to undertake this work, as her department undertakes the actuarial valuations of the unfunded public service pension schemes across the UK, and therefore has detailed knowledge of the schemes the government Actuary's Department provides impartial, professional actuarial advice and analysis to the government and the public sector.

I can also say the government is also due to respond to the Public Accounts Committee recommendation, and to include liabilities calculated on an Undiscounted basis, which means that neither the discount rate nor the accounting discount rates will be applied. This will be published within the time frame and the amendment. I would therefore invite the House not to insist on Lords Amendments 77 and to agree with amendments in lieu. 85 C to 85 E I hope the House will now accept. The government has listened, has reflected and has responded with substantive changes to the Bill.

This is an important bill which will bring great benefits to pension savers, and we need to find a way to get the bill agreed. Industry is waiting to get to work implementing these reforms and it's not just industry. Yesterday, the TUC said it's vital the bill is passed so workers can start to benefit and age UK said it may not be perfect, but it's important that the bill is passed before it's too late. There are lots of good measures in the bill that will help both today's and tomorrow's pensioners.

Indeed, there are. My Lords. I beg to move.

18:47

Baroness Bowles of Berkhamsted (Liberal Democrat)

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EA question is motion A >> Be agreed to. >> Motion A1 Baroness Bowles of Berkhamsted. >> My Lords. >> I beg to move. Motion A1.

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I beg to move. Motion A1. As an amendment to motion A, which leaves out from house and which leaves out from house and inserts the words as printed on the Marshalled List. My Lords, I thank the Minister for her explanation, and also for our meeting with her and the Pensions Minister yesterday. Small movements are better than none, but she will know from that conversation that, as regards the so-called reserve power, there is still a long way to go and the House should be clear about the issues that remain.

There are four in particular. First, the principle of mandation. Even if it's reserve power to bring in Mandation. The primacy of trustee fiduciary duty must be made clear. A structure that subordinates. That duty is not acceptable, which means no mandation. Secondly, it's wholly unacceptable that the bar for trustees to decline to invest in the assets that the government prefers is set higher than the fiduciary duty threshold itself, requiring trustees to prove material harm, which is a very high standard and probably impossible to do.

And what reward would the pension saver receive for taking that additional risk? The potential for higher returns alone is not sufficient, but if that goes, that goes if mandation goes. Thirdly, the Mansion House Accord has fiduciary duty and consumer duty embedded within it. If this clause is truly a backup to that accord, it cannot set those duties aside and replace them with something else. Fourthly, this whole part of the bill, as the Minister has explained, is predicated upon an allegation of market failure.

Were that not the case. I would maintain that competition law would come into play for policy coordination. So what to do? The only logical conclusion is that Mandation must go. That does not stop a nudge and monitoring approach, but no threatening reserve power or regulations because that's coercive. Like the debt collector who says they will break your arm, even if not right now, and supporting the Mansion House Accord should surely reference the enablers and caveats, which are the fiduciary duty and consumer duty, and also the government assistance with assets where appropriate.

And as this whole project is, in effect, a competition law dispensation to permit coordinated policy action, then it should be appropriately time limited, for example, to the end of the current Parliament, because that would also safeguard from what future governments might do, which has been an issue raised more than once. And after that, the entire structure should fall away. If it needs replacing, then that would be up to the subsequent government. And of course, as I have expressed all the way through, there must be no discrimination between investment vehicles, which we know is a Treasury plant and not an industry request.

And an example embedded in the heart of the bill of how things can be imposed, which are highly inappropriate. So it will come as no surprise that I will ask noble Lords once again to insist on our deletion and to disagree with the government amendment. I beg to move.

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The original question. Is that motion a be agreed to? Since one motion, A one has been moved as an motion, A one has been moved as an amendment to motion A to leave out from house to the end and insert the words as printed on the Marshalled List. The question, therefore, is that motion A1 be agreed to.

18:52

Baroness Noakes (Conservative)

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>> I'd just like to speak briefly to motion C, because that deals to motion C, because that deals with amendment 35 B, which I moved at the last round of ping pong. Let me say at the outset that I am delighted with the amendments that the government have brought forward. I felt during the process of committee and report that I was banging my head against a brick wall every time I spoke, which was often about innovation and competition, and I didn't think I was getting anything out of them a headache.

But I am absolutely delighted, and I completely accept that the broader wording that the government had put forward in their amendments, 35 C and D are an improvement on what I have been arguing for. So thank you to the government. Can you go next? My Lords, I rise briefly just to support everything that the noble Lady Baroness Bowles has said. But I would also like to thank the noble Lady, the Minister. I recognise that there has been

18:53

Baroness Altmann (Non-affiliated)

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significant movement on the part of the government, on some of the the government, on some of the other issues and unfortunately, just constraining the mandatory power in the way the government has proposed. It is better than it was before, but it is not OK for before, but it is not OK for members. And normally if there is an expectation of market failure, we would wait until that failure is proven before we pass primary legislation in case it were to arise in the future.

It has not been proven, and indeed, if the schemes who do invest in the way the government wants and in accordance with the voluntary accord we're trying to mimic, perform better as the government expects, then others are likely to follow. But forcing them to do so against their better judgement. My Lords cannot be right. There is no compensation if the investment decisions go wrong. The government has, as the noble Lady Baroness Bowles has said, inexplicably excluded listed investment companies, which indeed will potentially hold exactly the investments that the government wishes pension schemes to invest in.

And therefore, it does not seem that the government itself is the

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best judge of how to invest. I rise to support the noble Baroness, Lady Bowles.

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Baroness, Lady Bowles. In. Insisting on the omission of Mandation in motion A1. The proposal has made the government unpopular in the city and as an ex businesswoman and ex pension businesswoman and ex pension trustee, I urge Ministers to think more radically and get rid of the power altogether, even in its power altogether, even in its constrained form. But moving on, I'd like to thank the noble Lady, the Minister and the Minister of State, Torsten Bell, for amendment

18:55

Baroness Neville-Rolfe (Conservative)

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85, C, D and E in motion D. This responds positively to my proposal for review of public sector for review of public sector pensions, the work promised by the government Actuary's Department should provide the transparent should provide the transparent analysis of this complex area that I've been calling for, with the support of the centre for Policy Studies economist, Neill Record and my noble friend Lady Noakes and Lord Moynihan of Chelsea, and the Lord Moynihan of Chelsea, and the coverage, indeed in the times and The Telegraph, it was reassuring to know from the Minister that the important complementary work responding to the Public Accounts Committee's concerns about the whole of government accounts 20 2324 will be published and will be published within the one year time frame in the amendment.

My Lords, I've not just been addressing a technical matter, but serious problems such as intergenerational unfairness and long term affordability of our important public service pensions. And I trust that as a result of the new work, we will be able to tackle the issues better and in a much more informed way.

18:56

Lord Vaux of Harrowden (Crossbench)

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My Lords, I want very briefly to add my support to Baroness Bowles motion A1 to remove the mention motion A1 to remove the mention reserve power. On Monday, the noble Lady, the Minister told us, and I quote on the question of fiduciary duty, nothing in the bill supplies trustees existing duties of loyalty, prudence and acting in members best interests. And her argument was, and again, I quote that the savers interest test allows a scheme to seek an exemption if it can show that compliance would cause material financial detriment to members.

Hopefully, noble Lords can see there are the fundamental flaw in that argument. Not causing material financial detriment is a very different thing to acting in members best interests. Let me ask the noble Lady would she put her pension savings into a fund that promised only that it would not cause material financial detriment? Of course she wouldn't. But that, as she has said, is the standard to which the mandated asset allocation will be held. So, contrary to what the noble Lady keeps claiming, the power to mandate asset allocation, even with the latest proposed constraints, quite clearly does undermine the fiduciary duty of trustees to act in members best interests.

And it has no place in pension scheme regulation.

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I just want to make two points. First, on the issue of mandation, First, on the issue of mandation, we need to be clear. I am really concerned about those. The absolutist, no mandation point. absolutist, no mandation point. There is, of course an issue to discuss as to how effective these discuss as to how effective these measures would be and what effect it would have on trustees responsibilities. But it's

18:58

Lord Davies of Brixton (Labour)

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responsibilities. But it's important to remember that we are talking here about tax advantage, tax advantage provisions, where there is a substantial cost to the Exchequer. So I think it is entirely reasonable in principle for the government and the legislation to lay responsibilities on those tax advantage arrangements. And so saying Mandation is in a in and of itself wrong, I think is clearly incorrect as a matter of public policy. I think it's entirely right that we should legislate to place requirements on tax advantaged investment arrangements.

People can invest their own money in any way they wish, but in return for the tax advantages, there are equal responsibilities. The second point I want to make, I'm afraid we need to be clear, and it may be some comfort to my noble friends what the the amendment to 77 does not produce a review of public service pensions. It just requires important information to be published within a one year timescale. I'm totally.

In fact, I said during the Committee stage that I would welcome a review of public service pensions. But this isn't a review of public service pensions. It's just a requirement on the government actuary to produce the report. I'm afraid in my view, the amendment is a bit lacking because it just refers to cash figures. Now, every trust in the government actuary, cash figures by themselves are meaningless. They tell us anything if they're put into context.

And in terms of of pay as you go, public service pension schemes, the relevant context is the. Using shorthand of gross domestic product. We can pay public service pensions, whether or not we can pay public service. Pensions depend on the relationship of those cash figures against the productiveness of the economy as a whole. So I very much hope, and perhaps my noble friend in reply, could indicate that the government actually has the responsibility to produce not just the cash figures referred to in the amendment, but context.

19:01

Baroness Stedman-Scott (Conservative)

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OK, my Lords, since we only have >> OK, my Lords, since we only have one group of emotions today, I shall address our three key areas shall address our three key areas of scale and competition public sector pensions and mandation together. First, on scale and competition. I am grateful to the noble Baroness, the Minister, for bringing forward these amendments. In lieu. The government response does two important things. First, it places a clear duty on the Secretary of State when making regulations under key pension powers, to have regard to a set of core principles innovation in scheme design and operation, competition between providers, the need to improve outcomes for members, the achievement of appropriate scale and effective governance.

Secondly, it applies a similar discipline to the appropriate authority when making regulations under sections 42 and 44 requiring regard to innovation, competition, member outcomes and governance. Together. Therefore, this amendment establishes a statutory framework that must guide the making of these regulations. It ensures the scale is not pursued at all costs, but alongside innovation, competition and above all, better outcomes for savers. We also welcome the amendment in lieu from the government, which would require the Secretary of State to publish a report into the effects of consolidation on innovation in the design and operation of relevant master trusts.

These are welcome changes on the face of the Bill. Following our long fought conservative campaign. They reflect in a meaningful way the concerns we have consistently raised about the balance between scale and innovation. On that basis, we are content to accept these amendments, and I thank the noble Baroness, the Minister, for her constructive engagement in bringing this forward. This is the change in emphasis that we wanted to see, and we're glad that the government has moved on this issue.

Now, turning to public sector pensions, I want to pay tribute to my noble friend Baroness Neville-Rolfe for her sterling work impressing this important issue. This is a fundamentally important matter, and we are talking about vast sums of public money. Indeed, one of the largest government liabilities behind gilts. I'm pleased that the government have recognised the important point that my noble friend has been making and has brought forward this amendment in lieu. We shall, of course, await the publication by the government to ensure that it receives full and proper scrutiny once it is released, but we thank them for their recognition of this point.

Finally, my Lords, I come to Mandation. We have had some small movement from the government in their amendments in lieu, which is welcome to some extent, but the government should not have this power at all. A view we share with both industry and with the public. The government wants greater investment in private markets, but the reason why this is not happening as fast as they would want has many causes which could in turn have many solutions not limited to increasing consumer visibility, strengthening employer side incentives, addressing the role of intermediaries and promoting coordination through voluntary alignment.

Indeed, we already have several emotion, such as the Mansion House Accord, a voluntary industry led framework agreed less than a year ago, designed precisely to address these issues through alignment, not coercion. Yet before the approach has even had time to take root, the government is reaching for the most extreme lever available the power to direct private investment into assets of its choosing. This was contrary to some claims, not in the government's manifesto. The noble Lady Baroness Bowles is right to oppose this in the strongest possible terms.

Mandation is a profound mistake. It cuts across the fundamental principle of fiduciary duty the obligation to act in the best interest of savers, not Ministers. And it sets a deeply troubling precedent that where markets do not move quickly enough, in the government's opinion, the government will simply override them. The government is trading partnership for pressure, and they are replacing trust with the threat of intervention. This is not how you build a strong, dynamic investment market. It is precisely how you undermine it.

This power is not just unnecessary, it is dangerous and it should not stand. We entirely support Lady Boal's motion to insist on her amendment, and we will support her if she chooses to test the opinion of the House on this question.

19:07

Baroness Sherlock, The Minister of State, Department for Work and Pensions (Labour)

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My Lords, I'm grateful to all noble Lords who have spoken. And noble Lords who have spoken. And can I just start by thanking noble Lords who have been very constructive in their engagements, and possibly more so off stage than on stage, but I'm always very grateful for what I take, whatever I can find, and particular thanks to Baroness Brady Neville-rolfe and the noble Lady Baroness Noakes. And I'm glad she knows now that I really was listening all the way through Committee report, even if there may be times when I'm sorry it looked like I wasn't, and I shall.

I shall work better on my nodding in future, but. And here we are now. I'm really glad that she's happy with where we've. We've got to. And also the noble Lady, Baroness Stowell Neville-rolfe, is to. Let me try to pick up a few of the points, a number of the points that have been made. Essentially, we've been around these debates many, many times. So I'm not going to hold the house while I redo them all over again. Tempting though it is. But let me just pick up a couple of them.

I think the starting point is that maybe to the noble Lord Lord Faulks, that I think he started in the middle of the argument. And that's the problem. I mean, my Lords, it is I mean, diversification of portfolios is critical to reducing risk. There is clear international evidence that a small investment in productive finance in the context of a diversified portfolio brings better returns. And it is demonstrable that that that is that is clearly the case. And we have to admit that most mass market DC schemes have little or no private markets in their default funds.

And that's very much by contrast to the position in many other countries. So I think the starting point is it is reasonable to assume that the evidence would suggest it is better for savers for that to happen. However, we do want safeguards around this, and what he described is one of the safeguards. So if this power were ever to be used and it is a reserve power, the government doesn't expect it to be used, then the report would have to be commissioned to look at the impact of doing so on savers, as well as the broader economy, to establish what would happen.

And then, despite all of that, if trustees believed, looking at that, knowing their savers and their membership, that it would not be in their interests because of some reason that even if might broadly be an interest, it wouldn't be in their interests. Not only can they, but we would expect the fiduciary duty to drive them to make an application for an exemption under the savers interest test, and the test is designed to be capable in past, not just failed. So that's that's our position.

I understand his but that that is the government's position. Let me pick up the question. Noble Baroness O'Grady bowls asked about the timing. Why shouldn't it stop in this Parliament? Of course, of course the the the power. We've talked about stopping in 2032. But the Mansion House agreement, of course, the accord has until 2030 to happen. And this Parliament, I'm sorry to say, is due to finish before that. Would that it can continue. No, don't go in that direction. No. That'll get badly reported.

But no, clearly, we simply think if the power were ever used, there would have to be enough time to see what the impact of it was before bringing it to an end. So I think 2032 seems to me to be to be a reasonable starting point, a sunset. And that, I hope, is something that she can appreciate. A couple of other questions that were asked. Oh yes. About the collective action. And we've been around this a lot of times. I mean, the, the government, we I think we've set out the arguments.

It isn't simply our view that the problem, the collective, the collective action, failure in the market is just our view. It isn't us. The industry has made this really clear, and when the amount of the Mansion House Compact. When they published their most collective assessment of progress two years into the Compact's assessment, the predecessor to the Mansion House Accord, they identified this dynamic of competitive pressure, focusing the market on minimising cost, and has been the single biggest barrier to delivering on their own commitments.

So we have been here before, where it's been tried on a voluntary measure and failed, and industry identified this as the single biggest barrier. That's why we're addressing this and that's the reason for doing it. I think my noble friend Lord Davis asked about yes, I can reassure them. The OBR will continue to produce long term forecasts of the economy, but will provide a context for the figures that are being made, and I am grateful to him for doing that. And finally, my Lords, can I just say, I think to describe the changes the government has made are small, I think is unreasonable.

Let me just remind the House what this now is this this this provision reserve power is now capped at the same rate as the accord. It cannot be used to compel investment in a single handpicked asset class. The headline percentage can only be used once at once. The power lapses in 2032 if not used, and if it were ever used, the entire regime is repealed at the end of 2035. Every element off the statute book. While those are significant movements, the government has listened.

The Commons has clearly twice sent this back. It wants this in the bill. We should give it to them. My Lords, I urge the House to agree to.

19:11

Baroness Bowles of Berkhamsted (Liberal Democrat)

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My Lords, I thank all those who have contributed and as the noble have contributed and as the noble Minister said, we have been round the arguments many times, so I will. I will be brief, but I think that I will be brief, but I think that this was sold as a backstop to the accord. So it's not really a case for celebration when something that bit off a lot more than the accord is brought a little bit more closely into alignment with it.

And the fact is that the reserve power is coercive. That's what it's there for. That's what it's meant to do. So it is not without effect. And yet it wasn't consulted upon. It was just sprung upon as suddenly snuck into the bill. And we've had to deal with it. I was interested in the tax advantage point raised by the noble Lord Davis. But I mean, if these are the least well off pensioners that are going to be asked to put more into risky assets, so shouldn't they get an extra slice of tax relief then? Because all the people who are in, you know, safe defined benefit schemes and those kinds of things where they're not at risk, they get tax advantage too.

So it's not it's not a runner, but it comes back to the basic point, fiduciary duty and the best interests of the pensioners in what is their money. And bear in mind that the point has been raised, and I'm not sure whether it's actually ever been answered about the human rights aspect of diverting some of pensions. So we could go on a long, lot longer. I hope we don't, but I

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regret I must test the opinion of the House. Yeah. The question is that motion A1

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The question is that motion A1 be agreed to, as many of that opinion will say, content. Content to the contrary, not content. Not content.

**** Possible New Speaker ****

Not content. I will advise the question will be decided by division. I will advise the House when voting is advise the House when voting is open. Voting is now open. Clear the

19:13

Division

This debate has concluded

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